Developments In Equal Pay Litigation - 2022 Update

8 | Developments in Equal Pay Litigation © 2022 Seyfarth Shaw LLP pay grade, and that other differences in pay were explained by other non-discriminatory factors of the employer’s compensation system. 51 Questions also frequently arise regarding what types of compensation should be compared to establish a wage disparity, and even what counts as “compensation” at all. A pay disparity does not have to be based on the wage or salary components of compensation. Differences in benefits, such as the use of a company car, can also form the basis of an equal pay claim. For example, in Pate v. Medical Diagnostic Laboratories LLC , 52 a senior sales executive for a pharmaceutical laboratory alleged that she was paid less than male employees in the same position, even though they earned the same base salary, because they were given a company car while she was not. Although plaintiff had requested a company car, the employer denied the request, saying that it was dependent on sales performance. 53 The employer argued that its refusal to provide a car to plaintiff was justified by several gender neutral reasons. The court agreed, noting that the use of a company car was not automatic, that both male and female employees regularly received cars, and that “none of the eight listed male employees who received company cars had the same combination of short tenure, deficient performance, and location as plaintiff.” 54 The court concluded that “individual comparisons between employees both male and female who received cars, do not create a genuine issue of material fact as to defendant's gender neutral justifications for providing company cars, particularly given the variety of gender-neutral factors and the overall pattern of male and female recipients.” 55 When a disparity in benefits forms the basis of a gender discrimination claim, it is obviously critical that a plaintiff establish their right to those benefits. In Barney v. Zimmer Biomet Holdings, Inc. , 56 a female Senior Vice President alleged, among other things, a wage discrimination claim based on the fact that she was denied severance benefits. Although this was sufficient to establish a prima facie case, the court held that she had failed to establish that the denial of severance was due to her gender because, under the company’s policies, she was not entitled to severance: “[employer] has put forth evidence that the difference in severance benefits was based on a factor other than sex; specifically, the difference was based on how the employees left their employment with [employer]. [Plaintiff] has not put forth evidence to place the facts surrounding that rationale in dispute.” 57 The question of how to compare different types of compensation can be quite complicated. For example, litigants sometimes dispute whether a court can find a wage disparity based on differences in base salary or wage rate alone, or whether it must also take into account and compare total compensation, including all bonuses, commissions, benefits, and other forms of remuneration. This is yet another seemingly simple legal question, which has bedeviled the courts and given rise to arguably conflicting decisions. For example, in Sempowich v. Tactile Systems Technology, Inc. , 58 a regional sales manager for a medical device manufacturer alleged that she was paid less than a male comparator when comparing base salaries. The district court held that she failed to establish a prima facie case of pay discrimination because she was actually paid more than her comparator when comparing total compensation, meaning base salary plus commissions. 59 The court applied the EEOC’s definition of “wages,” which includes all 51 Id. 52 Pate v. Med. Diagnostic Labs. LLC , No. 7:19-cv-126-FL, 2021 WL 965906 (E.D.N.C. Mar. 15, 2021). 53 Id. at *4. 54 Id. at *17. 55 Id. See also Perdue v. Rockydale Quarries Corp. , No. 7:18-cv-00416, 2019 WL 2216527, at *6 (W.D. Va. May 22, 2019) (holding that a female supervisor had adequately alleged a pay disparity based on her claim that she was allowed to use a company vehicle only for business travel while her male predecessor in the same position had been allowed to use a company vehicle for business travel and his commute to work: “While [employer] may ultimately disprove these allegations or establish that the alleged disparity was justified by a reason other than gender, the court concludes that the allegations are sufficient to withstand the defendant’s motion to dismiss”). 56 Barney v. Zimmer Biomet Holdings, Inc. , No. 3:17-cv-616 JD, 2021 WL 3212383 (N.D. Ind. July 29, 2021). 57 Id. at *10. 58 Sempowich v. Tactile Sys. Tech., Inc. , No. 5:18-cv-488-D, 2020 WL 6265076 (E.D.N.C. Oct. 23, 2020). 59 Id. at *23.