Table of Contents i ii iii iv 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 Back Cover

Developments In Equal Pay Litigation - 2023 Update

By Matthew J. Gagnon and the Seyfarth Pay Equity Group Developments in Equal Pay Litigation 2023 UPDATE

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | i Developments in Equal Pay Litigation March 2023 Dear Clients and Friends; We are pleased to provide you with the latest edition of Seyfarth Shaw’s annual analysis of developments in equal pay litigation. This publication provides an overview of significant decisions and recent developments impacting federal and state equal pay litigation and legislation. Our goal is to provide indepth analysis and commentary regarding these developments so that corporate counsel, human resources professionals, and other corporate decision makers have the up-to-date guidance they need to make informed decisions regarding equal pay issues, including a solid background in the types of issues that often come up in equal pay litigation. This report is divided into three main sections. The first section discusses equal pay litigation at both the federal and state level, with a special emphasis on how those various legal and regulatory regimes differ and the different legal risks they pose to employers operating in many jurisdictions. The second section contains an in-depth discussion of significant recent court decisions impacting equal pay litigation, including substantive trends and developments in the legal theories and defenses advanced by plaintiffs and employers. The third section discusses significant developments in federal regulation and enforcement of equal pay issues driven by the Equal Employment Opportunity Commission. Equal pay continues to be one of its top enforcement priorities and a significant legal risk for employers. We hope that our clients and friends will find this reference useful as they navigate these rapidly developing legal issues. Please feel free to contact the author, Matt Gagnon mgagnon@seyfarth.com, or any member of Seyfarth Shaw’s Pay Equity Group, with any questions. Matthew J. Gagnon Chicago Partner mgagnon@seyfarth.com (312) 460-5237 This publication should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have. Additionally, this publication is not an offer to perform legal services nor establishes an attorney-client relationship.

ii | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP OUR PAY EQUITY PRACTICE We combine legal expertise with industry-leading statistical capabilities to provide global pay equity solutions that assess and mitigate risk. Pay equity is at the forefront of legal issues facing employers today. New equal pay, transparency, and reporting laws within the United States and across the globe present new risks and opportunities for employers. Seyfarth’s dedicated Pay Equity Group offers a strategic and data-centered approach to pay equity compliance. Our attorneys, in-house labor economists, and data analysts make complex statistical analyses simple to understand. Seyfarth’s deep knowledge of the pay laws and commitment to innovation gives us the tools to help you operationalize equal pay programs and minimize the risk of litigation. If disputes cannot be avoided, Seyfarth leads in managing complex and single plaintiff equal pay litigation. HOW WE HELP Seyfarth has more than 20 years of experience handling all aspects of equal pay issues, including counseling employers on best practices across the globe. • We conduct proactive assessments of compensation using a privileged framework. • We work with employers to craft appropriate remedial measures to mitigate future risks that have been identified during the proactive analysis. • We conduct high-profile investigations related to complaints of pay discrimination. • We work with employers interested in communicating to customers, communities, and employees that they care about pay equality. • When necessary, we bring our unique experience to defend employers in high stakes equal pay litigation. • Seyfarth also spearheads employer advocacy around pay issues. Our unparalleled thought leadership and advocacy has included comments and testimony before the US House of Representatives, the US Senate, and various administrative agencies such as the EEOC and OFCCP.

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | iii TABLE OF CONTENTS EQUAL PAY LEGISLATION..................................................................................................................1 A. The Federal Equal Pay Act And Title VII ...............................................................................1 B. State Equal Pay Legislation ...................................................................................................1 C. Pay Transparency And Other State And Local Initiatives......................................................3 CASE LAW DEVELOPMENTS IN 2022 AND EARLY 2023 .................................................................7 A. Proving The Prima Facie Case ..............................................................................................7 1. Establishing A Wage Disparity......................................................................................8 2. Showing That Work Is “Equal” Or “Substantially Similar”...........................................16 B. Significant Class And Collective Action Decisions...............................................................25 1. Recent Cases Involving Collective Action Certification ..............................................25 2. Recent Cases Involving Class Action Certification.....................................................31 C. Disproving Discrimination: Employers’ Affirmative Defenses ..............................................35 1. Proving A Factor Other Than Sex...............................................................................35 2. Additional State Law Requirements To Establish The Factor Other Than Sex Defense.......................................................................................................................40 3. Challenging The Factor Other Than Sex: Salary History And Beyond ......................42 4. Other Affirmative Defenses.........................................................................................47 5. Pretext .........................................................................................................................50 D. Other Important Substantive Decisions Impacting Equal Pay Litigation .............................53 1. Retaliation Claims .......................................................................................................53 2. Arbitration Agreements ...............................................................................................56 3. Proving An “Establishment” ........................................................................................59 4. Identifying The “Employer” Under The EPA ...............................................................61 5. Statute Of Limitations And Willfulness Issues ............................................................64 DEVELOPMENTS IN EEOC ENFORCEMENT OF EQUAL PAY ACT CLAIMS................................65 A. Recent Examples Of EEOC Enforcement Activity...............................................................65 B. EEOC Litigation of Title VII Equal Pay Claims.....................................................................69

iv | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 1 EQUAL PAY LEGISLATION A. The Federal Equal Pay Act And Title VII The Equal Pay Act (“EPA”) was enacted by Congress in 1963, one year earlier than Title VII of the Civil Rights Act of 1964 (“Title VII”). It prohibits employers from discriminating “between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which [it] pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions . . . .”1 The law recognizes four affirmative defenses: (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex.2 The EPA therefore overlaps with Title VII, in that both statutes prohibit discrimination on the basis of sex. However, as discussed below, the EPA diverges from Title VII, both procedurally and substantively, in important ways. In addition to private litigation, the EPA can give rise to enforcement proceedings brought by the U.S. Equal Employment Opportunity Commission (“EEOC”). For the past decade, the EEOC has identified equal pay as one of the six enforcement priorities in its Strategic Enforcement Plan.3 Although the number of filings brought under the EPA make up a relatively small percentage of the EEOC’s docket, agency personnel have repeatedly reaffirmed its importance as an enforcement priority for the EEOC. This publication addresses significant developments in equal pay litigation under the federal EPA, Title VII, and similar state laws. Although there is an emphasis on the most recent decisions, from 2022 and early 2023, in order to provide an up-to-date snapshot of the current state of the case law, the primary aim of this publication is to identify and discuss significant developments in the law, many of which take years to develop. It also discusses recent developments in EEOC litigation involving pay discrimination. B. State Equal Pay Legislation Equal pay has been a prominent issue at the statewide level as well, with numerous states amending their equal pay laws to supplement the federal EPA. California, New York, and Massachusetts were the first states to adopt more onerous pay equity laws over the last few years.4 Other states soon followed. State equal pay laws differ from the federal EPA in significant ways. For example, on January 1, 2016, the California Fair Pay Act,5 became effective for all employers with California-based employees. It expands upon the protections offered by the federal EPA and Title VII, as well as already-existing California law. Importantly, the California Fair Pay Act allows employees to be compared even if they do not work at the same establishment.6 This means that an employee’s pay may be compared to the pay of other employees who work hundreds of miles away. By comparison, New York’s equal pay law also allows employees to be compared even if they do not work at the same establishment, but those comparators must work in the same “geographic region” no larger than the same county.7 Unlike the federal EPA, which requires plaintiffs to establish that they performed “equal work” as a comparator of the opposite sex, the California law requires a showing that employees are engaged in 1 29 U.S.C. § 206(d)(1). 2 Id. 3 U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION STRATEGIC ENFORCEMENT PLAN FISCAL YEARS 2017 - 2021, available at https://www.eeoc.gov/eeoc/plan/sep-2017.cfm. 4 2017 Cal. Legis. Serv. Ch. 688 (A.B. 168) (West); N.Y. Lab. Law § 194 (McKinney); Mass. Gen. Laws Ann. ch. 149, § 105A (West). 5 Cal. Lab. Code § 1197.5. 6 See id. The California Fair Pay Act expressly removed from the preexisting California pay law statutory exemptions that applied where work was performed “at different geographic locations” and “on different shifts or at different times of day.” 7 NY Lab. Law §§ 194, et seq.

2 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”8 The new laws enacted in New York and Illinois have similar standards.9 The Massachusetts Equal Pay Act prohibits differences in pay for “comparable work.”10 Other states apply different standards for comparing the work between a plaintiff and his or her alleged comparators. State laws also differ with respect to the affirmative defenses available to defendants. California’s law requires employers to affirmatively demonstrate that any pay differences are based on one or more of a limited number of factors. It also limits the factors that employers can use to justify pay differentials and requires that the factors be applied reasonably and, when viewed together, must explain the entire amount of the pay differential.11 The Massachusetts law also creates an affirmative defense for an employer that has: (1) completed a self-evaluation of its pay practices that is “reasonable in detail and scope in light of the size of the employer” within the three years prior to commencement of the action; and (2) made “reasonable progress” toward eliminating pay differentials uncovered by the evaluation. State laws also differ in terms of the procedural rights and remedies available to plaintiffs and defendants. For example, the California Fair Pay Act allows employees to bring an action directly in court without first exhausting administrative remedies—provided the employee does so within two years (or three if the violation was “willful”)—and the employee may recover the balance of wages, interest, liquidated 8 Cal. Lab. Code § 1197.5(b). 9 NY Lab. Law § 194(1) (“equal work on a job the performance of which requires equal skill, effort and responsibility, and which is performed under similar working conditions,” or “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions”); 820 Ill. Comp. Stat. 112/10(a) (“the same or substantially similar work on jobs the performance of which requires substantially similar skill, effort, and responsibility, and which are performed under similar working conditions”). 10 Mass. Gen. Laws. c. 149 § 105A. 11 Id.

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 3 damages, costs, and reasonable attorney’s fees.12 The California law also extends—from two years to three—an employer’s obligation to maintain records of wages and pay rates, job classifications, and other terms of employment.13 Under the California Fair Pay Act, employers may not prohibit employees from disclosing or discussing their own wages or the wages of others, or from aiding or encouraging other employees to exercise their rights under the law.14 The New York law includes a similar provision. These anti-pay secrecy requirements echo similar prohibitions under the National Labor Relations Act, the California Labor Code, and an Executive Order that applies to federal contractors. C. Pay Transparency And Other State And Local Initiatives In addition to more robust enforcement provisions, as described above, a number of states and local jurisdictions have also begun to experiment with other pay equity initiatives. Those have generally come in the form of salary history bans and pay transparency laws. Salary history bans generally prohibit or limit employers’ ability to gather information about a candidate’s past salary and/or use that information when making compensation decisions. Pay transparency laws generally require employers to provide pay range information about particular positions to applicants or to include those ranges in job postings. Some of the more onerous laws even require employers to submit reports of demographic and pay data to state agencies. What those state agencies will do with such information is not public knowledge. But some speculate it could be used to target employers for enforcement activity. State and local salary history bans generally prohibit employers from requesting the salary history of job applicants and limit their ability to consider prior salary when making offers to new hires. Those laws have sometimes been vigorously opposed by various business groups. On February 6, 2020, the U.S. Court of Appeals for the Third Circuit decided Greater Philadelphia Chamber of Commerce v. City of Philadelphia,15 which rejected a number of arguments claiming that those bans infringed on free speech. The lawsuit involved the 2017 Philadelphia Wage Equity Ordinance, which, among other things, prohibits employers from inquiring into or relying upon job applicants’ prior wage history in establishing starting pay. The ordinance consisted of two provisions: the “Inquiry Provision” and the “Reliance Provision.” The Inquiry Provision prohibits an employer from asking about a prospective employee’s wage history, and the Reliance Provision prohibits an employer from relying on wage history at any point in the process of setting or negotiating a prospective employee’s wage. Both provisions were upheld by the Third Circuit. Among other things, the court agreed that solving the gender pay gap is a substantial government interest and that the ordinance directly advances that interest.16 The court found that the City Council relied upon sufficient testimony and studies to support the enactment of the Ordinance, including that: (1) the wage gap is substantial and real; (2) numerous experiments have been conducted, which controlled for such variables as education, work experience, and academic achievement, still finding a wage gap; (3) researchers have long attributed the gap to discrimination; (4) existing civil rights laws have been inadequate to close the wage gap; and (5) witnesses who reviewed the data concluded that relying on wage history can perpetuate gender and race discrimination.17 This decision is significant because it upheld the ordinance based on many of the same arguments and analysis that support the rationale for salary history bans generally, including the alleged scientific bases of the gender pay gap and the purported failure of existing anti-discrimination legislation to address that issue. If the Third Circuit’s decision is a guide to the future, salary history bans will continue to be a key factor in employers’ hiring decisions. In addition to salary history bans, some states and localities have recently begun enacting legislation that requires employers to be more transparent about compensation. Those laws come in a variety of forms, 12 Cal. Lab. Code § 1197.5(h), (i). 13 Id. § 1197.5(e). 14 Id. § 1197.5(k)(1). 15 Greater Phila. Chamber of Commerce v. City of Phila., 949 F.3d 116 (3d Cir. 2020). 16 Id. at 143. 17 Id.

4 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP but they often require employers to provide salary range information to applicants or employees. The assumption underlying such laws appears to be that employees will be able to use this information to advocate for higher pay, which over time could help to narrow the pay gap. Colorado was one of the first states to pass such a law; it requires employers to notify employees of “promotional opportunities.” Promotional opportunities are job vacancies that are superior to the job held by at least one employee at the same company. The law mandates that such postings must include a list of information about the position, including detailed compensation and benefits information.18 In particular, the law requires employers to “make reasonable efforts to announce, post, or otherwise make known all opportunities for promotion to all current employees on the same calendar day and prior to making a promotion decision.”19 The law also requires employers to “disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all of the benefits and other compensation to be offered to the hired applicant.”20 The Colorado law also requires employers to “keep records of job descriptions and wage rate history for each employee for the duration of the employment plus two years after the end of employment in order to determine if there is a pattern of wage discrepancy.”21 Violations of the job posting requirements are subject to state agency enforcement or a private right of action.22 In the latter case, the law provides courts the option to provide private litigants with a rebuttable presumption that missing records would have contained information favorable to the employee's claim and an instruction to the jury that failure to keep records can be considered evidence that the violation was not made in good faith.23 This approach to pay transparency has proven quite popular. Many other states are experimenting with similar types of laws. For example, in California, employers must now provide a position's pay scale—a salary or hourly wage range that the employer reasonably expects to pay for a position—in job postings and to third parties that it uses to announce, publish, or otherwise publicize job postings.24 New York’s new law is similar: effective September 17, 2023, employers will have to disclose the compensation or compensation range—i.e., the minimum and maximum annual salary or hourly compensation range that the employer believes is accurate—and job description (if it exists) in advertisements for job, promotion, or transfer opportunities that can or will be performed at least partly in the state.25 Some states have gone even further, enacting laws that require employers to submit periodic reports of various pay and demographic data about their workforce in a manner very similar to what the EEOC briefly required as Component 2 of the federal EEO-1 pay report. The EEO-1 Report is a survey document that has been mandated for more than 50 years. Employers with more than 100 employees, and federal contractors or subcontractors with more than 50 employees, are required to collect and provide to the EEOC certain demographic information (gender, race, and ethnicity) in each of ten job categories.26 On February 1, 2016, the EEOC proposed changes to the EEO-1 report, which would have required more detailed reporting obligations of “Component 2 data,” specifically, data on employees’ W-2 earnings and hours worked.27 On August 29, 2017, the EEOC announced that the OMB, per its authority under the Paperwork Reduction Act, had stayed the collection of Component 2 data. The OMB’s decision was immediately challenged in court. 18 C.R.S.A. § 8-5-201. 19 Id. § 8-5-201(1). 20 Id. § 8-5-201(2). 21 Id., § 8-5-202. 22 Id., § 8-5-203. 23 Id., § 8-5-203(5). The law states that “the court may order appropriate relief, including a rebuttable presumption that records not kept by the employer in violation of section 8-5-202 contained information favorable to the employee’s claim and an instruction to the jury that failure to keep records can be considered evidence that the violation was not made in good faith.” Id. 24 See Cal. Lab. Code § 432.3(c). 25 N.Y. Lab. Law § 194-b. 26 For more information, see the EEOC’s dedicated website for data collections: https://eeocdata.org/. 27 See U.S. Equal Employment Opportunity Commission, Agency Information Collection Activities: Revision of the Employer Information Report (EEO-1) and Comment Request, available at https://www.gpo.gov/fdsys/pkg/FR-2016-02-01/pdf/2016-01544.pdf.

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 5 In National Women’s Law Center v. Office of Management and Budget,28 the District Court for the District of Columbia held that the OMB’s stay was unlawful. Ultimately, the court vacated the stay, holding that it “totally lacked the reasoned explanation that the APA requires.”29 The court issued a series of orders that required the EEOC to complete the Component 2 data collections for calendar years 2017 and 2018.30 Then, on September 12, 2019, the EEOC issued a Paperwork Reduction Act Notice, wherein it stated that it was not planning to continue using the EEO-1 Report to collect Component 2 data information.31 The EEOC’s decision to stop collecting Component 2 data settled the matter only briefly. In 2020, states began to enact laws that required employers to submit data reporting that was very similar to the EEOC’s rescinded Component 2 data reporting requirements. In 2020, California passed its Pay Data Reporting Law. Under that law, on or before March 31, 2021, and each year thereafter, private employers with 100 or more employees were required to submit a pay data report to the California Department of Fair Employment and Housing that includes the number of employees by race, ethnicity, and sex in ten categories, which track the federal EEO-1 categories.32 The report must include previous year W-2 earnings and hours worked for all employees and must be searchable and sortable.33 In 2021, Illinois amended its Equal Pay Act so that private employers with more than 100 employees in Illinois who are required to file an EEO-1 Report with the EEOC must apply to obtain an equal pay registration certificate from the Illinois Department of Labor.34 Those employers must then recertify every two years thereafter. The application must include a copy of the business’s most recently filed EEO-1 Report.35 The law also requires employers to compile a list of all employees during the past calendar year, separated by gender, race, and ethnicity, the county in which the employee works, and the date the employee started working for the business, and report the total wages for those employees. Employers must also submit a statement signed by a corporate officer, legal counsel, or other authorized agent, attesting to the company’s compliance with the Illinois Equal Pay Act and other federal and state antidiscrimination laws, among other things.36 State-level equal pay legislation has developed rapidly over the past few years in ways that touch on many aspects of a company’s operations. At present, this trend shows no signs of decelerating. 28 Nat’l Women’s Law Ctr. v. Office of Mgmt. & Budget, 358 F. Supp. 3d 66 (D.D.C. Mar. 4, 2019). The OMB had justified its stay based on the fact that the data file specifications that employers were to use in submitting EEO-1 data were not contained in the Federal Register notices. Id. at 87. According to the OMB, this meant that the public was not given an opportunity to provide comment on the method by which employers were to submit data and that the EEOC’s burden estimates did not account for the use of those data specifications. But the court held that the data file specifications merely explained how to format a spreadsheet, they did not change the content of the information collected: “[t]he government's argument therefore focuses on a technicality that did not affect the employers submitting the data.” Id. With respect to the burden estimates, the court noted that the OMB had not found that the data file would change the EEOC’s initial estimates, just that it may do so, an assertion the court said was “unsupported by any analysis.” Id. at 88. 29 Id. at 90. 30 See Order, Nat’l Women’s Law Ctr., No. 17-CV-2458 (D.D.C. Apr. 25, 2019), ECF No. 71; see also Press Release, U.S. Equal Employment Opportunity Commission, EEOC Opens Calendar Years 2017 and 2018 Pay Data Collection (July 15, 2019), https://www.eeoc.gov/eeoc/newsroom/release/7-15-19.cfm; Order, Nat’l Women’s Law Ctr., No. 17-CV-2458 (D.D.C. Apr. 25, 2019), ECF No. 71; Order, Nat’l Women’s Law Ctr., No. 17-CV-2458 (D.D.C. Oct. 29, 2019), ECF No. 91; Order, Nat’l Women’s Law Ctr., No. 17-CV-2458 (D.D.C. Feb. 10, 2020), ECF No. 102. 31 Paperwork Reduction Act Notice, 84 Fed. Reg. 48138 (Sept. 12, 2019); see also Press Release, U.S. Equal Employment Opportunity Commission, EEOC Holds Public Hearing on Proposed EEO-1 Report Amendments (Nov. 4, 2019), https://www.eeoc.gov/eeoc/newsroom/release/11-4-19a.cfm; Press Release, U.S. Equal Employment Opportunity Commission, EEOC Holds Public Hearing on Proposed EEO-1 Report Amendments (Nov. 4, 2019), available at https://www.eeoc.gov/eeoc/newsroom/release/11-4-19a.cfm. 32 Cal. Gov. Code § 12999. The law requires that a “private employer that has 100 or more employees and who is required to file an annual Employer Information Report (EEO-1) pursuant to federal law shall submit a pay data report to the department covering the prior calendar year . . ..” The categories of jobs required to be included in the report are: executive or senior level officials and managers, first or mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, service workers.” Id. § 12999(b)(1)(A-J). 33 Id., § 12999(b)(4). 34 820 Ill. Comp. Stat. 112/11(a)-(b). 35 Id. 112/11(c)(1)(A). 36 Id. 112/11(c)(1)(B).

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 7 CASE LAW DEVELOPMENTS IN 2022 AND EARLY 2023 Employers’ compensation practices are increasingly being challenged in court by aggressive plaintiffs’ counsel, the Equal Employment Opportunity Commission, and state agencies. The primary targets for this type of litigation have been companies in the health, education, finance, legal, and technology industries. Those cases continue to reshape the landscape of equal pay litigation across the country. A. Proving The Prima Facie Case The federal EPA utilizes a burden-shifting mechanism for establishing liability. First, an employee must establish a prima facie case of discrimination by showing that: (1) different wages were paid to employees of the opposite sex; (2) the employees performed equal work requiring equal skill, effort, and responsibility; and (3) the employees shared similar working conditions.37 State laws can differ with respect to these factors, but most state laws share a similar burden-shifting framework. Employees must first prove the basic elements of a cause of action before the burden shifts to the employer to show that the alleged wage disparity is for some legitimate, non-discriminatory reason. There is no requirement under the federal EPA for a plaintiff to prove any discriminatory intent or animus on the part of the employer. If the employee establishes a prima facie case, the burden of persuasion then shifts to the employer, who then must establish its defense. Under the federal EPA, the permissible range of legitimate reasons for a wage disparity are explicitly set forth in the statute as four affirmative defenses. They are: (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) any factor other than sex. The fourth defense, the “factor other than sex” defense is a catchall provision that attempts to account for the wide variety of legitimate non-discriminatory reasons that may exist for paying one employee differently than another employee. Like the factors used to establish a prima facie case, the affirmative defenses allowed by individual state laws can be different from those established by the federal EPA. However, with some exceptions, most of those affirmative defenses would also qualify as an affirmative defense under the federal EPA’s catchall “factor other than sex” defense. Accordingly, this analysis will focus on developments under the federal EPA, while noting significant variations in state law where appropriate. This burden-shifting framework forms the skeleton of all EPA claims. It is important to note, however, that even if an employer meets its burden to establish an affirmative defense to an employee’s prima facie 37 Even this skeletal outline of a plaintiff’s prima facie case has not escaped judicial scrutiny in recent years. For example, the district court for the District of Columbia recently had to clarify that a prima facie EPA claim consists of only two elements, not three. In Savignac v. Jones Day, 539 F. Supp. 3d 107 (D.D.C. Apr. 28, 2021), the court was reconsidering its own earlier decision, which had implicitly adopted a standard that would impose on EPA plaintiffs the initial burden of pleading that they were (1) paid less than employees of the opposite sex, (2) for work on jobs requiring “equal skill, effort, and responsibility” that are “performed under similar working conditions,” and (3) that they actually performed “equal work” on the equivalent job. Id. at 109. Quoting Justice Frankfurter, the court noted that “[w]isdom too often never comes, and so one ought not to reject it merely because it comes late,” id. (quoting Henslee v. Union Planters Nat'l Bank & Trust Co., 335 U.S. 595, 600 (1949) (Frankfurter, J., dissenting)), and overturned its earlier decision that had incorrectly applied a three-element test to determine if the plaintiff in that case had met her pleading burden. The court analyzed the language of the EPA closely, noting that it prohibits employers from paying different amounts “for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” Id. (quoting 29 U.S.C. § 206(d)(1)). Under plaintiff’s interpretation, which was adopted by the court, the part of that clause that appears after “equal work,” is meant to define that phrase and is therefore in that sense equivalent to “equal work”; the clause was not intended to state two separate requirements, such that plaintiffs would have to show that they performed equal work and that their jobs were also “equal” or similar as defined by the second part of that clause. Id. at 112-13. The court readily acknowledged that this interpretation was “not obvious from the text alone,” nevertheless, it held that that interpretation best accorded with the Supreme Court’s seminal decision, Corning Glass Works v. Brennan. Id. at 112 (citing Corning Glass Works v. Brennan, 417 U.S. 188 (1974)).

8 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP case, the employee still has an opportunity to show that the employer’s stated reason for the wage disparity is merely a pretext for discrimination. 1. Establishing A Wage Disparity The first and most fundamental element of a plaintiff’s prima facie case is establishing that a wage disparity exists, i.e., that different wages were paid to employees of a different sex for the same work. In a case that involves just one or a handful of plaintiffs, this might only require the identification of one or more alleged “comparator” employees who were paid at a higher rate. This requirement is often not difficult to meet. The “One-Comparator Rule”. Many courts have held that a plaintiff can establish a wage disparity by comparing themselves to just one member of the opposite sex who is paid more, even where the plaintiff is better paid then other comparable employees of the opposite sex.38 However, other courts have pointed to such situations as tending to disprove the existence of discrimination if, for example, plaintiff was paid more than other comparators of the opposite sex, or if other members of plaintiff’s sex were paid more than plaintiff and some members of the opposite sex.39 This question, whether an equal pay plaintiff may establish a prima facie case by comparing themselves to just one comparator, seems like a straightforward legal issue. But it has given rise to many conflicting decisions among different courts and different circuits. For example, In O’Reilly v. Daugherty Systems, Inc.,40 the District Court for the Eastern District of Missouri had to pick through inconsistent case law on this point just within its own circuit. The plaintiff argued she had established her prima facie case because she had identified at least one male comparator who was paid more than her.41 Relying on the sheer weight of authority, and without trying to resolve the conflict directly, the court noted that “district courts in this circuit have repeatedly found that plaintiffs fail to establish a prima facie case when the evidence supports that the number of males paid the same or less than the plaintiff significantly outnumbers the number of males paid more.”42 The court concluded that the plaintiff could not base her prima facie case on one comparator: “[Plaintiff] admitted that 10 male employees were either paid less than she or did not perform equal work. Given that alleged 38 See, e.g., Newman v. Amazon.com, Inc., No. 21-cv-531(DLF), 2022 WL 971297, at *6 (D.D.C. Mar. 31, 2022) (holding that a female plaintiff did not plead herself out of court by pointing to female comparators in addition to males: “An EPA plaintiff need not allege that other female coworkers were paid less than male coworkers. . .. She need only allege that she was paid less than male employees who performed similar work”) (internal citations omitted); Gutierrez v. City of Converse, No. 5:17-cv-01233-JKP, 2020 WL 156707, at *3 (W.D. Tex. Jan. 10, 2020) (acknowledging that the evidence showed that a female firefighter was better paid than all of her male peers with the exception of one, but holding: “[i]t is enough for the plaintiff to show that there is discrimination in pay with respect to one employee of the opposite sex”) (quoting Lenihan v. Boeing Co., 994 F. Supp. 776, 799 (S.D. Tex. 1998)); Allen v. Staples, Inc., 84 Cal. App. 5th 188, 194-95 (2022) (holding that plaintiff had established prima facie case by pointing to one comparator, even though employer showed that females in plaintiff’s position were paid more than males on average, and that some males were paid less than plaintiff: “Authorities under the federal EPA have held that a plaintiff claiming gender-based pay disparity may establish a prima facie case by showing that she was paid less in salary than a single male comparator”). 39 See, e.g., Davis v. Inmar, Inc., No. 21-cv-03779 SBA, 2022 WL 3722122 (N.D. Cal. Aug. 29, 2022) (granting motion to dismiss equal pay claim because complaint alleged only one male comparator was paid more than plaintiff, without alleging facts that would justify that comparison: “the Complaint compares Davis to a single male employee, without alleging facts to support such a limited comparison”); Jones v. Jefferson City Pub. Sch., No. 2:18-cv-4054, 2019 WL 1118557, at *2 (W.D. Mo. Mar. 11, 2019) (holding that plaintiff’s admission that both male and female teachers were paid more than him was fatal to his claim because “if sex-based discrimination is not the reason for disparity in pay, the disparity cannot form the basis of a claim under the Equal Pay Act”). 40 O’Reilly v. Daugherty Sys., Inc., No. 4:18-cv-01283 SRC, 2021 WL 4504426 (E.D. Mo. Sept. 30, 2021). 41 Id. at *4. The court first took note of apparently inconsistent decisions by the Eighth Circuit on this point. In Hutchins v. Int'l Bhd. of Teamsters, 177 F.3d 1076 (8th Cir. 1999), the Eighth Circuit upheld a decision that found a prima facie case where the evidence showed that plaintiff was paid less than twelve male employees, but which also showed that plaintiff was paid more than eight comparable males, and that five other comparable females were paid higher salaries than their male peers. O’Reilly, 2021 WL 4504426, at *5; see also Euerle-Wehle v. United Parcel Serv., Inc., 181 F.3d 898, 901 (8th Cir. 1999). On the other hand, in Sowell v. Alumina Ceramics, Inc., 251 F.3d 678, 684 (8th Cir. 2001), the Eighth Circuit found that a plaintiff failed to establish a prima facie case under Title VII where the evidence showed that she was paid the same as, or more than, at least some males in the same position. O’Reilly, 2021 WL 4504426, at *5. 42 O’Reilly, 2021 WL 4504426, at *5 (citing Evans v. Autozone Stores, Inc., No. 05-cv-1086, 2008 WL 697752, at *10 (W.D. Ark. Mar. 13, 2008); Garrard v. First Step, Inc., No. 1:14-cv-1033, 2015 WL 2248217, at *2 (W.D. Ark. May 13, 2015); Peniska v. CJ Foods Inc., No. 8:19-cv-277, 2021 WL 24729 (D. Neb. Jan. 4, 2021)).

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 9 comparators that either were paid less did or did not perform equal work outnumber by a ten-to-one margin the lone alleged comparator who was paid more for equal work, the Court concludes that [plaintiff] fails to establish a prima facie EPA claim.”43 But in Eisenhauer v. Culinary Institute of America,44 the District Court for the Southern District of New York came to a different conclusion. The plaintiff in that case had identified only a single relevant comparator to establish her claim under the EPA and the New York Equal Pay Law. The employer argued that the plaintiff could not rely on a single comparator to establish her prima facie case, especially since there were other comparable males who made less than her and other females who made more than other males.45 Both sides relied on the same Second Circuit case in support of their positions, LavinMcEleney v. Marist College.46 The court examined the reasoning in that case and concluded: “LavinMcEleney, as well as the discussions from the Fourth Circuit cited by the Second Circuit, show that a plaintiff may identify a single male comparator at the initial stage of the case, as Plaintiff has done here, but can later introduce additional data when addressing the ultimate merits of the case at trial. In each case, the plaintiff was required to identify a single male employee at the initial stage of litigation in order to establish a prima facie burden.”47 Despite this rationale, many courts are unwilling to allow an equal pay lawsuit to proceed where the evidence tends to refute the existence of wage discrimination. Some courts have even devised novel tests to escape the “one comparator” rule in certain circumstances. For example, in Duke v. College of San Francisco,48 the District Court for the Northern District of California dismissed the plaintiff’s first attempt at pleading an EPA claim because he had not alleged that he was paid less than the average of wages paid to females who performed substantially equal work.49 But when the plaintiff amended his complaint to compare himself with the only other Associate Vice Chancellor of Student Affairs who held that position during the relevant time period, the case was allowed to proceed: “When there is only a single opposite-gender employee with similar work, it is appropriate to compare the plaintiff's pay against that of a single employee.”50 Other courts hold to the “one comparator” rule even in these circumstances, expressly rejecting the use of a different test for a professional setting.51 Wage Rates or Total Compensation. The question of how to compare 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 43 Id. at *6. 44 Eisenhauer v. Culinary Inst. of Am., No. 19-cv-10933 (PED), 2021 WL 5112625 (S.D.N.Y. Nov. 3, 2021). 45 Id. at *4. 46 Lavin-McEleney v. Marist Coll., 239 F.3d 476 (2d Cir. 2001). 47 Eisenhauer, 2021 WL 5112625, at *5. So, while a single comparator may be insufficient to prove discrimination as a matter of fact before a jury, the court reasoned that the Second Circuit held that it is sufficient to establish a prima facie case prior to trial. The court further reasoned that it would contravene precedent in the Second Circuit to allow an employer to attack a plaintiff’s prima facie case based on the existence of other comparators. To do so, the employer would have to establish as a matter of fact that those comparators were similarly situated to the plaintiff or their comparator. But that question is the province of the jury, and therefore cannot be decided before trial: “Put another way, if Defendant cannot establish the absence of a pay disparity as a matter of law, then Plaintiff's prima facie showing must stand, despite the existence of employees who may serve as counterexamples to wage discrimination at trial.” Id. at *6. 48 Duke v. Coll. of S.F., 445 F. Supp. 3d 216 (N.D. Cal. Apr. 10, 2020). 49 According to the court, “[t]he proper test for establishing a prima facie case in a professional setting such as that of a college is whether the plaintiff is receiving lower wages than the average of wages paid to all employees of the opposite sex performing substantially equal work and similarly situated with respect to any other factors, such as seniority, that affect the wage scale.” Id. at 229 (quoting Hein v. Or. Coll. of Educ., 718 F.2d 910, 916 (9th Cir. 1983)). 50 Id. 51 See, e.g., Mullenix v. Univ. of Tex. at Austin, No. 1:19-cv-1203-LY, 2021 WL 5881690 (W.D. Tex. Dec. 13, 2021) (“[U]nder Fifth Circuit precedent, a plaintiff need only identify one comparator in a position requiring equal skill, effort, and responsibility under similar working conditions as the plaintiff.”) (citing Weaver v. Basic Energy Servs., L.P., 578 F. App'x 449, 451 (5th Cir. 2014); Vasquez v. El Paso Cnty. Cmty. Coll. Dist., 177 F. App'x 422, 425 (5th Cir. 2006); Gillis v. Turner Indus., Ltd., 137 F.3d 1349, (5th Cir. 1998)).

10 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP is yet another seemingly simple legal question, which has bedeviled the courts and given rise to many arguably conflicting decisions. For example, in Wiler v. Kent State University,52 the female head coach of a university’s field hockey team alleged that her employer violated the EPA and Title VII by paying her less than her male counterparts. But her claim was based on the fact that other coaches at the same university earned a higher total compensation, which was the sum of their pay, performance bonuses, and camp income.53 The court first held that the proper inquiry under the Sixth Circuit must focus on plaintiff’s and her comparators’ respective rates of pay, not total compensation. While that is not always easy to identify, the court held that, in this case, it was equivalent to the coaches’ base salaries and their performance bonus rates because those are the only components of compensation that are set by the university.54 Camp income had to be excluded because coaches had no obligation to run a camp, and the compensation earned from camps varied depending on factors over which the university had no control.55 “Where an employee exercises a significant degree of discretion or control over earning a portion of her income, that portion cannot comprise part of the common denominator for the base rate of pay. A contrary conclusion risks incentivizing strategic behavior for artificial or leverage purposes.”56 Using that metric, the court eliminated all but one of plaintiff’s chosen comparators because they were not paid at a higher rate than plaintiff, even though they earned higher total compensation.57 The court left it to the jury to decide whether the final comparator’s position was truly equal to plaintiff’s position and whether the university had established its “factor other than sex” defense.58 The issue was further clarified by the Fourth Circuit in Sempowich v. Tactile Systems Technology, Inc.59 In that case, a regional sales manager for a medical device manufacturer alleged 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.60 The court applied the EEOC’s definition of “wages,” which includes all payments made to an employee whether provided as base salary, bonus, or any other form of compensation.61 In an appeal joined by the EEOC as amicus curiae, the Fourth Circuit disagreed, holding that the district court should have made its decision based on a comparison of base salaries.62 According to the Fourth Circuit, “[t]he text of the Equal Pay Act unambiguously states that an employer may not ‘discriminate . . . between employees on the basis of sex by paying wages to employees . . . at a rate less than the rate at which he pays wages to employees of the opposite sex.’”63 There was no need to consider the regulatory definition of “wages” because the statute clearly puts its emphasis on wage rates. But even so, the Fourth Circuit held that the district court had misinterpreted the definition: “The term ‘wages’ includes commissions because, just as with salary, an employer could not pay commissions to a female employee at a lower rate than a similarly situated male employee. This does not mean that all types of remuneration should be combined into one lump sum when comparing the earnings of a male and female employee.”64 52 Wiler v. Kent State Univ., No. 5:20-cv-00490, 2022 WL 15633387 (N.D. Ohio Oct. 28, 2022). 53 Id. at *6. 54 Id. 55 Id. at *7. 56 Id. 57 Id. at *7-8. 58 Id. at *9-10. 59 Sempowich v. Tactile Sys. Tech., Inc., No. 5:18-cv-488-D, 2020 WL 6265076 (E.D.N.C. Oct. 23, 2020). 60 Id. at *23. 61 Id. Plaintiff argued that including her incentive compensation would frustrate the purpose of the EPA because it would require “harder work for commissioned employees with lower base salaries to achieve equal pay.” Id. The court rejected that argument, holding that the EEOC’s definition of wages comports with the text of the EPA and Supreme Court and Fourth Circuit precedent. Id. at *23-24. 62 Sempowich v. Tactile Sys. Tech., Inc., 19 F.4th 643 (4th Cir. 2021). 63 Id. at 655 (quoting 29 U.S.C. § 206(d)(1)) (emphasis in original). 64 Id.

©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 11 Non-Wage Components of Compensation. 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 plaintiff’s reliance on less clear-cut bases of compensation can create problems of proof that may result in dismissal.65 For example, in the high-profile case, Morgan v. U.S. Soccer Federation, Inc.,66 a group of professional women’s team players alleged that they were paid less than male professional soccer players employed by the same organization. The compensation for women’s team and men’s team players was determined by different collective bargaining agreements (“CBAs”). The women’s team players alleged that their CBA provided for lower bonuses than the men’s team.67 The employer pointed to players’ total compensation, arguing that when compared on a cumulative and average per-game basis, the facts showed that the women’s team players were paid more in total compensation than the men’s team players.68 The court found that the women’s team players’ focus on bonuses ignored the other benefits provided by their compensation arrangement, including guaranteed annual salaries and severance pay that the male players did not receive.69 The court concluded that “[t]o consider these bonus provisions in isolation would run afoul of the EPA, which expressly defines ‘wages’ to include all forms of compensation, including fringe benefits.”70 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,71 a senior sales executive for a pharmaceutical laboratory alleged 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. 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.”72 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.”73 65 Williamson v. Digital Risk, LLC, No. 6:18-cv-767-Orl-31EJK, 2020 WL 434954, at *5 (M.D. Fla. Jan. 28, 2020) (refusing to dismiss some discrimination claims, including a claim under Title VII, because plaintiff had introduced direct evidence of intentional discrimination, but with respect to her EPA claim, holding that the plaintiff had failed to produce evidence that male employees were entitled to a larger percentage of commissions than she received: “Plaintiff has not argued, much less shown, that the male employees were in fact paid more than her”). 66 Morgan v. U.S. Soccer Fed’n, Inc., 445 F. Supp. 3d 635 (C.D. Cal. 2020). 67 Id. at 652. 68 Id. at 653. 69 Id. at 654. 70 Id. (citing 29 C.F.R. § 1620.12(a); 29 C.F.R. § 1620.11(a)). The Court also rejected plaintiffs’ reliance on an analysis of what they might have been paid if they had been compensated under the same terms as the men players’ CBA. “This approach—merely comparing what each team would have made under the other team's CBA—is untenable in this case because it ignores the reality that the [men players] and [women players] bargained for different agreements which reflect different preferences, and that the [women players] explicitly rejected the terms they now seek to retroactively impose on themselves.” Id. at 655. The court found that the history of negotiations between the women players and their employer showed that they had rejected an offer to be paid under similar terms as the men’s team and instead opted for different terms that provided benefits to the women players that were difficult to value: “One of the defining features of the [women players’] CBA is its guarantee that players will be compensated regardless of whether they play a match or not. This stands in stark contrast to the [male players’] CBA, under which players are only compensated if they are called into camp to play and then participate in a match. It is difficult to attach a dollar value to this ‘insurance’ benefit, and neither party attempts to do so here.” Id. 71 Pate v. Med. Diagnostic Labs. LLC, No. 7:19-cv-126-FL, 2021 WL 965906 (E.D.N.C. Mar. 15, 2021). 72 Id. at *17. 73 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”).

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