©2024 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 49 sex” defense in a way that provides an easy path out of litigation for employers. Although broad in terms of what it will recognize as legitimate bases to justify a pay disparity, the defense ultimately hinges on a fact and case-specific analysis that allows for few bright line rules. That provides an advantage to plaintiffs and plaintiffs’ lawyers because, when facing the cost and uncertainty of trial, many employers may choose to settle at an inflated value rather than continue to defend a lawsuit on the merits. 2. Additional State Law Requirements To Establish The Factor Other Than Sex Defense As with the standards for establishing a prima facie case, the affirmative defenses allowed to a defendant under state laws may, arguably, vary from what is allowed under the federal EPA. For example, under the California Fair Pay Act, the “factor other than sex” defense is subject to some additional requirements. Under California’s statute, a defendant must demonstrate “[a] bona fide factor other than sex, such as education, training, or experience.”384 The statute further clarifies that “this factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity.”385 The California statute also requires that any affirmative defense must be “applied reasonably” and “account for the entire wage differential.”386 Finally, the statute explicitly excludes the use of prior salary as a justification for a wage disparity.387 Most of these additional requirements were enacted in 2015 and became effective on January 1, 2016. The courts are still working out how they should be interpreted and applied, and how exactly they depart from the federal requirements. Relevant, helpful decisions have been few and far between. In Eisenhauer v. Culinary Institute of America,388 the Second Circuit addressed a relatively narrow distinction between federal and state EPA laws. In that case, a female professor at a college and culinary school brought claims under the federal and New York EPA statutes, alleging she was paid less than a male professor who managed a similar course load. Plaintiff and her comparator had been hired at different salaries, and that pay disparity increased over time due to the to the sex-neutral terms of a compensation plan, which, among other things, gave the same percentage increase to professors’ salaries each year.389 The plaintiff argued that the plan could not be a “factor other than sex” because it created a pay disparity that was unconnected to any differences between her and her comparator’s job. The Second Circuit framed this question as asking whether the federal EPA requires an employer to show that the factor is related to the job in question.390 The Second Circuit held that no such requirement exists under the federal EPA. In so holding, the court clarified its earlier precedent, Aldrich v. Randolph Central School District,391 which held that a facially sexneutral job-classification system alone is insufficient to constitute a “factor other than sex.”392 In Aldrich, the Second Circuit held that a job-classification system may only serve as a factor other than sex “when the employer proves that the job classification system resulting in differential pay is rooted in legitimate business-related differences in work responsibilities and qualifications for the particular positions at different credentials, experience, and achievements, but holding that while such “potential differences in qualifications, certifications, and employment history could explain the wage disparity between the claimants and [comparator], the EPA requires that a factor other than sex in fact explains the salary disparity”) (emphasis in original). 384 Cal. Lab. Code § 1197.5(a)(1)(D). 385 Id. The statute further clarifies that “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.” Id. 386 Id. § 1197.5(a)(2-3). 387 Id. § 1197.5(a)(4). 388 Eisenhauer v. Culinary Inst. of Am., 84 F.4th 507 (2d Cir. 2023). 389 Id. at 512. 390 Id. 391 Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520 (2d Cir. 1992). 392 Eisenhauer, 84 F.4th at 515.
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