©2024 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 63 is merely a pretext for discrimination. Inconsistent application of work policies, as well as shifting and inconsistent testimony regarding the proffered justifications, are red flags that can lead to a finding of pretext. Most often this is considered by courts as the final step of the burden-shifting scheme applicable to EPA claims, meaning that the burden shifts back to plaintiff to establish pretext. But a few recent decisions have cast the exact nature of the burden shifting regime in doubt under both federal and state law, at least in some jurisdictions. In Wilder v. Stephen F. Austin State University,516 the District Court for the Eastern District of Texas held that EPA plaintiffs never bear the burden to establish pretext. In that case, a female professor alleged she was paid less than a similarly situated male professor. The employer argued that it had hired plaintiff’s comparator at a higher salary because he had replaced a tenured Full Professor whereas plaintiff had replaced an Assistant Professor, so there was more money in the budget to pay a higher salary when plaintiff’s comparator was hired.517 Plaintiff argued that this explanation was a pretext. Noting the differences in proving pretext under the McDonnell Douglas framework versus the framework applied under the EPA, the court held that, under the EPA, the defendant always keeps the burden of production and persuasion after a plaintiff has established a prima facie case.518 Accordingly, the impetus was on the employer to prove that the pay disparity can be explained by factors other than sex. The court held that it had not done so. Among other things, the court noted that the employer had chosen not to fix the known pay disparity when it was discovered: “There are genuine factual disputes about whether [employer] violated the EPA, and a jury could even decide that [employer] willfully violated the Act in light of the fact that the university chose not to fix a wage gap over the course of two academic years.”519 Patel v. Tungsten Network, Inc.,520 addressed this issue under California’s EPA statute. In that case, a client relationship manager brought suit under the California EPA and the California Fair Employment and Housing Act (“FEHA”), alleging pay discrimination.521 The court first granted the employer’s motion for summary judgment on the FEHA claim because it had met the requirements of the McDonnell Douglas burden-shifting framework applied to such claims.522 The court came to a different conclusion regarding plaintiff’s claim under the California EPA, specifically because of the heightened standard for a “factor other than sex” defense under that statute.523 It held that a defendant in a California EPA claim must do 516 Wilder v. Stephen F. Austin State Univ., 552 F. Supp. 3d 639 (E.D. Tex. 2021). 517 Id. at 652-53. Plaintiff argued that this defense should fail as a matter of law, likening it to the discredited “market forces” defense, which attempts to justify a wage disparity on the basis of the different market prices for male workers versus female workers. Or, as the court put it, “defendants cannot avoid liability for paying employees of one sex more than the other by chalking it up to inherently discriminatory market practices.” Id. at 653. But the court saw differences between that defense and what the employer was asserting in this case. “Saying we had more money available that year’ is different from saying ‘men are generally paid more in this market.’ The former recognizes financial limitations without regard to a prospective employee's sex, while the latter perpetuates a discriminatory industry practice. Therefore, the court is not willing to say that [employer’s] budget-line defense constitutes a ‘market forces’ argument so as to fail as a matter of law.” Id. 518 The court did acknowledge that several older cases imply that the burden should shift back to the plaintiff to prove pretext after the defendant met its burden to establish an affirmative defense. But the court held this was wrong, relying on the Fifth Circuit’s holding in Lindsley v. TRT Holdings, Inc. to conclude that “the court will always consider pretext if the analysis gets that far, but the burden never shifts back to the plaintiff in an EPA claim.” Id. at 654 (citing Lindsley v. TRT Holdings, Inc., 984 F.3d 460, 466 (5th Cir. 2021)). 519 Id. at 655. Other courts in the same circuit have relied on the same Fifth Circuit case to draw the opposite conclusion. See Mullenix v. Univ. of Tex. at Austin, No. 1:19-cv-1203-LY, 2021 WL 5881690 (W.D. Tex. Dec. 13, 2021) (“The burden-shifting framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), governs claims under the EPA.”) (citing Lindsley v. TRT Holdings, Inc., 984 F.3d 460, 466 (5th Cir. 2021)). 520 Patel v. Tungsten Network, Inc., No. 2:20-cv-7603-SB-JEM, 2021 WL 4776348 (C.D. Cal. Sept. 15, 2021). 521 Id. at *1. 522 The employer had pointed to differences in experience, qualifications, and education to justify the wage disparity, which the court held was a bona fide, non-discriminatory reason. Id. at *4. Under the burden shifting regime applicable to FEHA claims, the McDonnell Douglas framework, the burden then shifted back to the plaintiff to establish pretext. The court found that plaintiff failed to do so according to the rather stringent standard applied under McDonnell Douglas: “Plaintiff's assertions fail to raise the level of ‘substantial, responsive evidence’ necessary to show Defendant's bona fide, nondiscriminatory reason for the challenged wage disparity was pretextual.” Id. at *5. 523 The court first held that the California EPA should be interpreted in line with the federal EPA with respect to which burden-shifting framework to apply. Prior California precedent had held that the McDonnell Douglas framework should apply to California EPA claims. Id. (citing Green v. Par Pools, Inc., 111 Cal. App. 4th 620, 626 (2003)). However, the court relied on the more recent decision in Rizo to find that: “this burden-shifting test is inapplicable to the federal EPA because ‘EPA claims do not require proof of
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