Pay Equity Litigation Update: How The EEOC Has Pursued Its Equal Pay Focus In Fiscal Year 2019

Seyfarth Synopsis: As we look ahead to the end of the year, and Seyfarth Shaw’s annual analysis of trends and developments in EEOC litigation (see here for last year’s publication), we can begin to see how the EEOC has shaped equal pay litigation in the federal courts in 2019. For years, the Fourth Circuit has been a hotbed for equal pay cases, and FY 2019 continued that trend. Employers should be mindful of this Circuit’s litigation as a trend for things to come across the country.

Since 2012, the EEOC has included equal pay protections as one of its six substantive area priorities in its Strategic Enforcement Plan (“SEP”). The SEP guides the EEOC’s enforcement activity in terms of the types of lawsuits it brings and the theories of law that it champions and pursues.

The EEOC reports – and our yearly analysis has consistently confirmed – that the six priorities identified in the SEP are lightning rods for increased EEOC litigation, and are more often the subject of the agency’s conscious, directed development of the law. For that reason, we believe that employers are well advised to understand how the EEOC interprets and applies its enforcement priorities, as they tend to be a reliable guide to the types of employers, industries, and business practices that the EEOC is actively targeting. This post will describe the legal developments in FY 2019 within the EEOC’s equal pay priority.

EEOC Litigation Developments In 2019

Equal Pay Act cases are often highly fact-driven and therefore notoriously difficult for employers to scuttle with pretrial motions. Several recent decisions arising out of EEOC-initiated litigation are illustrative of this trend.

For example, in EEOC v. Enoch Pratt Free Library, No. 17-CV-2860, 2019 WL 5593279 (D. Md. Oct. 30, 2019), the District Court for the District of Maryland denied the EEOC’s and the employer’s cross-motions for summary judgment. With respect to the motion filed by the EEOC, the District Court found that genuine issues of material fact persist regarding elements of the EEOC’s prima facie case. Id. at *5. In particular, the District Court held that the evidence showed that employees within the charging party’s position, library supervisors, perform a wide variety of job duties across various library branches: “Overall, the branches generally have varying responsibilities in light of their different physical plants, different clientele, and different community resources. . . . A factfinder should therefore assess whether the duties performed by [supervisors] are sufficiently similar to establish a prima facie case of unequal pay for equal work.” Id.

With respect to the employer’s motion, the District Court applied the reasoning of a recent decision out of the Fourth Circuit, EEOC v. Maryland Insurance Administration, 879 F.3d 114, 124 (4th Cir. 2018). The EEOC alleged that the employer paid three former female fraud investigators less than it paid four former male fraud investigators with comparable credentials and experience. The Fourth Circuit held that the EPA requires “that an employer submit evidence from which a reasonable factfinder could conclude not simply that the employer's proffered reasons could explain the wage disparity, but that the proffered reasons do in fact explain the wage disparity.” Id. at 129. The employer argued that it could not have discriminated against the charging parties because it used the state's Standard Salary Schedule, which classifies each position to a grade level and assigns each new hire to a step within that grade level. The Fourth Circuit rejected this defense because it found that the employer exercised discretion each time it assigns a new hire to a specific step and salary range based on its review of the hire's qualifications and experience.

In Enoch Pratt Free Library, the employer had also argued that any wage differential was due to a factor other than sex, rather than due to discrimination, based on its use of a facially neutral salary scale, the Managerial and Professional Society Salary Policy (“MAPS”), to determine compensation for newly hired library supervisors. 2019 WL 5593279, at *6. The District Court held, however, that that policy did not necessarily compel any specific salary to be awarded to a new hire because it left open the possibility that the employer could apply discretion with respect to setting starting salaries. Id. Applying Maryland Insurance Administration, the District Court concluded that “[the EEOC’s comparator] was hired at a rate not only higher than the female [library supervisors] represented by the EEOC, but also significantly above the salary he had received during his first tenure at [employer]. Given these facts, combined with the inherent discretion within the MAPS policy, genuine factual questions exist about how defendants arrived at [the comparator’s] salary.” Id. at *7.

An employer’s burden at the motion to dismiss stage is even higher. For example, in EEOC v. George Washington University, No. 17-CV-1978 (CKK), 2019 WL 2028398 (D.D.C. May 8, 2019). the District Court for the District of Columbia denied an employer’s motion to dismiss even though the complaint at issue did not explicitly allege how the positions at issue were equal with respect to skill, effort, and responsibility. In that case, the EEOC had brought a lawsuit on behalf of a female university Director of Athletics, who alleged that a male colleague was treated more favorably and given greater opportunities because of his sex. Id. at *1. The University allegedly advertised a new position in its athletics department, but plaintiff had been informed that the job was off-limits to her because the University had already decided to hire her male coworker. Id. at *2. The position paid far more than plaintiff’s position.

The University moved to dismiss the complaint. The District Court held that the complaint “straightforwardly pleads that [plaintiff] was paid less as Executive Assistant than [comparator] was paid as a Special Assistant for substantially the same job responsibilities.” Id. at *4. The Court held that there was no reason for the complaint to get into the equal skill, effort, and responsibility, or other similar working conditions of those two positions, because at the motion to dismiss stage, a court cannot dismiss a complaint even if the plaintiff did not plead the elements of a prima facie case.

Implications For Employers

As these cases demonstrate, employers face considerable hurdles when trying to dispense with an equal pay claim early in the litigation. The fact-dependent nature of those claims often block an easy win at the motion to dismiss or summary judgment stage. When coupled with the increased stakes that come with litigating against the EEOC, these developments are yet another reminder that employers should be proactive about identifying and addressing pay equity risks. Even a facially neutral compensation policy may not be enough to save employers from expensive, protracted litigation if and when the EEOC comes knocking.

Our annual comprehensive analysis of trends in EEOC litigation will be published at the end of the calendar year. As always, we will continue to monitor EEOC litigation, including as it relates to equal pay issues, and keep our readers apprised of developments. We look forward to sharing lessons learned from FY 2019 at the beginning of 2020!