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Kouba v. Allstate Ins. Co.

United States Court of Appeals for the Ninth Circuit

May 14, 1982, Argued and Submitted ; October 29, 1982, Decided

Nos. 81-4536, 81-4566

Opinion

 [*874]  OPINION

CHOY, Circuit Judge:

This appeal calls into question the scope of the "factor other than sex" exception to the Equal Pay Act of 1963 1 [**2]  as incorporated into Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., by the Bennett Amendment. 2 Because the district court misconstrued the exception, we reverse and remand.

Allstate Insurance Co. computes the minimum salary guaranteed to a new sales agent on the basis of ability, education, experience, and prior salary. During an 8-to-13 week training period, the agent receives  [*875]  only the minimum. Afterwards, Allstate pays the greater of the minimum and the commissions earned from sales. A result of this practice is that, on the average, female agents make less than their male counterparts.

Lola Kouba, representing a class of all female agents, argued below that the use of prior salary caused the wage differential and [**3]  thus constitutes unlawful sex discrimination. Allstate responded that prior salary is a "factor other than sex " within the meaning of the statutory exception. The district court entered summary judgment against Allstate, reasoning that (1) because so many employers paid discriminatory salaries in the past, the court would presume that a female agent's prior salary was based on her gender unless Allstate presented evidence to rebut that presumption, and (2) absent such a showing (which Allstate did not attempt to make), prior salary is not a factor other than sex.

] The Equal Pay Act prohibits differential payments between male and female employees doing equal work except when made pursuant to any of three specific compensation systems or "any other factor other than sex." These exceptions are affirmative defenses which the employer must plead and prove. Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S. ct. 2223, 41 L. Ed. 2d 1 (1974) (Claim brought under the Equal Pay Act).

Because Kouba brought her claim under Title VII rather than directly under the Equal Pay Act, 3 Allstate contends that the standard Title VII rules govern the allocation [**4]  of evidentiary burdens. It cites Texas Department  of Community Affairs v. Burdine, 450 U.S. 248, 253, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981), for the proposition that under Title VII an employee alleging sex discrimination bears the burden of persuasion at all times as to all issues, and concludes that Kouba failed to carry the burden of showing that the wage differential did not result from a factor other than sex. 4

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691 F.2d 873 *; 1982 U.S. App. LEXIS 24479 **; 30 Fair Empl. Prac. Cas. (BNA) 57; 30 Empl. Prac. Dec. (CCH) P33,123

LOLA KOUBA, a/k/a LOLA HOGAN, individually and on behalf of all others similarly situated, Plaintiff-Appellee, UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff in Intervention-Appellee, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellant

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of California. Lawrence W. Karlton, District Judge, Presiding.

Disposition: REVERSED and REMANDED.

CORE TERMS

salary, sex, Equal Pay Act, employees, factors, wage differential, district court, female, business reason, differential

Labor & Employment Law, Wage & Hour Laws, Equal Pay, Defenses, Business & Corporate Compliance, Federal & State Interrelationships, Equal Pay Act, General Overview, Discrimination, Disparate Treatment, Title VII Discrimination, Enforcement