EEOC v. Sears, Roebuck & Co. - 839 F.2d 302 (7th Cir. 1988)

Rule:

Even absent a showing of equal work, there is a cause of action under Title VII when there is direct evidence that an employer has intentionally depressed a woman's salary because she is a woman.

Facts:

EEOC commissioner filed a charge against Sears, Roebuck & Company (Sears) on August 30, 1973. After efforts at settlement and conciliation failed, the EEOC brought suit against Sears on October 22, 1979, alleging several claims of nationwide discrimination against women (and minorities, but those claims were later withdrawn) in employment practices. Before trial the district court denied Sears' motion to dismiss, which was based on several grounds including an assertion that an EEOC attorney who headed the Sears investigation had a conflict of interest because he served on the Board of Directors of the National Organization for Women Legal Defense and Education Fund (LDEF) prior to and at the time NOW filed charges against Sears with the EEOC. During the ten-month trial which began September 13, 1984, and consumed 135 trial days, the EEOC sought to prove that Sears engaged in a nationwide pattern or practice of discrimination against women from March 3, 1973 to December 31, 1980, by failing to hire and promote females into commission sales positions on the same basis as males and by paying female checklist management employees less than similarly situated male employees. The district court on January 31, 1986, held for Sears on all claims and also denied the EEOC's outstanding motion for partial summary judgment. The EEOC appeals the district court's judgment on the disparate treatment claims and its denial of partial summary judgment regarding a provision that had existed in the Sears Personnel Manual until 1974 allowing a male employee a day off with pay when his wife gave birth. Sears cross appeals the district court's refusal to dismiss the case on the alleged ground of conflict of interest.

Issue:

Did EEOC manage to establish that Sears discriminated against women employed in checklist management positions by paying them less than men with similar jobs?

Answer:

No.

Conclusion:

The court found that even after the implementation of the Executive Compensation Program and its set salary ranges, other factors such as performance evaluations, previous job history, number of relocations, seniority, geographic location, and the individual discretion of managers regarding timing and size of salary increases still influenced the salaries of individual checklist employees. The court also found that the process of phasing in the new program took several years because of Sears' policy of not reducing an employee's pay. Salary increases for employees above the maximum were cut until they came within the range. The court found that not only were salaries not standardized for "several years" after implementation of the Executive Compensation Program, but the company did not formally change actual job structures immediately upon implementing the program. The court found that "Sears gradually communicated changes to employees over a period of years." Job activities were standardized through an informal communication of changes to employees that involved changes in job evaluations and creation of new job categories. The EEOC had the burden of meeting the equal work standard of the Equal Pay Act. That standard provides that an employer may not discriminate on the basis of sex by paying unequal wages for "equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions." To succeed, the EEOC "must establish, based upon 'actual job performance and content -- not job titles, classifications or descriptions' that the work performed . . . is substantially equal." The district court found that the EEOC, in attempting to prove substantial equality of the jobs at issue, did not introduce any credible evidence of job performance or content. Instead, the EEOC relied on the job descriptions that emanated from Sears' Hay Guide Chart-Profile Method of job evaluations to prove substantial equality. The EEOC contended that the factors measured by the Hay Method -- problem solving, know-how, and accountability -- were the equivalent of the EPA factors skill, effort, and responsibility, and that if Sears jobs received an equal number of points (for problem solving, know-how, and accountability), which would then place those jobs in the same salary range, the jobs would be "substantially equal" under the EPA's equal work standard. The district court found, "EEOC therefore relies on Sears' own analysis of its job categories and codes completed in 1976 as proof that the persons in each 1976 job code were performing substantially similar work." The EEOC's method of comparing jobs from 1973-1975 was somewhat different. The EEOC recognized that it could not rely on the "C" codes assigned to various jobs, because those codes were not valid indicators of job content. The EEOC thus worked backward from the 1976 job codes, trying to develop "correspondences" between "C" job codes and 1976 job codes. Because there were many 1976 job codes associated with one "C" code, the process of determining correspondences involved subjective judgments by the EEOC, based on patterns of movement among jobs without any knowledge of job content. Many employees were left out of the 1973-1975 analyses because the EEOC worked backwards, comparing the 1976 job codes of persons who had not been promoted or transferred in 1976 with "C" job codes of those persons at year-end in 1975. To be counted in 1974, for example, an employee had to have been in the same "C" job code in 1974 and in 1975. The district court found that the EEOC failed to prove by the above methods substantial equality of the jobs at issue for any year. The court may not disturb this finding unless we determine that it is clearly erroneous.