Pay Act prohibits employers from paying a female employee less than a male
employee for work that requires substantially equal skill, effort and
responsibility, and that is performed under similar working conditions within
the same establishment. The EPA does not require proof of discriminatory
intent, and an employer will be held liable to a woman who is paid less than a
similarly-situated man unless it can show that the discrepancy is attributable
to: (1) a bona fide seniority system; (2) a merit system; (3) a system
that measures earnings by quantity or quality of production; or (4) any factor
other than sex.
Most federal courts- but not all- have interpreted the
EPA's "factor other than sex" defense to require an employer to show that the
pay differential is consistent with a legitimate business purpose. Recently,
the United States District Court for the District of Vermont weighed in,
finding that "factors other than sex" must be business-related and capable of
explaining the entirety of the pay gap alleged.
v. Hudson Group (HG) Retail, LLC. [an enhanced version of this opinion is available to lexis.com
subscribers], the female plaintiff was terminated and replaced with
a man, who was paid $52,500, whereas the plaintiff had been paid approximately
$48,500. Plaintiff brought claims under the EPA and the Vermont equivalent, but
moved for summary judgment only on her state law claim. However, as the Court
noted, the state and federal statutes are substantially identical and it
applied federal law in deciding the plaintiff's summary judgment motion.
The employer defended the motion for summary judgment on
the basis that it had used "factors other than sex" in deciding to pay
plaintiff's male replacement more than it had paid plaintiff. Specifically, the
employer claimed that it had to pay the male replacement more as an inducement
to relocate to Vermont with his wife, who held a part-time job in New
Hampshire, and his children, who were in school. The employer further argued
that the male replacement drove a hard bargain, by rejecting the first offer
made to him as too low.
Not good enough, the Court held, in finding that the
employer had violated the Vermont EPA. Consideration of the male replacement's
family circumstances was not related in any way to the unique characteristics
of the position, his qualities or abilities, or any critical need of the
employer's operation. Further, the Court found, "there is simply no basis for
the proposition that a male comparator's ability to negotiate a higher salary
is a legitimate business-related justification to pay a woman less." To
hold otherwise, the Court continued, would require it to accept the argument,
repudiated by the Supreme Court in Corning Glass Works
v. Brennan [enhanced version], that employers are justified in
paying men more than women because market forces are such that men command
higher salaries in the marketplace
This case underscores the need for employers to make
carefully reasoned, gender-neutral compensation decisions, based on
business-related factors such as skills and experience.
Visit Employment Matters
for additional insights from Martha J. Zackin of Mintz Levin's Boston office.
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