Three plaintiffs successfully defend a jury verdict totaling $204,000 in a Title VII, Equal Pay Act and Iowa Civil Rights Act case, plus $269,877.67 in attorney's fees. The court casts doubt on the use of a "market forces" defense by employers to justify lower pay for women, yet also holds that if such a defense were valid, the employer presented insufficient evidence to warrant an instruction.
Dindinger v. Allsteel, Inc., No. 16-1305 (8th Cir. Apr. 3, 2017): The plaintiffs are women served as mangers in different plants of Allsteel's operation, and each identified men who earned more than they did.
During a five-day trial, the employer presented evidence that the plaintiffs' work was not equal to the male employees. It also argued that if the employees were comparable, nevertheless "it paid the plaintiffs less than their male comparators because of economic conditions," including "negative effects as a result of the economic recession that began in 2008." The company asserted that to save money, it "laid off several employees, restructured job responsibilities, and froze merit-based pay raises."
The Eighth Circuit, with one modest exception, affirms. The opinion addresses several recurring issues in discrimination and retaliation lawsuits:
1. "Market forces" defense: The district court gave an instruction that, in relevant part, stated that "market forces and economic conditions cannot justify perpetuation of [a pay] differential" between men and women. Allsteel argued that this was in error, but the Eighth Circuit held that it was an accurate statement of Corning Glass Works v. Brennan, 417 U.S. 188, 205 (1974), that it is not a defense under the Equal Pay Act that an employer pays women less than men "simply because men would not work at the low rates paid women" and market forces therefore dictated lower wages for women. Even if economic conditions might explain pay differential in some circumstances, "Allsteel offered no evidence at trial showing how [its] cost-saving measures caused the plaintiffs to be paid less than their male comparators."
2. "Other acts" evidence: The district court admitted evidence of three other women managers who were also paid less than their male counterparts, and two other women who learned (and complained about) salary information showing that men got paid more. On appeal, Allstate challenged the admission of this evidence under Federal Rules of Evidence 401 and 403, yet the Eighth Circuit affirms. Because such evidence (also known as "me-too") "should normally be freely admitted at trial" because it makes the pay decisions more likely to be intentional. Even if the testimony did not concern the exact job titles as plaintiffs, it still "tended to demonstrate that Allsteel did not uniformly set the wages of more senior employees higher than the wages of less senior employees," rebutting one of the employer's justifications.
3. OFCCP audit evidence: Allsteel sought to introduce that "the Office of Federal Contract Compliance Programs (OFCCP), a Department of Labor office, had conducted an audit of Allsteel to ensure Allsteel complied with certain requirements for federal contractors, including requirements related to compensating men and women equally." The Eighth Circuit upholds the exclusion, concluding that "admitting the OFCCP's findings would be unfairly prejudicial because it would suggest to the jury that an official fact-finding body had already decided whether Allsteel had violated the Equal Pay Act."
4. Evidence of retaliation to prove discrimination: Allsteel claimed that evidence of alleged retaliation against one plaintiff was inadmissible because that plaintiff did not allege retaliation. But the Eighth Circuit holds that the same evidence (of the timing of a negative performance review and alleged "bullying" because of her complaints) is also probative of pretext, i.e., "plaintiffs were entitled to attack the reliability of that testimony by asking questions about the timing of the purported problems." Retaliation evidence was "relevant to undermine Allsteel's evidence that the reason Loring was not promoted was her poor performance."
5. Attorney's fees for partial success: The Eighth Circuit upholds the plaintiffs' fee award, despite that damages under the state-law equal-pay claims were cut back on limitations grounds as a result of an interlocutory proceeding in which the timing issue was certified to the Iowa Supreme Court. The Eighth Circuit does "not hold that a party can never recover attorney's fees for work on an ultimately unsuccessful appeal."
6. Costs: Finally, the Eighth Circuit affirms an award - as costs - of RealTime transcript costs, video recordings, and printed transcripts. It also reverses the district court's categorical denial of Westlaw expenses, holding that "if the prevailing party demonstrates that separately billing for [Westlaw] is the 'prevailing practice in a given community' and that such fees are reasonable, the district court may award those costs."