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EEOC v. Md. Ins. Admin., No. 16-2408 (4th Cir. Jan. 5, 2018)

The panel majority reverses and remands judgment for the state in an Equal Pay Act case. It agrees with the Third and Tenth Circuits that the employer's burden on its affirmative defense is to show not only that a "factor other than sex" could have motivated a pay differential, but actually did motivate it. The dissenting judge would impose a higher burden of proof on the EEOC when it enforces the EPA against a state agency, citing the Tenth Amendment.

EEOC v. Md. Ins. Admin., No. 16-2408 (4th Cir. Jan. 5, 2018): This was in case in which there was no doubt that women at the state agency ("MIA") were paid less than similarly-situated men. Three women who worked as Fraud Administrators earned between $43,495 and $50,300; four comparable male employees earned more over the same period, topping up at $51,561.

Because the Equal Pay Act does not require proof of intentional discrimination, the only questions remaining were (1) whether the male investigators were different because they were hired at a higher step in the civil-service classification, and (2) whether the pay disparity could be explained away by a factor other than sex, an affirmative defense on which the employer bears the burden of proof. The district court found in favor of the state on both questions, granting it summary judgment.

The Fourth Circuit, in a 2-1 decision, reverses. The panel majority begins by noting that the employer's burden when seeking summary judgment on its own affirmative defense is a "heavy one." Citing cases from the Third and Tenth Circuit, it holds that to prove a factor-other-than-sex defense, "an employer [must] 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."

On the first question, the panel majority holds that the MIA failed to prove as a matter of law that the male agents were not comparable to the women for purposes of the prima facie case. That the men "were hired at higher step levels than at least one of the claimants, allegedly based on their background experience, relevant professional designations, and licenses or certifications" would be "relevant only to any affirmative defense asserted by MIA...." Thus, at "the initial stage we ask only whether the claimants and the identified comparators worked jobs requiring 'equal skill, effort, and responsibility,' and whether each claimant was paid less than one or more comparators."

On the affirmative defense of factor-other than-sex, the panel majority holds that there is genuine dispute of material fact. The state advanced two factors-other-than-sex, the first being the use of a gender-neutral civil-service compensation scale, the Standard Salary Schedule, which assigns weight to "prior state employment or a lateral transfer within the state employment system." But the panel majority holds that while the policy was gender-neutral, 

"MIA exercises 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. A fact finder faced with the present record could have determined that, when exercising this discretion, MIA at least in part based its assignment of the claimants' step levels on their gender with a resulting diminution of their assigned starting salary."

Second, the MIA cited "the experience and qualifications of the comparators and the claimants," with the men having prior tenure with the state or (in one case) 20 years of law enforcement background. But "the record does not contain any contemporaneous evidence showing that the decisions to award Hurley, Jacobs, and Pennington their respective starting salaries were in fact made pursuant to their aforementioned qualifications." Moreover, the state may have failed to credit the women's own "extensive prior investigative or law enforcement experience." Thus, there is an "issue of fact for the jury to decide whether MIA in fact objectively weighed the comparators' qualifications as being more significant than the claimants' qualifications."

Dissenting, Judge Wilkenson presents an issue that does not appear to have been raised by the parties. He contends that when a federal government agency such as th EEOC brings a suit against a sovereign state, in the interest of protecting the states' Tenth Amendment rights, the federal government should be held to a "clear and convincing" standard of proof.  This "standard is a workable approach that would serve to screen out deprivations of state sovereignty for trivial purposes, while leaving serious problems open to the corrective of federal law. Steering this middle course would restore for state governments in this narrow and discrete area of paramount state interest some of the constitutional protection of which they have been inexcusably deprived."

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