Proving illegal pay discrimination can be difficult because of the many factors employers consider when setting compensation.
In March, the Richmond-based 4th U.S. Circuit Court of Appeals added some needed clarity for employers on proving illegal pay disparity, upholding the dismissal of an equal pay lawsuit against Virginia State University brought by a female sociology professor.
In the case, the professor claimed that her $70,000 pay illegally differed from two men in the university, both of whom earned more than $100,000. She sued under the Equal Pay Act and Title VII of the Civil Rights Act, claiming discrimination based on her gender. The appeals court upheld the district court’s dismissal of the case in favor of VSU, largely on the determination that the professor did not perform “equal work” to the comparable male professors.
To prove a violation of the Equal Pay Act, the professor must show the university paid higher wages to an employee of the opposite sex who performed equal work on the jobs requiring equal skill, effort and responsibility and under similar working conditions. The court noted that the standard for proving “equal work” is a “demanding threshold.”
The 4th Circuit said the employee must show that the comparable employee performed work that is “virtually identical” or “substantially equal” to the plaintiff’s in skill, effort and responsibility. The court noted that in the plaintiff’s view, all university professors perform equal work because they all perform the same essential tasks.
But the appeals court noted that “professors are not interchangeable like widgets.” It identified various considerations that influence the hiring, promotion and compensation of different professorial jobs, and the “salary decisions require complex balancing factors,” including “differences in skill and responsibility attendant to different jobs.” The court also noted that the professors taught in different departments and at different skill levels (for instance, graduate courses vs. undergraduate ones).
“There must be evidence showing the jobs were equal in the strict sense of involving ‘virtually identical’ work, skill, effort and responsibility, not in the loose sense of having some comparative value,” the court wrote in its opinion.
The court also held that VSU met its burden of demonstrating that the salary difference was based on a “factor other than sex,” a defense under the law to disparate pay evidence.
VSU also proved that the wage difference resulted from the university setting pay at a percentage of the two professors’ previous salaries as administrators.
The court also rejected the plaintiff’s claim under Title VII, which requires only that the compared jobs be “similar” rather than “equal.” While a different standard, the court noted that the plaintiff must show that the comparable employees “are not just similar in some respects, but similarly-situated in all respects.”
In addition to failing to meet this burden, the 4th Circuit held that VSU met its burden to show that the pay practices were based on legitimate nondiscriminatory reasons — the two professors’ salaries were based on a percentage of the previous administrator’s pay.
The decision provides welcome clarity in an area fraught with confusion, especially for employers in the 4th Circuit’s jurisdiction of Virginia, Maryland, North Carolina, South Carolina and West Virginia.
To ensure compliance with these laws, employers should first carefully consider the skills, effort and responsibility needed for all jobs and evaluate comparable employees and those performing virtually identical work or work that is similarly-situated in all respects. From there, evaluate any reasons for pay disparity (both against women or men) and, if changes need to be made to compensation, make those changes before a claim occurs.
Regularly evaluate compensation to make sure your organization is paying fairly and can provide legitimate nondiscriminatory reasons for pay disparity.