September 30, 2010

Equal pay for jobs the performance of which requires equal skill, effort, and responsibility

Equal pay for jobs the performance of which requires equal skill, effort, and responsibility
Belfi v Long Island Railroad, 2nd Cir., 191 F.3d 129

The Equal Pay Act [EPA] prohibits employers from discriminating among employees on the basis of gender by paying higher wages to employees of the opposite sex for “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions [29 USC. Section 206(d)(1)].” Title VII bars discrimination on the basis of gender.

The Second Circuit U.S. Court of Appeals in New York commenced its review of Susan Belfi’s appeal of the summary dismissal of her Title VII and EPA complaints by a federal district court judge by commenting:

On this appeal we deal with an employer long on salary policies, but short on reasons justifying their application to a female employee whose salary for the same work was less than those of her male peers.

Belfi, originally employed by the Long Island Railroad [LIRR] in 1973 as a steno-typist, was promoted to the position of Office Engineer-Communications on a temporary basis in November 1989. Her salary: the minimum salary for that position, $39,508. On January 1, 1990 the minimum salary was increased to $40,691 but Belfi’s salary was not adjusted to this new, higher “minimum salary” rate.

On July 16, 1990, Belfi was permanently appointed Office Engineer-Signal in the Signal Department at $40,691 per year while the salaries of her two male peers -- the Office Engineer-Communications and the Office Engineer-Electric Traction -- were set at $52,794 and $53,046 respectively.*

By 1993, Belfi’s salary was increased to $44,857 while one co-worker’s salary was increased to $57,240. The other co-worker’s salary was not increased “because of his anticipated retirement.” On June 15, 1994, LIRR hired Gary Barnett to replace the retired Office Engineer-Electric Traction at a salary of $51,249, $6,000 more than Belfi’s salary and $8,931 more than the minimum for the position.

Belfi became aware of the salary differences in October 1992 and filed a number of grievances. LIRR offered a number of reasons to explain away these salary disparities, including:

1. The “time spent in the position by each of the incumbents” was the reason for the differences.

2. The 1986 transition of the office engineer positions to the Salary Plan, caused the disparity.

3. It was necessary to pay Barnett $51,249 to induce him to accept the position because “[i]n order to attract union employees to management, LIRR has found it necessary to consider W-2 earnings, which include overtime, in applying the ten percent (10%) promotional increase in accordance with its policy.”

Eventually LIRR consented to bringing Belfi’s salary up to Barnett’s retroactive to January 1, 1995. Still, Belfi’s salary from June 15, 1994 through December 31, 1994 was significantly less than Barnett’s.

The Circuit Court of Appeals emphasized that the EPA does not require the complainant to prove that the employer intended to discriminate in order to prevail.

Accordingly, a prima facie showing of the salary disparities was based on gender gives rise to a presumption of discrimination. If the plaintiff makes out a prima facie case under the EPA, the burden of persuasion shifts to the employer to show that the wage disparity is justified by one or more of the affirmative defenses allowed under the Act:

1. a seniority system;

2. a merit system;

3. a system which measures earnings by quantity or quality of production; or

4. a differential based on any other factor other than sex and that there is a legitimate business reason for implementing the gender-neutral factor that brought about the wage differential.

Once the employer offers one or more of these “affirmative defenses,” the burden of going forward shifts back to the employee, who must show that the reason given by the employer is, in fact, a pretext for unlawful discrimination in order to prevail.

The Circuit Court rejected LIRR’s combination of two affirmative defenses: seniority and factors other than sex, as justification for the differential between the salaries of Belfi and her male counterparts. Rather, it said, it was persuaded that these justifications were a pretext, as the evidence showed that its salary plan allows for an inequity increase under two circumstances:

1. where the employee’s salary is low in comparison with peers as a result of restructuring, reorganization, or job consolidation; or

2. where the promotion of a represented employee to a management position may have resulted in his or her earning a salary greater than that of a seasoned incumbent.

Accordingly, the Circuit Court concluded, there exist genuine issues of material fact regarding pretext sufficient to preclude the summary dismissal of Belfi’s EPA claims. It returned the case to the lower court for its further consideration of these claims.

The Circuit Court, however, affirmed the lower court’s summarily dismissing Belfi’s Title VII complaint.

* The salary range for these three “Office Engineer” positions was determined using the “Hay Method.” The Hay Method assigns a “point value” to a position based on the skills and talents needed to perform the job. A minimum, midpoint, and maximum salary for the position is then set. The decision notes that three positions had the same “Hay point value.”
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