Doctors’ Equal Pay Collective Action Gets Negative Diagnosis

As readers of this blog know, pay equity laws and regulations are expanding rapidly in the U.S. at both the federal and local level, as well as internationally.  And while regulatory compliance is critical and remains an area to watch (and we’ll keep covering it for you here), employers can take a short breath of relief after a recent victory in one of the key proving grounds for equal pay claims—class and collective action litigation.

On March 29, 2019, in Ahad v. Board of Trustees of Southern Illinois University, the U.S. District Court for the Central District of Illinois decertified an equal pay collective action brought by a group of female physicians.  Although the plaintiff alleged that she and other female physicians were paid less than male comparators for equal or similar work under the same compensation plan, Judge Sue E. Myerscough concluded that the opt-in members of the collective action had widely varying practices, duties, and compensation structures that would require many individualized inquiries, making the case inappropriate for treatment as a collective action.

Plaintiff Sajida Ahad sued Southern Illinois University and SIU Physicians & Surgeons Inc. in October 2015, alleging violations of the federal Equal Pay Act and Illinois Equal Pay Act, Title VII, and the Illinois Human Rights Act.  The court conditionally certified the case as a collective action under § 216(b) of the Fair Labor Standards Act in September 2017, but later denied the plaintiff’s motion for class certification of the Title VII claims in September 2018, based on a failure to show commonality and typicality.  SIU then moved to decertify the Equal Pay Act collective action, arguing that plaintiff and the other opt-in members of the collective action were not similarly situated, that individual inquiries would predominate, and that plaintiff had not pointed to a common policy or practice behind the alleged pay disparities.

Ahad argued that physicians at SIU shared a few job titles and were largely interchangeable and that factors such as specialties or duties were not as important as SIU suggested. She also claimed that, although SIU’s compensation plan was facially neutral, it allowed for too much discretion by the department heads charged with implementing the plan.

The court disagreed, and rejected plaintiffs’ effort to describe the jobs at issue at “a level of generality that would all but eliminate the ‘similarly situated’ determination.”  After “[a]nalyzing the actual duties performed by each of the plaintiffs on a day-to-day basis, as well as the individualized factors that determined initial compensation recommendations,” Judge Myerscough concluded “that they are not similarly situated.”

In support of this conclusion, the court observed that:

  • “Hiring decisions and compensation recommendations are standardized to some extent but are also based on a number of individualized factors, including, but not limited to, need, salary survey data, the source of funding, and the physician’s background and qualifications, as well as market factors.”
  • Only two of the plaintiffs shared similar job settings, and even those plaintiffs had different areas of focus (bariatric surgery compared to colon/rectal surgery).
  • The plaintiffs varied significantly with respect to how they allocated their time among tasks such as teaching, research, and administration.
  • “The Compensation Plan does not create the necessary ‘factual nexus’ that binds the plaintiffs together.”

Finally, citing Wal-Mart v. Dukes, the court held that “the statistical evidence here does not and cannot show whether a common cause existed regardless of the statistically significant showing of pay disparities based on gender.”

The Ahad decision is welcome news for employers faced with potential equal pay class and collective actions and is the latest in an emerging line of cases noting the difficulties in certifying equal pay or pay discrimination cases.  The decision also reinforces the requirement that courts evaluate the actual work performed by plaintiffs and their would-be comparators, and eschew invitations to judge similarity based solely on job titles or high-level descriptions of duties in common (e.g., treating patients; conducting research).