Equal Pay

EEOC To Analyze EEO-1 Component 2 Pay Data with Independent Assessment

On July 16, the EEOC announced plans to fund an independent study to evaluate pay data submitted by employers for fiscal years 2017 and 2018 through Component 2 of the EEO-1 form, both to inform potential next steps for the data, as well as to guide any potential future collections.  As we reported last March, after a tumultuous history, the EEOC decided against renewing its request for authorization to continue collecting pay data under Component 2 of the EEO-1 form, which reflected employees’ W-2 earnings and hours worked across broad job categories, broken down by gender, ethnicity, and race. The EEOC’s decision in March ended a four-year saga – including litigation – over whether the pay data collection would go forward at all.  Much of the controversy stemmed from critiques that the burden and confidentiality concerns implicated by the Component 2 submissions outweighed any potential benefit, particularly given the form’s reliance on W-2 earnings (as opposed to base pay or total compensation awarded for work performed in a given year), combined with the breadth of the pay bands and job categories used, as well as the inability for most employers to accurately track or report hours worked by exempt employees (as we reported here, here, here, here, here, here, here, here, and here). Despite last March’s announcement, the EEOC has not stated whether or how it plans to use the data it already has collected. READ MORE

Striking Out the “Catch-All”: Growing Number of States Narrow Affirmative Defenses for Employers in Pay Equity Cases

The federal Equal Pay Act (EPA) and its many state analogs require equal pay for equal (or, in some states, “substantially similar”) work.  The EPA contains a so-called “catch-all” defense to equal pay claims, permitting wage differentials if employers can show that they are “based on any factor other than [protected category].”  But this catch-all defense has been under scrutiny in courts and legislatures around the country. As we recently reported, an en banc Ninth Circuit rejected an employer’s argument that sole reliance on prior pay could be a “factor other than sex” within the meaning of the EPA. The Ninth Circuit’s finding is an outlier among circuit courts in this respect, but it fits a broader trend to narrow the “catch-all” affirmative defense, particularly at the state level. READ MORE

Ninth Circuit Hears Pay Case Challenging University Pay Decisions

On Tuesday, May 12, 2020, the Ninth Circuit heard oral argument in Freyd v. University of Oregon.  Jennifer Freyd, a professor of Psychology at the University of Oregon, filed a class action lawsuit in March 2017 alleging gender-based pay differences in violation of the Equal Pay Act, Title VII, and other statutes.  Freyd asserted that the University paid her less than four male colleagues in her department and that the University’s retention award policy had a disproportionate impact on the University’s female psychology professors.  In May 2019, the District Court granted Defendants’ motions for summary judgment, and Freyd subsequently appealed the decision to the Ninth Circuit Court of Appeals. READ MORE

California District Court Kicks Out U.S. Women’s National Team’s Equal Pay Claims

A California district court dealt a blow to the U.S. Women’s National Team’s (WNT) equal pay case on May 1, granting partial summary judgment to the United States Soccer Federation (USSF) in the headline-grabbing case filed last year. The decision dismisses the team’s compensation discrimination claims under both the Equal Pay Act (EPA) and Title VII but mostly leaves intact the WNT’s remaining discriminatory working conditions claims. We previously blogged about the case here.

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ARB Said, He Said: Secretary of Labor Announces New Oversight of Administrative Decisions

On March 6, 2020, U.S. Secretary of Labor Eugene Scalia published Secretary’s Order 01-2020, which is among the first of his management decisions since his confirmation back in September. The Order, titled the “Delegation of Authority and Assignment of Responsibility to the Administrative Review Board,” establishes the Secretary’s authority to review, at his discretion, decisions of the Department of Labor (DOL)’s Administrative Review Board (ARB), including decisions arising out of enforcement actions brought by the Office of Federal Contract Compliance Programs (OFCCP). The Order represents a shift in procedure before the Office of Administrative Law Judges (OALJ) and introduces various new process and substantive legal questions to be aware of in connection with contractor pay discrimination enforcement actions. READ MORE

EEOC Confirms It Will Discontinue EEO-1 Pay Data Collection

Today, the EEOC formally confirmed that it will not renew its request for authorization to collect employer’s pay data under Component 2 of the EEO-1 moving forward.  The notice is consistent with its announcement last September, marking the end of a four-year saga over whether the pay data collection would go ahead (as we reported herehereherehereherehere, here, here, and here).  Notably, the notice does not explain how the EEOC intends to use the pay data it already has collected, although it makes reference to using it in Title VII proceedings.  It does, however, confirm the EEOC’s intentions regarding sharing the EEO-1 pay data, including that the EEOC does not intend to share it with the Office of Federal Contract Compliance Programs (“OFCCP”), but under certain circumstances may share it with state and local fair employment practices agencies (“FEPAs”).  The notice also provides guidance regarding a potential pay data collection by the EEOC in the future, including that the EEOC intends to “develop a plan for using pay data before initiating any data collection.” READ MORE

Pay Equity Developments in the Mid-Atlantic

The past month has brought notable pay equity developments to the Mid-Atlantic, including pending legislation in Maryland, and a Third Circuit decision that might have far-reaching effects beyond the Philadelphia salary history ban that it upheld. READ MORE

Ninth Circuit Issues A Second En Banc Decision Regarding Prior Salary Considerations In Rizo v. Yovino Re-Do

In yet another development in the closely watched case of Rizo v. Yovino, the en banc Ninth Circuit ruled that employers may not defeat a plaintiff’s prima facie case under the Equal Pay Act (EPA) by arguing prior pay is a “factor other than sex” within the meaning of the statute. By doing so, the Ninth Circuit reaches the same result as the previous opinion penned by the late Judge Stephen Reinhardt before his passing in 2018, including overruling Kouba v. Allstate, a prior Ninth Circuit opinion that held that prior pay could justify pay differentials in combination with other factors, and if relied upon reasonably and to effectuate a business policy. The majority opinion further holds that as a matter of statutory interpretation, a “factor other than sex” within the meaning of the EPA must be “job related,” yet it also makes clear that the EPA does not prohibit employers from considering prior pay in making starting pay offers (and in this regard differentiates the opinion from California’s salary history ban). Two separate concurring opinions agree with the result, but they criticize the majority opinion for giving too narrow a reading of the EPA’s fourth “catch all” defense and for embracing a view of prior pay that puts the Ninth Circuit at odds with other circuits and guidance from the U.S. Equal Employment Opportunity Commission (EEOC). READ MORE

Philadelphia Wage History Ordinance Green-Lighted

On February 6, 2020 the U.S. Court of Appeals for the Third Circuit upheld a Philadelphia pay equity ordinance banning employers from inquiring into prospective employees’ prior pay or relying on prior pay in making compensation decisions unless candidates knowingly and willingly disclose the information. In upholding the ordinance, the Third Circuit vacated a lower court decision that enjoined enforcement of the inquiry provision on the grounds that it violated employers’ First Amendment free speech rights. While the Third Circuit acknowledged that the ordinance implicated First Amendment rights, the court found that there was “a plethora of evidence” provided by the city to meet its burden of clearing intermediate scrutiny for commercial speech. Consequently, it was reasonable for the city to conclude that the inquiry provision would address gender and race-based wage gaps based on experiments, witness testimony, and historical research concluding as much. READ MORE