Curious about the difference between pay claims under the Equal Pay Act versus Title VII?

Title VII is the nation’s leading anti-discrimination law. It prohibits discrimination on the basis of sex (as well as race, color, national origin and other protected classes). One form of prohibited sex discrimination is pay inequity. Another federal law, the Equal Pay Act, also prohibits pay inequities.

The Equal Pay Act is relatively uncommon in litigation. A recent federal lawsuit in Colorado illustrates why EPA claims are in some ways easier than a Title VII claim to prove while in other ways being more difficult. As that Court explained, in an EPA case, the plaintiff has to show, first, the following:

(1) she was performing work substantially equal to her male comparators in light of the skills, duties, supervision, effort, and responsibilities of the positions; (2) the work was performed under basically the same conditions; and (3) the male comparators were paid more under these circumstances.

Once the plaintiff makes that limited showing, the burden shifts to the company. The employer must then prove it did not discriminate, and it can do so only by showing “the pay differential is justified by a valid reason contained in a statutory list: (1) a seniority system; (2) a merit system; (3) a system where earnings are measured by quantity or quality of production; or (4) a factor other than sex. 29 U.S.C. § 206(d)(1).”

Those are the only permitted excuses for an established pay disparity, and it is the employer’s obligation to prove it falls into at least one.

Unlike Title VII, where the plaintiff has the ultimate burden to prove discriminatory intent, with regard to clams under the EPA, the employer has the ultimate burden to prove that the difference in pay was based on a factor other than sex.

The EPA’s test may seem like an easier way for a plaintiff to prove a claim, especially given the shifting burden. However, the plaintiff has to first produce proof of those three initial requirements. Basically she has to find proof of a male benchmark, that there is a man who performs basically the same job as she but receives higher pay. That is where the plaintiff in the Colorado federal case ran into problems, problems that resulted in her case being dismissed. She had proof that a male was paid more, but she wasn’t able to prove that he was doing basically the same job.

In dismissing her claim, the Court summarized its analysis, as follows:

It may be that Ms. Apodaca is seeking relief from sex discrimination rather than pay discrimination. For example, she notes that her education is different from Mr. Allen’s, that Mr. Allen received a raise when he was promoted to Director but that she did not, that Mr. Allen was paid significantly more than she was even though he was her subordinate, and that Mr. Allen delegated his extra duties instead of performing them. As noted above, these facts are not relevant to the equal-pay analysis. This is because the Equal Pay Act is concerned with the very limited question of whether two people are being compensated differently even though they are performing the same work. Questions about disparate education levels, disparate raises, disparate pay relative different positions in the organizational hierarchy, and disparate completion of duties might fall within the scope of disparate treatment based on sex discrimination which violates Title VII, but Ms. Apodaca has not brought such a claim. Given that Ms. Apodaca is represented by counsel, the Court cannot infer one.

As the Court noted, without proof sufficient to establish a male benchmark, the plaintiff’s EPA claim failed. While the Court noted, she might have had a Title VII claim related to how she was (she claimed) treated less favorably in a number of respects, she had not, the Court noted, asserted a Title VII claim.

The case illustrates the difference between the commonly litigated Title VII and its protections versus the less commonly litigated EPA.

Source: Apodaca v. Colorado Nonprofit Development Center.

Labor Secretary Acosta urges Executive Branch restraint

In a recent presentation for the Colorado Bar Association’s 2017 annual conference, I noted the relatively recent proliferation of Executive Branch guidances and other informal publications that have not gone through the formal rulemaking process required for the issuance of regulations. I predicted we will see (from a number of fronts including agencies themselves, the courts and Congress) a movement to swing the pendulum back and begin constraining such non-regulatory near-rulemaking. In other words, we will begin to see a push for agencies to return to the rulemaking process.

In a recent speech, Luis Acosta, Secretary of the U.S. Department of Labor, made a similar point and, indeed, took the point further.

I would like to begin with some basic observations, well understood by everyone here. Since the New Deal, we have sought solutions to govern an increasingly technical and complex economy. Congress has seen fit to rely on the Executive’s rulemaking discretion, and simultaneously, it has tried to limit that discretion.

Secretary Acosta emphasized that these informal guidances not only skip the rulemaking process but, as a result, do not enjoy scrutiny through the checks and balances that the rulemaking process provides, including opportunities to obtain “the public’s input” and Congressional oversight. He contends this is particularly troubling because informal guidance is nonetheless provided some deference by some courts (whether formal or simply practical deference).

Let me be clear: Agencies can, and must, interpret their regulations. And often, the regulated public is helped by knowing how an agency interprets its regulations. That is why I have resumed the policy of issuing opinion letters to companies that ask DOL whether their practices are lawful. These opinion letters do not enact substantive change to the law; they simply inform the requester how DOL will apply the law to a particular set of facts.

But so-called “interpretations” that go beyond providing clarity and become mechanisms to change the law are another matter entirely. The reason these interpretations matter, of course, is that the courts defer to them.

He concluded with direction to the agencies within the DOL and a call to the agencies outside his control to return to formal rulemaking.

The restraint I am advocating is hard, because the desire for results is real. Rulemaking is hard, and it is necessary. Congressional action may be hardest of all, but it is demanded by our Constitution.

In the end, taking the hard road connects us to the promise of our Founders and paves the future path that is right for our Republic.

This is an issue likely to come up in several Supreme Court cases this year. Even if not part of a case’s formal record, the courts, especially the Supreme Court, will be aware that  Secretary of one of the most powerful federal agencies spoke publicly on these issues.

Source: Acosta presentation to Federalist Society

California passes statewide ban-the-box prohibition

California continues to expand its employment laws. As reported in a previous post, California just passed a statewide prohibition against inquiries into pay history. Now, California has joined the growing trend (reported in this previous post) of jurisdictions that prohibit inquiries into an applicant’s criminal history, with its own statewide ban-the-box law (California AB 1008). AB 1008 not only prohibits such inquiries but also prohibits the inclusion of any inquiry into criminal convictions on an employment application form. It also limits the use of criminal history information obtained as part of a background check.

With the addition of California, this brings the number of states having ban-the-box prohibitions to ten, and as previously reported, there are even more cities and local jurisdictions that have passed such prohibitions. Employers should continue to check with legal counsel whether the jurisdictions in which they operate have adopted ban-the-box prohibitions.

Source: Bill Text – AB-1008 Employment discrimination: conviction history.

Trump Administration moves to expand religious — and moral — liberties of employers

President Trump campaigned, in part, on a promise to expand religious liberties. Following up on that promise, his Administration recently announced a series of new changes — changes that have already sparked litigation and are expected to be highly controversial. Many argue these changes are not only highly controversial but come at the expense of the rights of others.

On May 4, 2017, the President issued a Memorandum for all Executive Departments and Agencies in which he commanded all executive departments and agencies to “respect and protect” religious rights “to the greatest extent practicable and to the extent permitted by law.”  The only specific mandate his Memorandum highlighted (Sec. 3) was for Treasury to develop “conscience-based objections to the preventive-care mandate” under Obamacare. Likewise the Memorandum (Sec. 4) specifically commanded the Attorney General to issue occasional “Religious Liberty Guidance(s).”

Accordingly, it came as no surprise then when, on October 6, 2017, Attorney General Sessions issued his own Memorandum for all Executive Departments and Agencies articulating “twenty principles” designed to “guide administrative agencies and executive departments.”

Religious liberty is a foundational principle of enduring importance in America, enshrined in our Constitution and other sources of federal law. As James Madison explained in his Memorial and Remonstrance Against Religious Assessments, the free exercise of religion “is in its nature an unalienable right” because the duty owed to one’s Creator “is precedent, both in order of time and in degree of obligation, to the claims of Civil Society.” Religious liberty is not merely a right to personal religious beliefs or even to worship in a sacred place. It also encompasses religious observance and practice. Except in the narrowest circumstances, no one should be forced to choose between living out his or her faith and complying with the law. Therefore, to the greatest extent practicable and permitted by law, religious observance and practice should be reasonably accommodated in all government activity, including employment, contracting, and programming. The following twenty principles should guide administrative agencies and executive departments in carrying out this task.

And, on the same day, Treasury issued two sets of interim final rules, that took effect immediately, authorizing employers to claim an exemption from Obamacare’s contraceptive mandate. The first (published in the 10/13/17 issue of the Federal Register at 21851) expands the current right of some entities and individuals to opt out of Obamacare’s contraceptive provisions on religious grounds. Now, religious objectors include churches and their auxiliaries, nonprofits, for-profit entities, other non-governmental employers and certain institutions of higher education. The for-profit employer provisions expand the Supreme Court’s holding in Hobby Lobby, which had authorized closely-held for-profits to opt out on religious grounds. Now for-profit employers that are not closely-held, even publicly-traded companies, may also be religious objectors.

Objectors need not be entities either. Individuals may object to participating in contraceptive coverage, though their objection cannot force a plan to drop such coverage for others.

The second set of interim rules outlines a process for moral objectors. The rules distinguish between “moral convictions” and “religious beliefs,” but, in a move sure to spark significant litigation, they do not define the term “moral.” Whatever that term might mean, it is clear from the language of the rule that a moral conviction need not be based in a religious belief.

Employers interested in utilizing either of these rules should know that lawsuits have already been filed. Further litigation is likely for years to come. And, as cautioned by the Society of Human Resources Management (SHRM), employees may well respond unfavorably. It is estimated that over 55-million women have access to contraceptive care as a result of Obamacare’s mandate. One commentator in SHRM’s article predicted, “There would be tremendous employee relations repercussions if employers took this benefit away, especially given how many women are in the workforce, and I’m sure some employers have done the math comparing maternity costs to the cost of providing contraception.”

Source: Treasury’s final interim rules: 2017-21851.pdf and 2017-21852.pdf

California joins growing movement prohibiting pay history inquiries

California has joined a growing number of jurisdictions that prohibit employers from asking applicants about their pay history, with the enactment of a statewide law, effective January 1, 2018. This new law will  prohibit employers from asking applicants about their pay history or even relying upon information about an applicant’s pay history in setting a position’s pay (with some exceptions including the ability to consider such information if it was disclosed “voluntarily and without prompting”). The new law requires employers to provide an applicant, upon request, the preset wage scale for the position.

Other jurisdictions with similar restrictions include Delaware, Massachusetts, Oregon, Puerto Rico, as well as New York City, Philadelphia and San Francisco.

This is an evolving area of the law, and employers are advised to consult with legal counsel to determine the requirements, if any, in each jurisdiction where they hire and employ workers.

Source: Bill Text – AB-168 Employers: salary information.

EEOC is about to shift to majority of Republican-appointees

As previously reported, the NLRB recently shifted to a majority of Republican-appointees. Next, with President Trump’s appointments of Janet Dhillon (to be Chair) and Daniel Gade, it will be the EEOC’s turn. Their confirmation (expected by the end of October) will create the first Republican-majority at the EEOC in a decade.

President Trump is expected to nominate a new EEOC General Counsel soon, as well.

These changes will likely have significant impact on issues including LGBTQ protections and equal pay, as well as the EEOC’s recent practice of issuing, without undertaking the requirements for rulemaking, guidances and other non-regulatory publications.

NFL Players Association files NLRB charge

As anticipated, the NFL Players Association has filed a unfair labor practice (ULP) charge in the on-going protest-kneeling debate. The charge will now proceed to investigation by the NLRB.


The importance of lit holds

The practice of holding safe evidence relevant to a known claim, especially when that hold is implemented by counsel, is often called a “lit(igation) hold.” Whether or not an actual lit hold is in place, the courts will punish employers who engage in “spoliation.” Four recent federal cases  from Colorado (cited below under Sources) illustrate the importance of understanding these concepts.

What is spoliation?

Citing 2015 precedent, the court in Mitcham defined “spoliation” as “the destruction or significant alteration of evidence, or failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” Note how this includes then not just evidence that supports the party’s own position but also evidence that supports the opposing party’s position. That evidence must also be relevant to the case. As the same court noted, an element of “bad faith” must be proven, something more than “mere negligence in losing or destroying records.” Thus, a company, once aware of pending or reasonably foreseeable litigation has a duty to preserve evidence, which “duty is one of reasonableness under the circumstances.”

When are spoliation sanctions proper?

The court in Mitcham confirmed that sanctions for spoliation are proper “where: ‘(1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence.'” Note here the two key requirements that the other party prove the destroyer knew or should have known of the claim and further that the destruction caused prejudice. A party is not sanctionable for spoliation when it destroys evidence unaware of a possible claim. The routine destruction of records according to a recordkeeping policy or practice is not, without more, sufficient to raise a spoliation issue.

What sanctions are appropriate for spoliation?

The courts have discretion to determine an appropriate sanction. Sanctions often include attorney fees and costs, additional deposition opportunities, and the production of requested evidence that would not otherwise be discoverable. Witnesses can be precluded from testifying, and documents can be excluded from evidence. One of the most powerful forms of sanction is a “spoliation instruction” aka an “adverse inference” instruction, in which the jury is informed of the spoliation and advised it may infer that the destroying party did so in order to conceal condemnatory information.

Are there other consequences in the case that might result from spoliation?

The consequences of spoliation do not stop with sanctions. The court in Green for example denied, as a result of spoliation, the employer’s otherwise arguably merited motion for summary judgment, finding that the spoliation was itself evidence of what is called “pretext,” which in turn warranted a jury trial.

Therefore, even if the Postal Service can met its burden to produce legitimate, nondiscriminatory justification for its actions against Plaintiff, the actions of Ms. Ehrenshaft in destroying the relevant personal files after the commencement of this litigation is sufficient, as a matter of law based on my sanctions ruling, for Plaintiff to show pretext in order to rebut the Postal Service’s proffered legitimate reasons.

Is there an independent claim for spoliation?

The courts in Colorado have not yet decided whether a spoliator can independently be sued for the destruction. In Gomez the court dismissed such a claim observing that other states prohibited such claims and concluding there was no reason to believe “the Colorado Supreme Court ‘would buck the national trend'” of not allowing independent lawsuits against spoliators.

Still with the possibility of sanctions and other remedies, there is plenty of reason to consult with counsel about potential claims and develop appropriate lit holds.

Still interested?

You can read more about spoliation in the Colorado federal district court’s decision in Mueller v. Swift, the recently much publicized (and unsuccessful) lawsuit against Taylor Swift (who eventually won no doubt in part to the plaintiff’s having permitted the destruction of evidence).

Source:  Green v. Brennan, No. 10-cv-02201-LTB-KMT, 2017 BL 322599, 2017 FEP Cases 322599 (D. Colo. Sept. 13, 2017), Court OpinionMitcham v. Americold Logistics, LLC, No. 17-cv-00808-WJM-NYW, 2017 BL 332681 (D. Colo. Sept. 20, 2017), Court OpinionGomez v. Sam’s West, Inc., No. 16-cv-02240-CMA-STV, 2017 BL 284853 (D. Colo. Aug. 14, 2017), Court OpinionMueller v. Swift, No. 15-cv-1974-WJM-KLM, 2017 BL 250171, 2017 IER Cases 250171 (D. Colo. July 19, 2017), Court Opinion

Joint Employer bill moves forward, towards an unclear future

The House Education and the Workforce Committee approved the Save Local Business Act (H.R.3441) moving it forward towards a potential floor vote before the House. As explained in a previous post, the Bill will reverse the NLRB’s 2015 joint employer standard. No sister bill has been introduced in the Senate, and it is unclear whether such a bill could muster sufficient votes to withstand a filibuster in the Senate.

Source: H.R.3441 – 115th Congress (2017-2018): Save Local Business Act | | Library of Congress