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Pay history bans coming, at a federal level, by way of the Circuit Courts?

A growing number of state and local governments prohibit asking applicants about their pay history or using prior employer pay histories as a basis for setting employee pay. Two Circuit Court cases suggest that such a ban may be coming, not by way of state and local legislation, but at a federal level under currently existing federal laws known as Title VII and the Equal Pay Act.

The Circuit Courts are the nation’s federal appellate courts. They are divided (and numbered) by region. They are for practical purposes generally the highest courts in the land, just beneath the Supreme Court of the United States. Very few cases result in Supreme Court review; the Circuit Courts resolve the vast bulk of federal appellate litigation without cases ever rising to the Supreme Court.

Pay history bans are growing across the country because advocates for equal pay, particularly between men and women, contend that one reason women earn less than men in many positions, is simply that women tend to have previously earned less than men in prior positions. In other words, they contend it is a self-perpetuating cycle.

In one case, the Ninth Circuit held last year, in 2017, that, consistent with its precedent, an employer may set pay levels purely on the basis of pay histories. However last summer the Ninth Circuit withdrew that decision and ordered the matter reheard en banc (by the entire bench of its judges). The case is pending reconsideration.

In the other case, the Eleventh Circuit just ruled in a Georgia case that an employer was not entitled to summary judgment, in other words, it would have to explain itself to a jury, where the female plaintiff argued she was underpaid compared to her male predecessor. The Eleventh Circuit case did not go so far as to hold that pay histories cannot be considered. It simply held, on the basis of the record before it, that pay histories were not themselves enough to warrant ruling for that employer. The Eleventh Circuit’s decision may be limited to its facts in that, there, the company’s HR manager had testified to general female-male pay disparities at the company and further that the company’s general manager had made an anti-female remark.

Employers should consider monitoring pay history bans.

Source: Rizo v. Yovino, case no. 15-372 (9th Circuit) (case pending reconsideration en banc); Bowen v. Manheim Remarketing, Inc., case no. 16-17237 (11th Cir. 2/21/18).

Disability discrimination claim denied, despite claims of shifting reasons and temporal proximity

Shifting reasons and temporal proximity are two of the most common arguments in discrimination cases. Employees often (correctly) argue either or both as part of efforts to withstand a motion for summary judgment. A recent Eleventh Circuit case illustrates how these arguments work.

An employer may file a motion for what is called “summary judgment” when it believes that the undisputed evidence requires dismissal of a plaintiff’s claims. In employment discrimination cases, when an employer has given a legitimate nondiscriminatory reason for the adverse employment action at-issue (discharge, demotion, etc.), a plaintiff most prove an issue of fact suggesting that the employer’s reason is “pretext” for discrimination. The plaintiff need not convince the judge of discrimination, merely produce sufficient evidence to support a jury verdict, assuming the jury were to believe that evidence. Two common ways that employees try to establish pretext are to show that the employer gave shifting reasons and that there was a temporal proximity. This case illustrates both arguments.

When an employer gives shifting reasons, it can suggest that its failure to provide a consistent statement of its reasoning suggests its reasons were in fact pretext for discrimination. Here, the plaintiff made such an argument. The Eleventh Circuit disagreed, noting that the employer’s reasons didn’t shift, its supervisors just didn’t articulate the company’s reasoning clearly. But, as unclear as the supervisors might have been, they all said the same basic reason: Her performance. Likewise, one supervisor gave an extra reason (“the needs of the Center”), but that reason was also related to performance. Thus, the Eleventh Circuit rejected the argument that the employer’s position had shifted.

(H)ere Cappetta’s supervisors consistently gave verbal and written warnings about her workplace violations. The fact that one supervisor also pointed to the needs of the Center does not undermine its consistent concern about her attendance issues, attitude problems, and cash handling violation.

Next she argued that there was a temporal proximity (a closeness in time) between an MRI she’d undergone for her disability and her suspension. The Eleventh Circuit agreed that the timing was certainly close and might have suggested more than coincidence; however, when a plaintiff establishes a temporal proximity, the employer can respond that there was no coincidence, rather, there was an intervening act that produced the adverse employment action. Here, the employer argued that was an incident with her handling of cash. The Eleventh Circuit agreed that intervening act broke the alleged temporal proximity.

Second, Cappetta argues that the close temporal proximity between her MRI and her suspension demonstrates pretext. We have held that close temporal proximity can be evidence of pretext, but it is not necessarily sufficient on its own. Hurlbert, 439 F.3d at 1298 . Cappetta has presented no evidence, other than closeness in time, that the MRI or her diagnosis impacted the Center’s decision. And the remaining evidence actually suggests otherwise. The day she had the MRI taken was the same day as the cash handling violation, and the forced leave came after weeks of documented concerns about her attendance and attitude. Given that evidence, the close temporal proximity between her diagnosis and her termination is insufficient to rebut the Center’s reasons for her termination.

Lacking evidence of pretext, the Eleventh Circuit affirmed summary judgment in favor of the employer. HR professionals interested in temporal proximity and shifting position arguments may find the Cappetta case a helpful, brief illustration.

Source: Cappetta v. North Fulton Eye Center, Case No. 17-11581 (11th Cir. 2017).