An employer allegedly told a woman she did not need a higher salary because her husband was employed. That allegation was sufficient to avoid summary judgment on the employee’s wage discrimination claim, according to the U. S. Court of Appeals for the Seventh Circuit. In Kellogg v. Ball State Univ., the court held that a trial was necessary to determine whether the statement revealed that the employer’s proffered explanation of the plaintiff’s pay rate was a pretext for discrimination. Leaders of the ABA Litigation Section believe that decisions like this one should prompt employers to address inequality.
District Court Dismissed Claim Because of Gender-Neutral Explanations
In Kellogg, the plaintiff was a biology teacher who alleged that her school paid her less than a similarly credentialed male chemistry teacher. The school denied sex discrimination, instead claiming the male teacher had superior qualifications and had been hired after the school’s starting salaries increased.
The district court decided the plaintiff did not meet her burdens under the Equal Pay Act or Title VII of the Civil Rights Act. It granted summary judgment before trial, holding the plaintiff had not “designated evidence from which a jury could find the [defendant’s] gender-neutral explanations for the pay disparity were a pretext for discrimination.”
The plaintiff appealed, arguing the statement about her husband’s employment challenged the defendant’s explanations. The defendant responded that it was an irrelevant “stray remark” that had “no real link” to the how the plaintiff’s pay was determined. The defendant also argued that the applicable statute of limitations for discriminatory acts in 2006, when the comment was made, had expired by the time the plaintiff filed her claim in 2018.
The appeals court disagreed that the statement was a “stray remark” because “it was a straightforward explanation” of the plaintiff’s pay by someone with the authority to determine it and during negotiations over it. And it held that each time an employer pays an employee in connection with a discriminatory practice, the statute of limitations begins on a new claim. Accordingly, if the plaintiff’s 2018 pay was low because of a 2006 discriminatory decision, the statute of limitations did not preclude an examination of the original decision.
The Lily Ledbetter Fair Pay Act Changed the Applicable Law
The Seventh Circuit acknowledged that the statute of limitations for employment discrimination claims has changed. In its 1997 decision in Dasgupta v. Univ. of Wisc., the court held that “an untimely [discrimination] suit cannot be revived by pointing to effects within the limitations period of unlawful acts that occurred earlier.” The U.S. Supreme Court endorsed this view in 2007 in Ledbetter v. Goodyear Tire & Rubber Co., when it held the decision to set an employee’s pay is a “discrete act,” and the statute of limitations runs only once from the date of that decision.
Congress responded to that decision by passing the Lily Ledbetter Fair Pay Act. It states that “each time wages, benefits, or other compensation is paid, resulting in whole or in part from [a discriminatory] decision or other practice,” a new claim with its own limitation period arises. The Kellogg decision recognized that this law “partially overruled” Dasgupta, and so the plaintiff could cite her employer’s 2006 discriminatory act to support a timely claim for a 2018 pay disparity.
But even without the Ledbetter Act, the defendant’s remark may support the plaintiff’s claim: “the court points out that both the Seventh Circuit and the Supreme Court have allowed older evidence to support a more recent claim, even when that evidence might have established an earlier claim that is now barred by the statute of limitations,” notes Cassandra Robertson, Cleveland, OH, chair of the Appellate Subcommittee of the Litigation Section’s Civil Rights Litigation Committee.
The Impact on Employees and Businesses
Section leaders agree that an employer’s efforts to comply with antidiscrimination laws will help it in similar cases. “If the university has a good track record otherwise with ensuring pay equity and creating a culture where such ‘stray remarks’ lead to real consequences for those who make them, then that would certainly strengthen its case with the jury,” offers Robertson. Plaintiffs, however, can bolster their case with “evidence of ongoing pay disparities more broadly and a workplace culture where discrimination is tolerated,” she adds.
Employers can also take proactive measures to address wage disparities. They are “well-advised to conduct pay equity assessments at regular intervals and identify any statistical outliers,” counsels Jerry M. Cutler, New York, NY, cochair of the Section’s Employment & Labor Relations Law Committee. “As to any such outliers,” he advises, “employers should document their reasons supporting such pay differentials or take prompt action to rectify pay disparities which cannot be substantiated.”
Once in court, litigants may dispute whether an employer’s remark is genuinely relevant to the plaintiff’s claim. Employers should contest “whether the comments are about the plaintiff specifically and whether the comments concern the type of harassment about which the plaintiff complains,” suggests Dustin L. Crawford, Atlanta, GA, chair of the Employment Subcommittee of the Section’s Civil Rights Litigation Committee. As for employees, he adds, they “should attempt to tie the comments to the same type of discrimination that the plaintiff alleges he or she suffered.”
Hashtags: #equalpay, #strayremarks, #discrimination, #summaryjudgment
- Rebecca Sha, “The Persisting Gender Pay Gap: Recent Developments in the Law That Address Gender Pay Disparities,” Diversity & Inclusion Committee (May 16, 2019).
- Justin M. Swartz, et al., “Time After Time: Compensation Litigation Under the Lilly Ledbetter Fair Pay Act,” ABA Section of Labor & Employment Law (Mar. 24, 2010).
- Stephanie Francis Ward, “Recent Equal Pay Lawsuits By Female Law Professors Has Shined A Light On Academic Compensation Process,” ABA J. (Oct. 1, 2020).
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