Many laws governing employment contain anti-retaliation prohibitions. Indeed, many claims, demands and lawsuits are accompanied by retaliation allegations. For example, the Minneapolis and St. Paul paid sick leave ordinances both make it unlawful for an employer to take adverse employment actions against an employee for requesting to use earned paid sick leave hours.  The Equal Pay Act similarly disallows retaliation for asserting discrimination under that Act.

On June 12, 2018, in Brazil v. Arkansas Dep’t of Human Servs., the Eighth Circuit dismissed an employee’s retaliation claim, since the employee had changed jobs with the employer after commencing the suit, and was thus, not subjected to the adverse employment action that caused her to sue in the first place. The employee alleged her employer retaliated against her after she had filed a lawsuit against it for violation of her civil rights by subjecting her to manual labor and fewer opportunities for promotion. The employee asked the court to require the employer to transfer her to a “suitable position under the direction of different supervisors.” However, since filing the retaliation claim, the employee had transferred to new division with different supervisors. Thus, the court found the employee had already received what she sought in her lawsuit. Further, the court held that, “a speculative possibility of future harm is not enough to preserve a live case or controversy” necessary for a lawsuit. The lesson here is that an intervening event in a current employee’s employment may aid in cutting off a retaliation claim (similar to re-hiring someone who was wrongfully terminated).

The Equal Pay Act (EPA) requires that all individuals are paid equally for performing the same job, regardless of gender. But what does that mean exactly? When are jobs equal? On March 21, 2018, in Berghoff v Patterson Dental Holdings, the Honorable Judge Frank ruled that jobs of males and females “need not be identical to be considered equal under the EPA”, and that “job titles and classifications are not dispositive.” (D. Minn., March 21, 2018, Case No. 16-2472). Judge Frank noted there are only four exceptions to the EPA: “(1) a seniority system; (2) a merit system; and (3) a system that measures quantity or quality of production; or (4) that the pay differential was based on a factor other than gender.” In this case, the employer argued that the Plaintiff’s compensation was lower not because she was female, but because the product she marketed for the company generated less revenue than her male counterparts (who marketed products that brought in higher revenue for the company). While the jobs being compared were “essentially [all] marketing positions”, and the revenue generated by each of the respective products being marketed is relevant, the Court held that fact issues “surrounding the economic analysis on that point” precluded summary judgment. In sum, because there was a dispute regarding the use of revenue streams to show that the Plaintiff’s job involved less responsibility, the lawsuit goes on. However, Judge Frank similarly hinted that Plaintiff’s claim appeared weak and that “settlement would serve the interests of all parties.”

Take away for employers? Especially as your company grows, restructures, or changes compensation and commission plans, take a look at similar positions and ensure that there is no apparent pay disparity based on gender (or anything other than the four exceptions noted above).

In August 2017, the EEOC sued Estee Lauder Companies, Inc. based on a parental leave program that provided employees with paid leave to bond with a new child, as well as flexible return-to-work benefits. Mothers were given 6 additional weeks of paid bonding leave, while fathers were only given 2 weeks, and were not provided the flexible return-to-work benefits. The EEOC alleged such a policy violated Title VII and the Equal Pay Act of 1963, prohibiting discrimination in pay or benefits based on sex. It was recently announced that the lawsuit has been settled, while the terms have yet to be disclosed.

What does this mean for employers? While bonding leave or parental leave policies that go above and beyond any legal requirement are more common and certainly routed in good intentions, you should consider taking another look at any such policy that provides different benefits based on gender.

 

HR Generalists tasked with the EEO-1 report can celebrate.  On August 29, 2017, the White House’s Office of Management and Budget sent a memo to EEOC Acting Chair Victoria Lipnic, stating that it is reviewing the September 29, 2016 pay data collection revisions to the existing EEO-1, and while it does so, the pay data collection will be stayed. In other words, the new data requirement (aimed at determining equal pay issues) is on hold but employers need to be sure to continue to collect the normal data as usual, by March 2018.

In its memo, the OMB noted that the EEOC released data file specifications for employers to use in submitting EEO-1 data that were not contained in the Federal Register notice, and thus, could not obtain public comments: “As a result, the public did not receive an opportunity to provide comment on the method of data submission to EEOC.” Accordingly, “OMB has also decided to stay immediately the effectiveness of the revised aspects of the EEO-1 form for good cause, as we believe that continued collection of this information is contrary to the standards of the PRA (Paperwork Reduction Act). Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

In short, employers may continue using the previously approved EEO-1 form to comply with FY2017 reporting requirements!

 

 

Kenney Equal Pay ActThe EEOC issued new resource documents today in connection with its White House United State of Women Summit. The EEOC issued the following:

As with its earlier ADA guidance, the above “resource documents” are simply new webpages providing guidance for the above topics. For example, the EEOC’s proposal to collect pay data is not new, I blogged about it earlier. However, the new guidance notes that, following the first public comment period regarding the proposal, it will submit additional revisions and revised proposal for a second comment period this summer, 2016.

In short, the guidance reinforces that men and women must be paid equal wages if they perform the substantially same work, in the same workplace, under the Equal Pay Act (the picture above is President John F. Kennedy signing the Act into law in 1963).   “Wages” includes pay, overtime pay, bonuses, stock options, profit sharing, bonus plans, life insurance, vacation and holiday pay, and other forms of compensation.

What About Minnesota’s Equal Pay for Equal Work Law?!

Minnesota also has its own Equal Pay for Equal Work Law, Minn. Stat. 181.66 – .71.  Minnesota requires that employers (1 or more employees) similarly cannot discriminate against employee’s wages based on sex. The exception is public employers and employers that make payments based on a seniority system, merit system, piece rate system, or other differential based on any other factor other than sex.  Naturally, employers may not retaliate against an employee for making a complaint under this law.

What are the penalties for violating Minnesota’s Equal Pay for Equal Work Law? You don’t want to find out. An employee can sue the employer in court for the amount of unpaid wages for the previous year, plus an equal amount as liquidated damages, plus attorneys’ fees. Such an action may be brought by one employee or more collectively. This will add up much quicker than you would think. To put it into perspective, in Ewald v. Royal Norwegian Embassy, a single plaintiff was awarded $170,594 in lost wages and $100,000 in emotional distress.  The court then awarded the plaintiff’s attorneys $1.98 million – yes, that’s $1,983,692.66 ($1.7M in attorney’s fees and $209,973.61 in costs), as well as prejudgment interest on Plaintiff’s damages in the amount of $114,267.31. Thus, employers would be wise to internally audit their pay practices, at least annually, to ensure that pay ranges are consistent across the board within a certain position so you don’t find yourself in Norway’s boots.