DLLR's Division of Labor and Industry

 

Memorandum - Maryland Commission on Human Relations - Equal Pay Act - Appendix F - Report of the Equal Pay Commission

 

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TO: Equal Pay Commission Members
FROM: Glendora C. Hughes, General Counsel
Erika Gilliam, Law Clerk
DATE: March 8, 2006
SUBJECT: Equal Pay Act: Overview of Commencing a Claim; and Recent Maryland and Supreme Court Holdings

I. EQUAL PAY ACT OVERVIEW

The Equal Pay Act (hereinafter "EPA") was passed on June 10, 1964 and became effective on June 11, 1964. EPA provides protection against wage discrimination on the basis of sex. EPA prohibits employers from unequally paying "wages to employees of the opposite sex . . . 'for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions."

A. PLAINTIFF'S/EMPLOYEE'S CASE

When establishing an EPA claim, the plaintiff (hereinafter "employee") has the ultimate burden of persuasion and has the burden of production to establish a prima facie case. Employee need not show intentional discrimination , however, the employee must create a presumption of discrimination by proving three elements needed to establish a prima facie case:

(1) employer pays different wages to employees of the opposite sexes;
(2) employees of the opposite sex hold jobs that require equal skill, effort and responsibility; and
(3) jobs are performed under similar working conditions.

Courts have explained the different methods of proving each EPA element. For example, an employee may establish a prima facie case simply through successive employment by establishing that her successor made higher wages. However, if employee is unable to produce a salary comparison because no opposite sex was employed in a similar position at a higher wage rate, an employee cannot set forth an EPA claim. While traditionally, employees prove that working conditions were "virtually identical," for the second element, the employee cannot claim that their assigned duties plus additional voluntary duties constituted similar working conditions to that of another employee. Also, an employee also cannot establish similar working conditions on job titles alone. For the third prong of EPA, courts have rejected that similar title combined with similar generalized responsibilities are equivalent to equal skills and responsibilities. In addition, one cannot compare all positions held by other gender department heads to the department heads of the opposite sex. Instead comparisons must made on a case-by-case basis. However, jobs that have the same general responsibilities are considered unequal "if the more highly paid job involves additional tasks which (1) require extra effort . . . (2) consume a significant amount of time . . . and (3) are of an economic value commensurate with the pay differential."

B. DEFENDANT'S/EMPLOYER'S CASE

If the employee is able to establish a prima facie case by proving the elements of EPA, the burden shifts to the defendant [hereinafter "employer"]. The employer then has the burden of production, by preponderance of the evidence, to produce credible evidence supporting one of the statutory affirmative defenses to justify the wage discrepancy. The affirmative defenses are: (1) seniority system; (2) the merit system; (3) production system, which measures earnings by quantity or the quality of production; and (4) a system based on factors other than sex.

Throughout a number of cases, courts have further defined and accepted specific nuances of each affirmative defense. For example, the 4th Circuit made clear that if an employee has a seniority system, the system does not have to be recorded; however, employees must be aware of the system's existence.

The 4th Circuit also addressed aspects of the merit system in Equal Opportunity Commission v. Aetna Insurance Co. In this case, the Secretary of Labor brought suit on behalf of an employee under the EPA. The employer, however, was able justify the pay disparity with the statutory affirmative defense, the merit system. The merit system took into account the employee's previous work experience, performance, and current progression within the company. Ultimately, the District Court granted summary judgment to the employer based on the merit system and the 4th Circuit subsequently affirmed. Similar to the seniority system, the 4th Circuit indicated that the merit system does not have to be recorded; however, the system must be organized and structured in a manner where employees are systematically evaluated according to predetermined criteria. If the merit system is not recorded, employees must be aware of the system and the merit system is not upon sex. Although the 4th Circuit in Equal Opportunity Commission v. Aetna Insurance Co. acknowledged the merit system, the Court did not specifically characterize employer's affirmative defense as the merit system. Instead the 4th Circuit affirmed the lower court's ruling and declined to make a distinction. The 4th Circuit only designated employer's justification as a "pay differential . . . not based on sex."

However 15 years later in 1995, the 4th Circuit identified the employer's affirmative defense in Equal Opportunity Commission v. Aetna Insurance Co. as a "factor other than sex," the fourth statutory affirmative defense. The last affirmative defense also deemed by the Supreme Court as a "general 'catch-all'" affirmative defense. The 4th Circuit in Strag v. Board of Trustees simply characterized the pay disparity justification as "factor other than sex" because of the a difference in qualifications/experience between the opposite sexes. Another recently accepted "factor other than sex" defense is market demand. As what occurred in Brinkley v. Harbour Recreation Club, the Court accepted the employer's affirmative defense of market demand as a "factor other than sex" since the marketplace demanded an individual with a higher level of experience. If another employee of the opposite sex did not possess the same experience, they would be paid a lower wage.

Although the affirmative defenses are clearly stated in both case law and at 29 U.S.C. § 206 (d)(1), employers have attempted to remedy EPA violations through other means and have attempted to characterize them as a "factor other than sex." For example in Corning Glass Works v. Brennan, Secretary of Labor, the Supreme Court rejected pay equalization as a "factor other than sex." In this case, the employer continued to violate EPA by paying higher wages to the male night shift inspectors than the female day shift inspectors. In efforts to remedy this violation and avoid equalizing pay wages, the employer made the night shift positions available to female inspectors. By making these positions available, female inspectors were able to bid for higher paying night inspection positions. Ultimately the Supreme Court rejected pay equalization as a "factor other than sex," because although the employer made an effort to integrate night shift positions, the employer still failed to adjust daytime pay disparities between the opposite sexes.

The employer may raise its affirmative defenses either in its answer to employee's complaint or in a motion for summary judgment. With summary judgment, since the burden is on the movant to prove summary judgment, the facts are viewed in favor of the opposing party. If employer fails to put forth affirmative defenses in its answer, the employer has not waived the right to produce affirmative defenses during summary judgment if employee is not unfairly surprised or prejudiced by the late notice of the affirmative defense.

C. PLAINTIFF'S/EMPLOYEE'S SUBSEQUENT CASE

When the employer produces evidence supporting their affirmative defense, the burden of production then shifts back to the employee who "must come forward with 'specific facts showing that there is a genuine issue for trial.'" The employee must produce evidence to controvert the employer's evidence for justifying affirmative defenses. However, if the employee is unable to produce specific facts, summary judgment as a matter of law is granted to the employer.

D. DAMAGES

If the employer is unable to produce evidence supporting one of the affirmative defenses or if the employee rebuts the employer's successful affirmative defense, the employee may be entitled to damages. The employee can be awarded liquidated damages and/or compensatory damages. If the employer is able to establish "that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not violating of the Act," the employee is not entitled to damages. To establish reasonable grounds for good faith, the employer's actions must not have been willful. Similar to what occurred in Brinkley-Obu v. Hughes Training Inc., where the employer decreased another employee's salary to equalize the salaries of both sexes. If the employer's actions are not willful, the employee is not entitled to liquidated damages.

II. MARYLAND EQUAL PAY ACT

The Maryland Equal Pay Act (hereinafter "MEPA") also "prohibits discrimination in the payment of wages between male and female employees in the jobs of comparable character of work in the same establishment." While the MEPA elements are similar to that of the EPA, the Maryland Court of Appeals made clear that the federal EPA did not preempt the MEPA. Yet while the MEPA prima facie elements are similar, the exceptions that justify wage disparity are dissimilar. Instead of three factors as in the federal EPA, there are five factors in MEPA:

(1) a seniority system that does not discriminate on the basis of sex;
(2) a merit increase system that does not discriminate on the basis of sex;
(3) jobs that require different abilities or skills
(4) jobs that require the regular performance of different duties or services; or
(5) work that is performed on different shifts or at different times of day.

Factors (4) and (5) are not reflected in the federal EPA.

A. CLAIMS UNDER THE MARYLAND EQUAL PAY ACT

Although the MEPA currently remains in effect, there have been few cases found within the appellate system. In fact, we found only three reported cases: Gaskins v. Marshall Craft Associates Inc., Hassman v. Valley Motors, Inc., and Nixon v. State of Maryland none which give insight to the MEPA. As previously stated in Gaskins v. Marshall Craft Associates, Inc., the federal EPA does not preempt the MEPA. In Hassman v. Valley Motors, Inc., the employee brought an action against her employer under both the federal EPA and MEPA. The Maryland District Court entered judgment in favor of the employer because the employee's duties were not similar to those of the opposite sex. The Court deemed the employer's reason "a legitimate, non-pretextual reason for the salary differential." Since the Court found that the employer was unable to meet the prima facie elements of the federal EPA, the Court stated their findings also applied to the employee's MEPA claim. Finally, in Nixon v. State of Maryland, although the employee brought a claim under the MEPA, the employee relied on the federal EPA. The Court analyzed employee's claim under MEPA. Ultimately, the Court rejected the claim because the employee failed to show "that her deities required equal skill, effort and responsibility . . . [and that she] performed work of comparable character" to that of the opposite sex.

B. CONCLUSION

It appears that most employees are either unaware of MEPA, are using the federal EPA to file a claim, or are mistakenly filing a claim under MEPA but are establishing a prima facie case under federal EPA elements. In addition, the lack of appellate case law can probably be attributed to the lack of claims filed under the MEPA.

 
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