Title VII pay claims do not require EPA violations, court says

Dive Brief:

Title VII of the Civil Rights Act of 1964 does not require a plaintiff to establish an Equal Pay Act violation — that he or she received unequal pay for equal work — but simply that the employer engaged in pay discrimination on the basis of sex, according to the 2nd U.S. Circuit Court of Appeals (Lenzi v. Systemax, Inc., No. 18-979 (2nd Cir. Dec. 6, 2019)).
The plaintiff, Danielle Markou, was paid "significantly less" than her male counterparts who also reported to the company CFO, said the 2nd Circuit. Markou was actually paid at a below-market rate for her position, based on the employer's salary benchmarking data, while the salaries of her male peers generally exceeded market rates.
"A Title VII plaintiff alleging a discriminatory compensation practice need not establish that she performed equal work for unequal pay," said the 2nd Circuit. "By its plain terms, Title VII makes actionable any form of sex-based compensation discrimination." Markou was also able to establish a prima facie showing of discriminatory intent, based on pay data and disparaging remarks the CFO made about Markou specifically and women in general. Accordingly, the 2nd Circuit reversed a district court's summary judgment ruling in favor of the employer on this issue.

Dive Insight:

This case serves as a good reminder that illegal pay discrimination can take several forms. The court in this case noted, as an example, that an employer's decision to hire a woman for a unique position but pay her less than it would have had she been a man could constitute sex-based pay bias under Title VII.

More than half of employers (60%) are working to achieve pay equity, according to a WorldatWork and Korn Ferry report, and many, including several household names, are declaring success. Nordstrom reported it reached 100% pay equity across gender and race earlier this year. Match Group, the owner of OkCupid and Tinder, said late last year that an audit confirmed it had achieved 100% pay equity.

Regular pay audits can help employers uncover and remedy discriminatory pay practices. At last year's National Employment Law Institute conference, Zina Deldar, corporate counsel at Affirm, Inc. and co-presenter Quenton Wright, a principal at Charles Rivers Associates, have recommended employers ensure the audit and its results are effective, accurate, and privileged in the event of litigation.

Deldar and Wright also recommended that employers get clear on their pay philosophy and processes and maintain sufficient data to justify their compensation decisions.