Should Salary History be History? Circuit Court Holds Past Salary History Cannot Justify Unequal Pay

By Sharon L. Gold

In Rizo v. Yovino, the Ninth Circuit Court recently held that an employer cannot use an employee’s prior salary history as a ‘factor other than sex’ upon which a wage differential may be used under the Equal Pay Act.  The EPA prohibits employers from paying women less for the same job unless the difference is based on merit, seniority, quantity or quality of work or the catchall “any other factor other than sex.”  The court held that salary history was not a legitimate factor that was related to the job, and instead, employers should use factors such as experience, training, education or prior performance to set wages.  The en banc decision was unanimous.

This decision comes amid several states banning salary history as a permissible factor upon which to base pay.  According to the Department of Labor, women in the U.S. make on average 82 cents to a dollar of what men make in comparable jobs.  Proponents of banning the “salary history” question claim that

Scotus Has Spoken: Arbitration Contracts Barring Class Actions are Lawful

By R. Joseph Stennis, Jr.

In a narrow 5 – 4 ruling, the United States Supreme Court (“SCOTUS”) finally put to rest yesterday an antagonistic class action waiver issue that has been brewing in various federal circuit courts for the past six years. In  the opinion, (written by Trump Administration appointee Justice Neil Gorsuch), the Court upheld the use and enforceability of class action waiver language contained in employment arbitration agreements.   Relying heavily on the language contained in the Federal Arbitration Act (“FAA”), the Court reasoned that “Congress has instructed federal courts [by way of the FAA] to enforce arbitration agreements according to their terms – including terms providing for individualized proceedings.”  The Court rejected the notion that arbitration agreements violate the ‘concerted activities’ clause of the National Labor Relations Act (“NLRA”) by concluding, “[the NLRA] does not mention class or collective action procedures.  It does not even hint at a wish to displace the Arbitration Act.”

Federal Appellate Court Extends ADEA to Job Applicants

By Thomas E. Travis

On April 26, 2018, the U.S. Court of Appeals for the Seventh Circuit ruled that portions of the Age Discrimination in Employment Act (“ADEA”) protect job applicants, in addition to internal employees.

Dale Kleber, a 58-year old attorney applied for a legal position with CareFusion, a healthcare product company.  The job posting called for a “business person’s lawyer” capable of “assum[ing] complex projects.”  The position’s qualifications required “3 to 7 years (no more than 7 years) of relevant legal experience.”  CareFusion reviewed Kleber’s application, but ultimately hired a 29-year old applicant.  Kleber filed a charge of age discrimination regarding the 7-year maximum experience cap with the Equal Employment Opportunity Commission, who issued Kleber a right-to-sue letter in 2014.

In turn, Kleber

The Sixth Circuit Rules an Employer Violated Title VII by Terminating its Transgender Employee

By R. Joseph Stennis, Jr.

On March 7, 2018, the United States Court of Appeals for the Sixth Circuit reversed a district court decision and ruled in favor of a transgender employee who claimed she was terminated by her employer based on her sex pursuant to Title VII of the Civil Rights Act of 1964.  Aimee Stephens, formerly known as Anthony Stephens, worked as a funeral director at R.G. and G.R. Harris Funeral Homes, Inc.  The funeral home had a dress code policy, requiring male employees to wear suits and female employees to wear skirts and business jackets.  The funeral home provided free suits to the male employees, but did not (at least initially) provide female employees with any clothing to comply with the company’s dress code policy.  Stephens informed the funeral home that she would be transitioning from male to female and therefore would begin to dress to be in compliance with the company’s dress code for females.  Shortly thereafter,

Second Circuit Recognizes Sexual Orientation Discrimination as Subset of Sex Discrimination under Title VII

By Courtney Samford

The U.S. Court of Appeals for the Second Circuit recently held that Title VII prohibits discrimination on the basis of sexual orientation in Zarda v. Altitude Express, No. 15-3775 (2d Cir. 2018).  With this decision, the Second Circuit joins the Seventh Circuit as the second court to recognize sexual orientation as a protected class under federal law.

Donald Zarda was a skydiving instructor who claimed that he was terminated from his position after he told a client that he was gay.  He sued his former employer and its owner, alleging that Title VII and New York law prohibit discrimination based on sexual orientation.  The lower court granted partial summary judgment in favor of the employer on the ground that Title VII does not protect gay and lesbian employees.  Zarda died in a skydiving accident prior to trial, so

Where Wage Disparity Exists, Court Holds that Employers have Heavy Burden to Prove the Reason for Disparity

By Julie Laemmle

The Fourth Circuit recently issued a decision in EEOC v. Maryland Insurance Administration, No. 16-2408 (4th Cir. Jan. 5, 2018), joining the Third, Sixth and Tenth Circuits in finding that the statutory language of Section 206(d) of the Equal Pay Act (“EPA”) requires an employer to provide evidence that the employer’s affirmative defenses do in fact explain the wage disparity; it is not enough for the employer to possibly explain the wage disparity.

The Fourth Circuit denied summary judgment because there were fact issues for trial as to whether the salary difference between the male and female employees was due to factors other than gender.  The Court explained the parties’ respective evidentiary burdens as follows:

• The employee must show that the employer paid different wages to an employee of the opposite sex for equal work on jobs requiring equal skill, effort and responsibility under similar working conditions.
• The employee does not have to establish that males, as a class, receive higher wages than females as a class; rather, the employee must demonstrate that there is discrimination in pay against the employee with respect to only one employee of the opposite sex.
• It is irrelevant to the employee’s initial burden that other employees of the opposite sex perform substantially identical work as the employee, but make less money than her.
• If the employee meets the initial burden and proves that a disparity exists, the employer must prove that the disparity was justified by one of four affirmative defenses: a seniority system; a merit system; a pay system based on quantity or quality of output; or, a disparity based on any factor other than gender.
• If an employer fails to establish one or more of these affirmative defenses, the employee will win summary judgment. In contrast, it is a heavy burden for the employer to establish one of the four affirmative defenses as a matter of law.

Take away for employers:  Several circuits require that employers explain the reason for the wage disparity in terms of concrete facts, not in terms of what may have caused the wage disparity.  Wage disparity claims are gaining steam and are in the news across the nation.  Employers are wise to review their wage practices now to ensure that wage disparity does not exist because once these claims are brought, the employers’ evidentiary burden will be heavy.

Sixth Circuit to Weigh In on Religious Protection and Transgender Rights

By Amanda Warford Edge

Last week, a Detroit funeral home filed a brief with the Sixth Circuit arguing that it could fire a transgender employee who refused to follow its sex-specific dress code. According to the funeral home, allowing the employee (who was transitioning from male to female) to wear women’s clothes at work — namely, a skirt suit — would violate the religious beliefs of the home’s owner.

Last year, at the district court level, the Court said that the Religious Freedom Restoration Act (“RFRA”) shielded the funeral home from liability because the termination stemmed from its owner’s devout Christian worldview. In other words, the Court held that the funeral home was entitled to a religious exemption under RFRA and, therefore, did not violate federal employment discrimination law. In making its ruling, the Court reasoned, in part, that transgender people are not protected by federal anti-bias law.

The EEOC appealed this ruling and filed its brief in February. The funeral home has now asked the Court to affirm the holding that Title VII does not protect transgender people because the meaning of “sex” when Title VII was passed did not include the concept of gender identity. The funeral home also remains adamant that RFRA provides a legal defense for its enforcement of its sex-specific dress code.

The case is EEOC v. RG & GR Harris Funeral Homes, Case No. 16-2424.