The Equal Pay Act (EPA) and Title VII of the Civil Rights Act generally prohibit covered employers from discriminating against employees on the basis of sex with regard to compensation. The EPA requires men and women to receive equal pay for equal work in the same establishment. Thus, in order to prove a violation of the EPA, a claimant must show that she was paid less than a male comparator working in a “substantially equal” job. Under Title VII, plaintiffs often attempt to establish a gender-based pay disparity claim with evidence of a similarly-situated male comparator who was paid more than a female coworker performing a similar job. In a recent case before the U.S. Court of Appeals for the Fourth Circuit, a plaintiff attempted to demonstrate such a claim by arguing that a male in a different job received pay consistent with the “local industry standard” (i.e., market rate) for such job, while the plaintiff’s pay for her job was below that standard. Based on the facts of the case, a panel of three judges on the Court rejected that theory and found that the plaintiff had not been subjected to pay discrimination under Title VII or the EPA. See Noonan v. Consolidated Shoe Company, Inc. (4th Cir. 10/19/23).
Noonan was employed by Consolidated Shoe most recently as a senior photographer and PR specialist in the company’s marketing department. She had previously held the title of graphic designer, though she had little relevant experience in that role. The company hired a more experienced male candidate, Matt Wiese, for the senior graphic designer position. Noonan complained to the company that she was being subjected to sex discrimination when she learned that Wiese was paid “considerably more” than she was. However, after an internal investigation the company determined that Wiese was paid more because of his “greater job duties, experience, and skills.”
Noonan filed suit against Consolidated Shoe alleging claims of pay discrimination and retaliation under the EPA and Title VII. She initially attempted to prove sex discrimination by arguing that Wiese performed a similar job but was paid more than she was paid. However, the federal district court dismissed that claim on summary judgment, on the grounds that Wiese was not a similarly situated comparator because he held a substantially different job than Noonan. (The court also dismissed Noonan’s retaliation claims.) Noonan then appealed to the Fourth Circuit Court of Appeals. Interestingly, on appeal Noonan abandoned her argument that Wiese was paid more for performing a similar job. Instead, she argued that Wiese was paid a wage consistent with “local industry standard” for his job, while Noonan and several other female employees were paid a rate lower than that standard for their jobs. According to Noonan, this disparate application of local market rates was sufficient to prove discriminatory pay practices on the basis of sex.
However, the Fourth Circuit rejected Noonan’s theory. The Court’s analysis focused on the fact that Wiese, Noonan and the other female employees all held different positions. The Court cited earlier caselaw for the proposition that “where the comparator performs a dissimilar job, no comparative inference of discrimination can be drawn.” Given the lack of job similarity between Noonan, other female employees, and Wiese, the Court concluded that any disparity between their pay and any purported local market pay rates could not be used to establish an unlawful pay practice. The Court reasoned as follows: “What Noonan cannot show by comparing herself to one dissimilar male employee, she can’t show by comparing that same male co-worker to two other dissimilar employees either. So Noonan has not satisfied her burden of raising an inference of sex discrimination.” Accordingly, the Court affirmed summary judgment for the employer regarding Noonan’s pay-disparity claims under Title VII and EPA.
Because of the Fourth Circuit’s finding that Noonan failed to establish an inference of discriminatory motive, the Court’s analysis of Noonan’s pay disparity claims did not proceed further in order to dispense with those claims. Ordinarily, if a plaintiff presents sufficient evidence to demonstrate such an inference, the burden then shifts to the employer to articulate a non-discriminatory business reason for any pay disparity (such as seniority, merit, performance, etc.). While the Court’s decision is instructive regarding the type of evidence an employee must present in order to establish a prima facie case of pay discrimination claim, it is important to recognize that any pay disparities between men and women can potentially prompt a legal challenge. (In that regard, it should be noted that employees generally cannot be prohibited from discussing their wages and other terms and conditions of employment.) Employers should therefore exercise caution when determining pay rates for employees, and especially those within the same job categories. Any disparities in compensation among employees performing the same or similar jobs must be based solely upon legitimate, non-discriminatory criteria.
