Last week, the Fourth Circuit issued a favorable decision for the EEOC in a case the federal agency brought against the Maryland Insurance Administration (“MIA”) for violations of the Equal Pay Act (“EPA”). United States EEOC v. Md. Ins. Admin., 2018 U.S. App. LEXIS 298 (4th Cir. Jan. 5, 2018).
The Underlying Case
The lawsuit grew from three female MIA Fraud Investigators’ complaints that they made less money than male Fraud Investigators for the same work. Under a pay schedule created by the State of Maryland, when the MIA hired an individual, it assigned that person a grade and step level, which determined that person’s salary. Certain background and experience (such as previous State employment) caused assignment of an employee to a certain grade and/or step level. The relevant individuals were subject to the pay schedule and assigned the same grade level at hire. Notwithstanding the scheme, the three females had lower starting salaries than four males that the EEOC identified.
The Majority
The Court of Appeals first reversed the district court’s holding that the EEOC (who brought the lawsuit on behalf of the female complainants) failed to make its prima facie case. Stated simply, the EPA requires a plaintiff to demonstrate that his or her employer paid more money to another employee of the opposite sex for equal work on the same job, performed under similar working conditions. The Court found that because the women here earned less money than the men identified, the EEOC had met its burden of proof under the EPA, noting that the actual differences in background experience and step levels between the two groups had no bearing on the prima facie case.
The Court then held that the MIA did not meet its “necessarily [] heavy” burden of proof on an affirmative defense to the EEOC’s case. Under the EPA, an employer may assert one of four affirmative defenses to explain the pay disparity. Focusing on the “factor other than sex” defense (and noting that the MIA “abandoned” other affirmative defenses), the Court rejected the MIA’s explanation that the pay schedule dictated the discrepancies in pay. It found that although the employees were assigned salaries pursuant to the pay schedule, the MIA still used discretion in assigning the employees to their initial place on the schedule. As a result, the MIA failed to demonstrate that the schedule “in fact” explained the salary disparities, as required by the EPA. Nor was the Court persuaded by the different qualifications that the male employees possessed.
The Dissent
Judge Wilkinson dissented vigorously, framing the case as a matter of states’ rights, federalism, and constitutionality. His dissent chastised the majority for permitting a federal agency to enforce a federal law in federal court against the state agency over such a “weak” and “marginal” underlying case. Such an attack, he conveyed, usurps “a state’s sovereign interest in its own civil service.”