53: EEOC Sex-Based Pay Discrimination Cases

Pay discrimination
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Its been illegal to pay women less than men for substantially equal work under similar working conditions since 1963. 

In the last episode we learned a wee bit about equal pay for women. I briefly presented the case that we don’t have an epidemic that needs fixing with more laws, as the politicians and the press would have you believe. We learned its been illegal to pay women less than men for substantially equal work under similar working conditions, since 1963, as a result of the Equal Pay Act and Title 7 of the Civil Rights Act of 1964. We learned these laws have been supplemented by additional laws since then, including the Lilly Ledbetter Fair Pay Act of 2009.

I want to explore this issue a little deeper by looking at some of the recent Equal Employment Opportunity Commission, or EEOC, lawsuits against employers and ask the question, do we have an equal pay problem that will be improved if we pass another law, such as the Proposed Pay Check Fairness Act?

EEOC press releases:

The EEOC issues a press release every time they file or settle a lawsuit for discrimination. I scoured the archives of January 1, 2015 through July 31, 2016 looking for all the pay discrimination lawsuits and I was shocked by what I found.

Of the 573 press releases, only 8 are related to pay discrimination! I saw far more lawsuits for pregnancy discrimination, but most are for disability discrimination or sexual harassment.

I was captivated by the case summaries provided in the press releases and think you’ll find them interesting and educational. I’d like to read all of them, but that will take too long, so I’m just going to read the first two paragraphs of the two most interesting, plus a bonus one you’ll think is funny, well, at least I think it’s funny.

If you want to read the others, you’ll find them in the show notes which you can get at smallbizbrainiac.com/podcasts and click on episode 53.

EEOC lawsuits for equal pay violations:

Stanley Martin Companies, LLC Will Pay $45,000 to Settle EEOC Sex Discrimination Suit – January 11, 2016

Stanley Martin Companies, LLC, one of the largest homebuilders in the Mid-Atlantic Region, will pay $45,000 and furnish significant equitable relief to resolve a federal sex-based pay discrimination lawsuit, the EEOC announced today.

EEOC charged  Stanley Martin with refusing to promote Carrie Smith to a purchasing manager position at its Reston, Virginia office, due to her sex. When Stanley Martin finally promoted Smith to the purchasing manager position, she was paid a lower salary than male purchasing managers even though she was doing substantially equal work, EEOC says.

SOCI Petroleum/Santmyer Oil Company, Inc. Sued For Sex-Based Pay Discrimination – October 6, 2015

SOCI Petroleum aka Santmyer Oil Company, Inc., (SOCI), a leading oil company, violated federal equal pay laws by paying a female employee less than a male predecessor for performing substantially equal work, EEOC charged in a lawsuit filed on September 30, 2015.

According to the EEOC’s lawsuit, SOCI hired Lori Bowersock in 2006 to perform human resources work at the company’s facility in Wooster, Ohio. At the time, a male was functioning as the company’s human resources manager but after his employment ended in 2009, Bowersock assumed his function and began performing the human resources management work. The EEOC alleges that SOCI was biased against females and that the company tolerated the use of derogatory sex-based remarks to refer to females and devalued the accomplishments and capacity of female employees, as compared to that of males. The company paid Bowersock lower compensation than it paid to the male predecessor, according to the complaint.

Here is one where males were discriminated against and even though this isn’t one of the 8 pay discrimination cases, I wanted to mention it because it is a good example of how you can end up going too far to avoid discrimination against one group that you end up discriminating against another.

Ruby Tuesday to Pay $100,000 to Settle EEOC Sex Discrimination Lawsuit – May 21, 2015

International restaurant chain Ruby Tuesday, Inc., will pay $100,000 and implement preventative measures to settle a sex discrimination lawsuit brought by the EEOC, the agency announced today.

The federal agency charged that Ruby Tuesday denied two male employees the opportunity to work as servers in the busy resort town of Park City, Utah in the summer of 2013. According to the EEOC’s suit, Ruby Tuesday posted an internal announcement within a nine-state region for temporary summer positions with company-provided housing and the chance for greater earnings (Oregon, Arizona, Colorado, Iowa, Minnesota, Missouri, Nebraska, Nevada, and Utah). However, the announcement stated that only females would be considered, purportedly because of concerns about housing employees of both genders together. Ruby Tuesday only selected women for those summer jobs, therefore blocking two male employees from transferring to the resort.

So, in an attempt to avoid any potential sexual harassment situations they get slapped with a sex discrimination lawsuit. I’m sure the accounting department is to blame for this. The bean counters were too cheap to purchase two  separate housing facilities.

By the numbers:

What percentage of all sex-based pay discrimination violations does the EEOC catch? Of course nobody knows, but the EEOC does track all charges filed by 10 different categories, one of which is equal pay. A charge is filed when an individual reports discrimination. For fiscal year end September 30, 2015, there were 973 Equal Pay Act charges whereas over an 19 month period there were only 8 lawsuits filed. The number of charges since 1997 has ranged from 818 to 1,134 for an average of 1,038, or 1.21% of all filed charges. The least of all 10 categories.

Let’s just say for argument sake that the 8 represent a 12 month period. That would mean .77% of the average number of annual complaints are legitimate.

So, do we have a problem that needs more legislation? Clearly there are companies out there breaking existing laws but by these numbers, it isn’t remotely the problem the press and politicians claim it is. If the statistic that women are being paid, on average, 21 cents less than males is accurate, (that’s according to the report by the American Association of University Women that I mentioned in the last episode) then the number due to violations of existing laws is minuscule. And any laws forcing that statistic lower would have to include reverse discrimination. I.E. paying women more despite the existing legal reasons for doing so which is where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.

Conclusion:

Its been illegal to pay women less than men for substantially equal work under similar working conditions since 1963 — So don’t do it. Don’t do stupid things like these 8 companies who were sured by the EEOC. Base all compensation decisions on real differentiating factors. Use the affirmative defenses to establish your compensation decision making criteria, and document everything.

That said, based on the number of pay discrimination charges and the number of EEOC lawsuits that result, this just isn’t the epidemic the press and politicians are promoting. New laws will create unintended consequences and put more compliance pressure on you. We need less regulation, not more. We need more freedom and individual responsibility not more nanny state rules.

The other 6 cases from my research:

Sealed Air Sued By EEOC for Sex-Based Pay and National Origin Discrimination – July 27, 2016.

https://www.eeoc.gov/eeoc/newsroom/release/7-27-16.cfm

Sealed Air Corporation, a protective packaging business, violated federal law by paying a female production supervisor lower wages than its male production supervisor and by discriminating against her because of her national origin, Hispanic, the EEOC charged in a lawsuit filed today.

EEOC says that the Albuquerque-based Sealed Air Corp., d/b/a Kevothermal LLC, paid a female production supervisor lower wages than it paid her male counterpart who was doing substantially equal work under similar working conditions.

Hearn-Kirkwood Will Pay $63,500 to Resolve EEOC Pay Discrimination and Retaliation Lawsuit – January 5, 2016

https://www.eeoc.gov/eeoc/newsroom/release/1-5-16.cfm

Gilbert Foods LLC, trading as Hearn-Kirkwood, a food service distributor, will pay $63,500 and furnish significant equitable relief to resolve an EEOC pay discrimination and retaliation lawsuit, the EEOC announced today.

EEOC charged that Hearn-Kirkwood paid Sonia Coates, an order selector, less than it paid male order selectors, even though she had more experience and performed equal work at its Hanover, Maryland facility. When Coates learned that Hearn-Kirkwood paid a newly-hired male order selector significantly more per hour than she was earning, she told co-workers she intended to file a charge of discrimination.

According to the lawsuit, after a Hearn-Kirkwood manager learned about Coates’s plan to file a charge, he informed Coates’s supervisor that Hearn-Kirkwood intended to fire her without making it appear unlawful. Hearn-Kirkwood engaged in a pattern of retaliation, including unwarranted disciplinary actions that culminated in Coates’ termination, EEOC said.

EEOC Sues Prince George’s County for Pay Discrimination – October 1, 2015

https://www.eeoc.gov/eeoc/newsroom/release/10-1-15e.cfm

Prince George’s County, Maryland, violated federal law when it repeatedly paid a female engineer less than her male coworkers because of her gender, the EEOC charged in a lawsuit it announced today.

According to EEOC’s lawsuit, Joanna Smith had a bachelor’s of science degree in civil engineering and more than five years of engineering experience when she was hired for an engineer III position with Prince George’s County’s Stormwater Management Division. Prior to accepting the position, Smith requested a salary commensurate with her experience and education, but the county hiring official told her she could not negotiate her salary, according to the lawsuit. On March 12, 2012, Smith was hired at the entry-level salary for the engineer III position. EEOC said that two weeks later after Smith was hired, Prince George’s County hired a male for another engineer III position, but paid him his requested salary, which was $10,000 more than Smith’s starting salary, even though they were performing substantially equal work.

Taprite Fassco to Pay $72,500 to Settle EEOC Sex, Disability and Retaliation Discrimination Suit – July 31, 2015

https://www.eeoc.gov/eeoc/newsroom/release/7-31-15.cfm

Taprite Fassco Manufacturing, Inc., a San Antonio-based manufacturer of CO2 regulators in the soda and beer industries, will pay $72,500 and furnish other relief  to settle a gender, disability and retaliation-based discrimination lawsuit filed by the U.S. EEOC, the agency announced today.

The EEOC’s lawsuit charged that Taprite Fassco subjected a female quality control employee to sex-based wage discrimination, disability discrimination and unlawful retaliation after she raised questions to management concerning wage disparity between the sexes.  The suit said that Taprite Fassco paid a male over three dollars an hour more than the female employee for performing substantially equal jobs at the same location.  The federal agency claimed that the company also retaliated against the female employee for complaining about the wage discrimination by demoting her into a less favorable and lower-paying position that she could not perform because of physical limitations resulting from rheumatoid arthritis and carpal tunnel syndrome.  The EEOC’s lawsuit also alleged that Taprite Fassco denied the female employee’s requests for reasonable accommodation for her disability such as reassignment to her previous position that would have permitted her to continue working.

Ten Exploration and Production Companies Sued by EEOC for Sex-Based Pay Discrimination – May 18, 2015

https://www.eeoc.gov/eeoc/newsroom/release/5-18-15.cfm

CASPER, Wyo. – Ten associated exploration and production companies operating in 12 states violated federal law by paying female employees lower wages than men, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed today.

The EEOC says that Casper, Wyo.-headquartered True Oil, LLC and its associated companies paid a class of female accounting clerks lower wages than it paid to their male counterpart who was doing substantially equal work under similar working conditions.

EEOC Sues Maryland Insurance Administration for Sex-Based Pay Discrimination – April 20, 2015

https://www.eeoc.gov/eeoc/newsroom/release/4-20-15a.cfm

BALTIMORE – The Maryland Insurance Administration, an independent state agency that regulates Maryland’s insurance industry and enforces insurance laws, violated federal law by paying  female employees lower wages than men, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it announced today.

The EEOC says that since at least December 2009, the Maryland Insurance Administration paid Alexandra Cordaro, Mary Jo Rogers, Marlene Green and a class of similarly situated female investigators and enforcement officers lower wages than it paid to their male counterparts who were doing substantially equal work under similar working conditions.  The alleged wage discrimination took place at the agency’s Baltimore office.

About the author, Thomas

I have 20 of years insurance industry experience in C-level management, focusing on all aspects of workers compensation, risk management, loss control, employee benefits, HR, payroll and professional employer organization (“PEO”) operations. Currently, I am the owner and CEO of Humanly HR, and founder and host of SmallBiz Brainiac; a podcast providing employer intelligence to small business owners.

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