Recent Ninth Circuit Equal Pay Act Decision A Reminder To Examine and Eliminate Gender-Based Pay Disparity (US)
On Monday, March 15, 2021, the Ninth Circuit Court of Appeals reversed, in part, a district court’s order denying a federal Equal Pay Act (“EPA”) claim filed by a former University of Oregon tenured psychology professor who claimed she was paid significantly less than her male colleagues. The decision serves as a reminder to employers to critically evaluate the compensation of male and female employees performing similar duties, even those performing unique and highly specialized duties like teaching and research.
Professor Jennifer Joy Freyd, a Stanford- and Cornell-educated full tenured psychology professor specializing in trauma studies, taught students, oversaw a research lab, edited one of the foremost journals in her field, and served on numerous University committees. She had little interest in leaving the University, despite “initial probes” from other universities that she received about once per year, because her husband also worked at the University and they were raising their children in the area. She also had worked hard to build her own research lab and to procure private donors to support her research in trauma studies. Many of her peers also were courted to leave the University and teach elsewhere. When they were wooed in this manner, the University of Oregon had a practice of granting “retention raises” to faculty as an incentive to remain at the University. As a result of Prof. Freyd’s disinterest in leaving the University, she had no reason to engage in, and the University was disincentivized from initiating, discussions about awarding her a retention raise. She also came to believe that when her women peers engaged in retention raise negotiations with the University, they were less likely to obtain a raise at all, and when they did, the raises were significantly smaller than those negotiated by their male peers.
Through an unrelated public records request, Prof. Freyd obtained salary data for the full professors at the University of Oregon. In the process, she learned she was paid between $14,000 and $42,000 less per year than several comparable male peers with the same teaching rank and seniority, tenure, publication histories, and teaching or editorial responsibilities. Prof. Freyd then looked at sex-based pay disparities affecting her women colleagues. She ran a regression analysis on pay data and determined that six of eight (75%) male professors fell above the regression line, whereas five out of six (83%) female professors fell below the regression line for average pay. An independent self-study by the University of Oregon conducted the following year confirmed there was an annual average difference in salary between male and female full professors of psychology of $25,000, which, the self-study concluded, was primarily connected to the retention raise phenomenon. Based on all of this data, Prof. Freyd sought a retroactive merit raise to compensate her for the historic pay gap caused by the retention raises. Despite support from her Department Chair, the University’s Associate Dean denied the request.
Prof. Freyd sued, alleging among other causes of action, that the gender-based pay disparity violated the EPA. In support, she retained a statistical expert who again confirmed, using an even broader data set, that the evidence “strongly suggests that the gender discrepancy in full professor salaries can be attributed to retention raises.” The University rejected this position and argued that Prof. Freyd had failed to identify male comparators doing equal work, as required by the EPA. Although conceding that all held the rank and title of full professor, the University argued the four male comparators did different types of psychology research, ran different labs, obtained funding for their research from different sources, and sat on different University committees. The district court agreed.
The Ninth Circuit Court of Appeals reversed. Although the majority agreed a jury might find that the four male comparators performed tasks too distinguishable to be considered equal work, the majority determined that a reasonable jury could just as easily conclude that Prof. Freyd and her comparators “perform a ‘common core’ of tasks and do substantially equal work.” That is, a reasonable jury could be persuaded the comparators “share the same ‘overall job’” as they are all full professors in the psychology department with responsibilities for research, teaching, advising students, and participating in University committees. The majority also asked the practical question whether the EPA could ever apply to professors, each of whose teaching, research, and advisory foci might be slightly different, if any picayune distinction invalidated the EPA analysis, noting “the granularity with which the dissent [and the trial court] picks through the facts would gut the [EPA] for all but the most perfunctory of tasks.” Since the EPA has broad remedial scope and should be construed and applied as such across a broad range of industries, including higher education, the Ninth Circuit remanded the case to the district court so that a reasonable jury could consider whether Prof. Freyd and her male comparators did substantially similar work. The Ninth Circuit also reversed and remanded her related state law equal pay act claims and allegations of sex-based disparate impact in pay under Title VII.
The decision is a reminder to employers, particularly those located within the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), to analyze carefully any pay gaps that emerge along gender lines and that cannot be clearly explained by differences in the type of work performed. In this case, even the University’s own statistical analysis yielded no explanation for the significant pay disparity among full professors other than because of the retention bonuses that were a product of negotiation rather than reflective of the quality, sophistication, or amount of work performed by the professors. Although bona fide differences in job duties may provide a non-discriminatory explanation for pay gaps, negligible differences or ones that arise because of self-advocacy for pay raises – a phenomenon that disproportionately negatively impacts women (see, e.g., here and here) – will not automatically insulate an employer against claims under the EPA.