Hunton Employment & Labor Perspectives

Earlier this year, a federal court in Illinois decertified a small class of Physicians who alleged gender-based pay discrimination under the Equal Pay Act (“EPA”).  Sajida Ahad, MD v. Board of Trustees of Southern Illinois University, No. 15-cv-3308 (C.D. Ill. Mar. 29, 2019).  Although not a groundbreaking appellate court decision, the opinion does provide a roadmap for employers facing EPA collective actions, which may gain traction in the wake of increasing media attention on pay disparities.

Procedural History

Sajida Aha, a physician for Southern Illinois University Healthcare, alleges that the defendants paid her and other female physicians substantially lower compensation than male physicians for the same or similar work, in violation of several state and federal statues, including the EPA.

In September 2017, the district court conditionally certified a class of female physicians and authorized notice for potential class members to opt-into the action.  Notably, the EPA allows such a conditional certification procedure because it is part of the Fair Labor Standards Act (“FLSA”), not Title VII as some mistakenly assume.  In addition, because the EPA is part of the FLSA, employees do not have to go to the EEOC prior to filing an EPA lawsuit.

Notice was sent to all female faculty physicians employed by Southern Illinois University Healthcare between September 2014 and September 2017.  Of the potential class, only three physicians opted into the action.

After nine months of discovery, defendants filed a motion to decertify the collective action, arguing that none of the plaintiffs were similarly-situated, thus warranting decertification.

Analysis

The court agreed with defendants and decertified the class.  Central to this determination was the court’s focus on the individual job duties of each opt-in.

Plaintiffs argued they were similarly situated because they all practiced medicine generally, shared a common job title, and had duties in administration, patient care, research, and teaching.  All plaintiffs were also subject to the same general compensation plan, which gave two administrators final approval for all compensation decisions.

Defendants countered these arguments by pointing out individualized differences in the plaintiffs’ medical specialties (e.g., surgery v. family medicine), as well as differences in the amount of time each plaintiff spent among research, patient care, administration, and teaching duties.  Defendants also pointed out that market forces demanded differing compensation structures for each medical specialty.

Ultimately, the court agreed with defendants that a fact-intensive inquiry would be required to assess the validity of defendant’s affirmative defense that “factors other than sex” determined each plaintiff’s compensation.  Because the inquiries were so individualized, the case could not proceed as a class.

Takeaway

The case is a reminder that EPA actions follow the FLSA’s 2-stage conditional certification procedure.  This can make them more costly to defend because conditional certification is easier for plaintiffs to obtain than Rule 23 certification.  It is not until stage 2, after discovery, and after defendant files a motion for decertification, that courts engage in a fact-intensive analysis to decide if certification is proper.

Ultimately, certification of EPA claims will turn upon an analysis of plaintiffs’ job duties and compensation structure.  As the Ahad case makes clear, merely sharing a job title, having similar education experience, and performing the same general tasks will not suffice for class certification.  Rather, courts will engage in a fact intensive analysis.

With this in mind, employers should take a close look at their recruitment, pay and performance evaluation policies and ensure such policies are gender neutral.  More critically, pay disparities among individuals with overlapping responsibilities should be motivated by gender-neutral factors unique to each individual.  As is true with all pay and discrimination statutes, steps taken towards compliance now generally help fray the cost of a lawsuit should litigation prove inevitable.