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.

Recently-introduced federal legislation could have a significant impact on equal pay class actions. On January 30, 2019, Democratic legislators reintroduced the Paycheck Fairness Act (H.R.7), which provides for various changes to the Equal Pay Act of 1963 (“EPA”).  Earlier versions of this bill, which was originally introduced in 1997, have all died in Congress. However, on February 26, 2019, the House Committee on Education and Labor voted in favor of H.R.7, which means the legislation will now be presented to the full House for a vote.

Some key features of the newly-proposed legislation include:

This morning, the U.S. Supreme Court punted a key Equal Pay Act (“EPA”) case back to the Ninth Circuit because the decision’s author, Judge Stephen Reinhardt, passed away shortly before the decision was formally issued.

Yovino v. Rizo is a significant EPA case that has been winding its way through the courts for years.  In 2017, a Ninth Circuit panel held that a wage differential based on prior salary can qualify as a “factor other than sex” under the EPA.  But, in 2018, the Ninth Circuit, sitting en banc, came to the opposite conclusion: “prior salary alone or in combination with other factors cannot justify a wage differential.”  The en banc opinion was authored by Judge Reinhardt, who passed away 11 days before the decision was issued.  The opinion acknowledged the Judge’s passing with a footnote stating that voting had been completed and the decision was written prior to his death. 

Imagine that you are a company with two openings for the same position.  After selecting the two most qualified candidates, you offer each candidate a salary equal to his or her prior salary, plus 5%, pursuant to your established policy for setting new hire salaries.  On its face, your policy has nothing to do with sex, but does it violate the Federal Equal Pay Act?  This was the issue addressed by the Ninth Circuit Court of Appeals in the recent decision Rizo v. Yovino, No. 16-15372, slip op. at 11–12 (9th Cir. Apr. 27, 2017).

In response to a presidential memorandum directing the Department of Labor (“DOL”) to collect summary compensation data from federal contractors and subcontractors to combat pay discrimination, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) recently proposed a rule calling on certain federal contractors to submit reports on employee compensation.  The rule, published in the Federal Register on August 8, requires covered contractors to annually submit an “Equal Pay Report.” Covered federal contractors and subcontractors are those who:

• File EEO-1 reports;
• Have more than 100 employees; and
• Hold federal contracts or subcontracts worth $50,000 or more for at least 30 days.

You're Invited: Pay Equity Under The Obama Administration

Pay equity for women and minorities has been a priority throughout President Obama’s administration. President Obama has wielded his Executive power with increasing frequency in 2014. President Obama recently issued an Executive Order and a Presidential Memorandum that target the pay practices of federal contractors. Both actions are designed to increase transparency in employee compensation. They may have significant consequences for covered employers.