Trial Magazine

From insurance companies to the U.S. Soccer Federation, businesses and institutions across America are facing lawsuits for paying women less than men.¹ Slowly but surely, women are demanding equal pay for equal work. Although women’s wages steadily increased between 1980 and 2000—diminishing the gap between the wages of their male counterparts—these gains have not continued, and wages have leveled off in the last 20 years.² Frustratingly, the overall pay gap appears to be stuck at women earning 80 cents on the dollar—with women in minority groups often earning significantly less.³ Several explanations have been offered for this phenomenon,⁴ but, regardless, the result is wage theft, plain and simple.

As corporate employers fail to right this wrong, litigation has become necessary to help level the playing field, and the federal Equal Pay Act of 1963⁵ remains an underutilized tool. Plaintiff attorneys bringing equal pay claims in collective and class actions should prepare for these five common obstacles, whether under the federal statute or a state law equivalent. 

Hurdle 1—Rule 11

To state a claim under the Equal Pay Act, which prohibits pay discrimination on the basis of sex, an employee must show that the employer paid workers of opposite sexes different wages for substantially equal work in jobs that require substantially “equal skill, effort, and responsibility, and which are performed under similar working conditions.”⁶

Women often don’t know exactly what their male colleagues are earning, which can complicate pleading. Study after study has shown that women earn less than men in every industry in America,⁷ but questions remain about whether that is enough to satisfy an attorney’s obligation under the Federal Rules of Civil Procedure to verify that “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.”⁸

Without question, it would be better if your client knows details relating to her underpayment. Even if she doesn’t know precisely what her male counterpart is making, maybe he received a promotion or title change typically accompanied by a raise, or maybe she learned relevant information after discreetly asking colleagues. Although employers aren’t required to tell an employee what others are making, they can’t stop an employee from asking coworkers about their compensation. 

For example, Michigan has prohibited pay secrecy since 1982.⁹ In California, workers are protected from retaliation for talking about pay.¹⁰ In 2015, New York amended its equal pay law, adding a provision that makes it unlawful for an employer to prohibit employees from discussing or disclosing their wages or the wages of other employees.¹¹ Between 2000 and 2015, 10 other states—Colorado, Connecticut, Illinois, Louisiana, Maine, Minnesota, New Hampshire, New Jersey, Oregon, and Vermont—enacted “pay secrecy” laws.¹²

Hurdle 2—Discovery

Once you’ve filed the complaint, the defendant undoubtedly will attempt to narrow the company records you can get through discovery, potentially limiting you to information regarding only the individual male counterparts your client identified, not the full breadth of salary information you need.

In response, your best argument is that equal pay cases require a full picture of the pay scale for your client’s position or department. If other women hold the same job title or have similar job duties, find out their salaries to support an argument that women, generally, are paid less than men doing the same or substantially similar work.

Likewise, a fair analysis requires disclosure of what men are earning too. In at least some jurisdictions, a plaintiff can’t cherry-pick her male comparator—she must show she is earning less than the average man in that position¹³—so defendants shouldn’t be able to limit discovery of everyone’s earnings.

Hurdle 3—Defenses

Under the Equal Pay Act, any reason other than the employee’s sex can justify a pay differential.¹⁴ Defendants have relied on this language to argue that factors such as a man’s longer tenure or seniority or higher educational qualifications justify more pay even if he and his female counterpart are performing the same tasks. 

Another justification that has been used successfully is that “market forces” support higher pay for men because they are more sought after by employers. In the sports context, courts have tolerated lower pay for women coaching the women’s basketball team based on the fact that the men’s basketball team was more profitable for the university.¹⁵

Until recently, a defendant could point to a woman’s salary history to justify lower pay. This might be changing, however. The Ninth Circuit explained in Rizo v. Yovino—reconsidering the case on remand from the U.S. Supreme Court—that “allowing employers to escape liability by relying on employees’ prior pay would defeat the purpose of the [Equal Pay] Act and perpetuate the very discrimination the [Act] aims to eliminate.”¹⁶ Municipalities are beginning to weigh in too, passing laws prohibiting employers from asking about salary history completely.¹⁷

Some states have narrowed the defenses available to employers that wish to justify paying certain workers less.¹⁸ In 2016, California strengthened its equal pay law by requiring employers to demonstrate that any pay differential is not based on the employee’s sex.¹⁹ Now, the employer must explain what nondiscriminatory factors underlie the entirety of the wage gap, an extremely difficult task. In 2015, New York also narrowed the defenses available to employers accused of unequal pay.²⁰

Hurdle 4—Getting a Collective Action or Class Certified 

When bringing claims in federal court under the Equal Pay Act, collective action certification is a two-step process because the Equal Pay Act is part of the Fair Labor Standards Act.²¹ Conditional certification comes early in the litigation, and courts apply a much lower standard than class certification under Rule 23.²² If conditional certification is granted, notice goes out to all putative class members, who then can opt in to the case.²³ After the close of discovery, the defendant can move for decertification. 

When pursuing one of these cases under state law, you need to meet the requirements of Rule 23 or the state law equivalent. Although challenging, you still can get a class certified if you select the right case and carefully define your class. Here are some issues to look for. 

Numerosity. Rule 23 requires that a proposed class possess sufficient numerosity to justify certification.²⁴ Typically, 40 members will satisfy this requirement. In an equal pay class action, you hopefully will be representing many more women than that—greater numbers make your labor economist’s job easier because showing statistical significance in wage differentials is easier with larger populations.

Typicality. Your named plaintiff will need to bring the same legal claims as the absent class members, so beware of related claims such as harassment or hostile work environment. Such claims often accompany equal pay claims but can be harder to certify because they frequently require individual inquiries to determine liability. Although a class representative can bring individual claims in addition to those brought by the class, the more distant her claims are from the core class claims, the tougher a finding of typicality will become.

Commonality. This requirement examines the factual and legal issues that will need to be decided. Review whether your client’s duties were unique or similar to those of other employees. Equal pay comparators need to do the same or substantially similar work. 

It’s OK if your client doesn’t share the exact same job title, but if you can show the court that this group of workers was impacted by the company’s uniform policies and procedures, then commonality will be easier to satisfy. When investigating the case before filing, look for patterns at the workplace—for example, in performance evaluations, pay scales, or bonus systems—and detail these common facts in your complaint as much as possible. 

Defining the class. Crafting the right class definition is crucial. You don’t want to define your class so narrowly that you unnecessarily limit the impact of your case; but if you have a single class representative in the accounting department, can she really represent every other female salesperson, executive, cashier, and programmer? 

As long as you can make a compelling case that all women at the company are subject to the same employment policies and that those policies are systematically suppressing women’s wages at the company, draft your class definition as broadly as you can reasonably defend it. Of course, if you can add class representatives who hold different job titles or work in different departments, your complaint will be even stronger. 

Predominance. One of the trickiest issues in equal pay cases is the outlier. Inevitably, there will be one, or even a handful, of women at the company who exceed their male comparators’ earnings, which can be problematic for your economist. If you are trying to prove that the company underpays women systematically, then how do you explain this particular woman’s success? 

Defendants and their experts will try to break down the analysis to the smallest increments possible. If you show that overall women earn 10% less than men company wide, the defense will attempt to justify each individual pay decision by explaining that this woman was a poor performer, while another had performance issues with her last supervisor, and yet another did not apply for a promotion—and on and on. 

In response, you need to constantly try to show the judge the bigger picture. 

The stronger your statistical significance and the larger the gap, the more likely you are to show the judge that the pay differential is not due to chance and that—outliers and individual excuses notwithstanding—the unequal pay issues predominate and can be adjudicated through common evidence. 

Remember that employees willing to sue an employer are a special breed. They must be brave, and they run the risk of being viewed as troublemakers by future employers. Be careful to screen your clients carefully and, whenever possible, review their personnel files (or at least their performance reviews) before filing. 

Hurdle 5—Forced Arbitration

The prominence of forced arbitration clauses, coupled with class action bans, presents a real obstacle for equal pay cases. The U.S. Supreme Court removed any doubts about the enforceability of such agreements—even in the employment context—in Epic Systems Corp. v. Lewis.²⁵ The reality is that 56% of the private-sector, non-union workforce is subject to a forced arbitration agreement, and that percentage is expanding.²⁶

Screen your cases carefully to avoid ending up in individual arbitration, but challenging forced arbitration agreements is still possible. If the agreement lacks proper consent, for example, or if the defendant is a joint employer and is trying to enforce another company’s arbitration agreement vis-à-vis their shared employee, you might be able to keep your client’s case in court—and keep the hope of a collective or class action alive.²⁷ For example, in California, including injunctive relief in your complaint may help you avoid the arbitral venue.²⁸

The obstacles to successfully litigating equal pay cases are real but not insurmountable, so don’t dismiss the next equal pay case that crosses your desk.

Lori E. Andrus is a partner at Andrus Anderson in San Francisco and can be reached at lori.andrus@andrusanderson.com. 

Notes

1. See, e.g., Coates v. Farmers Grp., Inc., No. 5:15-cv-1913 (N.D. Cal. filed Apr. 9, 2015); Andrus Anderson, Gender Discrimination Class Action Lawsuit Against Farmers Insurance (Sept. 16, 2015), http://andrusanderson.com/gender-discrimination-class-action-lawsuit-against-farmers-insurance; see also Houck v. Steptoe & Johnson, LLP, No. 2:17-cv-04595 (C.D. Cal. filed June 22, 2017); Andrus Anderson, Andrus Anderson Files Equal Pay Lawsuit Against Major Law Firm (June 27, 2017), http://andrusanderson.com/andrus- anderson-files-equal-pay-lawsuit-major-law-firm.
2. Am. Ass’n Univ. Women, The Simple Truth About the Gender Pay Gap 5 (Fall 2018), https://www.aauw.org/app/uploads/ 2020/02/AAUW-2018-SimpleTruth-nsa.pdf. 
3. Id. (citing Kayla Fontenot et al. & U.S. Census Bureau, Income and Poverty in the United States: 2017, at 10 (Sept. 2018)).
4. For example, one explanation is that men’s wages are actually decreasing. See Elise Gould et al. & Econ. Pol’y Inst., What Is the Gender Pay Gap and Is It Real? (Oct. 20, 2016), https://www.epi.org/publication/what-is-the-gender-pay-gap-and-is-it-real. Another is that women’s participation in the labor pool is no longer expanding, slowing progress: Women make up approximately 46% of the American workforce and have for the last 25 years. U.S. Dep’t Labor, Facts Over Time—Women in the Labor Force, https://www.dol.gov/agencies/wb/data/facts-over-time/women-in-the-labor-force. Another likely culprit may be that while overt sexism at work is no longer tolerated, “second generation” sexism persists. Susan Sturm, Second Generation Employment Discrimination: A Structural Approach, 101 Colum. L. Rev. 458, 460 (2001) (“‘Second generation’ claims involve social practices and patterns of interaction among groups within the workplace that, over time, exclude nondominant groups. Exclusion is frequently difficult to trace directly to intentional, discrete actions of particular actors, and may sometimes be visible only in the aggregate.”). 
5. 29 U.S.C. §206(d) (1963).
6. 29 U.S.C. §206(d)(1).
7. See Anthony P. Carnevale et al., Georgetown Univ. Ctr. Educ. & Workforce, Women Can’t Win 18 (2018), https://tinyurl.com/sp5w9l6.
8. Fed R. Civ. P. 11(b)(3).
9. Mich. Comp. Laws §408.483a (2020).
10. Cal. Lab. Code §1197.5(k) (2019).
11. N.Y. Lab. Law §194 (Consol. 2020). Other states may follow suit.
12. Dep’t for Prof. Emps., Professional Women: A Gendered Look at Inequality in the U.S. Workforce: 2017 Fact Sheet 6 (Feb. 2017), https://tinyurl.com/yc642ozu (citing Women’s Bureau, U.S. Dep’t Labor, Pay Secrecy Fact Sheet (Aug. 2015)).
13. See, e.g., Hein v. Or. Coll. of Educ., 718 F.2d 910, 916 (9th Cir. 1983).
14. Under the federal Equal Pay Act, once an employee establishes each element of a claim, the burden shifts to the employer to prove the pay disparity is justified under one of four affirmative defenses: a seniority system; a merit system; a pay system based on quantity or quality of output; or any factor other than sex. 29 U.S.C. §206(d)(1).
15. See, e.g., Stanley v. Univ. of S. Cal., 178 F.3d 1069, 1075–76 (9th Cir. 1999).
16. 950 F.3d 1217, 1219 (9th Cir. 2020).
17. See, e.g., City of S.F., Cal., Admin. Code §12K.4 (2018); see also City of Phila., Pa., Code §9-1131 (2017). In 2020, the Third Circuit upheld the constitutionality of the Philadelphia ordinance, which makes it illegal for employers to rely on an employee’s wage history when determining salary. Greater Phila. Chamber of Commerce v. City of Phila., 949 F.3d 116 (3d Cir. 2020).
18. In 2016 and 2017, other states enacted strengthened equal legislation too. Susan Gross Sholinsky et al., Efforts Continue to Strengthen Equal Pay Laws in 2017, Nat’l L. Rev. (Dec. 27, 2017), https://www.natlawreview.com/article/efforts-continue-to- strengthen-equal-pay-laws-2017.
19. Cal. Lab. Code §1197.5(a)(1)(D)(3).
20. N.Y. Dep’t Labor, Guidance on Pay Equity for Employers in New York State, https://labor.ny.gov/formsdocs/factsheets/pdfs/p828.pdf.
21. 29 U.S.C. §216.
22. Some good conditional certification decisions include: Coates v. Farmers Grp., Inc., 2015 WL 8477918 (N.D. Cal. Dec. 9, 2015); Chapman v. Fred’s Stores of Tenn., Inc., 2013 WL 1767791 (N.D. Ala. Mar. 15, 2013); Moore v. Publicis Groupe, SA, 2012 WL 2574742, at *11 (S.D.N.Y. June 29, 2012); Rochlin v. Cincinnati Ins. Co., 2003 WL 21852341 (S.D. Ind. July 8, 2003); Jarvaise v. Rand Corp., 212 F.R.D. 1, 4 (D.D.C. 2002).
23. Bringing a federal Equal Pay Act claim can be an effective litigation tactic. If you get a few dozen opt-ins but ultimately lose the class at the decertification stage, the case will still be viable because you’ll have multiple individual cases to take to trial.
24. Fed. R. Civ. P. 23.
25. 138 S. Ct. 1612 (2018).
26. Alexander J.S. Colvin & Econ. Pol’y Inst., The Growing Use of Mandatory Arbitration 2 & 5–6 (Apr. 6, 2018), https://tinyurl.com/yd6m4x3j.
27. Taylor v. Pilot, 955 F.3d 572, 577 (6th Cir. 2020) (contract formation disputes must be decided by the court, not an arbitrator). 
28. See McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017). Bringing suit under California’s Private Attorney General Act also will keep you out of arbitration, but your client’s remedies will be limited to only a portion of the statutory penalties.