The Equal Pay Act of 1963 (EPA) prohibits sex-based discrimination in pay and benefits. Employers should not pay different wages to employees of the opposite sex for substantially equal work. “Substantially equal” work does not mean identical work. It means substantially equal in terms of required skills, effort and responsibilities. An employer can defeat an EPA claim of discriminatory compensation if the employer shows the difference in wages was on account of seniority, merit, quantity, quality or any factor other than sex. Such was the case in Foco v. FNGP, Case No. 12-2174 (6th Cir. 11/25/13).
Foco’s auto industry work
Nicole Foco began her employment with FNGP, a Michigan auto parts manufacturer, as an intern while attending college to earn an engineering degree. After graduation, FNGP hired her as a test engineer. Four other male engineers were hired at the same time as Foco.
After three years, Foco was promoted to application engineer, a position that serves as a technical liaison between FNGP and its customers. In contrast to application engineers, FNGP account managers held a sales and business development position. Account managers worked directly with large-scale FNGP clients and were responsible for developing multimillion-dollar accounts.
Foco claimed she was eventually promoted from her position as application engineer to an account manager position. According to FNGP, although she was never promoted to the position, the employer did allow her to gain some experience toward becoming an account manager by permitting her to work with small, inactive accounts. FNGP also allowed Foco to hold herself out to customers as an account manager for appearance purposes.
Foco’s claims of unequal pay
While employed at FNGP, Foco repeatedly complained about her salary. As a result of those complaints, the company awarded her significant pay raises, although other employees’ salaries were frozen. Foco also accused management of making gender-based comments towards her and treating her like an administrative assistant by requiring her to get coffee and organize birthday parties.
Foco’s lawsuit against FNGP was based upon allegations her employer had paid sexually discriminatory wages. First, Foco claimed that while an application engineer, she was paid substantially less than three male application engineers in her work group. However, her EPA claim for the time she was working as an application engineer was dismissed because each of the male application engineers had significantly more work experience in the field and held greater credentials in engineering.
Foco also claimed that she was not appropriately compensated as an account manager when compared with three male account managers. However, the male account managers were shown to have had significantly more account management experience, their accounts were larger in terms of volume and financial impact, and the accounts assigned to the male account managers required more skill than the smaller accounts that had been assigned to Foco. Further, the male account managers were responsible for developing additional business from clients and had successfully produced tens of millions of dollars in additional revenue for FNGP. They had built relationships with high-level decision makers, added customers, and had many more years of experience in the industry than Foco. Foco’s EPA claim for discriminatory compensation as an account manager was also dismissed.
What to look for
There are some steps employers can take to protect themselves against claims of sexually discriminatory compensation under the EPA. Look for employees holding the same positions or performing the same or similar functions to see if there is a wide variation in pay between male and female employees. If you find circumstances where female employees are performing the same or similar jobs but are being paid at a lesser rate, check to see if there are non-discriminatory reasons for that pay differential. Are the male employees more experienced, more qualified, or have greater responsibilities? If the answer is “yes,” the compensation differential may be justified. If the answer is “no,” you may have exposure to a discriminatory compensation claim.