Sixth Circuit Affirms Summary Judgment Dismissing Plaintiff’s Wage Discrimination Claims

more+
less-

The Sixth Circuit recently upheld a district court’s grant of summary judgment dismissing a female plaintiff’s wage discrimination claims under the Equal Pay Act (“EPA”), Title VII, and Michigan’s Elliot-Larsen Civil Rights Act.  Foco v. Freudenberg-Nole General Partnership, Case No. 12-2174 (November 25, 2013). The appellate court affirmed that the plaintiff had not established a prima facie case, and in any event, the defendant employer had affirmatively proved that any relevant wage differentials were based on factors other than sex.

Background Facts

Defendant Freudenberg-Nole General Partnership (“FNGP”) is an auto-parts manufacturer.  Plaintiff Foco graduated from Ferris State in 2004 with a degree in plastics engineering technology.  FNGP hired Foco directly from Ferris State as a “test engineer” at a starting salary of $42,000.  FNGP hired four other new male engineering graduates at the same time, at the same salary.

In January 2007, the plaintiff was promoted to the position of “applications engineer” –  a position that was related to FNGP’s sales activities.  In 2009, Loco began to perform some duties related to FNGP’s “account manager” position.  The account manager position is the primary sales development position within FNGP.  Foco asserted that FNGP had promoted her to the account manager position.  FNGP asserted that it had merely allowed Foco to acquire account manager experience by giving her several small, mostly inactive accounts to manage, but it had never promoted her to that position.

Plaintiff complained to FNGP about her compensation on several occasions and she generally received substantial raises in response.  FNGP increased Foco’s salary by 36% from the time she started in 2004 to the date of her voluntary resignation in 2010.  During 2008 and 2009, the plaintiff received substantial salary increases while many other FNGP employees, including the plaintiff’s male comparators, had their salaries frozen or reduced.

District Court’s Summary Judgment

Foco sued FNGP for wage discrimination with respect to both her applications engineer position and her account manager position.  She asserted that her male comparators in both positions were paid substantially more than she had been paid.

The district court granted summary judgment to FNGP, holding that the plaintiff failed to establish a prima facie case of wage discrimination, and in any event, FNGP proved that the pay differential between the plaintiff and her male comparators was based on factors other than sex.  With respect to the account manager position, the district court concluded that the duties of the male comparators required building relationships with high-level decision makers, skills in high-stakes negotiations, and managing accounts involving tens of millions of dollars in revenue.  In contrast, the plaintiff’s duties mainly involved collecting outstanding bills and altering product designs to increase sales to small accounts.

With respect to the application engineer position, the district court determined that the jobs of the plaintiff’s male comparators required more skill than the plaintiff’s position.  “Skill” includes such factors as “experience, training, education, and ability.”

Finally, the district court held that even if the plaintiff could establish a prima facie case, FNGP had established as a matter of law that the wage differential between the plaintiff and her male comparators was based on factors including experience, education, expertise, prior salary, negotiations, market value, and the  need to attract well-qualified candidates — not sex.

Sixth Circuit’s Affirmance

The Sixth Circuit conducted its required de novo review and affirmed the district court’s summary judgment dismissing the plaintiff’s claims.  To establish a prima facie case of wage discrimination under the EPA, the plaintiff must show that the employer paid employees of the opposite sex different wages for (1) equal work, or (2) jobs the performance of which require equal skill, effort and responsibility, or (3) jobs performed under similar working conditions.  The two jobs do not need to be identical, only “substantially equal.”  Proving a violation of the EPA does not require proof of intent to discriminate.

If the plaintiff establishes a prima facie case, the employer has the opportunity to prove that the wage differential was due to one of four statutory affirmative defenses:  (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) any other factor other than sex. An employer is entitled to summary judgment “only if the record shows that they established the defense so clearly that no rational jury could have found to the contrary,” i.e., the employer establishes the defense as a matter of law.  If the employer proves one of the EPA defenses, it will also be entitled to judgment on a Title VII wage discrimination claim.

The Sixth Circuit concurred with the district court that no reasonable juror could find that plaintiff Foco’s sex played any role in the disparity between her salary and the salaries of her male comparators.  The record “convincingly” showed that the wage differential as to both positions was because the plaintiff lacked the skill, experience, and qualifications of her male comparators.  Some of the male comparators had greater job responsibilities, or vastly more account-manager experience, or their accounts were significantly more important to the financial success of the company, or their level of skill was substantially greater.  Proof of these facts was established by the personal knowledge of witnesses familiar with the job duties and qualifications of the plaintiff and her male comparators.  Pay differentials based on experience, overall qualifications, and skill levels are legitimate “factors other than sex” under the EPA.

Lessons to be Learned

It is important for the employer to “paper” the qualifications required for each of its job categories and delineate the duties and pay ranges applicable to each job. The employer also should conduct periodic performance evaluations, create accurate records of those evaluations, and document in each employee’s personnel file the reasons why the employee has been given, or denied, wage/salary increases.

The employer in Foco was able to get out of the case on summary judgment primarily because it had documentation that (1) described the job duties of each position put in issue regarding the plaintiff and her comparators, (2) established specific pay grade ranges for each position (Grade 9, Grade 10, etc.), and (3) accurately reflected the job functions actually performed by the plaintiff and her comparators and the reasons for applicable compensation decisions. Such documentation is crucial for the employer to effectively defend itself against wage discrimination claims.

The Foco decision can be found at:

http://www.ca6.uscourts.gov/opinions.pdf/13a1003n-06.pdf