Seyfarth Synopsis: It has been nearly a decade since some states began enacting changes to their equal pay statutes that appeared to some to differentiate those statues from the federal Equal Pay Act (“EPA”) in significant ways. Although those changes garnered plenty of press and speculation from commentators, the courts themselves have been rather slow to address those differences. Almost a decade on, there are still very few cases that interpret those state-level changes as differing in any meaningful way from the federal standards. A recent decision from the Second Circuit may herald the beginning of a change in this dynamic, albeit still quite incremental, cautious, and slow.
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This is the first in a series of posts examining the new and developing trends in equal pay litigation identified in Seyfarth’s yearly publication, Developments in Equal Pay Litigation, 2024 Update.
One of the most critical issues facing employers in today’s equal pay litigation landscape is whether and to what extent certain state laws have changed the legal standards governing key provisions of a plaintiff’s prima facie case and an employer’s defenses. Beginning with California in 2015, some states made what looked to some like fairly significant changes to their equal pay statutes (e.g., New York, Illinois, New Jersey, Massachusetts, Washington; the list is ever growing). Some commentators and plaintiffs’ lawyers have argued those changes introduced a different set of standards into equal pay litigation, especially as they relate to determining what counts as “equal” or “substantially similar” work for purposes of identifying appropriate comparators, and the factors employers may rely upon as an affirmative defense.
The courts have generally not gone along. Most decisions that have come out since those changes were enacted continue to interpret the new state statutes in a manner that is consistent with federal law. In 2023, one Appeals Court finally did find a difference between state and federal law, but not in a way that many expected.
Recent Decisions in the Second Circuit
In Eisenhauer v. Culinary Institute of America, 84 F.4th 507 (2d Cir. 2023), which was an important case for several reasons (see here and here), the Second Circuit addressed a relatively narrow distinction between the federal and New York equal pay laws. In that case, a female professor at a college and culinary school alleged she was paid less than a male professor who managed a similar course load. The employer argued that the plaintiff and her comparator had been hired at different salaries, and that that pay disparity increased over time due to the sex-neutral terms of a compensation plan that gave the same percentage increase to professors’ salaries each year. The plaintiff argued that the plan could not be used by the employer as a “factor other than sex” affirmative defense because the resulting pay disparity was not connected to any differences between her and her comparator’s job. The Second Circuit framed this question as asking whether the federal EPA requires an employer to show that the factor is job-related, i.e., related to the job in question.
The Second Circuit acknowledged that it had earlier held that a facially sex-neutral job-classification system alone may only constitute a “factor other than sex,” when it is rooted in legitimate business-related differences in work responsibilities and qualifications for the particular positions at issue. But the Eisenhauer court clarified that this requirement was only applicable to job-classification systems: “[A] job-relatedness requirement is necessary to ensure that a job-classification system is not a pretext for sex discrimination,” because, “Jobs are, after all, the principal feature of job-classification systems.” Id. at 516-17 (emphasis in original). More generally, the Second Circuit concluded that there is no job-relatedness requirement for the “factor other than sex” defense under the federal EPA because that requirement appears nowhere in the EPA’s text and would conflict with the statute’s plain meaning.
But, according to one argument, the same is not true for the New York EPA. The court held that when the New York legislature amended the New York equal pay statute, it added a provision that required a “factor other than sex” to be “job-related with respect to the position in question,” among other things. See N.Y. Lab. Law 194(1)(iv). The Second Circuit remanded the case back to the district court to reconsider its decision in light of the different standards under the federal and New York statutes, despite the fact that the district court had found in favor of the employer even after applying the more stringent job-relatedness standard to the federal EPA. According to the Second Circuit, the district court erred when it applied this same standard to analyze the “factor other than sex” defense under the state and federal statutes.
But in another recent case, which was decided by a court in the Second Circuit after Eisenhauer, Edelman v. NYU Langone Health System, No. 21-cv-502(LJL), 2023 WL 8892482 (S.D.N.Y. Dec. 26, 2023), the court arguably made no distinction between the state and federal laws with respect to other aspects. In particular, the court appeared to rely on the same analysis to determine whether plaintiff and her comparator performed “equal” (the federal language) or “substantially similar” work (the state language).
The court first acknowledged the change wrought by Eisenhauer, noting that it must now “analyze a plaintiff’s ‘[NY EPA] claim as altogether distinct form her [federal] EPA one.’” Id. at *7 (quoting Eisenhauer, 84 F.4th at 525). And in fact, the court was careful to apply a slightly different standard to analyze the employer’s “factor other than sex” affirmative defense under New York law, noting that “New York law specifies that such a factor must ‘be job-related with respect to the position in question and . . . be consistent with business necessity.’” Id. (quoting NYLL § 194(1)(iv)(B)). But when it considered the plaintiff’s prima facie case, the court arguably made no effort to distinguish between the New York EPA and the federal EPA. After citing a long line of precedent, which mostly predated the New York’s ostensible change to a “substantially similar” standard, the court concluded that “the evidence at trial establishes that Plaintiff did not perform equal work to [comparator] because their positions did not require substantially equal effort.” Id. Notably, the court came to the same conclusion under the NY EPA going so far as to hold that the “equal work inquiry” is “’critical’ for unequal pay claims under the [NY EPA].” Id. at *10 (quoting Woods-Early v. Corning Inc., 2023 WL 4598358, at *4 (W.D.N.Y. July 18, 2023)).
Implications For Employers
When read together, it could be argued that these two cases recognize only the faintest glimmer of daylight between the federal and New York equal pay statutes. If so, they are significant because they are among the very few cases that do. The implications for employers could be profound. If a court were to hold, for example, that “substantially similar” work is somehow different from “equal” work, plaintiffs’ counsel might use that to argue that some of the new state-level statutes actually lower the burden on a plaintiff to establish a prima facie case.
Many class cases founder on the “equal” work requirement because it is difficult to show, on a class-wide basis, that many different employees all perform the same job. If plaintiffs’ counsel were able to argue successfully that some state statutes have relaxed that standard, that could open the floodgates of equal pay class action litigation. For now, most courts are still arguably interpreting these provisions the same way under either the state or federal statutes. Employers should not take their eye off this ball. Just one errant decision by a court anywhere in the country could have a massive impact on employers with a nationwide footprint.
These and other trends impacting equal pay litigation are discussed in much greater detail in Seyfarth Shaw’s yearly report, Developments in Equal Pay Litigation, 2024 Update. We highly recommend that report to any employer facing equal pay litigation, or to those who just want to know more about it so they can avoid such lawsuits in the future or keep abreast of changes in the law. We look forward to continuing to share our analysis of these issues.
