Royal Tire Will Pay $182,500 for Wage Discrimination Against Female Executive

by U.S. Equal Employment Opportunity Commission (EEOC)
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EEOC Lawsuit Charged St. Cloud Tire Company Underpaid HR Director For Years in Violation of Federal Law

MINNEAPOLIS - Royal Tire, Inc., a commercial and retail tire company based in St. Cloud, Minn., will pay $182,500 and be subject to detailed consent decree which resolves a lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. The decree was approved on July 31, 2014 by Judge John R. Tunheim of U.S. District Court for the District of Minnesota.

The EEOC's lawsuit charged that between January 2008 and June 2011, Royal Tire discriminated against its female human resources director, Christine Fellman-Wolf, by paying her lower wages than it paid a male employee who held the very same position. The EEOC's investigation showed that when Fellman-Wolf became HR director she was paid $35,000 less per year than her male predecessor, and $19,000 less than the minimum salary for the position under Royal Tire's own compensation system. Fellman-Wolf complained about the disparity and asked to be compensated fairly, but Royal Tire did not make up the difference.

Pay discrimination is illegal under the Equal Pay Act of 1963 (EPA), which prohibits sex-based wage differentials for work requiring equal skill, effort, and responsibility performed under the same or similar working conditions. It is also illegal under Title VII of the Civil Rights Act of 1964, which generally prohibits employment discrimination-including in compensation-on the basis of sex. Both statutes are enforced by the EEOC, and EEOC's lawsuit charged that Royal Tire had violated both. The EEOC filed suit on June 21, 2013 in U.S. District Court for the District of Minnesota (Equal Employment Opportunity Commission and Fellman-Wolf v. Royal Tire, Inc., Civil Action No. 13-cv-1516 (JRT/LIB)) after first attempting to reach an pre-litigation settlement through its voluntary conciliation process.

"We are very pleased with this consent decree," said EEOC General Counsel David Lopez.  "This is the latest in a series of cases where the Commission was able to successfully vindicate the rights of women under the Equal Pay Act."

The successful EPA enforcement actions noted by the General Counsel included EEOC v. Harmony Public Schools (http://www.eeoc.gov/eeoc/newsroom/release/3-6-14a.cfm), EEOC v. Checkers (http://www.eeoc.gov/eeoc/newsroom/release/4-2-14.cfm), and EEOC v. Extended Stay Hotels (http://www.eeoc.gov/eeoc/newsroom/release/2-19-14.cfm)

John C. Hendrickson, the EEOC's regional attorney for the Chicago district, said, "Too many employers appear to think that it's enough just to let women in the door, and that no one is going to notice if the money in their pay envelope is less than men's who are doing the same work. Bad guess. Employers should know that such pay discrimination is a violation of federal law under two statutes and that it's a top law enforcement priority for the EEOC. That should be the takeaway for employers-and women-who have been watching this case."

In addition to substantial monetary relief to Fellman-Wolf, Royal Tire must comply with the three-year consent decree, which contains an injunction prohibiting the company from any future discriminating based on sex, paying men and women different wages for doing equal work, and retaliating against employees who exercise their rights under federal law. Additionally, the consent decree requires Royal Tire to evaluate its pay structure to ensure compliance with the Equal Pay Act and Title VII, and if it discovers employees who are being paid less than required by law, it must immediately raise the wages for those employees. The decree requires training for Royal Tire's managers and employees under the Equal Pay Act and Title VII, and allows the EEOC to monitor Royal Tire's compliance with the decree. Royal Tire must report to the EEOC any complaints it receives about pay discrimination and provide information on how it handles those complaints.

Trial Attorney Jessica Palmer-Denig, who handled the litigation for the EEOC, noted, "Equal pay for equal work is a fundamental civil right, and the EPA is a strict statute. Employers should carefully examine the actual job duties of their employees, not just employee or job titles, to determine if wages are really equal. If a pay disparity exists between men and women doing the same work, the employer is well-advised to raise the salary of the lower-paid employees immediately."

The EEOC's legal team in its Minneapolis Area Office, along with Associate Regional Attorney Jean P. Kamp, conducted the litigation under the management of the agency's Chicago District Office. That office is responsible for processing charges of discrimination, administrative enforcement, and the conduct of agency litigation in North Dakota, Minnesota, South Dakota, Wisconsin, Illinois and Iowa, with Area Offices in Milwaukee and Minneapolis.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© U.S. Equal Employment Opportunity Commission (EEOC) | Attorney Advertising

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