Overturning the trial court’s grant of summary judgment in an equal-pay case, the circuit court held that an employer did not prove its affirmative defenses so convincingly that a juror would be compelled to accept them.
The Maryland Insurance Administration, an independent state agency, follows the Standard Pay Plan Salary Schedule promulgated by the state’s Department of Budget and Management. Per the Schedule, MIA assigns new employees first to a “grade” that defines a set base salary and then to a “step” within a salary range. The salary step assignment is based on prior work experience, relevant professional designations, licenses or certifications, recruiting difficulty for that position, and prior years of state service. Employees transferring from another state position bring their grade and step assignments with them.
The EEOC brought suit under the Equal Pay Act on behalf of three female employees in MIA’s fraud investigation division. The employees learned that their salaries were lower than those of certain male comparators and filed EEOC charges after unsuccessful efforts to correct the disparities. In the resulting lawsuit, the district court granted summary judgment to MIA, finding that the male employees were not valid comparators because they were hired at higher steps than were the claimants and, in any event, the disparity in pay was attributable to their relative experience and qualifications.
Following the 3rd and 10th Circuits, the 4th Circuit held that the Act requires an employer to submit evidence from which a reasonable factfinder could conclude not simply that the employer’s proffered reason could explain the wage disparity, but that the proffered reasons do in fact explain the wage disparity. Thus, once the plaintiff has established a prima facie case, the employer will not prevail at the summary judgment stage unless it proves an affirmative defense so convincingly that a rational jury could not have reached a contrary conclusion.
In this case, the EEOC established a prima facie case of pay discrimination: The female employees were paid less than their male comparators, despite holding the same position and performing substantially equal work. Under 4th Circuit precedent, the fact that some other male employees actually made less money does not require a different conclusion – an equal-pay plaintiff need not demonstrate that males as a class are paid higher wages than females as a class, but only that there is pay discrimination with respect to one employee of the opposite sex.
Because the claimants established a prima facie case of pay discrimination, MIA was not entitled to summary judgment unless a rational jury could not have rejected MIA’s proffered reasons for the wage disparities, that is: (1) use of the state’s Standard Salary Schedule, and (2) the comparators’ experience and qualifications. Although the Salary Schedule is facially neutral, MIA exercises discretion each time it assigns a new hire to a specific salary step. Thus, it had the burden to show that its use of the Salary schedule was in fact neutral in application. And while considerations of qualifications, certifications, and employment history could explain the wage disparity, at the summary judgment stage MIA had the burden to demonstrate that such factors did in fact explain the disparity. The record does not contain any contemporaneous evidence showing that the decisions to award the male comparators their respective starting salaries were in fact made pursuant to their aforementioned qualifications. The claimants’ prior experience creates an issue of fact for the jury to decide whether MIA in fact objectively weighed the comparators’ qualifications as being more significant than the claimants’ qualifications.
Vacated and remanded.
(Wilkinson, J.) Simply put, state civil-service systems are not hotbeds of gender bias, as this feeble suit makes all too clear. For a federal agency to bring this tenuous case raises serious constitutional questions and makes one wonder if Washington’s overlords even know what dual sovereignty is all about.
This suit raises the question – one that is fundamental to our constitutional structure and that the Supreme Court has struggled with for decades – of the extent to which Congress’s power may constitutionally extend over state civil-service systems. The states’ vulnerability to federal overreach is alarming where their sovereign interests are at their zenith: in the management of their own workforces. And many states – Maryland included – have passed remedies to address gender discrimination in all of its forms; remedies which Maryland courts have hardly been reluctant to enforce. In the area of pay inequity, the active partnership between Maryland’s legislature and courts reflects a healthy state system, not a hive of discrimination in need of a federal agency’s intrusion.
Based on these considerations, a federal agency seeking to supervise through litigation a state’s management of its own workforce should have to make a clear and convincing case for doing so, rather than proceeding under the preponderance of the evidence threshold. Here, the so-called disparities in pay identified by the EEOC are all easily explained by neutral factors unrelated to gender: state policies crediting prior state employment – which are entitled to Tenth Amendment protection – and the respective qualifications of the individuals involved. Equal-pay liability does not require discriminatory intent, but in this case MIA’s explanations do in fact explain the differentials presented.
The majority has allowed a federal agency possessed of no more than a transparently thin and insubstantial case to abrogate a state’s interest in managing its own workforce, and that is not right.
US EEOC v. Md. Ins. Admin., Case No. 16-2408, Jan. 5, 2018, 4th Cir. (Keenan). Philip Matthew Kovnat for Appellant; John Van Lear Dorsey for Appellee. Lawyers Weekly No. 001-006-18, 36 pp.