WHAT IS THE EQUAL PAY ACT?

The Equal Pay Act is a federal labor law that prohibits pay discrimination between employees based on their gender. The law requires that male and female employees performing substantially the same job be paid the same wage or salary, regardless of their gender, regardless of job title, and regardless of insignificant differences in their assignments or working conditions.

An employer can only pay a male and female employee performing the same job different salaries if there is a legitimate reason to do so, such as one employee having more tenure or seniority or job-related experience, training, or education than another employee. Some employers have attempted to exploit a loophole in the law, relying on “salary negotiations” to justify a difference in pay. If a man negotiated his salary to be higher, while a woman working the same job did not negotiate, can the employer maintain a disparity in pay? What if the employer expressed to the female employee that the salary was non-negotiable but did not enforce that restriction on a similarly-situated man?

THE BASICS OF EQUAL PAY FOR EQUAL WORK

The Equal Pay Act makes it illegal for employers to pay unequal wages to men and women who perform substantially the same job. An employee may have an Equal Pay Act claim if he or she performs substantially the same job tasks as a member of the opposite sex (regardless of job title); the jobs are performed under similar working conditions; and the member of the opposite sex is paid more. 

Even upon that preliminary showing, an employer can rely on an affirmative defense that the pay disparity exists for one of four “legitimate” reasons:

• Wages are set by seniority

• Wages are set by a bona fide merit system

• Wages are set by a system that measures earnings by quantity or quality of production (such as sales incentives)

• Wages are set by another legitimate factor aside from sex

IS SALARY NEGOTIATION A DEFENSE TO EQUAL PAY ACT CLAIMS?

Some employers have relied on the affirmative defense that certain men in their employ negotiated higher salaries while similarly-situated female employees did not, claiming that the salary negotiation constituted another “factor aside from sex.” Courts have been split over whether a negotiated salary constitutes a proper defense to an Equal Pay Act claim.

Some courts have held that employers cannot negotiate away employees’ rights to equal pay. As one court stated: “[T]here is . . . no basis for the proposition that a male comparator’s ability to negotiate a higher salary is a legitimate business-related justification to pay a woman less.” Others have held that salary negotiation does constitute a defense to Equal Pay Act claims, as salary negotiation amounts to a separate factor not based on sex.

WHAT ABOUT IN TEXAS?

The Fifth Circuit Court of Appeals, the federal appellate court that governs Texas workplaces, has not yet rendered a clear decision on the matter. The Fifth Circuit has emphasized that the “factor other than sex” defense applies only where “pay differentials are based on a bona fide use of ‘other factors other than sex.’” In one case, the plaintiff employee alleged that the employer told her that salaries were non-negotiable but then allowed a male counterpart to negotiate his salary. In that instance, the Fifth Circuit held that the employer may have “discriminatorily applied its negotiation policy.” In such a case, the salary negotiation would not constitute a proper “factor other than sex,” and the employer’s disparate treatment of the male and female employee as far as applying its negotiation policy would support finding an Equal Pay Act violation.

In an unpublished opinion, the Fifth Circuit has allowed negotiation to play a role in pay disparity when other non-gender-based factors supported the resulting pay differential, such as one doctor having a different medical specialty than another doctor, or a male employee coming from a stronger bargaining position with more relevant work experience. The Fifth Circuit has generally held that certain “market forces” defenses–that the employer simply had to pay the male counterpart more in order to lure him away from a more lucrative industry alternative–are not proper defenses to an Equal Pay Act claim. Texas district courts, however, have allowed certain market factors, such as a higher cost of living in one area compared to another, to contribute to allowing one employee to negotiate a better salary than a similarly-situated female employee.

The Fifth Circuit has not, however, issued a published opinion clearly finding that “salary negotiation” is or is not a defense to an Equal Pay Act claim, at least where the salary negotiation was arguably equally available to both the plaintiff and her better-paid male counterpart. 

If your rights to equal pay have been violated in a Texas workplace, you can rely on the dedicated and passionate employment attorneys at Tremain Artaza PLLC for advice and representation. Our attorneys are committed to justice and protecting the families of workers across Texas. Submit your case for our review for free online or schedule a low-cost telephone consultation with us.