Seyfarth Synopsis: One issue that has consistently divided the federal courts is whether an equal pay plaintiff can establish a prima faciecase of wage discrimination by pointing to a single comparator of the opposite sex who is paid more, even where other comparators are paid the same or even less. Two Appellate Courts recently passed on an opportunity to clarify this issue for the lower courts. This lack of clarity has real-world consequences for employers.
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This is the third 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. The two previous posts can be found here and here.
As we have written about before, one of the key issues currently being disputed in equal pay litigation involves a "one-comparator" rule. Applying that rule, some courts have held that a plaintiff may establish a prima facie case under the federal Equal Pay Act ("EPA") by pointing to the existence of one comparator of the opposite sex who is paid more, despite evidence that would tend to undercut an inference of sex-based wage discrimination. For example, may a plaintiff who is the second-highest paid person among their cohort establish a prima facie case of wage discrimination by comparing themselves to the highest paid person who happens to be the opposite sex? Or does the fact that they are paid more than every other member of their cohort—regardless of sex—undercut their claim of wage discrimination?
Some courts have held that a plaintiff fails to establish a prima facie case if there are a significant number of comparators of the same sex as plaintiff who were paid more than plaintiff, or a significant number of comparators of the opposite sex who are paid less than plaintiff, because those comparators suggest that discrimination is not the cause of plaintiff's lower pay. Other courts have held fast to a "one-comparator" rule, holding that a plaintiff need only identify one comparator of the opposite sex who is paid more than plaintiff, regardless of how plaintiff's compensation stacks up against others, of either sex, who do the same work.This question has divided the district and appellate courts. And now that some states' laws have opened the door to equal pay claims based on differences other than sex (e.g., race, national origin, etc.), this issue is more important than ever.
Two Appellate Courts Leave The Issue Open
In 2023, two circuit courts had an opportunity to decide this issue in their jurisdictions, but both declined to do so. In Eisenhauer v. Culinary Institute of America, 84 F.4th 507 (2d Cir. 2023), a female plaintiff had relied on only a single comparator to establish her claim under the EPA and the New York Equal Pay Law. The employer argued that plaintiff's prima facie case was undercut by evidence that showed there were other comparable males who made less than her, and other comparable females who made more than other comparable males. The district court had held that a plaintiff may establish a prima facie case by identifying a single male comparator at the initial stage of the case, but that the employer can later introduce additional data about other comparators when the issue is ultimately addressed on the merits at trial.
The employer urged the Second Circuit to take up this issue. In a footnote, the court acknowledged that the employer had argued that plaintiff "could not have established a prima facie case by identifying a single male-comparator employee who earns more than her while ignoring all other employees who perform substantially equal work," and that "[t]he question of how many comparators are necessary to establish a prima facie EPA case is a source of disagreement among our sister circuits." Id. at n.83. But rather than address the issue, the court noted that it was affirming the district court's decision on other grounds, and even compounded the problem by holding that the issue was also undecided under the New York Equal Pay Law and would have to be decided separately by the district court if that court chose to retain supplemental jurisdiction over the state-law claim. (It later decided not to do so.)
The Eighth Circuit similarly sidestepped the issue in O'Reilly v. Daugherty Systems, Inc., 63 F.4th 1193 (8th Cir. 2023). In that case, the district court had come to the opposite conclusion as the Eisenhauer court, holding that a prima facie case could not be based solely on one comparator when there existed other evidence that undermined any inference of discrimination: "[Plaintiff] admitted that 10 male employees were either paid less than she or did not perform equal work. Given that alleged comparators that either were paid less did or did not perform equal work outnumber by a ten-to-one margin the lone alleged comparator who was paid more for equal work, the Court concludes that [plaintiff] fails to establish a prima facie EPA claim." Daugherty Sys., Inc., No. 4:18-cv-01283 SRC, 2021 WL 4504426, at *6 (E.D. Mo. Sept. 30, 2021)
Like the Second Circuit, the Eighth Circuit was urged to decide the issue, this time by the plaintiff. The Eighth Circuit noted that plaintiff asked it "to only compare her job situation to that of [her one chosen comparator]." O'Reilly, 63 F.4th at 1197. The court obliged, simply assuming that the facts presented established a prima facie case, and decided the case on the basis of the defendant's affirmative defenses. The court concluded: "In sum, [defendant's] explanation for the pay differential—the differences in skillsets and experience and the desire to incentivize [plaintiff] to grow in the position—is sufficient to satisfy its burden of proving the pay differential was based on a factor other than sex." Id. at 1197.
Implications For Employers
This issue is of particular concern to employers for many reasons. For one, some might argue that a "one-comparator rule" sets a low bar for equal pay plaintiffs to prove a prima facie case. Once a plaintiff has cleared that hurdle, it is up to the employer to justify the alleged pay discrepancy by one of the four EPA affirmative defenses. A strict application of a one-comparator rule arguably creates an unlevel playing field to the detriment of employers. Second, many employers actively and diligently seek to identify and root out any potential pay discrimination in their midst. Often, the only way to do that is by analyzing pay data across different departments or groups to ensure there are no unusual or unexplained pay discrepancies between males and females viewed as a group. These practices would not protect against a one-comparator rule. Unless an employer chooses to pay all employees doing the same work exactly the same, there will always be at least one employee who makes less for the same work than another employee of the opposite sex (or other protected group). If that is enough for that employee to establish a prima facie case, regardless of their employer's best efforts to find and fix any potentially discriminatory pay structures, this could weaken the incentive to undertake those efforts in the first place.
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.
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