Defending the "Acceptable Business Reason" Requirement of the Equal Pay Act: A Response to the Challenges of Wernsing V. Department of Human Services

By Pagan, Ruben Bolivar | Journal of Corporation Law, Summer 2008 | Go to article overview

Defending the "Acceptable Business Reason" Requirement of the Equal Pay Act: A Response to the Challenges of Wernsing V. Department of Human Services


Pagan, Ruben Bolivar, Journal of Corporation Law


I. INTRODUCTION

II. BACKGROUND

  A. History of Inequity
  B. Congressional Remedy: The Equal Pay Act of 1963
    1. Legislative History
    2. Title VII and the Bennett Amendment
  C. Judicial Interpretation of the "Differential Based on Any
    Other Factor" Clause
    1. The Supreme Court's Guidance in Corning Glass Works
      and Gunther
    2. Majority View
      a. The Ninth Circuit in Kouba
      b. The Sixth Circuit in EEOC
      c. The Eleventh Circuit in Glenn
      d. The Second Circuit in Aldrich
    3. Minority View
      a. The Eighth Circuit in Strecker
      b. The Seventh Circuit in Wernsing

III. ANALYSIS

  A. Legislative History of the Equal Pay Act
    1. Committee Reports
    2. Express Language of the Equal Pay Act
  B. Market Force Theory vs. Comparable-Worth Theory
    1. Market Force Theory
      a. Comparable-Worth Advocates' Challenge
      b. The Supreme Court's Rejection of Market Force Theory
        Analysis in EPA Suits
      c. Use of Market Force Theory in Wernsing
    2. Comparable-Worth Theory
      a. Economists' Challenge
      b. Redeeming Comparable-Worth Theory

IV. RECOMMENDATION

  A. All Circuits Should Join the Majority View
  B. Businesses and Corporations in the Seventh, Eighth, and
    Undecided Circuits Should Voluntarily Adopt Payment
    Policies That Do Not Strictly Rely on Employees' Prior
    Wages

V. CONCLUSION

I. INTRODUCTION

Historically, female employees have earned less than male employees for substantially similar work. (1) This trend, known as the gender wage gap, (2) continues today and is demonstrable in almost every sector. (3) Modern social scientists posit competing theories about why it exists. Under choice theory, it is suggested that women consistently earn less because they make different choices in their careers. (4) For example, female employees are more likely to exit the workforce in order to become full-time parents than male employees. Thus, the theory makes the normative claim that male employees earn more on average than female employees because males more frequently make choices that are more conducive to career advancements. (5) Another theory, the discrimination theory, states that female employees earn less on average because employers continue to employ discriminatory payment systems. (6) As evidence supporting this argument, research suggests that women even earn substantially less in positions of power, such as corporate executives. (7)

Recognizing that the gender wage gap was in fact at least partially caused by discriminatory employment practices, (8) Congress enacted the Equal Pay Act of 1963 (EPA) (9) to supplement preexisting labor law statutes. (10) The EPA unequivocally prohibits employers from paying male and female employees working comparable jobs different wages solely based on an employee's sex. (11) However, it is also narrowly tailored to protect legitimate business practices. This otherwise sweeping prohibition on discriminatory payment practices contains exceptions for gender based disparities in pay resulting from "(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex." (12)

Under a liberal construction of these exceptions, most discriminatory payment practices could be insulated from judicial scrutiny. However, most courts reject that interpretation. Instead, they maintain that the EPA created a cognizable cause of action for employees that believe their gender unjustly influences their salary. Most courts hold that the EPA exceptions are active defenses against allegations of gender-based pay discrimination that can only be used once an employee has made out a prima facie case that disparities in pay are directly related to his or her gender. (13)

In interpreting the fourth exception, "a differential based on any factor other than sex," the Second, Sixth, Ninth, and Eleventh Circuits have held that under the EPA, once an employee establishes a prima facie case of gender-wage discrimination, the burden shifts to the employer to state an "acceptable business reason" for their disparate payment practices.

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