Academic journal article Journal of Legal Economics

The Economist's Role in Equal Pay Act Litigation

Academic journal article Journal of Legal Economics

The Economist's Role in Equal Pay Act Litigation

Article excerpt


The Equal Pay Act of 1963 prohibits employers from discriminating against employees by paying higher wages to members of the opposite sex who are performing equal work on jobs that require equal skill, effort, and responsibility. Equal Pay Act (EPA) violations usually become part of a multiple count sex discrimination lawsuit.1 It is not uncommon in Title VII cases for economists to use statistical techniques to prove sex discrimination. However, economists are rarely used in EPA cases. The purpose of this paper is to discuss the economist's role in demonstrating whether a violation of the EPA has occurred.

There are two reasons why economists are seldom used in EPA litigation.2 First, there are very few cases filed under the EPA. Between 1985 and 1997, the Equal Employment Opportunity Commission (EEOC) filed 164 cases and resolved 251 lawsuits under the EPA (Castro 1998). During this same period the EEOC recovered over $16 million dollars under the EPA itself or in combination with Title VII. These numbers are almost insignificant when compared to the total number of cases and their dollar values that forensic economists participate in. Further reducing the number of economists who testify, is the plaintiff's inability to recover expert fees for non-testimonial services from the defendant.3 A successful EPA plaintiff's suit allows recovery of only $40 per day for expert testimony.4 Small verdict awards and nonrecoverable fees have not provided financial incentives to retain economic experts.5 This pattern may be changing, however, and would thus provide more opportunities for economists in EPA cases.

Less discrimination in society may be one reason why there are more federal discrimination cases. This counterintuitive outcome occurs as female labor market barriers of entry fall, and women earn higher salaries, thus increasing potential benefits of EPA lawsuits. As women enter traditionally higher paying male jobs, benchmarks, necessary in EPA suits, become more available (Posner 1989).

Courts recognize that there may be more "disgruntled employee" suits about workplace grievances unrelated to gender. The increased costs associated with these cases, when they do not violate anti-discrimination law, put a burden on how the courts allocate resources. The courts have established intricate summary judgment procedures to distinguish between frivolous and meritorious claims. These procedures may lead to granting summary judgment to defendants even when legitimate issues of discrimination dominate the fabricated ones. Economic analysis can be helpful in sorting the legitimate from the frivolous issues in EPA cases.

The Equal Pay Act

Title VII forbids sex discrimination in employment - in hiring, firing, promotion, and working conditions. The EPA overlaps Title VII in banning sex discrimination only in the area of pay and compensation in employment. Unlike Title VII, the EPA, which is a provision of the Federal Fair Labor Standards Act (FLSA)6, does not require a plaintiff to prove "an intent" to discriminate.7 Because an EPA claim can continue without a Title VII violation, these claims are often tacked on to Title VII sex discrimination claims.

The EPA prohibits sex-based pay discrimination for equal work performed on jobs requiring equal skill8, effort, and responsibility under similar working conditions. Equal work does not mean jobs have to be identical (Lambert v. Genesee Hospital 1994).

All a plaintiff has to do is show that the jobs are substantially equal.9 Two jobs with different requirements may be considered equal under the EPA. However, if one job requires substantially more time, effort, and responsibility or requires more skills to perform than the other job, an EPA violation would be difficult to prove. If two jobs are just comparable, then the "substantially equal" standard is not met. (Lambert v. Genesee Hospital 1993; Tomka v. Seiler Crop. 1995)

An EPA prima facie case requires plaintiffs to meet three conditions. …

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