Lessons Learned about Equal Pay in Higher Education

The #MeToo movement has brought public awareness to claims concerning pay disparity based on gender. As more and more women bring equal pay claims and enter into hefty settlements, the general public begins to internalize the message that women are often paid less than men. In this climate, employers have good reason to review their pay practices and take steps to remedy any inequities discovered before an equal pay claim is raised.

Equal pay issues can arise in any industry. In higher education, for example, women are increasingly bringing pay equity lawsuits. Pay claims are generally raised under both the Equal Pay Act (the “EPA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”). A part of the Fair Labor Standards Act, the EPA provides women with legal recourse if they are not paid equally for equal work and the employer cannot show that the pay disparity is based on a factor other than sex. Importantly, there is no requirement that a plaintiff show intentional discrimination under the EPA. In contrast, discriminatory pay claims under Title VII require a claimant to show invidious intent through direct or circumstantial evidence, or to establish an inference of discrimination under the familiar McDonnell-Douglas burden shifting framework. So while it is seemingly easier to establish a claim under the EPA, which does not require a showing of intent, the prima facie burden is actually higher under the EPA than under Title VII. While both statutory schemes require claimants to identify male comparators who are paid more, under the EPA, comparators must perform “equal” work, whereas Title VII merely requires the work of comparators to be “similar” to the work of the claimant. Employers can prevail under both statutory schemes if they show, respectively, that there is a reason other than sex for the pay disparity or that they have a legitimate non-discriminatory business reason for the difference.  

If race is a factor, a plaintiff can also raise pay claims under Section 1981(a) of the Civil Rights Act of 1866 and enjoy a longer statute of limitation, no damages cap, and no administrative exhaustion requirement.

Equal Pay Settlements Can Be Significant, and Public

The size of many recent settlements illustrates how high the stakes are for employers faced with equal pay claims. In May of 2018, for example, the University of Denver settled with the EEOC in an equal pay case, agreeing to pay $2.66 million in back pay and damages to seven female law professors. The University also agreed to increase the female professors’ salaries going forward.

On September 13, 2016, the EEOC sued the University of Denver in the United States District Court for the District of Colorado (Denver) for employment discrimination in pay under Title VII and the EPA on behalf of Lucy Marsh, a law professor at the University’s Sturm College of Law. Six other female professors at the law school later joined the suit. The EEOC alleged that a male professor hired in 1976, the same year that Ms. Marsh was hired, was paid more upon hiring than Ms. March was paid, and the pay differential grew over time. In fact, the University admitted that by 2013, the male professor was being paid more than $190,000.00, whereas Ms. Marsh was paid only $115,998.00. The EEOC also alleged that Ms. Marsh was paid less than every other male law professor at Sturm, including those hired after she was hired. As of October 2013, the law school employed sixteen male professors and nine female professors. The University conceded that the mean annual salary was $139,940.00 for females and $159,721.00 for males, but attributed the difference to performance.

Notably, the EEOC alleged that the University of Denver knew about the pay disparity in December of 2012, but made it worse by allocating raises pursuant to a Faculty Salary Competitiveness Initiative. When Ms. Marsh requested information about faculty salaries, she was allegedly told that she was the lowest paid professor at the law school and that nothing would be done to adjust her salary. The University also refused to provide Ms. Marsh with salary data for its professors despite having offered to analyze any inequities in pay for anyone who requested it.

After an extended discovery period, which included expert discovery, the parties reached a settlement agreement by which Ms. Marsh and the six other female law professors who joined the EEOC’s lawsuit were each paid approximately $380,000.00 in back pay and damages.

Similar settlements have been reached at the undergraduate level. For example, in February 2018, a retired assistant geography professor settled the lawsuit she brought in the Southern District of Ohio against the University of Cincinnati for $212,500.00 in back pay, benefits and damages. The Plaintiff, Colleen McTague Storrs, compared her salary to that of the other two assistant professors in the geology department who were men, which were higher. In that case, the parties reached a settlement on the fifth day of a jury trial.

The Fourth Circuit Weighs In

The Fourth Circuit recently curtailed the scope of equal pay claims that can be raised by university professors.

On March 18, 2019, the Fourth Circuit Court of Appeals affirmed the United States District Court for the District of Virginia’s decision, granting summary judgment in favor of Virginia State University in an equal pay case brought by Dr. Zoe Spencer, a female sociology professor at the University, because her comparators were in different departments and therefore did not perform “equal” work. See Spencer v. Virginia State Univ., No. 17-2453, 2019 WL 1233046 (4th Cir. Mar. 18, 2019), as amended (Mar. 26, 2019). Dr. Spencer had raised claims under Title VII and the EPA alleging that she and her male counterparts performed equal work, yet she earned $70,000.00 annually, whereas her male counterparts earned more than $100,000.00 annually. However, the Fourth Circuit rejected Dr. Spencer’s argument that she and her comparators performed equal work, as required to sustain her pay claim, simply because they were both professors and generally performed the same teaching and research-related duties. Specifically, the Court viewed the tasks and skills she identified as general teaching tasks performed by educators at all levels. See id. at 2. Further, the Court accepted the University’s explanation that professors are paid more in specialized disciplines like engineering than professors in the humanities disciplines because the former positions require more specialized skills and are more highly compensated in the job market generally. This view is consistent with two prior Fourth Circuit decisions finding that university professorships in different departments required different skills. See Strag v. Bd. of Trustees, Craven Cmty. Coll., 55 F.3d 943, 950 (4th Cir. 1995); Soble v. Univ. of Maryland, 778 F.2d 164, 167 (4th Cir. 1985).

In addition to finding that Dr. Spencer did not establish a prima facie case under the EPA, the Court accepted the University’s affirmative defense that a factor other than sex explained the pay disparity between Spencer and her comparators. The two male professors Dr. Spencer identified as comparators were former administrators who had returned to teaching and were paid pursuant to the University’s practice of setting salaries at 75% of what the now-professors earned as administrators. Relying on the oft-quoted employment law paradigm from DeJarnette v. Corning, Inc., 133 F.3d 293, 299 (4th Cir. 1998) that courts do not sit as “super-personnel departments,” the Court declined to second-guess the University’s pay practices.

The Court also rejected Dr. Spencer’s pay claims under Title VII’s less demanding “similarity” requirement. The Court found that Dr. Spencer could not establish a prima facie case of pay discrimination under Title VII because the generalized tasks that she argued that she and her comparators performed were insufficient to show that they performed “similar” work. The Court also accepted the legitimate non-discriminatory reason for the pay disparity proffered by the University– that the comparators were paid more because they were former administrators.

The Fourth Circuit’s opinion in Spencer is a strong signal that, even in the aftermath of #MeToo, claimants have a high legal burden to meet before their case can reach a jury. The lesson for employers in higher education, then, is to proactively analyze pay levels and make any adjustments necessary to avoid paying unequal wages for equal work.

This blog was written by Nicole Whitecar at Miles & Stockbridge.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.