*** Mathyguy 18***Unit 8 Research Project
armyangel
equal_pay_act_literature_review.docxDefending the "acceptable business reason" requirement of the Equal Pay Act: a response to the challenges of Wernsing v. Department of Human Services
The Journal of Corporation Law . 33.4 (Summer 2008): p1007.
Copyright: COPYRIGHT 2008 University of Iowa Journal of Corporation Law
Full Text:
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. (14) In these circuits, employers must affirmatively provide reasons that serve legitimate business purposes. It is not enough to provide a veiled or neutral reason such as unqualified statements that their pay systems are based on their employees' prior earnings. (15) When employers offer explanations that do not provide any indication of their underlying intent, these circuits will consider whether the "use [of] the factor [was] reasonabl[e] in light of the employer's stated purpose as well as its other practices." (16) In other words, these courts will not presume that the expressed reason was legitimate. Rather, they will consider whether the expressed reason was no more than a pretext for gender discrimination. (17)
Other circuits, however, have balked at the majority circuits' willingness to question the legitimacy of an employer's pay system that is based on employees' prior earnings. (18) In the 1980s, the Eighth Circuit was the first to avoid inquiring into the possibility that an employer's seemingly gender-neutral payment practice was a cover for impermissible gender-wage discrimination. (19) Subsequently, in dicta, the Seventh Circuit followed suit and tentatively abandoned the "acceptable business reason" requirement. Finally, in 2005, the Seventh Circuit expressly joined the Eighth Circuit to create a significant circuit split with regard to whether the EPA requires courts to consider the legitimacy of an employer's seemingly gender-neutral rationale for adopting a discriminatory payment practice. (20)
This Note analyzes the Seventh Circuit's rationale for failing to find that the "acceptable business reason" requirement is integral to the "any other factor than sex" defense. In particular, it responds to the Seventh Circuit's assertion that the "acceptable business reason" requirement "rests on an 'intent' that, if not manufactured by the judges rather than discovered by digging through legislative debates, lacks any footing in enacted texts." (21) Part 11 of this Note reviews the legislative history of the EPA and the principal appellate court cases interpreting the meaning of "any other factor than sex." Next, Part III discusses whether a clear congressional intent can be identified in the congressional record corresponding to the enactment of the EPA. Then, Part III analyzes the strengths and weaknesses of two competing sociological theories implicated in the majority and minority circuit interpretations of the "factor other than sex" clause that offer competing rationales for, and draw distinct normative conclusions about, gender-based pay disparities. Based on this discussion, this Note argues that the majority circuits have properly interpreted the "factor other than sex" clause. Part IV identifies weaknesses and practical difficulties in the Wernsing opinion that further favor the "acceptable business reason" requirement interpretation of the "factor other than sex" defense and encourages the minority circuits and undecided circuits to embrace the majority interpretation. Finally, Part V explains how the Seventh Circuit has established a precedent detrimental to its employees and corporations.
II. BACKGROUND
A. History of Inequity
In the past, American employers, on average, paid female employees less than male employees. (22) When the EPA was enacted in the 1960s, women earned 61% of what men earned for the same work. (23) Over the years, following its enactment, the gender-wage gap declined. However, women still only earn approximately 81% of what men make. (24) The gap in managerial, professional, and related occupations is even greater. In these sectors, the gap has only improved by about ten percent. (25)
B. Congressional Remedy: The Equal Pay Act of 1963
1. Legislative History
In 1963, Congress took steps to redress this inequity by enacting the EPA. (26) The EPA's express purpose was to insure that "where men and women are doing the same job under the same working conditions ... they will receive the same pay." (27) To this end, the EPA prohibits gender discrimination in pay for "equal work on jobs the performance of which requires equal skill, effort, and responsibility and which are performed under similar working conditions." (28)
Responding to the concerns of labor representatives, who feared that the EPA would prohibit pay systems based on seniority or merit, (29) Congress provided three specific exceptions and one categorical exception. (30) These exceptions, however, were not added solely to undermine the EPA's effectiveness. (31) Rather, they were added to protect "bona fide job classification program[s]" from charges of discrimination. (32)
2. Title VII and the Bennett Amendment
The following year, Congress enacted further legislation, Title V11 of the Civil Rights Act of 1964, to provide comprehensive protection against discriminatory practices in the workforce. (33) While protection against gender discrimination under Title V11 is not the focus of this Note, it is significant to point out that the legislative trend has been the continued reaffirmation of Congress's commitment to the eradication of gender discrimination while insulating expressly permitted business practices. (34) Consistent with that trend, Congress enacted the Bennett Amendment to Title V11 in 1964, which reaffirmed that Congress had prohibited gender discrimination but that compensation systems based on seniority or merit were not discriminatory. (35)
The Amendment limited the expansive sweep of Title V11 by extending "the affirmative defenses to wage discrimination claims under the Equal Pay Act into Title VII." (36) There is no reason, however, to interpret the enactment of the Bennett Amendment as a deviation from Congress's commitment to the elimination of gender-based discriminatory pay practices. The extension of the EPA defenses to actions under Title V11 is merely an affirmation of Congress's continuing commitment to the protection of legitimate business practices. (37) Other commentators suggest that the Bennett Amendment's enactment may demonstrate a shift in congressional focus from the elimination of illegitimate workplace practices to the protection of common business practices. 38 However, that argument fails to recognize that while the Bennett Amendment may have reduced the ability of employees to use Title V11 to strike down legitimate business practices, it had absolutely no effect on the ability of employees to challenge illegitimate pay systems. (39) Rather than being a sign of Congress's weakening resolve, the enactment of the Bennett Amendment ensured employees' ability to challenge gender-based pay discrimination under both Title VII and the EPA by clarifying the type of impermissible employer conduct Title VII was intended to redress.
C. Judicial Interpretation of the "Differential Based on Any Other Factor" Clause
1. The Supreme Court's Guidance in Corning Glass Works and Gunther
The Supreme Court has never definitively interpreted the "factor other than sex" exception to the EPA. (40) However, its decision on a related issue in Corning Glass Works v. Brennan (41) and dicta in County of Washington v. Gunther (42) arguably suggest an endorsement of the "acceptable business reason" requirement interpretation of the "factor other than sex" exception. (43)
In Corning Glass Works, the Supreme Court considered the meaning of the concept of "similar working conditions" as embodied in the EPA. (44) Here, the Secretary of Labor brought charges against a company for back wages owed to female employees. (45) The company paid higher wages to male night-shift employees than to female day-shift employees. (46) The higher wages paid to male employees were in excess of bonus pay given for night shift employment. (47) In construing "similar working conditions," the Court looked to the legislative history of the EPA and determined that it meant work in the same surroundings and around the same hazards. (48)
In Gunther, the Court considered a Title VII suit initiated by female prison guards who alleged that they were intentionally paid less for work equivalent to work done by male prison guards. (49) While the principal issue was the legitimacy of the lower court's holding that the female prison guards were not precluded from filing a Title VII action because of the lower court's fact finding that the male and female prison guards did not hold equivalent jobs, in dicta, the Court described how the case would have proceeded if it was an EPA suit. (50) The Court discussed the possibility of an employer excuse under the "factor other than sex" exception and suggested that the excuse would be limited to "bona fide job-evaluation systems." (51)
2. Majority View
a. The Ninth Circuit in Kouba
In Kouba v. Allstate Insurance Co., (52) the Ninth Circuit first considered the burden of proof that an employer must satisfy in order to successfully use the "factor other than sex" defense against an employee challenging a pay system under the EPA. (53) Here, a female employee challenged an insurance company's policy of paying new sales agents the greater of a minimum based in part on their prior salaries and the commissions earned from sales during a training period. (54) Because most women made less in their former jobs than their male counterparts, new female sales agents received less than new male sales agents. (55) In considering whether the EPA permitted the pay system, the Ninth Circuit focused on the EPA's exception for pay systems based on a "factor other than sex." (56)
The Ninth Circuit considered several interpretations of the exception. (57) Ultimately, it rejected the two extreme interpretations that "any factor that ... does not refer on its face to an employee's gender [is acceptable]" and that "employers cannot use any factor that perpetuates historic sex discrimination." (58) It reasoned that these interpretations clearly conflicted with congressional intent. (59) It likewise rejected a more moderate requirement that an "employer must demonstrate that it made a reasonable attempt to satisfy itself that the factor causing the wage differential was not the product of sex discrimination." (60) Applying the maxim ejusdem generic, the Ninth Circuit held that the EPA merely required employers to affirmatively make minimum showings that their pay systems were based on an "acceptable business reason." (61)
b. The Sixth Circuit in EEOC
The Sixth Circuit, in line with the Ninth, adopted the "acceptable business reason" requirement in EEOC v. J C. Penney Co. (62) Even though the court ultimately found that the employer's pay system was defensible under the "factor other than sex" exception, it cited with favor the Kouba court's rejection of "an interpretation that would allow the use of any other factor as that would facilitate an employer's disguising all but the most blatant discrimination." (63) The Sixth Circuit's rationale was that nothing in the legislative history of the EPA suggested that the "factor other than sex" exception was intended to be a congressional loophole exempting all pay systems based on prior wages from EPA challenges. (64)
c. The Eleventh Circuit in Glenn
Similarly, in Glenn v. General Motors Corp., (65) the Eleventh Circuit recognized that a "factor other than sex" entailed a minimum "acceptable business reason." (66) At the very least, an employer had to prove that a discriminatory pay system was based on a socially acceptable business reason (e.g., a decision that a rational business person would make absent a desire to discriminate against women). (67) The Eleventh Circuit commented that the exception did not create a prima facie defense any time employers stated that their pay systems were based on employees' prior wages. (68)
Responding to critics of the "acceptable business reason" requirement, the Eleventh Circuit pointed out that the interpretation made more sense than the alternative interpretation (69) because it was consistent with the Supreme Court's rejection of the market force theory (70) of justifying gender discriminating pay systems. (71) Furthermore, the Eleventh Circuit reiterated that legislative history favored the "acceptable business reason" requirement by limiting the "factor other than sex" defense to situations "when the disparity results from unique characteristics of the same job; from an individual's experience, training or ability; or from special exigent circumstances connected with the business." (72)
d. The Second Circuit in Aldrich
Finally, the Second Circuit in Aldrich v. Central School District (73) joined the majority circuits in requiring an employer to demonstrate an "acceptable business reason" for a pay system in order to qualify for the "factor other than sex" exemption. (74) Like other circuits applying the majority interpretation, the Second Circuit in Aldrich cited consistency with legislative intent, application of statutory interpretation that does not render the clause meaningless, consistency with Supreme Court EPA and Title VII precedent, and a desire to prevent shifting the burden onto the employee to establish employment discrimination even after making out a prima facie EPA claim as reasons for finding an "acceptable business reason" requirement. (75) Here, the Second Circuit held that a mere showing that an employer applied a "neutral civil service examination and classification system" was insufficient for making out a defense because that argument implies a meaningless tautology. (76)
3. Minority View
a. The Eighth Circuit in Strecker
Before the majority interpretation emerged, the alternative interpretation of the "factor other than sex" exception first appeared in Strecker v. Grand Forks County Social Service Board. 77 The Eighth Circuit determined that a prima facie case for the "factor other than sex" defense was established by a characteristically neutral pay system. (78) Contrary to courts applying an "acceptable business reason" requirement, the Eighth Circuit placed the burden on the employee to challenge the assumption that a pay system was based on a "factor other than sex." (79) The Eighth Circuit required no showing on the employer's part that its pay system was enacted for a non-discriminatory purpose. (80)
b. The Seventh Circuit in Wernsing
Most recently, the Seventh Circuit joined the Eighth Circuit's view construing the "factor other than sex" exception as a prima facie authorization of all pay systems not explicitly discriminatory. (81) In Wernsing v. Department of Human Services, (82) a female employee challenged Illinois' practice of basing lateral employees' salaries on their previous salaries because it resulted in "substantially different pay ... for determining initial salaries" of male and female employees. (83) The employee argued that the state "lack[ed] an 'acceptable business reason' for its approach." (84) The Seventh Circuit rejected the "acceptable business reason" argument on the basis that it "rest[ed] on an 'intent' that, if not manufactured by the judges rather than discovered by digging through legislative debates, lack[ed] any footing in enacted texts." (85) Instead, the Seventh Circuit held that the EPA merely required the state to show that it had any reason other than sex to use the pay system. (86) In doing so, the Seventh Circuit substantially shifted the burden onto the employee to show that the pay system was invidiously discriminatory. (87) Furthermore, it presented one of the first cognizable challenges to the "applied business" requirement interpretation.
III. ANALYSIS
A. Legislative History of the Equal Pay Act
In Wernsing, the Seventh Circuit criticized the proponents' of the "acceptable business reason" requirement interpretation of the EPA's fourth defense and suggested that its legislative history was unclear and immaterial. (88) While an analysis of the validity of supplementing the language of the EPA with "congressional intent" is beyond the scope of this Note, it is useful to point out that the Supreme Court has used this technique in interpreting the meaning of the "equal world' language of the EPA in Corning Glass Works. (89) Furthermore, as the Eleventh Circuit pointed out, a clear congressional intent for an "acceptable business purpose" requirement can be inferred from the EPA's committee reports (90) and the express language of the statute. (91)
1. Committee Reports
The congressional documentation corresponding with the enactment of the EPA suggests that Congress believed the EPA would be used to eliminate pay disparities based solely on gender classification and at the same time protect legitimate business practices. (92) To this end, Congress limited the scope of the EPA to practices "contrary to our basic traditions of freedom and fairplay" and excused the rest. (93) During the House debate on the bill, one congressman explained that the EPA defenses excused a category of legitimate business practices. (94) Another explained that the EPA was designed to eliminate payment systems where sex was the "sole factor" causing disparities in pay. (95)
The first three EPA defenses are examples of legitimate business practices that the EPA does not invalidate. (96) One congressman explained that the fourth is a category of which the first three are specific examples. (97) Therefore, the fourth must, at a minimum, include all payment systems that are based on legitimate business practices.
To understand why this is so, consider an analogous situation in which one foreigner, who knows nothing about U.S. geography, is told that it is a country comprised of the states of Iowa, Washington, Louisiana, and all other North American states that are not part of Canada or Mexico. Given only these facts, the foreigner knows, at a minimum, that the U.S. includes Iowa, Washington, and Louisiana. If this foreigner is later asked to describe what other states in the U.S. are like, it would be prudent for the foreigner to answer that they are similar to Iowa, Washington, or Louisiana. While the characteristics of other states might be common knowledge to an individual with personal knowledge of the U.S., they are a mystery to the foreigner. However, by analogizing to the states that he knows, the foreigner can answer truthfully. Courts are like the hypothetical foreigner. Congress named three specific business practices that are always acceptable under the EPA and a general category of protected practices. Courts must determine the range of protected business practices under the categorical defense by analogy to the enumerated defenses. By limiting their description of business practices exempted from EPA scrutiny under the "factor other than sex" defense to acceptable business practices, courts in the majority circuits are in fact applying the narrowest, least expansive interpretation of the "factor other than sex" defense. Furthermore, these courts interpret the EPA as Congress suggested.
2. Express Language of the Equal Pay Act
The Seventh Circuit accurately pointed out that there is no express language in the EPA describing an "acceptable business purpose" requirement in the "factor other than sex" defense. (98) However, such a requirement is a reasonable interpretation applying the maxim of statutory interpretation: ejusdem generis. Ejusdem generis states that when a statute contains enumerated specific items and also has references to a general category, the general category should be construed narrowly so that it only includes items sharing a common characteristic with the specifically enumerated items. (99) Since each of the other specifically enumerated defenses in the EPA exempt undeniably legitimate business practices, (100) so should the "factor other than sex" defense.
The validity of limiting the "factor other than sex" defense to acceptable business reasons also follows from the language of the prohibition on discriminatory pay, which states that "[n]o employer ... shall discriminate ... between employees on the basis of sex ... for equal work on jobs the performance of which require equal skill, effort, and responsibility...." (101) Skill, effort, and responsibility are all "acceptable business reasons" that an employer can consider when establishing a payment system. (102) While prior pay often reflects the extent that an employee possesses job-related skills and attributes, it can also indicate other socially harmful factors such as favoritism, bias, and the compounding effect of gender-based pay discrimination throughout a female employee's career. (103)
B. Market Force Theory vs. Comparable-Worth Theory
Much of the disagreement about what the EPA requires of an employer who is accused of discriminatory pay practices reflects a tension between two competing explanations for the disparity in pay between male and female employees: market force theory and comparable worth theory. (104) While the courts do not openly use these theories to justify their interpretations of the EPA, both the Supreme Court in Corning Glass Works and the Seventh Circuit in Wernsing overtly commented that the theories do color the decision-making process. (105) Therefore, the merits and weaknesses of the theories are important to an assessment of the correct interpretation of the EPA's "factor other than sex" defense. texts").
1. Market Force Theory
Market force theory has two forms: market conditions and market value. (106) The market conditions justification states "'that supply and demand dictates that women qua women may be paid less'" than their male counterparts for equivalent work. (107) It suggests that male employees are in higher demand than female employees. (108) Thus, employers are justified in paying male employees more for their services. (109) The weaker form, the market value approach, argues that "an actual difference in market demand for a particular [male] employee" justifies paying that employee more. (110)
a. Comparable-Worth Advocates' Challenge
Advocates of comparable-worth theory strongly oppose market force theory in both its forms because of the inherent imperfection of market analysis. (111) They contend that "collective bargaining, public regulation of wages and hours, and the lack of information and mobility of some workers make the market model an inaccurate description of how relative wages are determined and how they influence the choice of jobs." (112) Market force theory is a particularly weak justification for gender-based wage discrimination in the public sector because pubic employers "do[] not have the same incentives as [private employers] ... to use labor efficiently." (113) This criticism implicates a general problem with an economic justification: classic economic theory presumes a perfectly functioning market which economists admit is inconsistent with the real market. (114) It is unwise to prima facie exempt a specific instance of possible gender discrimination, prohibited by the EPA, because of a theory that most likely assumes premises that are untrue.
b. The Supreme Court's Rejection of HarketForce Theory Analysis in EPA Suits
The Supreme Court explicitly rejected the use of the strong version of market force theory--the market considerations defense--as a justification for a disparate payment system in Corning Glass Works. (115) The Court considered a pay differential that arose because female employees were willing to work for less than equally skilled male employees. (116) It stated, "[t]hat the company took advantage of such a situation may be understandable as a matter of economics, but its differential nevertheless became illegal once Congress enacted into law the principle of equal pay for equal work." (117)
While the Supreme Court did not reject the weaker version of market force theory--the market value defense--courts should still abandon it because it suffers from the same weaknesses as the market considerations defense. (118) Any market model is an inaccurate description of an individual employee's worth because comparably skilled workers may lack information about job opportunities or the mobility to pursue a job for which they are qualified. 119 Consequently, courts should not exempt facially ambiguous payment systems under the "factor other than sex" exception using a market force theory approach. Rather, courts considering ambiguous payment systems should always inquire into an employer's purpose for enacting an ambiguous system.
An affirmative defense, such as the "factor other than sex" exception, places the burden of proof on the employer. (120) When the burden of proof is expressly placed squarely on one party's shoulders, it should not be shifted by an explanatory sleight of hand; doing so unjustly places the burden of proof on the party least likely to be able to prove the employer's motive. It is unreasonable to argue that Congress intended to enact a statute remedying a serious social ill by making it impracticable to use. Economically, the employer is in the best position to bear the cost. The cost of acquiring information about the employer's motives in enacting a particular payment scheme is significantly lower for the defendant employer than the plaintiff employee. Therefore, the "acceptable business reason" requirement is efficient because it places the burden of production on the party that can access the information for the lowest cost by requiring a defendant employer to justify an ambiguous payment practice as a "factor other than sex."
c. Use of Market Force Theory in Wernsing
The Seventh Circuit implicitly approved a market force theory justification in Wernsing when it stated that the "Equal Pay Act forbids sex discrimination, an intentional wrong, while markets are impersonal and have no intent." (121) It ignored the Supreme Court's guidance in Corning Glass Works that blind adherence to market factors, which are neutral, at the expense of gender equality is impermissible under the EPA. (122) The Court's remarks in Corning Glass Works suggest that even if the employer's only motive is economic gain, that is still the sort of social evil that the EPA was enacted to redress. (123) After the EPA was enacted, no court should vindicate the blind pursuit of wealth at the expense of gender equality.
2. Comparable-Worth Theory
The Wernsing court criticized the proponents of the "acceptable business reason" requirement for their endorsement of comparable-worth theory. (124) Comparable-worth theory is the belief that "when jobs filled mostly by women are judged 'comparable' to jobs filled mostly by men, wages for both should be the same." (125) Comparable-worth theory is premised on two ideas. (126) The first is that society intentionally created segregated job markets and depressed wages below their worth in fields dominated by women. (127) The second is that it is possible to "determin[e] the relative worth of jobs that involve different levels of skill, effort, risk, [and] responsibility." (128) Advocates of comparable-worth theory argue that federal institutions, such as legislatures and judiciaries, should actively intervene in industries where women are not fully compensated for the value of their work. (129)
a. Economists' Challenge
Economists and proponents of market force theory dispute both the premises of the comparable-worth theory and the conclusion that federal intervention is justified. (130) They argue that the belief that society is structured to create and enforce gender stratification in the work force is unproven. (131) Moreover, "[e]conomists have conducted studies which show that virtually the entire difference in the average hourly wage of men and women ... can be explained by the fact that most women take considerable time out of the labor force in order to take care of their children." (132) Economists argue that the value of work is determined by market forces rather than intrinsic value. (133) Consequently, it is impossible to determine the relative value for work requiring different skills, risks, and responsibilities. (134) Finally, economists argue that remedial intervention by legislators and judiciaries would ultimately undermine the goal of ending gender-based disparate payment practices and equal opportunity for male and female employees to seek employment in all career fields. (135)
b. Redeeming Comparable-Worth Theory
The Seventh Circuit's criticism in Wernsing that the majority circuits unjustifiably used comparable-worth theory to judicially expand the requirements of the "factor other than sex" defense and to justify their micromanagement of businesses is misplaced. It erroneously assumed that the "acceptable business reason" requirement was an additional requirement derived from comparable-worth theory, separate and apart from the "factor other than sex" clause. In reality, the "acceptable business reason" requirement is merely an elaboration of the phrase "any other factor other than sex." (136) This mistake is likely due to the Seventh Circuit's own conflicted understanding of the merits of comparable worth theory. (137) As the Seventh Circuit points out in American Nurses' Association, a comparable worth theorist is skeptical of an employer's ambiguous disparate payment practices. (138) However, the majority courts can be both sympathetic to the comparable worth theorists' skepticism and unbiased in their interpretation of the EPA. Given that the majority circuits recognize that the Supreme Court has condemned the use of market force theory to supplement the meaning of the EPA, the Seventh Circuit has no reason to believe that these circuits are guilty of using comparable-worth theory in a similar way. (139)
Likewise, the Seventh Circuit is not justified in blindly accusing the majority circuits of fallaciously micromanaging businesses when these courts readily point out that the Supreme Court has condemned such actions. (140) Rather than impermissibly supplementing their own business judgment for that of employers, the majority circuits simply hold employers to the standards required by Congress. More specifically, to ensure that employers comply with the EPA's requirements, the majority circuits ask employers to clarify their business practices. (141) They do not second guess the practicality of the decisions.
Employers cannot avoid EPA liability by masking their intent in ambiguous policies once an employee makes out a prima facie case that the employer violated the EPA. (142) Otherwise, the most heinous pay practices could be justified by mere ignorance or clever legalese. (143) Thus, it is a straw-man argument to conclude that comparable-worth theory puts words into the EPA that are not there because it merely suggests an outcome that the EPA already embraces. Likewise, it is unfair of the Seventh Circuit to suggest that the majority circuits are ignorant of Supreme Court mandates that they have frequently referenced and acknowledged.
IV. RECOMMENDATION
The Seventh Circuit established a precedent detrimental to corporations because the analytical framework codified in Wernsing at worst establishes a safe harbor for certain forms of ambiguous gender discrimination and at best suggests hostility towards strong concepts of gender equality. One recent study on the relationship between gender diversity and the performance of corporations suggests that now, more than ever, businesses should take all reasonable steps to promote gender diversity at all levels. (144) On a more general level, substantial interdisciplinary research indicates that diversity improves group performance in a variety of ways.145 Moreover, Congress recognized that gender-wage discrimination has a detrimental impact on commerce when it enacted the EPA. (146) Given these facts, it is unfortunate that the Seventh Circuit embraced an interpretation of the EPA that undercuts employees' efforts to enforce their EPA rights.
For corporate boards, gender diversity has been tied to heightened levels of independence and other indicators of strong corporate governance. (147) Of note, though, is that these benefits do not evidence themselves until significant equality is achieved. (148) There is little corporate governance benefit from minimal gender inclusion in the boardroom. And, given the plethora of nondiscriminatory barriers to gender equality which courts are powerless to rectify, they should not be looking for opportunities to avoid statutory interpretations that would promote desirable social and economic goals: gender equality and improved corporate governance.
This Note recommends that circuits that have yet to consider the proper interpretation of the "factor other than sex" exception join the majority opinion finding an "acceptable business reason" requirement. Also, the Seventh and Eighth Circuits should reconsider their position because it is based on a theory that has been rejected by the Supreme Court and it enlarges the scope of actions unquestionably authorized by the EPA's fourth affirmative defense without a valid justification for doing so. Furthermore, businesses and corporations in the Seventh and Eighth Circuits should voluntarily adopt pay systems that are not strictly based on employees' prior wages to clearly endorse employee wages based on seniority, merit, and quantity and quality of production. In doing so, they can continue to remain competitive by attracting and retaining the best male and female executives.
A. All Circuits Should Join the Majority View
The First, Third, Fourth, Fifth, Tenth, and D.C. Circuits have yet to consider whether the EPA's "factor other than sex" exception contains an implicit "acceptable business reason" requirement. (149) While the Seventh Circuit in Wernsing questioned the validity of appealing to congressional intent when interpreting the "factor other than sex" exception, (150) the fear of permitting judicial activism is far outweighed by the need to consistently eliminate gender-based pay disparities. An "acceptable business reason" requirement does not impose a burden on employers beyond that which the EPA proscribes. (151) It merely requires them to explain their purpose for employing a particular payment system when the purpose is facially ambiguous. (152) The alternative, permitting "any" reason, so long as it is not express gender discrimination, creates a loophole for individuals engaged in precisely the practice the EPA was designed to stop. (153) Thus, between the two alternatives, undecided circuits should find an "acceptable business reason" requirement.
The Seventh Circuit in Wernsing pointed out that "Congress has not authorized federal judges to serve as personnel managers for America's employers." (154) However, the "acceptable business reason" requirement does not authorize this sin. Rather, as Part III.B.2.b of this Note argues, the "acceptable business reason" requirement requires employers to explain their ambiguous business decisions. (155) The "acceptable business reason" requirement does not authorize courts to strike down payment policies they dislike. It merely facilitates the illumination of ambiguous policies so that shrouded gender discrimination will be unveiled. Even courts applying the "acceptable business reason" requirement do not find an EPA violation when an ambiguous, facially neutral policy, such as one based on employees' prior wages, is enacted for neutral purposes. (156) These courts simply place the burden on the employer to state that purpose. (157) Thus, the Seventh Circuit's criticism of the "acceptable business reason" requirement is misplaced.
Furthermore, as the Eleventh Circuit pointed out in Glenn, the minority view implicitly uses market force theory to authorize any payment system that is not entirely based expressly on gender. (158) As explained in Part III. B. Lb, the Supreme Court has already rejected the interpretation of the "factor other than sex" exception premised on market force theory. (159)
If the Seventh and Eighth Circuits are not using market force theory to justify their construction of the EPA's fourth affirmative defense, they should explicitly distinguish their approach. If they are, then they should stop, given the Supreme Court's rejection of market force theory as a tool to interpret the EPA. Moreover, this Note urges the Seventh and Eighth Circuits to reconsider the "acceptable business reason" requirement because it can be found in the language of the EPA and is consistent with congressional intent, without appealing to comparable-worth theory. (160)
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
Until the minority circuits revise their interpretation of the "factor other than sex" exception or the Supreme Court officially embraces the "acceptable business reason" requirement, businesses and corporations in the Seventh, Eighth, and undecided circuits should voluntarily adopt payment policies that do not strictly rely on employees' prior wages. Adopting the "acceptable business reason" requirement has the dual advantage of limiting liability in the undecided circuits and promoting workforce diversity. The first advantage is achieved by discouraging lawsuits where the rule of law is uncertain. The second is achieved by sending a message to both current and future employees that the organization is committed to admirable business practices rather than leaving the door open for invidious discrimination. This is especially important at the corporate governance level, where pay disparities are still significant, and corporations would generally benefit from increasing the number of women serving as directors. Voluntarily adopting payment systems based on "acceptable business reasons" will allow corporations in these circuits to compete for the best and brightest female executives.
V. CONCLUSION
While fear of overly-intrusive judicial activism interfering with long standing business employment practices is a valid concern, (161) a court's unwillingness to hold employers to the strict standards mandated by Congress is equally problematic. Critics of the "acceptable business reason" requirement argue that it has no basis in the statutory language of the EPA. (162) However, the requirement is a practical inference from the stated purpose of the EPA in various committee reports as well as the express language of the statute. The "acceptable business reason" requirement is a necessity to protect against discriminatory practices that are intentional but facially neutral.
The difficulty with the Seventh and Eighth Circuits' expansive interpretation of the EPA's "factor other than sex" defense is that it places an unreasonable burden on employees to uncover and prove an employer's discriminatory intent, (163) even when a payment system results in glaring pay disparities. As Part IV of this Note argues, a more reasonable approach is for courts to place the burden on employers to defend their pay systems when the purpose is ambiguous since they will have more access to evidence demonstrating their actual intent. This is particularly true in large corporations, where ground-level employees are far removed from managerial decisions.
The gap between the average salaries of male and female employees has shrunk since the 1960s, (164) but it will not disappear unless courts continue to fully enforce the EPA. This includes applying the "acceptable business reason" requirement to the "factor other than sex" exception. Thus, the Seventh Circuit's decision in Wernsing was in error, and the merits of the "acceptable business reason" requirement should be reconsidered by that court.
(1.) See Thane Somerville, Comment, The Equal Pay Act as Appropriate Legislation Under Section 5 of the Fourteenth Amendment: Can State Employers Be Sued?, 76 WASH. L. REV. 279, 279 (2001). Somerville states that in 1960, women earned on average 61% as much as men. Id (citing MICHAEL J. ZIMMER ET AL., EMPLOYMENT DISCRIMINATION 973 (4th ed. 1997)). Somerville also states that in 1998, women earned on average 73% as much as men. Id at 280 (citing U.S. CENSUS BUREAU, DEP'T OF COMMERCE, No. P60-206, MONEY INCOME IN THE UNITED STATES (1998)). In 2006, women earned on average 77.3% as much as men. U.S. CENSUS BUREAU, DEP'T OF COMMERCE, NO. ACS-08, INCOME, EARNINGS, AND POVERTY DATA FROM THE 2006 AMERICAN COMMUNITY SURVEY (2007), available at http://www.census.gov/prod/2007pubs/acs08.pdf.
(2.) Lucy B. Bednarek, Note, The Gender Wage Gap: Searching for Equality in a Global Economy, 6 IND. J. GLOBAL LEGAL STUD. 213, 214 (1998) (defining the phrase "gender wage gap").
(3.) Hilary M. Lips, The Gender Wage Gap: Debunking the Rationalizations, http://www.womensmedia.com/new/Lips-Hilary-gender-wage-gap.shtml (last visited Apr. 8, 2008).
(4.) See Brief Analysis, Denise Venable, National Center for Policy Analysis, The Wage Gap Myth (Apr. 12, 2002) (offering non discriminatory reasons for the gender wage gap), available at http://www.ncpa.org/pub/ba/ba392/ba392.pdf.
(5.) Id.
(6.) Sheila Clark, Whatever Happened to Equal Pay, http://www.marxist.com/women/equal_pay.html (last visited Apr. 8, 2008) (describing discriminatory reasons for the gender wage gap).
(7.) See B. Burcin Yurtoglu & Christine Zulehner, The Gender Wage Gap in Top Corporate Jobs Is Still There 9 (June 2007) (unpublished manuscript) (finding a 24% difference between the average compensation of male and female corporate executives), available at http://www.ssm.com/abstract-996224.
(8.) For a comprehensive discussion of the legislative history of the Equal Pay Act, infra note 9, see Thomas E. Murphy, Female Wage Discrimination: A Study of the Equal Pay Act 1963-1970,39U. Cix. L. REv. 615, 615 (1970). See also Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir. 1971) (describing the history of the Equal Pay Act).
(9.) Equal Pay Act of 1963, Pub. L. No. 88-38, 77 Stat. 56 (codified as amended at 29 U.S.C. [section] 206 (2000)).
(10.) Nina Joan Kimball, Note, Not Just Any "Factor Other Than Sex": An Analysis of the Fourth Affirmative Defense of the Equal Pay Act, 52 GEO. WASH. L. REV. 318, 321 (1984) (stating that "[t]he Equal Pay Act of 1963 amend[ed] the Fair Labor Standards Act of 1938"). The Fair Labor Standards Act of 1938 is codified at 29 U.S.C. [section][section] 201-219 (2000).
(11.) 29 U.S.C. [section] 206(d)(1) (2000) (commanding that "[n]o employer ... shall discriminate ... between employees on the basis of sea").
(12.) Id
(13.) See Kouba v. Allstate Ins. Co., 691 F.2d 873, 875 (9th Cir. 1982) (explaining that "[t]hese exceptions are affirmative defenses which the employer must plead and prove" (citing Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974))).
(14.) See Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 526 (2d Cir. 1992) (stating that "an employer bears the burden of proving that a bona fide business-related reason exists for using the gender-neutral factor that results in a wage differential in order to establish the factor-other-than-sex defense"); EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1988) (stating that "'the factor other than sex' defense does not include literally any other factor, but a factor that, at a minimum, was adopted for a legitimate business reason"); Glenn v. General Motors Corp., 841 F.2d 1567, 1571 (11th Cir. 1988) (requiring an employer to make an affirmative showing that a disparity in pay was based on the "experience, training, or ability" of the employee, rather than just an unwritten "policy" against requiring an hourly employee to take a cut in pay when transferring to a salaried position); Kouba, 691 F.2d at 876 (stating that "[a]n employer ... cannot use a factor which causes a wage differential between male and female employees absent an acceptable business reason").
(15.) See Aldrich, 963 F.2d at 525 (stating that "employers cannot meet their burden of proving that a factor-other-than-sex is responsible for a wage differential by asserting use of a gender-neutral classification system without more"); EEOC, 843 F.2d at 253 (holding that the EPA only exempts disparate pay practices "adopted for ... legitimate business reason[s] and used reasonably in light of the employer's stated purpose"); Glenn, 841 F.2d at 1570-71 (stating that merely identifying a policy of paying new employees based on their prior wages is not sufficient evidence to establish an "any factor other than sea" defense); Kouba, 691 F.2d at 876 (stating that an acceptable business reason is one that is more than a pretext for a discriminatory objective and that prior salary is a factor that can be a pretext).
(16.) Kouba, 691 F.2d at 876-77.
(17.) The Second, Sixth, Ninth, and Eleventh Circuits use different phrases to describe the same concept of an "acceptable business reason" requirement. See Aldrich, 963 F.2d at 526 (using the phrase "bona fide business-related reason"); EEOC, 843 F.2d at 253 (using the phrase "legitimate business reason"); Glenn, 841 F.2d at 1571 (suggesting that the expressed business reason must be legitimate); Kouba, 691 F.2d at 876 (using the phrase "acceptable business reason").
(18.) See Taylor v. White, 321 F.3d 710, 719 (8th Cir. 2003) (rejecting the "acceptable business reason" requirement).
(19.) See Strecker v. Grand Forks County Soc. Serv. Bd., 640 F.2d 96, 102-03 (8th Cir. 1980) (holding that an employer who engaged in sex-discrimination did not violate the EPA because the discriminated employee lacked the personal qualifications to receive a higher salary).
(20.) See Wernsing v. Dep't of Human Servs., 427 F.3d 466, 470 (7th Cir. 2005) (announcing that "[f he disagreement between this circuit (plus the eighth) and those that require an 'acceptable business reason' is established, and we are not even slightly tempted to change sides").
(21.) Id
(22.) See generally HENRY 7. AARON & CAMERON M. LOUGY, THE COMPARABLE WORTH CONTROVERSY (1986) (providing an overview of the comparable-worth theory, discussed in Part III of this Note, and indicating that historical evidence of disparate pay practices is a key argument supporting the theory).
(23.) Somerville, supra note 1, at 279.
(24.) BUREAU OF LABOR STATISTICS, U.S. DEP'T OF LABOR, WOMEN IN THE LABOR FORCE: A DATABOOK tb1.18 (2007), available at http://www.bls.gov/cps/wlf-databook2007.htm.
(25.) Id For management, professional, and related occupations, women only make 73% as much as men. Id.
(26.) Kouba v. Allstate Ins. Co., 691 F.2d 873, 876 (9th Cir. 1982) (stating that "Congress fashioned the Equal Pay Act to help cure long-standing societal ills').
(27.) 109 CONG. REC. 9196 (1963) (statement of Rep. Frelinghuysen).
(28.) 29 U.S.C. [section] 206(d)(1) (2000).
(29.) See Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 524-25 (2d Cir. 1992) (referencing Equal Pay Act: Hearings on HR. 3861 and Related Bills Before the Special Subcomm. on Labor of the House Comm. on Educ. and Labor, 88th Cong. 2-6 (1963) (statement of William Miller, Vice President, Stewart Warner Corp., on behalf of the Chamber of Commerce of the United States).
(30.) H.R. REP. No. 88-309 (1963), reprinted in 1963 U.S.C.C.A.N. 687, 688-89 ("Three specific exceptions and one broad general exception ... shall be exempted from the operation of this statute. As it is impossible to list each and every exception, the broad general exclusion has also been included.").
(31.) See Kimball, supra note 10, at 323-25 (describing the purpose of these four affirmative defenses to the EPA as striking a balance between the promotion of civil liberties and economic interests).
(32.) Aldrich, 963 F.2d at 525.
(33.) See Shannon Vincent, Comment, Unbalanced Responses to Employers Getting Even: The Circuit Split over What Constitutes a Title VII-Prohibited Retaliatory Adverse Employment Action, 7 U. PA. J. LAB. & ENW. L. 991, 1010 (2005) (describing the reason why Congress enacted Title VII).
(34.) Id.
(35.) 42 U.S.C. [section] 2000e-2(h) (2000).
(36.) Aldrich, 963 F.2d at 526 n.2.
(37.) See id. (stating that the Bennett Amendment only protects an employer's legitimate business practices).
(38.) See generally Thomas H. McCarthy, Jr., Note, '"Market Value" As a Factor "Other Than Sex" in SexBased Wage Discrimination Claims, 1985 U. ILL. L. REV. 1027, 1034 (justifying the willingness of some courts to reject the "acceptable business purpose" requirement on the theory that this extra burden on employers favors one EPA goal over another when they are both equal).
(39.) See Aldrich, 963 F.2d at 526 (confirming the validity of challenging gender-based pay discrimination under Title VII).
(40.) See Wernsing v. Dep't of Human Servs., 427 F.3d 466, 470 (7th Cir. 2005) (recognizing the circuit split because of the lack of Supreme Court guidance).
(41.) Corning Glass Works v. Brennan, 417 U.S. 188 (1974).
(42.) County of Wash. v. Gunther, 452 U.S. 161 (1981).
(43.) See Corning Glass Works, 417 U.S. at 195-96 (describing legitimate business reasons justifying an employer's decision to pay male and female employees different wages); Gunther, 452 U.S. at 171. The Court in Gunther stated that an employer's "bona fide job rating system" is immunized from court scrutiny under the EPA "so long as it does not discriminate on the basis of sex[.]" However, its use of the phrase "so long as" suggests that court scrutiny of an employer's payment practice is appropriate when it does discriminate on the basis of sex.
(44.) See Corning Glass Works, 417 U.S. at 202 (describing the meaning of similar "working conditions").
(45.) Id at 194.
(46.) Id at 190.
(47.) Id.
(48.) Id at 202 (reasoning that "[w]hile a layman might well assume that time of day worked reflects one aspect of a job's 'working conditions,' the term has a different and much more specific meaning in the language of industrial relations").
(49.) County of Wash. v. Gunther, 452 U.S. 161, 163-64 (1981).
(50.) Id at 170-71.
(51.) See McCarthy, supra note 38, at 1034 n.2 ("The Court [in Corning Glass Works, 417 U.S. at 198-201] observed that earlier versions of the Equal Pay bill were amended to define equal work and to add the fourth affirmative defense because of a concern that bona fide job-evaluation systems used by American business would otherwise be disrupted." (quoting Gunther, 452 U.S. at 170-71 n.11)).
(52.) Kouba v. Allstate Ins. Co., 691 F.2d 873 (9th Cir. 1982).
(53.) Id at 876.
(54.) Id at 874-75.
(55.) Id at 875.
(56.) Id at 876.
(57.) Kouba, 691 F.2d at 876.
(58.) Id The court reasoned that Congress did not intend for the Act to be meaningless. Id Such interpretations made the Act meaningless because they permitted employers to defend any pay system by asserting any "business reason as a pretext for a discriminatory objective." Id
(59.) Id.
(60.) Kouba, 691 F.2d at 876.
(61.) Id at 878.
(62.) EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1992).
(63.) Id.
(64.) Id (explaining that "'the factor other than sex' defense does not include literally any other factor").
(65.) Glenn v. Gen. Motors Corp., 841 F.2d 1567 (11th Cir. 1988).
(66.) Id at 1576 (holding that appellees were entitled to damages because they established a prima facie case under the EPA and that appellants failed to affirmatively justify their discriminatory pay practices).
(67.) See id at 1569-70 (describing the employer's attempt to justify its system).
(68.) Id.
(69.) For examples of cases applying the alternative interpretation of the "factor other than sea" exemption, see generally Strecker v. Grand Forks County Soc. Serv. Bd, 640 F.2d 96, 103 (8th Cir. 1980), and Wernsing v. Dep't of Human Servs., 427 F.3d 466, 468 (7th Cir. 2005).
(70.) The market force theory argues that gender discriminating pay systems should be permissible under the EPA because "supply and demand dictates that women qua women may be paid less." Brock v. Georgia Sw. Coll., 765 F.2d 1026, 1037 (11th Cir. 1985) (citing Corning Glass Works v. Brennan, 417 U.S. 188, 188 (1974)); see also McCarthy, supra note 38.
(71.) Glenn, 841 F.2d at 1570. The court pointed out that the Supreme Court, in Corning Glass Works, "rejected the market force theory as a 'factor other than sex.'" Id (citing Corning Glass Works, 417 U.S. at 205).
(72.) Id at 1571 (citing H.R. REP. No. 88-309, at 3 (1963), reprinted in 1963 U.S.C.C.A.N. 687, 689).
(73.) Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520 (2d Cir. 1992).
(74.) Id at 525.
(75.) Id.
(76.) Id at 527 (stating that a "neutral" pay system was not necessarily a "factor other than sea" because the defendant offered no proof that the pay system was a "factor other than sea" beyond the implied classification of gender neutrality).
(77.) See Strecker v. Grand Forks County Soc. Serv. Bd., 640 F.2d 96, 102 (8th Cir. 1980) (analyzing the plaintiff s work experience to see if she would have received an increase in pay using objective criteria).
(78.) See id (stating that "Mrs. Strecker offered no evidence that in her case the objective, neutral criteria of the Central Personnel classification system were not applied").
(79.) Id.
(80.) See id at 103 (holding that the plaintiff bears the burden of proving that the pay system was based on her sex).
(81.) See Wernsing v. Dep't of Human Servs., 427 F.3d 466, 468 (7th Cir. 2005) (stating that "[f he statute asks whether the employer has a reason other than sex not whether it has a 'good' reason").
(82.) Id.
(83.) Id at 467.
(84.) Id at 468.
(85.) Id at 470.
(86.) Wernsing, 427 F.3d at 468 (stating that "the wisdom or reasonableness of the asserted defense" is irrelevant (citing with approval Taylor v. White, 321 F.3d 710, 719 (8th Cir. 2003))).
(87.) Id. at 468.
(88.) Id. at 469 (stating that "[w]e're not sure what 'congressional intent' the eleventh circuit thought we had ignored").
(89.) See Corning Glass Works v. Brennan, 417 U.S. 188, 201 (1974). The Court used "congressional intent" as inferred from House Committee Reports to determine the meaning of "equal work," rather than strictly relying on the enacted text. Id
(90.) Glenn v. Gen. Motors Corp., 841 F.2d 1567, 1571 (11th Cir. 1988) (stating that "[the legislative history thus indicates that the 'factor other than sex' exception applies when the disparity results from unique characteristics of the same job").
(91.) In Part III. A.2, infra, this Note argues that application of a traditional maxim of statutory interpretation implicates the "acceptable business reason" requirement in the express language of the EPA.
(92.) See Equal Pay Act of 1963, Pub. L. No. 88-38, 77 Stat. 56 (1964) (codified as amended at 29 U.S.C. [section] 206 (2000)) (After describing payment practices based purely on gender classification and the resulting evils, the report states that "[i]t is hereby declared to be the policy of this Act ... to correct the conditions above referred to in such industries.").
(93.) Kimball, supra note 10, at 323 (citing 109 CONG. REC. 9195 (1963) (statement of Rep. Powell)).
(94.) Rep. Griffin stated that "Roman numeral iv is a broad principle, and those preceding it are really examples.... "Id (citing 109 CONG. REC. 9203 (1963)).
(95.) Id at 323 n.31 (citing 109 CONG. REC. 9198 (1963) (statement of Rep. Goodell)).
(96.) See 29 U.S.C. [subsection] 206(d)(1)-(3) (2006); 28 U.S.C. [section] 206(d)(1) (2000) (prohibiting employers from engaging in sexually discriminatory practices against their employees). Payment systems that reward seniority, merit, and the ability to increase the quantity or quality of earnings are practical in a business sense in that they promote efficiency. 29 U.S.C. [section] 206 (2000).
(97.) Kimball, supra note 10, at 323 (citing 109 CONG. REC. 9203 (1963) (statement of Rep. Griffin)).
(98.) Wernsing v. Dep't of Human Servs., 427 F.3d 466, 470 (7th Cir. 2005) (arguing that "[f he opposing view [e.g., the view promoting the 'acceptable business reason' requirement] ... lacks any footing in enacted
(99.) See, e.g., Circuit City Stores v. Adams, 532 U.S. 105, 115 (2001) (using the maxim of ejusdem generis to interpret the meaning of a congressional statute).
(100.) See 28 U.S.C. [section] 206(d)(1) (2000) (stating that pay systems based on a seniority system, a merit system, and a system that measures earnings by "quantity or quality of production" do not give rise to EPA liability).
(101.) Id
(102.) Corning Glass Works v. Brennan, 417 U.S. 188, 199 (1974).
(103.) See Am. Nurses' Ass'n v. Illinois, 783 F.2d 716, 724 (7th Cir. 1986) (reciting the trial court's findings of fact, including a list of some of the social harms of sex-based discrimination).
(104.) The Eleventh Circuit in Glenn stated that the circuits refusing to find an "acceptable business reason" requirement made the mistake of permitting an employer to explain pay disparities based on market force theory, an idea that was rejected by the Supreme Court in Corning Glass Works. See Glenn v. Gen. Motors Corp., 841 F.2d 1567, 1570 (11th Cir. 1988) (rejecting the argument that the market force theory is an acceptable "factor other than sea"). The Seventh Circuit in Wernsing responded with the accusation that the circuits requiring an "acceptable business reason" requirement erred in applying a comparable-worth theory. See Wernsing v. Dep't of Human Servs., 427 F.3d 466, 469-70 (7th Cir. 2005) (expressly refusing to adopt the comparable-worth theory).
(105.) See, e.g., supra note 104 and accompanying text (providing examples of the Court's decision making process).
(106.) See McCarthy, supra note 38, at 1037 (describing the difference between the market conditions defense and the market value defense).
(107.) Glenn, 841 F.2d at 1570 (quoting Brock v. Georgia Sw. Coll., 765 F.2d 1026, 1037 (11th Cir. 1985) (citing Corning Glass Works, 417 U.S. at 205)).
(108.) See McCarthy, supra note 38, at 1037 (stating that "[u]nder the market conditions defense, the defendant makes broad assumptions about an entire class of employees based on sea").
(109.) Id
(110.) Id
(111.) See Am. Nurses' Ass'n v. Illinois, 783 F.2d 716, 720 (7th Cir. 1986) (generally describing the flaws in market analysis that comparable-worth theorists point to when vindicating their position).
(112.) Id.
(113.) Id
(114.) See generally Edward H. Chamberlin, An Experimental Imperfect Market, 56 J. POL. ECON. 95, 95 (1948) (stating that a controlled setting does not accurately approximate the real market and that traditional economic experiments in controlled settings have had a negative impact on the science).
(115.) Corning Glass Works v. Brennan, 417 U.S. 188, 205 (1974).
(116.) Id
(117.) Id
(118.) Cf. McCarthy, supra note 38, at 1042-43 (advocating the use of the market value defense to qualify prior wages as a "factor other than sea").
(119.) See supra Part III. B. 1.a (describing criticisms of market force theory).
(120.) Wernsing v. Dep't of Human Servs., 427 F.3d 466, 469 (7th Cir. 2005) (stating that "once the plaintiff makes a prima facie case of discrimination ... the employer need[s to] ... articulate a ground of decision that avoids reliance on the forbidden grounds"); Kouba v. Allstate Ins. Co., 691 F.2d 873, 875 (9th Cir. 1982) (citing Corning Glass Works v. Brennan, 417 U.S. 188 (1974)) (agreeing that "[t]hese exceptions are affirmative defenses which the employer must plead and prove").
(121.) Wernsing, 427 F.3d at 469.
(122.) See Corning Glass Works, 417 U.S. at 205 (stating that the company could not take advantage of the fact that the market had developed a pay differential).
(123.) See id ("That the company took advantage of such a situation [higher market demand for male than female employees] may be understandable as a matter of economics, but its differential nevertheless became illegal once Congress enacted into law the principle of equal pay for equal work.").
(124.) Wernsing, 427 F.3d at 469-70.
(125.) Claire Andre & Manuel Velasquez, Comparable Worth, ISSUES IN ETHICS, Spring 1990, http://www.scu.edu/ethics/publications/iie/v3n2/comparable.html.
(126.) See Am. Nurses' Ass'n v. Illinois, 783 F.2d 716, 719-20 (7th Cir. 1986) (identifying a historical and cognitive premise underlying comparative-worth theory).
(127.) Id at 719.
(128.) Id
(129.) See Andre & Velasquez, supra note 125 (explaining the views of proponents of comparable-worth theory).
(130.) In rejecting comparable-worth theory, the Seventh Circuit indicated with favor a traditional economic critique of comparable-worth theory:
Economists point out that unless employers forbid women to
compete for the higher-paying, traditionally men's jobs ... women
will switch into those jobs until the only difference in wages
between traditionally women's jobs and traditionally men's jobs
will be that necessary to equate the supply of workers in each
type of job to the demand.
Am. Nurses'Ass'n, 783 F.2d at 720.
(131.) Id
(132.) Id at 719.
(133.) Id
(134.) Id
(135.) See Am. Nurses' Ass'n, 783 F.2d at 719 (stating that "[i]f the movement should cause wages in traditionally men's jobs to be depressed below their market level and wages in traditionally women's jobs to be jacked above their market level, women will have less incentive to enter traditionally men's fields and more to enter traditionally women's fields").
(136.) See Kouba v. Allstate Ins. Co., 691 F.2d 873, 876 (9th Cir. 1982) ("The Equal Pay Actconcerns business practices. It would be nonsensical to sanction the use of a factor that rests on some consideration unrelated to business. An employer thus cannot use a factor which causes a wage differential between male and female employees absent an acceptable business reason.").
(137.) See Am. Nurses' Assn, 783 F.2d at 721 (stating that "[t]he relevance in a comparable worth study in proving sex discrimination is that it may provide the occasion on which the employer is forced to declare his intentions toward his female employees").
(138.) See id (noting that a comparable-worth study "may provide the occasion on which the employer is forced to declare his intentions").
(139.) See supra Part III.B. Lb (discussing the Supreme Court's rejection of market force theory).
(140.) The Ninth Circuit in Kouba pointed out that the Supreme Court held that the EPA does not permit the judiciary to substitute their judgment for an employer who has used a bona fide pay system. See Kouba, 691 F.2d at 876 (acknowledging the Supreme Court's mandate in County of Washington v. Gunther, 452 U.S. 161, 171 (1981)).
(141.) For examples of cases in the majority circuits requiring employers to explain their ambiguous policies, see supra Part II.C.2.
(142.) E.g., id (noting the Second Circuit's finding that an employer's "neutral civil service examination and classification system" was an insufficient defense).
(143.) If literally any reason other than sex qualifies as an EPA defense, businesses need only issue company policy statements explaining that their payment practices are based on prior wages. Upon doing so, they would have an ironclad defense against all EPA challenges absent an exceedingly challenging showing on an employee's part that the expressed purpose was a pretext for a discriminatory purpose. This is an unreasonable interpretation of a statute intended to prohibit gender-based pay discrimination. See 28 U.S.C. [section] 206(d)(1) (2000) (providing an employer nondiscrimination requirement).
(144.) Vicki W. Kramer et al., Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance (Wellesley Ctrs. for Women's Publ'ns Office, Report No. WCW 11, 2006), 2-6, available at http://www.tiaa-crefinstitute.org/research/grants/docs/ CriticalMassreport.pdf.
(145.) See id (identifying research that demonstrates the merits of diversity); see, e.g., Nancy Ditomaso & Corinne Post, Workforce Diversity: Why, When, and How, in DIVERSITY IN THE WORKFORCE 1, 5-6 (Nancy Ditomaso & Corinne Post eds., Elsevier Ltd. 2004) (stating that a diverse work force helps a company serve a diverse clientele); Lu Hong & Scott E. Page, Groups of Diverse Problem Solvers Can Outperform Groups of High Ability Problem Solvers, 101 PNAS 16,385 (2004) (suggesting a model for why diverse groups can often outperform experts in problem solving exercises), available at http://www.pnas.org/cgi/reprint/101/46/16385.
(146.) See Equal Pay Act of 1963, Declaration of Purpose, Pub. L. No. 88-38, 77 Stat. 56 (1963). The Congress hereby finds that the existence in industries engaged in commerce or in the production of goods for commerce of wage differentials based on sex--
(1) depresses wages and living standards for employees necessary for their health and efficiency;
(2) prevents the maximum utilization of the available labor resources;
(3) tends to cause labor disputes thereby burdening, affecting, and obstructing commerce;
(4) burdens commerce and the free flow of goods in commerce; and
(5) constitutes an unfair method of competition. Id.
(147.) Kramer, supra note 144.
(148.) Id
(149.) The Second, Sixth, Seventh, Eighth, Ninth, and Eleventh Circuits have considered this issue with mixed results. See supra Part II.C (discussing judicial interpretation of the "differential based on any other factor" clause).
(150.) Wernsing v. Dep't of Human Servs., 427 F.3d 466, 469 (7th Cir. 2005) (stating that "Congress makes legal rules through statutes rather than pure 'intent' demonstrated by statements in committee reports or on the floor").
(151.) See supra note 136 and accompanying text (explaining that the "acceptable business reason" requirement is not an additional requirement).
(152.) This Note argues that the "acceptable business reason" requirement is an inherent feature of the "factor other than sea" defense. Id As such, placing the burden on employers to justify their behavior is no more than the EPA inherently requires. Id
(153.) See Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 525 (2d Cir. 1992) (stating that "[w]ithout a job-relatedness requirement, the factor-other-than-sex defense would provide a gaping loophole in the statute through which many pretexts for discrimination would be sanctioned").
(154.) Wernsing, 427 F.3d at 468.
(155.) See, e.g., Aldrich, 963 F.2d at 526 (suggesting that an EPA inquiry does not end at the recognition of a "facially neutral" payment system because such a system can hide impermissible gender discrimination).
(156.) See, e.g., Kouba v. Allstate Ins. Co., 691 F.2d 873, 878 (9th Cir. 1982) (stating that "the EqualPay Act does not impose a strict prohibition against the use of prior salary").
(157.) See supra note 13 and accompanying text (discussing employer's burden).
(158.) See Glenn v. Gen. Motors Corp., 841 F.2d 1567, 1570 (11th Cir. 1988) (explaining that market force theory is no justification for discriminatory payment practices and therefore a valid interpretation of the "any other factor" exception cannot be premised on the theory).
(159.) See Corning Glass Works v. Brennan, 417 U.S. 188, 205 (1974) (holding that reliance on market forces alone does not justify gender-based pay discrimination).
(160.) See, e.g., Am. Nurses' Ass'n v. Illinois, 783 F.2d 716, 721 (7th Cir. 1986) (rejecting the "acceptable business reason" requirement because of the erroneous assumption that the requirement is based on comparableworth theory rather than the EPA).
(161.) See Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 524-25 (2d Cir. 1992) (acknowledging the legitimate concern that the EPA will be used to strike down legitimate business practices).
(162.) Wernsing v. Dep't of Human Servs., 427 F.3d 466, 470 (7th Cir. 2005).
(163.) See id at 469 ("[O]nce the plaintiff makes a prima facie case of discrimination, all the employer need do is articulate a ground of decision that avoids reliance on the forbidden grounds. The plaintiff then bears the burden to show that the stated reason is a pretext....").
Pagan, Ruben Bolivar
Source Citation (MLA 8th Edition)
Pagan, Ruben Bolivar. "Defending the 'acceptable business reason' requirement of the Equal Pay Act: a response to the challenges of Wernsing v. Department of Human Services." The Journal of Corporation Law, Summer 2008, p. 1007. Academic OneFile, go.galegroup.com%2Fps%2Fi.do%3Fp%3DAONE%26sw%3Dw%26u%3Doran95108%26v%3D2.1%26id%3DGALE%257CA185166669%26it%3Dr%26asid%3Dc21192b3c58537ed81f1b1064605fa01. Accessed 2 Sept. 2017.
