Salary Negotiation Can Provide Affirmative Defense To Equal Pay Act Claim As "Factor Other Than Sex"

Published date14 December 2021
Subject MatterEmployment and HR, Employee Benefits & Compensation
Law FirmLittler Mendelson
AuthorAlice H. Wang

A female applicant applies for a position that was widely advertised. During her interview she insists on being paid $100,000. The employer agrees to her salary demand although it employs a male doing substantially similar work for $125,000. Has the employer violated the federal Equal Pay Act?

On December 2, 2021, Judge Lawrence E. Kahn of the U.S. District Court for the Northern District of New York refused to strike from a federal Equal Pay Act (EPA) action the employer's affirmative defense alleging that salary negotiations constituted a "factor other than sex" that excused any wage disparity between comparable employees performing comparable jobs. The Equal Employment Opportunity Commission (EEOC) had asked the court to reject this defense as a matter of law. In denying the EEOC's request, the court left for determination at trial whether the employer's use of "salary negotiations" constituted a legitimate affirmative defense to EPA claims.1

Available Affirmative Defenses Under the Federal Equal Pay Act

Once a plaintiff establishes a prima facie case under the EPA,2 the burden shifts to the employer to offer a legitimate reason for why the compensation differs. An employer may overcome the prima facie showing by demonstrating that the difference in compensation results from: (i) a seniority system; (ii) a merit system; (iii) a system that measures earnings by quantity or quality of production; or (iv) a differential based on any factor other than sex.

To establish the "factor other than sex" defense, an employer must demonstrate that it had a legitimate business reason for the gender-neutral factor that brought about the wage differential.3

This fourth variety of affirmative defense was at the center of the parties' dispute in Hunter-Tannersville Central School District.

Factual Background Regarding Employer's Affirmative Defense to EEOC's Equal Pay Act Claim

The EEOC filed a complaint against an employer for potential discrimination and a violation of the EPA after the employer hired a female as superintendent to replace a male superintendent. The male superintendent earned more than the female, and also received additional benefits. In response to the complaint, the employer asserted (among other affirmative defenses) that any pay differential the EEOC identified was the result of factors other than sex, as permitted by 29 U.S.C. ' 206(d)(1)(iv). Specifically, it claimed the "other than sex" factor was the ability of the male comparator to negotiate...

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