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Employer Must Prove Legal Reason for Unequal Pay

By Robyn Hagan Cain on March 14, 2012 | Last updated on March 21, 2019

The Seventh Circuit Court of Appeals ruled this week that a former employee can pursue her sex discrimination lawsuit against Acosta Sales and Marketing. The ruling is good news for both plaintiff Susan King and women who like equal pay for equal work.

Let’s discuss why.

In 2001, Acosta, a food broker, hired Susan King as one of its business managers. But there was a problem at Acosta. Based on a salary table that was part of the evidence in King's sex discrimination lawsuit, all 12 of Acosta's male business managers started at salaries of at least $40,000; only 5 of the 8 female business managers started at or above the $40,000 mark.

Salaries as of 2007, (or final salaries), showed even greater disparity. Only one of the male business managers made less than $60,000, while only one of the women made more than $60,000. It took the one $60,000-earning woman six years to achieve her salary, while men exceeded the $60,000 salary much faster.

Chief Judge Frank Easterbrook, writing for the court, noted that "Even a dollar's difference based on sex violated both Title VII and the Equal Pay Act -- and King established much larger differences. Some men in the same job classification, doing the same work under the same conditions, received more than twice her pay."

Acosta claimed that there was a perfectly reasonable explanation for the disparities between King and her male counterparts: the men had more education and experience.

Acosta noted that all of the male employees had college degrees; King did not. Further, they argued that they had to match or exceed what other companies would pay to secure a capable staff. Neither Title VII nor the Equal Pay Act penalize a company for unequal pay that is based on factors other than sex.

The district court, satisfied with this explanation, granted summary judgment to Acosta. That's where the Seventh Circuit Court of Appeals found an error.

The district court wrote that King was responsible for showing that Acosta's explanation was a pretext for discrimination. While that is part of the burden-shifting approach under Title VII, the Equal Pay Act only requires a plaintiff to show unequal pay for "equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions."

The Seventh Circuit kicked King's case back to the district court, instructing that Acosta must prove that education and experience accounted for unequal pay among its employees. The appellate court also told the district court that it must try the Title VII claim because King had provided sufficient evidence that would "permit a trier of fact to conclude that Acosta's explanations are smokescreens."

What does this mean for your employment law practice? You may not always prevail in an sex discrimination lawsuit, but -- if it looks like there was gender-based unequal pay within a company -- you can probably get a trial.

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