Employer Defense Under the Equal Pay Act Clarified

Takeaway: Employers must still comply with state pay equity statutes and other circuit court decisions interpreting the Equal Pay Act (EPA), which may require job-relatedness or a legitimate business reason to satisfy the “factor other than sex” defense. Accordingly, employers should rely on this 2nd Circuit decision narrowly to apply to EPA claims brought within this circuit, which includes Connecticut, New York and Vermont.

The 2nd U.S. Circuit Court of Appeals clarified that the Equal Pay Act (EPA) does not require employers that raise the “factor other than sex” affirmative defense to show that the factor is job-related. Thus, under the EPA, the pay disparity can be based on any factor except sex.

The plaintiff, a female culinary school professor in New York, alleged that she was paid less than a male professor who managed a similar course load. The pay disparity began when they were hired at different salaries. When hired, the plaintiff had 15 years of culinary experience, several cooking awards and two years of university studies, whereas her male comparator had an associate degree, 23 years of culinary experience, previous teaching experience, and superior performance in the cooking and teaching demonstrations during the application process. The plaintiff did not claim that her starting salary was the result of sex-based pay discrimination.

The employer provided the employees with pay increases according to the sex-neutral terms of a collective bargaining agreement and employee handbook. This resulted in a continuing pay disparity between the plaintiff and her male comparator. The employer argued in its defense that its sex-neutral compensation plan for awarding pay increases was a factor other than sex justifying the salary differential. The plaintiff argued that the employer’s compensation plan unfairly locked in the starting salary differential, served no legitimate business purpose and failed to include any adjustment to her salary based on merit.

The plaintiff brought claims under both the EPA and the New York Labor Law’s pay equity statute. In granting the employer’s motion for summary judgment, the district court applied the same “factor other than sex” standard to both claims, finding the compensation plan was a factor other than sex justifying the pay disparity.

On appeal, the 2nd Circuit considered the requirements for establishing the “factor other than sex” affirmative defenses under the EPA and New York Labor Law. The 2nd Circuit clarified that the EPA and New York Labor Law apply different standards to the “factor other than sex” affirmative defense.

The 2nd Circuit departed from the job-relatedness requirement set forth in Aldrich v. Randolph Central School District, 963 F.2d 520 (2d Cir. 1992), finding that there was nothing in the legislative history to suggest that the factor other than sex must be job-related under the EPA. The court held that, under the New York Labor Law, to establish a “factor other than sex” defense, an employer must prove that the pay disparity in question results from a differential based on a job-related factor.

The 2nd Circuit affirmed the district court’s summary judgment decision as to the EPA claim and remanded the New York Labor Law claim. The New York Labor Law claim was remanded because it should have been analyzed separately, using the job-relatedness requirement.

Eisenhauer v. Culinary Institute of America, 2d Cir., No. 21-2919 (Oct. 17, 2023).

Maria Caceres-Boneau is an attorney with Duane Morris in New York City.