Unexplained Pay Disparity Supports Race Bias Claim

By Jeffrey L. Rhodes Nov 13, 2015
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A black former employee of a U.S. Army contractor who received a salary $11,000 higher than he requested still has a triable pay discrimination claim, a divided 8th U.S. Circuit Court of Appeals ruled.

The contractor, URS Corp., hired employees to destroy munitions at an Arkansas facility. Melvin Smith, who is black, was hired as a training specialist on the project. Smith had applied to work for the position for a salary of $46,000. He was hired and given the grade S5.12 with a salary of $57,668 per year. Five months later, URS hired a white applicant named Jessie Griffin. Griffin sought the same position title but sought a higher salary of $65,000. Griffin also received placement in a training specialist position. Upon starting, Griffin received a higher grade of S5.13 and a working title of senior training specialist.

Two months later, URS hired another black applicant, Stanley Ellis. Ellis was given the title of training specialist and a grade of S5.12 and received a salary of $57,668. Four other trainers already worked on the project for URS, hired between 2001 and 2003. Three were white, and one was Hispanic. All four had the working title of senior training specialist at grade S5.13 and earned higher wages than Smith and Ellis. One of these trainers earned less than Griffin. The written descriptions of the positions for grade S5.12 and S5.13 were very similar, if not identical.

Smith later learned that Griffin had been hired at a higher grade and higher rate of pay than both Smith and Ellis. In 2009, Smith complained to training manager Ted Howard and asked for a promotion to S5.13. Howard responded that the U.S. Army “might frown at that.” Smith also complained to a lower-level shift supervisor, Charles Smith (no relation), who told Smith he was doing a good job and should ask Howard for a promotion. Smith relayed Charles Smith's opinion to Howard, and Howard told Charles Smith “not to encourage” Smith.

The URS project then began to shut down, and URS began preparations for reductions in force (RIFs). Howard conducted a ranking of the seven trainers and ranked Smith and Ellis lowest and Griffin highest. Thus Smith and Ellis were first in line to be terminated during a RIF. URS asserts Howard's ranking reflected the different trainers’ relative abilities to teach courses that would be needed during the shutdown phase. Smith renewed his complaint about his salary and grade assignment to HR representative Erika Hadley and asked about the ranking process. Smith was the first trainer terminated during the RIF.

After his termination, Smith sued, alleging racial discrimination and retaliation in violation of 42 U.S.C. Section 1981. Smith claimed the discrepancy in pay and grade between Griffin and Ellis and Smith was discriminatory. He also claimed that his requests for higher pay were protected acts and that the ranking and order of termination were discriminatory and retaliatory.

In the litigation before the district court, URS moved for summary judgment to have the case dismissed before trial. URS argued that Smith did not show the basic requirements of a discrimination claim. It argued that, because Smith received a rate of pay above what he requested and Griffin had more management experience, Smith could not claim discrimination. Regarding the RIF rankings, URS argued that the rankings were based on objective criteria in the trainer's abilities to teach closure-related courses. The district court agreed and dismissed the case, granting summary judgment to URS.

On appeal to the 8th Circuit, Smith argued that he showed the basic elements of discrimination through his evidence of differences between his terms of employment and those of Griffin. The 8th Circuit agreed, finding that Smith’s burden was very low and that URS had not sufficiently distinguished the qualifications of Smith and Griffin so as to justify the distinctions. The court was particularly affected by the fact that Griffin started at a salary nearly $8,000 more than Smith without URS identifying significant differences in duties performed. The 8th Circuit also found that the retaliation claim should not have been dismissed, but should be reconsidered by the district court.

Smith v. URS Corp., 8th Cir., No. 13-3645 (Oct. 14, 2015).

Professional Pointer: An employer generally has the right to set terms and conditions of employment in the way that best suits its business practices, but, in so doing, the employer should remain consistent and have legitimate justifications for differences between positions. While failure to do so is not necessarily a violation of law, it can be sufficient proof of subjectivity to allow a discrimination claim to go to trial.

Jeffrey L. Rhodes is managing partner of the civil division of Albo & Oblon, a business and employment law firm in Arlington, Va.

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