HR’s Response to Internal Claims of Wage Discrimination Helps Defeat Lawsuit

Takeaway: An employer’s swift, even-handed response to an employee’s internal claims of sex discrimination in compensation is one of its surest defenses to potential lawsuits. In this case, the human resources director acted quickly to reassure the employee that she had not acted improperly, and the manager apologized for her misstatement. Most importantly, the CEO launched an internal investigation of corporate compensation policies to ensure the company wasn’t engaged in discriminatory practices.  

A female marketing employee claiming sex-based wage discrimination and retaliation failed to show that she or any of her female marketing department co-workers had job responsibilities or experience similar to that of their more highly paid male co-worker, the 4th U.S. Circuit Court of Appeals ruled. The court noted HR’s responsiveness in addressing the worker’s allegations when they were brought up internally.

A shoe distributor had hired the plaintiff as content marketing coordinator in 2016 at a salary of $39,000. The employer was short-handed at the time the plaintiff was hired, so she handled some graphic design responsibilities until 2018. At that time, she was given the title of graphic designer.

Soon after, the company hired an experienced male graphic designer for $68,000. The plaintiff asked for a pay raise but was rebuffed and given a new title: senior photographer and PR specialist.

Her manager, after creating a “local industry standard” for pay based on publicly available salary information found online, asked for salary increases for her marketing employees. The manager argued that the three female workers in the marketing department, including herself, were paid well below the “local industry standard.” Because the manager’s data showed that the one male marketing employee made close to the standard, she did not request a raise for him. All requested raises were denied.

The following year, a co-worker found the male employee’s pay stub and shared it with the plaintiff, who was shocked to see that he made considerably more than she did. She confronted her manager, claiming that she was being subjected to sex discrimination in compensation. Her manager refused to raise her pay and admonished her that “it was a fireable offense to know another employee’s salary.”

The human resources director assured the plaintiff that she could not be fired for what she had done, and the manager apologized for the remark. In response to the plaintiff’s allegations, the company’s CEO ordered an internal investigation of possible sex discrimination in compensation. The investigation determined that there was no sex discrimination in compensation and found that the male employee was paid more because of his greater job duties, experience and skills.

With the onset of the COVID-19 pandemic and consequent economic conditions, some changes were made in the marketing department. The plaintiff viewed these changes as taking some of her job responsibilities away. Both she and the male graphic designer were then laid off in June 2020. The plaintiff sued the company, alleging wage discrimination and retaliation under both Title VII of the Civil Rights Act of 1964 and the Equal Pay Act.

In attempting to show wage discrimination, the plaintiff compared her wages to those of her male former co-worker. However, the district court found that her male co-worker “had a meaningfully different role at the company than the plaintiff, who was a content creator and part-time photographer.” Because the two did not perform similar jobs, the plaintiff could not rely on her co-worker as a comparator to show wage discrimination, the court held in granting summary judgment to the employer.

On appeal, the plaintiff dropped her comparator argument, instead arguing a broader theory that female employees were categorically paid less than men.

The court noted that the plaintiff, in attempting to create an inference of an unlawfully discriminatory motive on the part of the employer, argued that the “so-called ‘local industry standard’ creates some objective value of what marketing department work was worth.” However, the court found that the three female employees didn’t perform jobs similar to that of the male employee: one was a creative director, another a social media coordinator. “The sum here is not more than its parts,” the court said. “What the plaintiff cannot show by comparing herself to one dissimilar male employee, she can’t show by comparing that same male co-worker to two other dissimilar employees either.”

The plaintiff failed to raise an inference of sex discrimination under Title VII, thus also failing the Equal Pay Act’s even higher bar of showing that the comparable jobs were equal, the court concluded.

Turning to the plaintiff’s retaliation claims, the court examined the three alleged retaliatory acts: her manager’s threat to fire her; the reduction in her job responsibilities, including doing fewer photo shoots; and the employer’s refusal to provide a letter of recommendation after letting her go.

A prima facia case of retaliation would have required the plaintiff to prove that she engaged in protected activity, that her employer took adverse action against her, and that a causal relationship existed between the protected activity and the adverse employment activity. The court found no evidence “from which a reasonable jury could conclude the plaintiff had met all three elements for any of the alleged retaliatory conduct because none of the actions she complains about were both material and undertaken because of her complaints about salary equity.”

With regard to the manager’s alleged threat, the court said no reasonable juror would conclude that the one-off statement was a significant harm that would have dissuaded a reasonable worker from making a charge of discrimination. The court noted that the manager had apologized, the human resources director supported the plaintiff in the wake of the comment and the CEO conducted a full investigation to assuage the plaintiff’s concerns.

Examining the plaintiff’s claim that her employer had “hollowed out” her job responsibilities after the conversation, the court noted the record didn’t support her claim that her reduced responsibilities were objectively more desirable or prestigious than her increased responsibilities. She asserted that she “really enjoyed” photography but offered no evidence showing that photography is somehow objectively better than writing.

Finally, the plaintiff failed to show that the company’s decision not to provide her with a letter of recommendation was a retaliatory action. She would have received a recommendation letter if she had accepted the severance package as her male co-worker had, according to the court. Although the human resources director had originally agreed to write her a letter, the record shows that she was under the mistaken belief that the plaintiff had signed the severance agreement. When she realized the plaintiff had refused the agreement, she personally decided not to write the letter because she didn’t “feel comfortable” doing so.

Even assuming that withholding a letter of recommendation would dissuade a reasonable worker from engaging in protected activity, no reasonable jury could find the necessary causal link between the two events, the court said in affirming the lower court’s grant of summary judgment.

Noonan v. Consolidated Shoe Co., 4th Cir., No. 21-2328 (Oct. 19, 2023), motion for rehearing and rehearing en banc denied (Nov. 14, 2023).

Rosemarie Lally, J.D., is a freelance legal writer based in Washington, D.C.