Ruling is a reminder on this Equal Pay Day

Wednesday is Equal Pay Day 2021, a symbolic date that marks how far into the new year women, on average, must work to earn what men were paid the year before. It is neither a holiday nor cause for celebration, but a measure of the persistent gender wage gap that costs women employed full-time in the United States over $950 billion dollars annually. This enormous loss hits particularly hard in a year that saw women pushed out of the workforce in record numbers: women lost more than half of the jobs shed by the U.S. economy during the COVID pandemic.

Against this backdrop, the 9th U.S. Circuit Court of Appeals' March 15 decision in Freyd v. University of Oregon, 2021 DJDAR 2280, came as welcome news for advocates and supporters of pay equity, including the 48 organizations that submitted amicus briefs in support of the plaintiff, Professor Jennifer Joy Freyd, whose pay discrimination claims had been dismissed by the district court.

Freyd, a tenured professor of psychology and renowned trauma studies scholar, discovered in 2014 that she was being paid significantly less than several of her male colleagues in the psychology department at the University of Oregon -- colleagues who, like Freyd, held positions as full professors, but had less seniority and were no more accomplished than she. The pay disparity in Freyd's situation was particularly glaring, but not unique. Several studies conducted by the university and independent analysts found a "significant equity problem with respect to salaries at the full professor level." This disparity was driven primarily by the practice of giving retention raises to certain (disproportionately male) professors as an incentive to remain at the University, without making corresponding equity adjustments to the salaries of other (disproportionately female) faculty members, like Freyd, who did not seek outside offers to leverage higher pay.

When, after attempting to resolve the issue internally over three years, the university refused Freyd's requests for a raise, she filed suit in the U.S. District Court for the District of Oregon, claiming that the university discriminated against her in violation of the Equal Pay Act, Title VII of the Civil Rights Act, the U.S. and Oregon constitutions, and related state laws. The district court dismissed Freyd's equal pay claims because it found that she did not do "equal work" to her male comparators, even though they held the same position and rank, had the same core job functions and responsibilities, and were evaluated based on the same criteria.

The university argued -- and the district court held -- that Freyd could not show she did "equal work" to her four male comparators because they conducted different types of research, ran different labs, obtained different funding for their studies, and sat on different university committees. However, in reversing summary judgment on her EPA claim, the 9th Circuit rejected the view that granular distinctions in the way individuals carry out particular segments of their job make it impossible to establish that they did substantially equal work as a matter of law, especially if they hold positions that share a "common core of tasks." The court affirmed the principle that under the EPA, the concept of "equal work" does not mean "identical," and underlined the importance of comparing the overall content of jobs, "not the individuals who hold the jobs" in determining whether a plaintiff did substantially equal work to that of a comparator.

Responding to the dissent's complaint that examination of the "full picture of duties and skills" compelled a finding that the jobs of Freyd and her comparators "cannot be substantially equal as a matter of law," the majority embraced arguments advanced by Equal Rights Advocates and other amici in noting that, "the granularity with which the dissent picks through the facts would gut the Equal Pay Act for all but the most perfunctory of tasks." This would render the EPA a dead letter for huge swaths of the workforce, not just academics, ignoring the law's "broadly remedial" purpose and frustrating its intent.

The 9th Circuit also reversed and remanded Freyd's disparate impact claim under Title VII, recognizing that she did not challenge the practice of giving retention raises, per se, but rather "the specific employment practice of awarding retention raises to some professors without increasing the salaries of other professors of comparable merit and seniority." This important distinction was lost on the dissent, which lamented that limiting unequal application of retention raises will hinder universities' ability to compete for top talent -- a position echoed by the university in its statement following the decision. This position is as puzzling as it is troubling since it implies that only through discriminatory employment practices can the university (and other institutions) attract and retain the "best and brightest" and succeed financially.

Fortunately, the majority rejected this prognostication in remanding the question of whether the university's current retention raise policy represented a "business necessity," and if so, whether Freyd's proposed alternative practice -- of "evaluating the resulting salary disparity with others in the same rank with comparable merit and seniority, and giv[ing] affected individuals a raise" -- would be equally effective in accomplishing the goal of retaining talented faculty while reducing or eliminating the adverse impact on women. The decision signals that market-based defenses to discriminatory pay practices should be closely scrutinized by courts precisely because they are so likely to perpetuate the very gender wage disparities that the EPA was designed to address.

Finally -- and importantly -- the court held that the district court erred in finding that the small size of the psychology department precluded Freyd from using statistical evidence to support her pay discrimination claim. The district court's conclusion contravened substantial authority recognizing that employees must not be deprived of Title VII protections simply because they work in a small employee pool.

In 2021, women are still paid less in virtually every industry and occupation. Pay gaps still grow as education levels increase, with the largest disparities among workers with advanced degrees -- like Professor Freyd. The 9th Circuit's recent decision in her case is a reminder, on this Equal Pay Day, that it is long past time for employers to pay all workers fairly and value them fully, regardless of their gender.

It also reminds us that we can't fix what we don't see -- or refuse to look at. The Freyd decision should prompt employers to take a critical look at their compensation structures and practices to see where gender (and race) disparities lie. And then correct them. Rather than waiting to get sued to act, employers can be proactive. If they find that certain pay practices are consistently working to the advantage of some employees at the expense of others; if they are preserving the status quo and not making the organization more healthy, diverse, equitable, and inclusive -- then change them. In the words of Dr. Freyd -- act with institutional courage. Examine your assumptions. Lift the rug and look at the numbers. Be as transparent as possible. And don't forget to put your money where your mouth is.

Jennifer co-authored the brief from Equal Rights Advocates in the Freyd case.