Woman sues for equal pay, saying men got retention raises, but female staffers didn’t

“Donna is suing us under the Equal Pay Act,” said HR Director Carolyn McGill. “She claims that she’s being paid less than her male coworkers because of her gender.”

“Donna is mistaken,” said Supervisor Nathan Hawkins. “She’s well compensated for her work.”

“Donna disagrees,” said Carolyn. “According to her, three male colleagues perform essentially the same job she does, but the men are paid an average of $15,000 more per year. She says that’s a violation of federal law.”

“Donna receives a healthy pay hike every year,” said Nathan, “There’s no way she can allege a disparity based on her gender.”

“Well, she’s alleging it,” said Carolyn.

“I know the identities of the three men she’s talking about,” said Nathan. “In all three cases, the male staffers were offered jobs somewhere else, so we engaged in negotiations and then boosted their salaries to keep them. As you know, we’re allowed to provide retention bonuses to people who’ve found a job elsewhere to make sure we don’t lose them.”

“Yes, it’s important for us to try to keep certain people being courted by other employers,” said Carolyn. “But Donna alleges that we offer retention bonuses more quickly to men than we do to women. She has statistics showing that 75% of the male staffers who requested retention increases received them, but only 17% of the women who sought retention bumps got them.”

“Her statistics are misleading,” said Nathan. “We’ve found that our male employees are much more likely to find a job somewhere else and then request a retention raise from us. In the case of the women, very few of them have ever requested a retention bump, so Donna’s sample size is miniscule. Plus, we don’t pick the people who get job offers from other employers.”

“There’s the rub,” said Carolyn. “Donna claims that women, for a variety of reasons, are less likely to seek retention hikes, so our policy is discriminatory.”

“It’s more complicated than that,” said Nathan. “If you ask me, it’s a business necessity to offer retention increases to workers to keep them. We can’t afford to let good talent walk out the door.”

“Donna doesn’t think we should stop offering retention hikes,” said Carolyn. “Instead, she suggests that when we do provide a retention bump to a male worker, we increase the salaries of women in similar jobs to level the playing field.”

“That sounds good on paper,” said Nathan, “but it would cost us a fortune to do that. We should fight this lawsuit.”

Result: The employer lost. The court said a jury should decide whether the employer violated the Equal Pay Act.

First, the judge pointed to the woman’s statistics showing that females on average earned $15,000 less than their male coworkers. That was surely potential evidence of pay discrimination motivated by gender.

In addition, the court dismissed the employer’s argument that it was a business necessity to offer retention raises to workers being courted by other employers so it could remain competitive in the marketplace for talent.

The judge reasoned that the employer could still provide retention bonuses, but it had to analyze the increase and, if needed, raise the compensation levels of other staffers in comparable jobs to bring their salaries in line with what the person receiving the retention raise got.

Cite: Freyd v. University of Oregon, U.S. Court of Appeals 9, No. 19-35428, 3/15/21.

(From the April 16, 2021, issue of HR Manager’s Legal Alert for Supervisors. To start your no-obligation trial subscription to the publication right now, please click here.)