The Second U.S. Circuit Court of Appeals recently provided clarification on the Equal Pay Act’s (EPA) “factor other than sex” exemption in a new decision.
Anita Eisenhauer, a female professor at the Culinary Institute of America, alleged that she was the victim of pay discrimination in violation of both the EPA and New York Labor Law § 194(1). Since 2017, the Culinary Institute paid Eisenhauer a lower salary than it paid Robert Perillo, a male professor carrying a similar course load. For example, in 2019, Eisenhauer’s salary was $111,263, while Perillo’s was $118,080.
The Culinary Institute pays the professors according to the sex-neutral terms of a collective bargaining agreement (CBA) and employee handbook. Together, this compensation plan requires fixed pay increases triggered by time, promotion and degree completion.
When Eisenhauer and Perillo were hired, their starting salaries differed due to their different experience and education levels. Eisenhauer started at $50,000 in 2002 and Perillo started at $70,000 in 2008. Over the years, both attained further education and received promotions.
While the EPA prohibits pay discrimination on the basis of sex, it contains four exceptions, one of which permits “a differential based on any factor other than sex.”
The Culinary Institute argued that the compensation plan was a factor other than sex and therefore justified the pay disparity at issue. Eisenhauer countered that the compensation plan could not qualify as a factor other than sex because it resulted in a pay disparity unconnected to differences in work responsibilities and qualifications.
Affirming the employer’s motion for summary judgment, the Second Circuit held that to establish the EPA’s “factor other than sex” defense, an employer must prove only that the pay disparity in question results from a differential based on any factor except for sex.
The meaning of “any other factor other than sex” is unambiguous, the court said, and does not include a requirement that the factor must be job related, as Eisenhauer argued.
“The requirement that a ‘factor other than sex’ be job related appears nowhere in the EPA’s text and, in our view, conflicts with the statute’s plain meaning,” the court wrote. “If Congress had intended all ‘factor[s] other than sex’ to be job related, it would have said so.”
Legislative history supported this position, the court added, from statements made during congressional debate to the Senate Report on the EPA bill.
The federal appellate panel also distinguished a 2018 Ninth Circuit opinion on the EPA relied upon by Eisenhauer, Rizo v. Yovino, where the court adopted a job relatedness factor.
Applying the standard that a factor other than sex does not have to be job related, the Second Circuit said the Culinary Institute’s compensation plan left “no room” for genuine factual dispute.
“As both parties agree, the pay disparity resulted entirely from (1) disparate starting salaries and (2) the formulaic application of the compensation plan, which it also applied uniformly to other faculty members, male and female,” the court wrote. “The terms of the compensation plan are sex neutral.”
In addition, the Culinary Institute provided undisputed explanations for its fixed-dollar pay increases, which recognized the skill, experience or added value associated with additional degrees or academic promotions.
“The Culinary Institute’s justification produces neither a whiff of pretext nor anything else to raise a jury’s doubt or suspicion,” the court added. “As it happens, Eisenhauer never even argues that the compensation has any basis in sex. Her appeal rests entirely on a misinterpretation of the term ‘factor other than sex.’”
As no reasonable jury could find that the pay disparity was based on sex, intentionally or otherwise, the panel affirmed summary judgment on Eisenhauer’s EPA claim.
However, the court remanded for consideration of Eisenhauer’s state law claim, as New York’s exceptions no longer mirror its federal analogue.
In 2016, the New York State Legislature amended Labor Law § 194(1) from “any other factor other than sex” to “a bona fide factor other than sex,” and again in 2019 to “a bona fide factor other than status within one or more protected class or classes.”
Given the difference from the EPA – and the fact the district court evaluated both federal and state claims under the same standard – the Second Circuit remanded for the district court to evaluate the divergent requirements under New York state law.
One member of the panel authored a separate opinion, concurring in the judgment but expressing concern that the majority broke with precedent and adopted “a seemingly broader reading of the EPA’s fourth affirmative defense that is out of step with many of our sister circuits.”
To read the opinion in Eisenhauer v. Culinary Institute of America, click here.
Why it matters
The Second Circuit panel provided clarity on the phrase “factor other than sex,” holding that it unambiguously does not contain any requirement of job relatedness – a beneficial ruling under the EPA for employers.