Ninth Circuit Reverses Equal Pay Act Claim

The Ninth Circuit recently decided a claim of unequal pay of a college professor.

Jennifer Freyd is a Professor of Psychology at the University of Oregon, and while she is a well-recognized academic and pioneer in trauma studies, the University pays her several thousand dollars less per year than it does four of her male colleagues—even though they’re of equal rank and seniority. Freyd claimed that this gender disparity in pay is department-wide and is caused by the University’s practice of granting “retention raises” to sought-after faculty as a way to keep them at the University when they’re being courted by other schools. She also claimed that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors, and when they do, they’re less likely to successfully obtain a raise.

Freyd sued the University alleging violations of, inter alia, the Equal Pay Act, Title VII, Title IX, and state law. The district court granted summary judgment in favor of the University on all counts, finding that Freyd had failed to raise any genuine issue of material fact. The professor appealed.

The Equal Pay Act and “Substantially Equal” Jobs

The Ninth Circuit wrote that the Equal Pay Act states:

No employer . . . shall discriminate . . . between employees on the basis of sex by paying wages to employees . . . at a rate less than the rate at which he pays wages to employees of the opposite sex . . . for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earning by quantity or quality of production; or (iv) a differential based on any other factor than sex.

The plaintiff in an Equal Pay Act case has the burden of establishing a prima facie case of discrimination by showing that employees of the opposite sex were paid different wages for equal work. To make this showing, the Ninth Circuit explained that the plaintiff must demonstrate that the jobs being compared—not “the individuals who hold the jobs”—are “substantially equal.” The “crucial finding on the equal work issue is whether the jobs to be compared have a ‘common core’ of tasks.” Once a plaintiff establishes a common core of tasks, “the court must then determine whether any additional tasks, incumbent on one job but not the other, make the two jobs ‘substantially different.’”

The Ninth Circuit held that a reasonable jury could find that Freyd and the male professors share the same “overall job.” Thus, the district court’s grant of summary judgment on this claim was in error.

Oregon Revised Statute § 652.220

State law prohibits employers from “[p]ay[ing] wages to any employee at a rate less than that at which the employer pays wages to employees of the opposite sex for work of comparable character, the performance of which requires comparable skills.”

The Ninth Circuit held that because Oregon courts have declared that “comparable work” is a more inclusive standard than “substantially equal work,” it concluded that Freyd raised a genuine issue of material fact under § 652.220 for the same reasons she did under the Equal Pay Act. Accordingly, the Court held that the district court’s grant of summary judgment on this claim was also in error.

Title VII Disparate Impact

The district court granted summary judgment on Freyd’s disparate-impact claim on two bases: (i) it held that her evidence was insufficient as a matter of law to sustain a prima facie case of disparate impact; and (ii) it held that even if she had made out a prima facie case, the University was entitled to an affirmative defense because (a) the challenged practice was job related and consistent with business necessity and (b) “Freyd has not put forth an alternative practice that would effectuate the University’s legitimate business goal of retaining top talent in its Psychology Department.” But because the Court of Appeals concluded that each of these conclusions was erroneous, it reversed the district court’s grant of summary judgment on this claim.

The Ninth Circuit found that Freyd challenged a specific employment practice of awarding retention raises without also increasing the salaries of other professors of comparable merit and seniority. Freyd’s theory of pay equity wouldn’t forbid the University from taking account of market factors, as evidenced by the salaries other universities were willing to pay to lure Oregon’s faculty elsewhere. Rather, when a competing offer is made to a faculty colleague, the Court said “it demonstrates that Oregon is out of step with respect to salary, and a retention raise should be offered to all comparable faculty members.”

Second, the Ninth Circuit held that Freyd offered evidence that this specific employment practice causes a significant discriminatory impact. She offered two different sets of statistical evidence to support her claim of disparate impact. As a result, the Ninth Circuit held there was at least a genuine issue of material fact as to whether Freyd established a prima facie case of disparate impact. The district court erred in granting summary judgment on this claim.

Summary Judgment Upheld on Claims for University

As to her Title VII Disparate Treatment claim, the Ninth Circuit held that Freyd failed to present evidence sufficient to raise a genuine issue of material fact concerning disparate treatment. She didn’t present “direct or circumstantial evidence of discriminatory intent.” And she didn’t present evidence sufficient to establish a prima facie case under the McDonnell Douglas framework because she didn’t show that similarly situated individuals outside of her protected class were treated more favorably than her.

As far as the professor’s claim under Oregon Revised Statute § 659A.030, the Ninth Circuit said that Oregon courts assess § 659A.030 claims under the same framework as they do Title VII disparate treatment claims. As a result, because summary judgment was proper on her disparate treatment claim, it was also proper on this claim. On her Title IX claim, the Court found that Freyd presented no evidence of intentional discrimination, so there was no genuine issue of material fact. As to her claim under the Oregon Equal Rights Amendment, because she presented no evidence of intentional discrimination, she couldn’t prove that the University denied her equality of rights “on account of” her sex.

In sum, the Ninth Circuit found that Freyd presented a genuine issue of material fact under the Equal Pay Act and Or. Rev. Stat. § 652.220, and for disparate impact under Title VII. As such, the Court reversed the district court’s grant of summary judgment for those claims. However, the Court found that Freyd didn’t present a genuine issue of material fact for her claims for disparate treatment under Title VII, and her claims under Title IX, Or. Rev. Stat. § 659A.030, and the Oregon Equal Rights Amendment, so it affirmed the district court’s grant of summary judgment for those claims. Freyd v. Univ. of Or., 990 F.3d 1211 (9th Cir. 2021).

Takeaway

The Ninth Circuit’s decision in Freyd is a good reminder to California businesses to examine their pay policies to avoid pay inequities.

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Eanet, PC is a boutique law firm located in Los Angeles, California specializing in business litigation, real estate litigation, labor and employment litigation, and employment advice and counsel. We provide advice to help employers remediate pay inequities identified through an audit or otherwise. We also represent California employers facing sexual harassment, wrongful termination, equal pay, retaliation and discrimination claims under California and federal law.