TABLE OF CONTENTS

TABLE OF AUTHORITIES.............................................................................................. ii

STATEMENT OF INTEREST........................................................................................ 1

STATEMENT OF THE ISSUES..................................................................................... 2

STATEMENT OF THE CASE

1. Nature of the Case and Course of Proceedings....................................................... 3

2. Statement of Facts............................................................................................................ 4

3. District Court’s Decision............................................................................................... 6

STANDARD OF REVIEW............................................................................................... 9

ARGUMENT

The District Court Properly Denied Summary Judgment To

The County On Its Affirmative Defense Under The Equal Pay Act...... 10

A. The EPA does not permit employers to base pay decisions

solely on applicants’ most recent prior salary........................................... 10

B. The district court reasonably concluded that the County

did not prove that it was entitled to summary judgment

on its affirmative defense under proper legal standards...................... 21

1. Defendant misunderstands its burden of proof

on summary judgment............................................................................................. 21

2. Defendant misunderstands what it must prove

to establish its affirmative defense........................................................................ 22

3. Based on the evidence, a reasonable jury would not be compelled

to find that Defendant proved its affirmative defense...................................... 26

CONCLUSION..................................................................................................................... 29

CERTIFICATE OF COMPLIANCE............................................................................. 30

CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES

Cases Page(s)

Alcantar v. Hobart Service,

800 F.3d 1047 (9th Cir. 2015)....................................................................................... 9

Aldrich v. Randolph Central School District,

963 F.2d 520 (2d Cir. 1992)................................................................................... 12, 21

Angove v. Williams-Sonoma,

70 F. App’x 500 (10th Cir. 2003)...................................................................... 8, 13-14

Beck-Wilson v. Principi,

441 F.3d 353 (6th Cir. 2006).................................................................................. 12, 22

Belfi v. Prendergast,

191 F.3d 129 (2d Cir. 1999).......................................................................................... 13

Corning Glass Works v. Brennan,

417 U.S. 188 (1974)................................................................................. 9, 11-12, 14, 15

Dixon v. United States,

548 U.S. 1 (2006)............................................................................................................. 26

Drum v. Leeson Electric Corp.,

565 F.3d 1071 (8th Cir. 2009)...................................................................................... 20

EEOC v. J.C. Penney Co.,

843 F.2d 249 (6th Cir. 1988)......................................................................................... 21

EEOC v. Maricopa County Community College District,

736 F.2d 510 (9th Cir. 1984)................................................................................... 11-12

Faust v. Hilton Hotels Corp.,

1990 WL 120615 (E.D. La. Aug. 13, 1990).............................................................. 16

Glenn v. General Motors Corp.,

841 F.2d 1567 (11th Cir. 1988)................................................................................ 8, 14

Irby v. Bittick,

44 F.3d 949 (11th Cir. 1995).................................................................... 7-8, 13-14, 18

Kouba v. Allstate Insurance Co.,

691 F.2d 873 (9th Cir. 1982)................................................................................ passim

Lyons v. England,

307 F.3d 1092 (9th Cir. 2002)...................................................................................... 23

Maxwell v. City of Tucson,

803 F.2d 444 (9th Cir. 1986).................................................................................. 11, 24

Ray v. Clements,

700 F.3d 993 (7th Cir. 2012)......................................................................................... 26

Riser v. QEP Energy,

776 F.3d 1191 (10th Cir. 2015).................................................................................... 13

Siler-Khodr v. University of Texas Health Sciences Center,

261 F.3d 542 (5th Cir. 2001)......................................................................................... 14

Soremekun v. Thrifty Payless,

509 F.3d 978 (9th Cir. 2007).................................................................................... 9, 22

Stanley v. University of Southern California,

178 F.3d 1069 (9th Cir. 1999)................................................................................ 23-25

Taylor v. White,

321 F.3d 710 (8th Cir. 2003)................................................................................... 19-20

Texas Department of Community Affairs v. Burdine,

450 U.S. 248 (1981).................................................................................................. 23, 25

Wernsing v. Department of Human Services,

427 F.3d 466 (7th Cir. 2005)............................................................................ 12, 19-20

Statutes and Rules

28 U.S.C. §1292(b).......................................................................................................... 3, 4, 9

Equal Pay Act,

29 U.S.C. §206(d)(1)............................................................................................... passim

29 U.S.C. §206(d)(1)(i)-(iv)................................................................................... passim

Federal Rule of Civil Procedure 56(c).......................................................................... 9, 22

Federal Rule of Appellate Procedure 29(a)...................................................................... 1

Other Authority

EEOC Compliance Manual, Compensation Discrimination §10-IV.F.2 (Dec. 5, 2000), https://www.eeoc.gov/policy/docs/compensation.html#2.%20Factor%20Other%20Than%20Sex.............................................................................................................................................. 13-16

AAUW, The Simple Truth about the Gender Pay Gap (Fall 2016), http://www.aauw.org/files/2016/09/the-simple-truth-figure-2-v2.jpg

(last visited Oct. 4, 2016)..................................................................................................... 15

AFL-CIO, Dep’t for Professional Employees,

Fact Sheet 2010, Professional Women: Vital Statistics,

http://www.pay-equity.org/PDF/ProfWomen.pdf (last visited Oct. 4, 2016).... 15

Here’s How Much Silicon Tech Workers Make,

http://www.huffingtonpost.com/silicon-valley-salaries_us_56d61ee6e4b0bf0dab3

(last visited Oct. 4, 2016)..................................................................................................... 27

IWPR, The Gender Wage Gap by Occupation 2015 & By Race & Ethnicity, available via download from http://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-2015 (last visited Oct. 4, 2016).............................................................................................................. 15

U.C.O.P, Academic Salary Scales, Table I, http://www.ucop.edu/academic-personnel-programs/_files/1617/t1.pdf (last visited Oct. 4, 2016)............................................. 27

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

________________________

No. 16-15372

________________________

AILEEN RIZO,

Plaintiff-Appellee,

JIM YOVINO,

Defendant-Appellant.

______________________________________

On Appeal from the United States District Court

for the Eastern District of California

The Honorable Michael J. Seng, U.S. Magistrate Judge

Civ. No. 14-cv-4932 (AWI-MJS)

______________________________________

BRIEF OF THE EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION AS AMICUS CURIAE

IN SUPPORT OF PLAINTIFF-APPELLEE

________________________________________________________________

STATEMENT OF INTEREST

The Equal Employment Opportunity Commission (“Commission” or “EEOC”) is the agency charged with interpreting, administering, and enforcing the Equal Pay Act, 29 U.S.C. §206(d)(1)(“EPA”), along with other federal employment discrimination statutes. The Commission is authorized to participate as amicus curiae in federal court appeals. Fed. R. App. P. 29(a).

This case raises an important question under the EPA. The parties agree that the plaintiff, an experienced female educator, is earning thousands of dollars less than her otherwise similarly situated male colleagues for doing exactly the same work. The parties also agree that this large disparity in pay results directly from the defendant’s practice of basing new employees’ starting pay exclusively on their most recent prior pay, regardless of experience or education or even whether their old job resembles the job for which they are being hired. The issue is therefore whether this practice violates the EPA. The Commission takes the position that prior pay alone cannot justify a compensation disparity under the EPA because the practice perpetuates the gender pay gap that continues to exist in the field of education, as well as elsewhere. Reaching the same conclusion, the district court — correctly, we believe — denied Defendant’s motion for summary judgment. Defendant, however, argues that its practice is entirely permissible. These arguments, if accepted by this Court, would seriously undermine the goals and effectiveness of the EPA. We therefore offer our views to this Court.

STATEMENT OF THE ISSUES[1]

1. Did the district court correctly hold that an employer may not base new employees’ starting pay solely upon their most recent prior pay, without regard to other factors such as experience or qualifications?

2. The County concedes that it bases starting pay for new employees solely on their most recent prior pay.

(a) Did the district court properly deny summary judgment to the defendant inasmuch as a rational jury would not be compelled to find that the County acted reasonably when it ignored factors such as relative qualifications or the similarity between an employee’s old and new jobs when setting an employee’s starting pay and, instead, considered only what that employee had been earning in his or her most recent prior job?

(b) May an employer shift the burden to the plaintiff to prove that the employer did not “use the [challenged] factor reasonably in light of its stated purposes as well as its other practices,” even though the reasonableness of the practice is an element of the employer’s affirmative defense?

STATEMENT OF THE CASE

1. Nature of the Case and Course of Proceedings

This is an interlocutory appeal from the denial of summary judgment for the employer on an affirmative defense under the EPA. 28 U.S.C. §1292(b). In pertinent part, Plaintiff alleges that Defendant violated the EPA by paying her thousands of dollars less than otherwise similarly situated male employees for doing exactly the same work. In June 2015, Defendant moved for summary judgment (R.12, R.19 (supplemental briefing)), and Plaintiff opposed the motion (R.14, R.18 (supplemental briefing)). On December 4, 2015, the district court issued an order denying Defendant’s motion, holding that Defendant is not entitled to summary judgment on its affirmative defense under the EPA. R.21. After further briefing, the court amended its order to certify the ruling for interlocutory appeal under 28 U.S.C. §1292(b). R.30 (“Order”). In March 2016, this Court granted permission to appeal. R.35.

2. Statement of Facts

Aileen Rizo began working as a math consultant with the Fresno County Schools (“County” or “FCOE”) in the fall of 2009. Order at 6. Math consultants coach math teachers and train them to use new methods for teaching math. ER000405. Considered management employees, math consultants’ pay is determined by a policy, formalized as SOP 1440 in 2004 but purportedly in use since 1998, that bases starting salary for newly-hired lateral employees exclusively on their most recent prior pay,[2] regardless of qualifications, education, or even the kind of work the individual had been doing. Order at 3.[3] FCOE had previously based starting pay on “experience regarding the position awarded.” Id. (citation omitted). FCOE used the same salary scale, consisting of twelve levels, each having ten steps, for both practices. Id.

When she was hired, Rizo had a Bachelor’s degree in Mathematics Education, Master’s degrees in Educational Technology and Mathematics Education, and approximately ten years of experience teaching middle and high school and designing math curricula. Her last position (in Arizona) paid just under $52,000 including $1200 for a master’s degree. Her starting salary at FCOE was set at Step 1, Level 1 ($62,133), plus $600 for a master’s degree. Order at 6-7. Rizo testified that she was assured her salary “was comparable to a person with as much experience as [she] had.” ER000325. A male math consultant hired six years earlier (in 2003) started at Step 7, Level 1. Id. at 4 n.2.

In 2012, the County hired three more math consultants, two men and one woman. All math consultants did exactly the same work as Rizo. Based on their most recent salaries, one man’s pay was set at Step 7, Level 1 ($73,832); the woman’s pay at Step 8, Level 1 ($76,414), and the other man’s pay at Step 9, level 1 ($79,088). Order at 4-5, ER000448-49 (salary scale).

In July 2012, one of Rizo’s new colleagues told her that he had been placed at Step 9. She also learned that all of her other colleagues earned substantially more than she did. Shortly thereafter, Rizo complained to Human Resources Administrator Lori Gabriel. Gabriel reviewed personnel records of current management employees going back twenty-five years and concluded that application of SOP 1440 had placed more women higher on the salary schedules than men in similar positions. She then told Rizo that her pay was not discriminatory. Order at 7-8.

Unconvinced, Rizo brought suit alleging clams under the EPA, Title VII, and state law. In moving for summary judgment, the County introduced Gabriel’s salary review. Rizo challenged the review on the grounds that it was improperly limited to current employees and included years before the County began basing salary solely on prior pay. She also offered her own study covering all employees going back to 2004. That study indicated that under SOP 1400, women tended to earn less than men; women did much better under the previous policy. ER000452-53 (Rizo Aff. ¶¶11-14). Rizo also offered a printout of survey results from the U. S. Bureau of Labor Statistics showing that the gender pay gap still exists, including in education. Order at 8-9 (taking judicial notice of BLS survey).

3. District Court Decision

The district court denied Defendant’s motion for summary judgment. The court noted that the EPA makes it unlawful for an employer to pay employees of one sex less than employees of the opposite sex for substantially equal work unless the employer proves that the wage disparity is attributable to one of four statutory exceptions, or affirmative defenses. Order at 10-11 (citing 29 U.S.C. §206(d)(1)).

Because it was essentially undisputed that Rizo established a prima facie case, the court turned to the County’s alleged affirmative defense. Defendant stated that the salary difference resulted from application of SOP 1440, a facially neutral policy that bases starting pay on prior salary alone. It explained that this policy “prevents favoritism and ensures consistency,” and is “objective,” “effective in attracting quality new employees,” and a “judicious use of taxpayer money.” In Defendant’s view, this practice satisfies the fourth catch-all defense for “a differential based on any other factor other than sex.” Order at 12. Thus, the issue presented was “whether a salary differential based solely on prior earnings would violate the EPA, even if motivated by legitimate, non-discriminatory business reasons.” Id. at 14.

Although both parties relied on Kouba v. Allstate Insurance Co., 691 F.2d 873, 876-78 (9th Cir. 1982), the district court concluded that Kouba did not decide the issue. The court noted that Kouba held that “the EPA does not impose a per se prohibition against consideration of prior salary in setting a new employee’s starting pay.” Order at 12. Kouba holds that, for use of prior salary to be permissible, the employer “‘must use the factor reasonably in light of the employer’s stated purpose as well as its other practices.’” Id. at 13-14 (citing 691 F.2d at 876-78). Unlike here, however, “prior salary was but one of several factors considered by the employer” in Kouba, so this Court was not called upon to determine whether prior salary alone was permissible. Order at 12.

The district court then consulted decisions from other circuits, noting that the circuits are “split.” Order at 14-15. After examining the cases, the court opted to follow the Tenth and Eleventh Circuits, which hold that “an employer’s EPA defense may not be based solely on prior salary.” Id. at 14, 17 (citing, e.g., Irby v. Bittick, 55 F.3d 949, 954 (11th Cir. 1995); Angove v. Williams-Sonoma, 70 F. App’x 500, 508 (10th Cir. 2003)). The court found Glenn v. General Motors Corp., 841 F.2d 1567 (11th Cir. 1988), especially persuasive. In Glenn, the Eleventh Circuit held, based on its reading of the EPA’s legislative history, that “the ‘factor other than sex’ exception applies when the disparity results from unique characteristics of the same job; from an individual’s experience, training, or ability; or from special exigent circumstances connected with the business.” Order at 15-16 (quoting Glenn, 841 F.2d at 1571) (emphasis added by district court). But prior salary alone cannot justify a pay disparity. Id. (citing Glenn).

The district court agreed with this approach. In the court’s view, “a pay structure based exclusively on prior wages is so inherently fraught with the risk — indeed, here, the virtual certainty — that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.” Order at 17. The court reasoned that record evidence reflected an “across-the-board pay disparity between male and female educators nationwide,” and “[l]ateral hiring salary plans [like the County’s] will perpetuate that disparity.” Id. The court concluded: “To say that an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the market’s sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate.” Id. (citing Corning Glass Works v. Brennan, 417 U.S. 188, 210-11 (1974)).

Accordingly, the court denied the County’s motion for summary judgment, holding that the County had not “met its burden to assert as an affirmative defense a qualifying justification for the wage differential present here.” Id. The court then certified the issue for interlocutory appeal, finding that the question “whether as a matter of law under the EPA[,] an employer subject to the EPA may rely on prior salary alone when setting an employee’s starting salary” satisfies the standard under 28 U.S.C. §1292(b). Order at 23.

STANDARD OF REVIEW

This Court reviews a district court’s decision to deny summary judgment de novo, viewing the facts in the light most favorable to the non-moving party. Alcantar v. Hobart Serv., 800 F.3d 1047, 1051 (9th Cir. 2015). Summary judgment is appropriate only if the moving party proves that no material facts are genuinely in dispute and the movant is entitled to judgment as a matter of law. Id. (citation omitted); Fed. R. Civ. P. 56(c). Where, as here, the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that the evidence on that issue, viewed in the light most favorable to the non-moving party, is so one-sided in the movant’s favor that no reasonable jury could find other than for the movant. See, e.g., Soremekun v. Thrifty Payless, 509 F.3d 978, 984 (9th Cir. 2007).

ARGUMENT

The District Court Properly Denied Summary Judgment To The County

On Its Affirmative Defense Under The Equal Pay Act.

The district court correctly denied Defendant’s motion for summary judgment on Rizo’s claim that the County violated the EPA by paying her less — much less — than similarly situated men for substantially equal work. As the court noted, evidence indicates that, as a whole, males in teaching and other education-related jobs continue to out-earn their female counterparts. A practice of basing starting pay for new employees solely on what they earned in their most recent prior job simply institutionalizes the gender pay gap that studies confirm still exists. Furthermore, a rational jury would not be compelled to find that the County proved that its business justifications reasonably explain its use of the practice. To the contrary, because the practice results in gross disparities in pay and does not ensure the hiring of better qualified applicants, a jury could rationally find that it is unreasonable. The County therefore is not entitled to summary judgment on its affirmative defense.

A. The EPA does not permit employers to base pay decisions solely

on applicants’ most recent prior salary.

The district court correctly concluded that employers like the County may not rely exclusively on prior salary in setting new employees’ starting pay. Prior salary may be one of several factors that an employer considers but by itself it cannot justify a compensation disparity under the EPA. Indeed, because exclusive reliance on prior salary institutionalizes the disparity between what men and women earn on average, the practice undermines the purpose of the EPA.

Congress’s purpose in passing the Equal Pay Act was to remedy what it viewed as a “serious and endemic problem” — the fact that “the wage structure of ‘many segments of American industry [had] been based on an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman even though his duties are the same.’” Corning Glass, 417 U.S. at 195 (citing legislative history). The solution Congress adopted was “simple in principle”: to “require that ‘equal work will be rewarded by equal wages.’” Id. (citing legislative history).

To that end, the EPA makes it unlawful for an employer to “pay[ ] wages to employees [of one sex] ... 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.” 29 U.S.C. §206(d)(1). The statute is “broadly remedial, and should be construed and applied so as to fulfill the underlying purposes which Congress sought to achieve.” Corning Glass, 417 U.S. at 208.

Unlike Title VII, the EPA “‘creates a type of strict liability; no intent to discriminate need be shown.’” Maxwell v. City of Tucson, 803 F.2d 444, 446 (9th Cir. 1986) (citation omitted). To establish a prima facie case, a plaintiff must show that the employer “pays different wages to employees of the opposite sex for substantially equal work.” EEOC v. Maricopa Cnty. Cmty. Coll. Dist., 736 F.2d 510, 513 (9th Cir. 1984) (citation omitted). Once the plaintiff has made this showing, the employer can avoid liability only by proving that the different payment to employees of opposite sexes was made pursuant to one of four statutory “exceptions”: “(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” Corning Glass, 417 U.S. at 196; 29 U.S.C. §206(d)(1)(i)-(iv). “These exceptions are affirmative defenses which the employer must plead and prove.” Kouba, 691 F.2d at 875 (citing Corning Glass, 417 U.S. at 196-97).

This case concerns the catch-all fourth exception for “any other factor other than sex.” 29 U.S.C. §206(d)(1)(iv). This Court and others have concluded that the defense does not mean literally any other factor. Rather, the employer must, at a minimum, provide an “acceptable business reason” for the purported factor other than sex. See Kouba, 691 F.2d at 876; see also, e.g., Beck-Wilson v. Principi, 441 F.3d 353, 365 (6th Cir. 2006) (“legitimate business reason,” adding that burden is “a heavy one”); Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 526 (2d Cir. 1992) (“legitimate business-related considerations”). But see Wernsing v. Dep’t of Human Servs., 427 F.3d 466, 468-70 (7th Cir. 2005) (disagreeing with Kouba, employer need not show acceptable business reason). As this Court explained, it would be “nonsensical to sanction the use of a factor that rests on some consideration unrelated to business. An employer thus cannot use a factor which causes a wage differential between male and female employees absent an acceptable business reason.” Kouba, 691 F.2d at 876. And where the employer offers an established policy as an explanation, the employer must show that it uses the policy “reasonably in light of the employer’s stated purpose as well as its other practices.” See Kouba, 691 F.2d at 876-77; see also Belfi v. Prendergast, 191 F.3d 129, 139 (2d Cir. 1999) (finding jury could reject employer’s use as not reasonable). The Commission agrees with this authority. In our view, an employer asserting this defense must show that “the factor is related to job requirements or otherwise is beneficial to the employer’s business.” EEOC Compliance Manual §10: Compensation Discrimination §10-IV.F.2 (“Factor Other Than Sex”) (Dec. 5, 2000), https://www.eeoc.gov/policy/docs/compensation.html#2.%20Factor%20Other%20Than%20Sex.

The challenged salary disparity here is attributable to SOP 1440’s exclusive reliance on prior salary, which Defendant contends is a facially nondiscriminatory factor and, therefore, entirely permissible. Thus, the question is whether prior salary alone can be considered a “factor other than sex” within the meaning of the EPA.

As the district court here recognized, the Tenth and Eleventh Circuits have held categorically that it cannot. See, e.g., Riser v. QEP Energy, 776 F.3d 1191, 1199 (10th Cir. 2015) (stating that the “EPA precludes an employer from relying solely upon a prior salary to justify pay disparity”) (quoting Angove, 70 F. App’x at 508); Irby, 44 F.3d at 955 (noting that Eleventh Circuit has “consistently held that prior salary alone cannot justify pay disparity” (citation omitted)). They reason that “if prior salary alone were a justification, the exception would swallow up the rule and inequality in pay among genders would be perpetuated.” Irby, 44 F.3d at 955.

For similar reasons, courts also reject the related “market forces theory” discredited by Corning Glass — that an employer must offer more money to male applicants because they will not accept less. See Glenn, 841 F.2d at 1570-71; see also Siler-Khodr v. Univ. of Tex. Health Sci. Ctr., 261 F.3d 542, 549 (5th Cir. 2001) (stating that market forces argument “is not tenable and simply perpetuates the discrimination that Congress wanted to alleviate when it enacted the EPA”).

On the other hand, courts agree that there is no prohibition on relying on prior salary in combination with other factors. For example, an employer might well establish an affirmative defense where it bases a new employee’s salary on both the employee’s previous salary and “the qualifications and experience the new employee brings.” Angove, 70 F. App’x at 508; see also Irby, 44 F.3d at 955-56 (pay and more experience, other business reasons).

The Commission agrees with this approach. In our view, an employer normally may consider prior salary as part of a mix of factors — as, for example, where the employer also considers education and experience and concludes that the employee’s prior salary accurately reflects his or her ability, based on job-related qualifications. Because “prior salaries of job candidates can reflect sex-based compensation discrimination,” however, “[p]rior salary cannot, by itself, justify a compensation disparity.” Compl. Man. §10-IV.F.2.g.

Nor is the market theory rationale viable. While it may make economic sense to pay a woman like Rizo less than her otherwise identically situated male counterparts based on her lower prior salary, an employer can do so only because she is willing to work for less. Yet that “is exactly the kind of evil that the [EPA] was designed to eliminate.” Comp. Man. §10-IV.F.2.g (citation omitted); see Corning Glass, 417 U.S. at 205 (Congress intended to prohibit practice of paying women less because they will accept less).

Moreover, while the situation has improved in the fifty years since the EPA was enacted, studies confirm that the gender pay gap continues to exist. See, e.g., IWPR, The Gender Wage Gap by Occupation 2015 & By Race & Ethnicity, Table 1 (listing median weekly earnings of female and male elementary and middle school teachers ($957 vs. $1077), adding that women hold 80.6% of such jobs), available via download from http://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-2015 (last visited Oct. 4, 2016); AFL-CIO, Dep’t for Professional Employees, Fact Sheet 2010, Professional Women: Vital Statistics, at 3 (2010) (“Female elementary and middle school teachers earned over 14% less than similarly situated men, despite comprising almost 82% of the field.”), http://www.pay-equity.org/PDF/ProfWomen.pdf (last visited Oct. 4, 2016); AAUW: The Simple Truth about the Gender Pay Gap (Fall 2016)(median earnings for full-time year-round workers in California are $50,562 for men, $44,050, for women, a ratio of 86%), http://www.aauw.org/files/2016/09/the-simple-truth-figure-2-v2.jpg (last visited Oct. 4, 2016). Of particular relevance in this case, survey results from the Bureau of Labor Statistics, proffered by the plaintiff and cited by the district court, show that even though women outnumber men in the field of education, men continue to out-earn their female colleagues. If reliance on prior salary alone were permissible, to the extent one employer discriminated in pay against a female employee, the next employer — even one who did not intend to discriminate — would benefit from the prior discrimination to the detriment of that employee by paying her less than male employees not similarly subject to prior discrimination. See Compl. Man. §10-IV.F.2.g (citing Faust v. Hilton Hotels Corp., 1990 WL 120615, at *5 n.12 (E.D. La. Aug. 13, 1990)). That would be improper. Accordingly, because the district court correctly held that the EPA precludes an employer from basing new employees’ starting salary solely on what they were earning in their most recent prior job, the decision should be affirmed.

In urging reversal, Defendant makes three main arguments, none of which justifies summary judgment in its favor. First, the County argues that none of the authority or reasoning relied on by the district court makes any difference because this Court in Kouba already “decided the precise question” presented here. Brief at 15; id. at 32 (other authority is “irrelevant”). According to the County, Kouba “squarely held” that an employer may rely exclusively on prior salary in setting wages even if it results in a wage differential between men and women in similar positions. Id. at 22 (citing Kouba, 691 F.2d at 878). The only caveat is that the employer must “use the factor reasonably in light of the employer’s stated purpose as well as its other practices.” Id. at 24 (citing Kouba, 691 F.2d at 876-77). To find a violation, the court must find that “the business reasons given by [the employer] do not reasonably explain its use of that factor.” Id. (citing Kouba, 691 F.2d at 878); cf. id. at 32 (acknowledging that practice must be “reasonable and consistent with business objectives”). Here, Defendant asserts, the district court never found that the reasons the County identified for using prior salary did not “reasonably” explain its practice. Id. at 24. In light of Kouba, therefore, the court should have granted Defendant’s motion.

To the contrary, as the district court recognized, Kouba was not presented with a practice like Defendant’s and, so, did not determine that the practice was permissible. The County’s selective reading of the case takes the quoted passages out of context and ignores the underlying circumstances of the case.

Unlike the County, the employer in Kouba purported to base starting pay on ability, education, and experience, as well as on prior salary. 691 F.2d at 874. Because those other factors were clearly relevant to pay, the case centered on prior salary. The employer explained that it mainly used this factor to predict a new employee’s performance. Id. at 878. Nevertheless, the district court held that because an employer could easily use prior salary to capitalize on the unfairly low salaries historically paid to women, before considering prior pay, the employer was required to make a reasonable attempt to satisfy itself that the factor was not the product of sex discrimination. Id. at 876.

While stressing that it shared the lower court’s concern that reliance on prior salary could lead to abuse, this Court rejected the district court’s requirement. The Court did not, however, simply rubberstamp the employer’s use of prior salary. Rather, the Court held that the employer must have an “acceptable business reason” for using any factor that causes a wage differential and, where that factor is prior salary, must further establish that the employer “use[d] the factor reasonably in light of the employer’s stated purpose as well as its other practices.” Id. at 876-77. The Court then carefully examined the employer’s use of prior salary as it related to the asserted reasons for the practice. Id. at 877-78 (questioning aspects of stated practice). Because the factor purportedly was used to predict performance, the Court stated, “[r]elevant considerations in evaluating the reasonableness of [that] practice” would include whether the employer also relied on other available predictors of performance and whether the employer relied more heavily on salary when the prior job resembled the job at issue. Id. at 878; cf. Irby, 344 F.3d at 955-56 (question after Kouba is whether other business justifications reasonably explain the use of prior salary) (citation omitted).

Thus, read fairly, Kouba neither “squarely” addresses nor endorses Defendant’s practice of basing starting pay on prior salary alone, without considering, for example, whether the employee’s prior job resembles the job at hand. Defendant’s reading of the case is not correct.

Moreover, although Defendant evidently assumes that it can satisfy Kouba’s reasonableness standard by simply asserting that its practice is not gender-based and listing reasons for its adoption, that assumption is unfounded. Because of this Court’s very real concern that reliance on prior salary would allow employers to capitalize on the unfairly low salaries historically paid to women (619 F.2d at 876), the Court adopted a standard with teeth. Even in Kouba, where prior salary was only one of several factors used in setting pay, this Court required proof that the company’s use of prior salary was reasonable. The court then scrutinized whether the stated reasons reasonably explained how the employer used the factor and why it made sense in light of the stated purpose and other practices. Id. at 878. The statements Defendant has offered here do not mandate summary judgment in its favor.

Second, Defendant asserts that the Seventh and Eighth Circuits have “expressly allowed prior salary as a sole gender-neutral justification” and suggests that the district court should have followed those circuits, rather than the Tenth and Eleventh. Brief at 33 (citing Wernsing, 427 F.3d at 468-69; Taylor v. White, 321 F.3d 710 (8th Cir. 2003)). Defendant is incorrect.

It is true that Wernsing holds that prior salary alone satisfies the “factor other than sex” defense. As Defendant acknowledges (Brief at 33), however, Wernsing disagreed with Kouba, holding that Kouba mistakenly requires that an employer prove an acceptable business reason for the reliance on prior pay. Wernsing would allow “any” other factor other than sex. 427 F.3d at 468. It thus is Wernsing, not Kouba, that supports Defendant’s position.

As for Taylor, Defendant overstates the holding. Taylor did not “expressly” endorse a practice like Defendant’s, but instead refused to “establish a per se rule that would exclude ... past salary as [a] qualifying ‘factor[] other than sex.’” 321 F.3d at 719. The Eighth Circuit then went on to clarify that, where prior salary is considered, the court “must carefully examine[] the record to ensure that an employer does not rely on the prohibited ‘market force theory’ to justify lower wages for female employees simply because the market might bear such wages.” Drum v. Leeson Corp., 565 F.3d 1071, 1073 (8th Cir. 2009) (citing Taylor, 321 F.3d at 719).

There is arguably an element of market forces theory in Defendant’s present practice since it pays individuals less if they were earning less in their previous jobs, based on the assumption that such individuals will be willing to work for less. As noted above, evidence indicates that, for the most part, it is women, like Rizo, who were earning less in their previous jobs.

Finally, Defendant reads the district court’s decision as holding that an employer may not base pay decisions on any single factor. Thus, Defendant contends that the court required the County to “come forward with one or more additional reasons for the pay differential,” holding that an employer must “prove not one but two or more factors” — “have at least one other reason to support the wage.” Brief at 31, 32 n.5. But, Defendant argues, an employer may assert only one reason as a factor other than sex. Id. at 34 & n.6 (citing Aldrich, 963 F.2d at 526; EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1988)).

This is a strawman argument. The court below never suggested that the County could not rely on an employee’s experience, for example, a single factor that Defendant had previously used. Order at 3. What the court held is that Defendant may not base starting pay exclusively on employees’ most recent prior salary since that would perpetuate the gender pay gap. Nor did the court state that the County, after its practice was challenged, must “come forward with” — essentially, manufacture — other factors or reasons in addition to prior salary to explain its decision making. To the contrary, those “other factors” should have been there all along. As for Aldrich and J.C. Penney, neither involves prior salary.

B. The district court reasonably concluded that the County did not

prove that it was entitled to summary judgment on its affirmative

defense under proper legal standards.

Besides its faulty assumption that the EPA and Kouba permit reliance on prior salary alone as an affirmative defense, the County’s arguments reflect three mistaken interpretations of the law.

1. Defendant misunderstands its burden of proof on summary judgment.

From its brief, it seems clear that the County misunderstands its burden of proof on summary judgment. In stating the standard of review, Defendant overlooks the fact that it bears the burden of persuasion on its affirmative defense. See Brief at 15-16 (describing standard where non-movant has underlying burden of persuasion).

Because it is the moving party and also must prove its affirmative defense, the County must meet two burdens to be entitled to summary judgment on its defense. As always, Defendant must show that the law is in its favor and there are no genuine issues of material fact. Fed. R. Civ. P. 56(c). In addition, Defendant here must establish that the evidence of its defense, viewed in the light most favorable to Plaintiff, is so one-sided in the County’s favor that “no reasonable trier of fact” could find other than for the County. See, e.g., Soremekun, 509 F.3d at 984 (“Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party.”); Beck-Wilson, 441 F.3d at 365 (stating that because the employer bears the burden of persuasion on its EPA affirmative defense and, as moving party, must also demonstrate an absence of disputed factual issues, summary judgment can be granted for the employer “only if the record shows that [the employer] established the defense so clearly that no rational jury could have found to the contrary”) (citation omitted). Thus, even if, as Defendant suggests, a jury could find in its favor at trial (Brief at 43), it has not shown that the evidence is so one-sided as to justify summary judgment in its favor.

2. Defendant misunderstands what it must prove to establish

its affirmative defense.

Defendant also appears to misunderstand what it must prove in order to establish its affirmative defense. According to Defendant, the County had to “proffer a reason other than sex for the pay disparity” whereupon the burden shifted to Plaintiff to prove that the “proffered non-discriminatory reason is a pretext for discrimination.” Brief at 17-18, 31-32 (citing, e.g., Maxwell, 803 F.2d at 446). “Pretext turns on whether the employer used the factor ‘reasonably in light of the employer’s stated purposes as well as its other practices.’” Id. at 18 (citing Maxwell, 803 F.2d at 446 (citing Kouba, 691 F.2d at 876-77); Stanley v. Univ. of Calif., 178 F.3d 1069, 1074 (9th Cir. 1999)). In Defendant’s view, it satisfied that burden by identifying its practice — exclusive reliance on prior salary — and listing the reasons for its adoption. It was then up to Rizo to prove that those reasons “do not reasonably explain [the County’s] use” of prior salary but were a pretext for discrimination. Brief at 42.

That is incorrect. Defendant is confusing Title VII with the EPA. Under Title VII’s familiar three-step burden-shifting proof scheme, once the plaintiff establishes a prima facie case, the burden of production shifts to the employer to proffer evidence of a legitimate nondiscriminatory explanation for the alleged discrimination after which the burden of persuasion shifts back to the plaintiff to prove that the proffered reason is false or otherwise a pretext for discrimination. See, e.g., Tex. Dep’t of Comm’y Affairs v. Burdine, 450 U.S. 249, 254-56 (1981); Lyons v. England, 307 F.3d 1092, 1112-13 (9th Cir. 2000). Except in unusual circumstances, a Title VII plaintiff bears the ultimate burden of persuasion; the employer’s burden is one of production only.

This scheme contrasts sharply with the EPA’s. As noted above, under the EPA, the plaintiff bears the burden of proving a prima facie case — that she is paid less than similarly situated men for substantially equal work. At that point, however, the “burden of persuasion” shifts to the employer to prove that the wage disparity is permitted by one of the four statutory exceptions. Maxwell, 803 F.2d at 446. The employer cannot simply “proffer a reason for the pay disparity” (Brief at 18); the employer must prove its affirmative defense. See Maxwell, 803 F.2d at 446. Where the asserted defense is “any other factor other than sex,” the employer must also prove that it “used the factor reasonably in light of the employer’s stated purpose as well as its other practices.” Kouba, 691 F.2d at 876-77. If the employer carries this burden, that is the end of the case. To avoid that, the plaintiff “may” offer her own evidence to counter that of the employer. Kouba and Maxwell use the word “pretext,” but the Court was not using the word in the technical Title VII burden-shifting sense — neither Maxwell nor Kouba suggests that an employer can satisfy its affirmative defense by merely “proffering” evidence and then shifting the burden of persuasion to the plaintiff. Rather, the plaintiff’s evidence would be aimed at undermining — “rebutting” — the employer’s showing. This is not a separate step or burden but simply part of what a factfinder could consider in deciding whether the employer has proved its affirmative defense.

We recognize that there is language in Stanley that could be read to blur the line between Title VII and the EPA. In that case, the Court acknowledged that the employer must “demonstrate” its affirmative defense but then stated that the plaintiff “bears the burden of demonstrating a material fact regarding pretext in order to survive summary judgment.” 178 F.3d at 1076. The Court also used the term “pretext for discrimination” and cited Burdine, 450 U.S. at 256, a well-known Title VII case. While the reference to Burdine is unclear, Stanley can best be understood as describing the parties’ respective burdens on summary judgment in a case where the employer bears the burden of proving an affirmative defense. In that context, once the employer has produced enough evidence that, if unrebutted, would compel a finding in its favor on its affirmative defense, the plaintiff may avoid summary judgment by proffering sufficient evidence to raise a triable issue of material fact. In an EPA case, that evidence normally would be directed at the employer’s evidence that it used the challenged factor reasonably in light of its stated purposes and other practices. Significantly, Stanley describes the plaintiff’s “burden” in this regard as “minimal.” Id. at 1076.

Defendant is therefore wrong in assuming that it can carry its burden on summary judgment by merely “proffer[ing] a reason other than sex for the pay disparity.” That would be true under Title VII but not under the EPA.

Defendant is also wrong in suggesting that the plaintiff, not the employer, bears the burden of persuasion on whether the employer used the factor of prior salary reasonably in light of its stated purposes and other practices. Brief at 18. To the contrary, that is part of the employer’s affirmative defense. This is clear from the fact that the standard is framed in the affirmative, rather than the negative: reasonableness, rather than unreasonableness. Moreover, the Court in Kouba listed several “considerations” that the district court should address in determining whether the employer there proved its affirmative defense. Significantly, those considerations are all framed in terms of “the employer,” and all turn on information that the employer, not the plaintiff, would have. See, e.g., 691 F.2d at 878 (“whether [in addition to prior salary] the employer uses other available predictors of the new employee’s performance”). “[W]here the facts with regard to an issue lie peculiarly in the knowledge of a party, that party has the burden of proving the issue.” Dixon v. United States, 548 U.S. 1, 9 (2006); see also, e.g., Ray v. Clements, 700 F.3d 993, 1008 (7th Cir. 2012) (“‘All else being equal, the burden [of proof] is better placed on the party with easier access to relevant information.’”) (citation omitted).

It was therefore up to the County to prove that it used its policy reasonably in light of its stated purpose and other practices and, on summary judgment, that its evidence was so compelling that no rational jury could find for Rizo. Rizo had no additional burden once she established her prima facie case.

3. Based on the evidence, a reasonable jury would not be compelled to find

that Defendant proved its affirmative defense.

To be entitled to summary judgment, the County was required to present overwhelming evidence of its affirmative defense. As noted above, this Court in Kouba carefully evaluated whether the employer’s evidence could satisfy its burden of proof. In our view, based on the record, a jury would not be compelled to find that Defendant’s evidence established that the County used the factor of prior salary reasonably in light of the employer’s stated purpose as well as its other practices.

The County listed four reasons for its practice of relying exclusively on prior salary: it is objective and uniform, prevents favoritism, saves tax dollars, and attracts the best new employees. Order at 12.

While there are issues with all four reasons, the last one — attracting the best new employees — is especially problematic. The County points to no evidence that the practice achieves that result or that prior salary is a reliable proxy for qualifications. Plaintiff, for example, makes thousands of dollars less than her male colleagues for doing the same job — without regard to their relative experience or education. Under Defendant’s policy, an applicant who had supported herself as an Instructor at the University of California (where she earned about $50,000)[4] while getting her Ph.D. in curriculum development — highly relevant for a math consultant — would, like Plaintiff, start at Step 1. In contrast, a tech worker from Silicon Valley (where pay would normally exceed $80,000)[5] who wanted to change careers but had no relevant experience in education would likely start at Step 9 or 10, earning nearly $20,000 more. A jury, viewing such facts, might well find that Defendant’s use of the factor was unreasonable, rather than reasonable. Cf. Kouba, 691 F.2d at 878 (suggesting that “relevant consideration” in evaluating reasonableness of using prior salary is “whether the employer relies more heavily on salary when the prior job resembles the job” at hand).

At a minimum, it cannot be said that any rational jury would necessarily find the County’s practice reasonable. The district court was therefore correct in denying Defendant’s motion for summary judgment. The decision should be affirmed.

CONCLUSION

The district court reasonably determined that, consistent with the EPA, the County could not base the starting pay of a new employee solely on that employee’s prior salary, without regard to what the employee had been doing and whether the salary was disproportionately high or low. Moreover, a reasonable jury would not be compelled to find that the County proved that its proffered business justifications reasonably explain its practice. Accordingly, the judgment should be affirmed and the case remanded for further proceedings.

Respectfully submitted,

P. DAVID LOPEZ

General Counsel

JENNIFER S. GOLDSTEIN

Associate General Counsel

MARGO PAVE

Assistant General Counsel

s/ Barbara L. Sloan

BARBARA L. SLOAN

Attorney

EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION

Office of General Counsel

131 M Street N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4721

FAX: (202) 663-7090

barbara.sloan@eeoc.gov

CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because it contains 6952 words from the Statement of Interest through the Conclusion, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(ii).

This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2010 with Garamond 14-point font.

s/ Barbara L. Sloan

BARBARA L. SLOAN

Attorney for Equal Employment

Opportunity Commission

Dated: October 5, 2016

[1] The Commission expresses no opinion on any other issues in the case.

[2] Defendant’s Brief repeatedly uses the term “salary history” (see, e.g., Brief at 2, 13-14, 21-22). The decision below indicates that Defendant relied on most recent prior salary (Order at 3), not “salary history.”

[3] According to the court, to determine pay, FCOE verifies the daily rate of the employee’s most recent position, adds five percent, and then places the individual on the step that pays an amount at or above the total. Order at 3. Employees with advanced degrees receive $600 credit for a master’s degree, $1200 credit for a doctorate. ER000448-49.