Table of Contents

Table of Authorities................................................................................. ii

Statement of Interest................................................................................ 1

Statement of the Issues............................................................................ 2

Statement of the Case.............................................................................. 2

I. Statement of Facts..................................................................... 2

II. District Court Decision............................................................. 8

Argument................................................................................................. 10

I. The district court erred in granting HCC summary judgment on Woody’s EPA claim because HCC did not establish its affirmative defense as a matter of law.............................................................................................. 10

II. The district court erred in granting HCC summary judgment on Woody’s Title VII equal pay claim................................................................ 27

Conclusion............................................................................................... 28

Certificate of Compliance........................................................................ 29

Certificate of Service

Table of Authorities

Cases page(s)

Addicks Servs., Inc. v. GGP-Bridgeland, LP,

596 F.3d 286 (5th Cir. 2010)...................................................... 11

Balmer v. HCA, Inc.,

423 F.3d 606 (6th Cir. 2005)..................................................... 20

Brennan v. Victoria Bank & Trust Co.,

493 F.2d 896 (5th Cir. 1974)................................................ 20, 22

Corning Glass Works v. Brennan,

417 U.S. 188 (1974).................................................. 10, 13, 22, 26

County of Washington v. Gunther,

452 U.S. 161 (1981)........................................................ 13, 24, 27

Dey v. Colt Constr. & Dev. Co.,

28 F.3d 1446 (7th Cir. 1994)..................................................... 20

Dreves v. Hudson Group,

2013 WL 2634429 (D. Vt. June 12, 2013)................................. 23

EEOC v. J.C. Penney Co.,

843 F.2d 249 (6th Cir.1988)...................................................... 24

EEOC v. Romeo Cmty. Schs.,

976 F.2d 985 (6th Cir. 1992) .................................................... 16

Futran v. Ring Radio Co.,

501 F. Supp. 734 (N.D. Ga. 1980)............................................. 23

Gay v. Bd. of Trs. of San Jacinto Coll.,

608 F.2d 127 (5th Cir.1979)................................................ 18, 19

Glodek v. Jersey Shore State Bank,

2009 WL 2778286 (M.D. Pa. Aug. 28, 2009)............................ 23

Goodrich v. Int’l Bhd. of Elec. Workers,

712 F.2d 1488 (D.C. Cir. 1983)........................................... 13, 26

Harris v. Auxilium Pharm., Inc.,

664 F. Supp. 2d 711 (S.D. Tex. 2009),

rev’d on other grounds, 473 Fed.Appx. 400 (5th Cir. 2012)..... 11

Heinemann v. Howe & Rusling,

529 F. Supp. 2d 396 (W.D.N.Y. 2008)....................................... 17

Hodgson v. Brookhaven,

436 F.2d 719 (5th Cir. 1970)..................................................... 23

Int’l Shortstop, Inc. v. Rally’s, Inc.,

939 F.2d 1257 (5th Cir. 1991)................................................... 12

Irby v. Bittick,

44 F.3d 949 (11th Cir.1995)...................................................... 24

Jones v. Westside Urban Health Ctr.,

760 F. Supp. 1575 (S.D. Ga. 1991)...................................... 25, 26

King v. Acosta Sales & Marketing, Inc.,

678 F.3d 470 (7th Cir. 2012) .................................................... 25

King v. Univ. Healthcare Sys.,

645 F.3d 713(5th Cir. 2011)...................................................... 10

Klaus v. Hilb, Rogal & Hamilton Co. of Ohio,

437 F. Supp. 2d 706 (S.D. Ohio 2006)...................................... 24

McDonnell Douglas Corp. v. Green,

411 U.S. 792 (1973).................................................................... 11

Peters v. City of Shreveport,

818 F.2d 1148 (5th Cir. 1987), abrogated on other grounds

by Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)... 17, 26, 27

Plemer v. Parsons-Gilbane,

713 F.2d 1127 (5th Cir. 1983)....................................... 10, 12, 17

Rector v. County of Blair, Pa.,

2011 WL 5439165 (W.D. Pa. Nov. 8, 2011).............................. 17

Siler-Khodr v. Univ. of Tex. Health Sci. Ctr. San Antonio,

261 F.3d 542 (5th Cir. 2001)..................................................... 23

Stanziale v. Jargowsky,

200 F.3d 101 (3d Cir. 2000)........................................................ 11

Vehar v. Cole Nat’l Group, Inc.,

251 Fed.Appx. 993 (6th Cir. 2007) ........................................... 17

Statutes

29 U.S.C. §§ 206 et seq........................................................................... 1

29 U.S.C. § 206(d)(1)............................................................................ 10

42 U.S.C. § 2000e et seq......................................................................... 1

Court Rules

Fed.R.App.P. 29(a)................................................................................. 1

Other Authorities

EEOC Compliance Manual Chapter 10: Compensation Discrimination,

No. 915-003 (Dec. 5, 2000); available at http://www.eeoc.gov/policy/docs/compensation.html ............................................................................................ 13, 14, 22, 26

Restatement (Third) Of Agency § 2.03 (2006)...................................... 18

Restatement (Third) Of Agency § 3.03 (2006)...................................... 19

Statement of Interest

The Equal Employment Opportunity Commission (EEOC) is the federal agency established by Congress to interpret, administer, and enforce the Equal Pay Act (EPA), 29 U.S.C. §§ 206 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and other federal anti-discrimination statutes. This appeal presents important issues concerning one of the EPA’s affirmative defenses, which Congress incorporated into Title VII: where an employer alleges that a pay disparity is based on a “factor other than sex.” In particular, this appeal raises the issue of how a court should evaluate the factor proffered here—negotiation—in light of evidence that one company official thwarted a female candidate’s attempt to negotiate a higher salary with incorrect information, while other company officials facilitated a male candidate’s salary negotiations. The standards this Court applies in resolving this appeal will affect not only EPA and Title VII claims brought by other private plaintiffs, but those brought by the EEOC as well. Because of the importance of these issues to the proper implementation of these statutes, and pursuant to Rule 29(a) of the Federal Rules of Appellate Procedure, the EEOC offers its views to this Court.

Statement of the Issues

1. Did the district court err in granting summary judgment to defendant Houston Community College (HCC) on plaintiff’s EPA claim where HCC did not establish as a matter of law the factor-other-than-sex affirmative defense because there was evidence that HCC officials facilitated the man’s negotiation of a higher salary but impeded plaintiff’s attempt to do the same?

2. Did the district court err in granting summary judgment to HCC on plaintiff’s Title VII claim where a jury could find that HCC offered a higher salary to her male colleague because of sex?

Statement of the Case

Statement of Facts

The material facts are not in dispute. In January 2008, Houston Community College posted two openings for the position of Program Manager in the Corporate College. RE-T.6, ROA.80 (Washington Affidavit (Aff.) ¶5). The job posting indicated that the Program Manager would report to the Director of the Corporate College who, at the time, was Joe Little. The posted salary range for the position was $35,630 - $41,615. ROA.83-84 (Job Posting). Margaret Thibodeaux-Woody (Woody), a woman, and Alan Corder, a man, were among those who applied for the two positions. Woody addressed her application to Director Little. ROA.210 (Woody Cover Letter).

In early March 2008, Don Washington, HCC’s Director of Employment Services, contacted Woody and Corder by telephone and extended verbal offers to both. RE-T.6, ROA.81 (Washington Aff. ¶5). HCC has a posted salary range for every pay grade, and within a particular salary range, HCC calculates salary offers “considering the candidate’s number of years of relevant work experience” and “internal equity.” RE-T.10, ROA.180 (Edwards Aff. ¶4). Woody and Corder had similar prior work experience and the same advanced degree, which they received from the same university. RE-T.5, ROA.130 (Woody Aff. ¶4); ROA.175-176 (Corder Resume); ROA.211-216 (Woody Resume). HCC’s Compensation Department determined that Woody and Corder should receive the same starting salary of $41,615—the highest starting salary identified in the job posting—and Washington extended that offer to both candidates. RE-T.6, ROA.81 (Washington Aff. ¶¶4-5).

The record reflects only one communication from Corder to HCC concerning his starting salary. The day after Washington extended offers to Woody and Corder, a member of HCC’s Human Resources (HR) Department, Readri Epps, emailed Associate Vice Chancellor Daniel Seymour that “Corder requested to negotiate the salary to $60,000 annually based on his years of directly related work experience and education.” RE-T.9, ROA.90; RE-T.6, ROA.81 (Washington Aff. ¶6). Epps copied Director Little, Washington, and Chief of HR Willie Williams on her email to Seymour. RE-T.9, ROA.90. The next day, Seymour responded to all four HCC officials with a proposed counter-offer, stating: “I know it pushes internal equity since the other program manager position is offered at $44,610,[1] but I am willing to write Willie [Williams] and [Deputy Chancellor] Art [Tyler] for permission to go to $53,590.” Id. Seymour stated, “[T]his is someone we have knowledge of and, to be honest, should probably be at a higher grade level,” and added: “Great skill set.” Id.

HCC had no formal policy for addressing requests by prospective employees for a higher starting salary than set by HCC’s Compensation Department. HCC had an informal practice of considering such requests, however, and “certain HCC administrators ha[d] the authority to approve a higher salary offer” based on such factors as “ability to fill the position, internal equity and previous salary.” RE-T.10, ROA.181 (Edwards Aff. ¶5). The approval process varied depending on the salary the candidate sought. The salary Corder requested required approval by three individuals: Seymour, HR Chief Willie Williams, and Deputy Chancellor Art Tyler. Id. (Edwards Aff. ¶6).

Like Corder, Woody also expressed interest in negotiating a higher salary, but HCC responded very differently to her. After learning how much she was being offered, Woody told Director Little that she would “like to negotiate for more." Little responded, “Human Resources says this is the maximum we can offer and will not allow a higher salary for this position. There is no negotiating.” RE-T.5, ROA.129 (Woody Aff. ¶2). Taking the Director of the Corporate College—her future supervisor—at his word, Woody did not contact anyone else about her request to negotiate a higher salary. Id. (at ¶2) (“I relied on Joe Little’s statements . . . .”).

On March 26, 2008, Woody accepted the job offer at a salary of $41,615. RE-T.5, ROA.129 (Woody Aff. ¶2). The same day, Seymour emailed Williams, Washington, Epps, and Little and reiterated his willingness to increase Corder’s starting salary to $53,590. RE-T.12, ROA.92. Acknowledging, again, that his proposal “pushes internal equity,” Seymour listed several reasons he advocated increasing Corder’s starting salary. Seymour stated that “Joe Little saw [Corder] in action at the City of Houston” and mentioned Corder’s language skills and that he had managed his own business for about six years and had “a wealth of HCC and college experience.” Id.

Like Corder, Woody had also managed her own business and had “HCC experience,” having been employed by the college as a part-time adjunct faculty for nine years. ROA.206-216; RE-T.4, ROA.58 (Joint Chronology). There is no evidence, however, that as HCC was considering offering Corder a higher starting salary, Seymour or any other HCC official considered that Woody’s background was comparable to Corder’s. And despite Seymour’s express acknowledgement that offering Corder a higher starting salary than Woody raised “internal equity” concerns, no HCC official advocated a higher salary for Woody, as Seymour did for Corder.

On March 28, 2008, Washington sent Woody a letter confirming HCC’s offer of a starting salary of $41,615 with a start date of April 16. RE-T.8, ROA.137 (Woody Offer Letter). That same day, Williams signed a memo approving Corder’s starting salary of $52,000. RE-T.13, ROA.177. On March 31, Washington sent Corder a letter offering him the same position as Woody, with the same start date of April 16, at a starting salary of $52,000—$10,385, or twenty-five percent, higher than Woody’s starting salary. RE-T.15, ROA.94 (Corder Offer Letter).[2]

HCC evaluates employee performance annually. HCC gave Woody an overall performance rating of “exemplary,” the highest available rating, on her first two evaluations. ROA.101, 109. In the first evaluation, covering June 2008 through May 2009, Director Little wrote that Woody “sold more contracts and generated more revenue than anyone else in the department” and “had an excellent year.” ROA.97, 101. The third year, HCC gave Woody an overall rating of “professional,” ROA.115, the second highest available rating. RE-T.6, ROA.82 (Washington Aff. ¶8). HCC never rated Woody lower than “exemplary” or “professional” in any subcategory and consistently gave Woody higher yearly evaluation scores than Corder. RE-T.6, ROA.82 (Washington Aff. ¶8); RE-T.5, ROA.130 (Woody Aff. ¶4).

In June 2009, Woody learned that her salary was substantially lower than Corder’s and asked HR if HCC would increase her salary. HR responded, “You negotiated this, there is nothing we can do about it.” RE-T.5, ROA.130 (Woody Aff. ¶6).

Woody and Corder are both still employed in identical Program Manager positions. They have continued to be assigned the same responsibilities, to perform the same duties, to work under the same conditions, to have the same schedule, and to report to the same supervisor, Director Little. Although HCC gave both employees raises over time, the college did nothing to lessen the salary disparity between Woody and Corder, which grew from $10,385 in April 2008 to $11,280 in May 2012, when HCC was paying Woody $45,785 and Corder $57,065. RE-T.6, ROA.82 (Washington Aff. ¶7).

The record contains no evidence explaining directly why Director Little told Woody, in March 2008, that salary negotiation was not available when he knew that HCC officials were facilitating Corder’s request for a higher starting salary. Woody alleges, however, that throughout her employment, Little made various comments to her that she considered disparaging and gender-based. For example, in staff meetings, Director Little called Woody “dingy” and “blonde” (even though she has dark hair) and “princess.” ROA.35 (First Amended Complaint ¶16). Director Little also urged Woody, in a text message, to rely on her husband’s salary as an additional source of income. Id.

Woody sued HCC claiming an equal pay violation under the EPA and Title VII, and HCC moved for summary judgment on both claims, arguing “negotiation” is a factor other than sex and only Corder negotiated. ROA.70, 73-75. HCC did not argue that Corder possessed superior skills or experience as compared to Woody. See id.

Woody sought partial summary judgment on her EPA claim, arguing that as a matter of law, salary negotiation does not fall within the EPA’s fourth statutory affirmative defense. ROA.123-25. Woody also argued that HCC did not make negotiation equally available to her. ROA.126-27.

District Court Decision

The district court granted summary judgment for HCC, rejecting Woody’s argument “that salary negotiation is a sex issue.” RE-T.3, ROA.266. The court stated that unlike the cases on which Woody relied where women were offered lower salaries because of “market forces,” here Woody “was offered the same salary as Corder” but “Corder negotiated a higher salary” and “Woody accepted the offered salary with no negotiation.” Id. In response to Woody’s argument that she attempted to negotiate when she told Director Little that she would like a higher salary, the court stated: “Little was not in a position to negotiate or decide salary questions.” RE-T.3, ROA.265. The court stated that Corder, in contrast, “spoke directly to Washington about a higher salary.” Id. The court concluded that Woody’s statement to Little that she had “a desire to negotiate is not a form of negotiation,” and even if “Woody’s conversation with Little was negotiation, her strategy was poor because she did not speak to people with authority to rectify her concerns. When she heard [Little’s] bureaucratic response, she stopped.” Id.

The court also stated there was no evidence here that the market had a higher demand for men than women because of their sex, noting that Woody offered “no data from which to infer that the market is biased for second-level staff at a junior college.” RE-T.3, ROA.266. The court asserted that Woody “had the opportunity to offer evidence that the college’s reason was disingenuous [but] did not.” Id.

The court also granted HCC summary judgment on Woody’s Title VII claim. The court stated only that sexual discrimination claims under Title VII have the same defenses for wage disparity claims as the EPA. Id.

Argument

I. The district court erred in granting HCC summary judgment on Woody’s EPA claim because HCC did not establish its affirmative defense as a matter of law.

The EPA makes it unlawful for an employer to “pay[] 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.” 29 U.S.C. § 206(d)(1). The plaintiff has the burden of proving each of these statutory elements. See Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974); Plemer v. Parsons-Gilbane, 713 F.2d 1127, 1136 (5th Cir. 1983). Once the plaintiff establishes a prima facie case, the employer is liable unless it can prove that the pay differential is based on one of the EPA’s four affirmative defenses: (1) a seniority system, (2) a merit system, (3) a system measuring pay by the quantity or quality of production, or (4) “a differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1). The defendant bears the burden of proof on its EPA affirmative defense. Corning Glass, 417 U.S. at 196-97; King v. Univ. Healthcare Sys., 645 F.3d 713, 724 (5th Cir. 2011); Plemer, 713 F.2d at 1136.

HCC does not dispute that Woody established a prima facie case under the EPA. ROA.73. In defense of the pay disparity, HCC asserted only the EPA’s fourth affirmative defense (“any factor other than sex”), and only on the basis that Corder negotiated a higher starting salary and Woody did not. ROA.73-74. Where a movant bears the burden of proof on an affirmative defense, as HCC does here, this Court has held that “the movant must establish beyond peradventure all of the essential elements of the defense to warrant judgment in his favor.” Addicks Servs., Inc. v. GGP-Bridgeland, LP, 596 F.3d 286, 293 (5th Cir. 2010) (internal quotations omitted). In other words, “to prevail at the summary judgment stage, the employer must prove at least one affirmative defense ‘so clearly that no rational jury could find to the contrary.’” Harris v. Auxilium Pharm., Inc., 664 F.

Supp. 2d 711, 727 (S.D. Tex. 2009) (citing Stanziale v. Jargowsky, 200 F.3d 101, 107 (3d Cir. 2000)), rev’d on other grounds, 473 Fed.Appx. 400 (5th Cir. 2012).

The district court improperly granted summary judgment to HCC because HCC failed to establish its affirmative defense as a matter of law. The district court held that HCC met its burden by “offer[ing] negotiation as the reason for the difference,” and that Woody failed to “offer evidence that [HCC’s] reason was disingenuous.” RE-T.3, ROA.265-66. Both holdings are legally flawed. First, HCC had to do more than simply “offer” a reason for the difference. Unlike the McDonnell Douglas framework used for Title VII claims, under which the plaintiff always bears the burden of proof, see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-805 (1973), it is not enough for the employer asserting an EPA affirmative defense simply to produce (or “offer[]”) evidence of a legitimate reason; the employer must offer sufficient evidence to prove the EPA defense as a matter of law, i.e., that no reasonable jury could reach a contrary conclusion. Plemer, 713 F.2d at 1136.

Second, Woody had no obligation to disprove HCC’s EPA affirmative defense before HCC established it. Although a plaintiff may defeat summary judgment by showing the asserted factor-other-than-sex is false or “disingenuous” (RE-T.3, ROA.266), as a plaintiff might need to do in the Title VII context, an EPA plaintiff is not required to do so. The plaintiff may, instead, defeat summary judgment by highlighting sufficient shortcomings in the employer’s proof that a reasonable jury could reject the defense. See generally Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1265 (5th Cir. 1991) (where movant bears burden of proof at trial, movant must demonstrate absence of fact dispute before non-movant must produce its evidence; non-movant may defeat summary judgment by highlighting that movant’s evidence is “so sheer” that it might not persuade a reasonable fact-finder to return a verdict in favor of the moving party). The district court misapplied this burden of proof when it granted summary judgment to HCC.

The district court, in accepting HCC’s proffered rationale at face value and criticizing Woody’s failure to show that HCC’s defense was “disingenuous,” also overlooked the crux of Woody’s claim. It is true that Corder negotiated a higher salary and Woody did not, but the district court missed the point that HCC officials not only gave Corder the opportunity to negotiate, they also ushered his request for a higher salary through the approval process for him, while thwarting Woody’s ability to do the same. This evidence that HCC treated the male and female candidates differently with respect to negotiation is significant, because it raises a question as to whether the “factor other than sex” that HCC proffered (that Corder negotiated a higher salary and Woody did not) is, in fact, a bona fide “factor other than sex.” See County of Washington v. Gunther, 452 U.S. 161, 170 (1981) (fourth affirmative defense applies only when “pay differentials are based on a bona fide use of ‘other factors other than sex’”); Goodrich v. Int’l Bhd. of Elec. Workers, 712 F.2d 1488, 1493 & n.11 (D.C. Cir. 1983) (fourth affirmative defense must be bona fide, because that defense “is not designed to provide a convenient escape from the Act’s basic command”).

To be a bona fide “factor other than sex,” the factor must actually be gender-neutral. As the EEOC’s guidance on gender-based compensation disparity explains, an employer asserting a factor-other-than-sex affirmative defense must establish that a “gender-neutral factor, applied consistently, in fact explains the compensation disparity.” See EEOC Compliance Manual, Section 10: Compensation Discrimination, No. 915.003 (12/5/2000), at §10-IV F.2 (citing, inter alia, Corning Glass, 417 U.S. at 204), available at http://www.eeoc.gov/policy/docs/compensation.html. Where an employer claims “negotiation” to be the factor other than sex, the salary negotiations must be scrutinized carefully; negotiations may not be a factor other than sex if “the employer bargains differently with men than with women (e.g., responds more favorably to men’s demands than to women’s demands).” Id. at §10-IV F.2.g.

Here, HCC failed to establish that a jury would be compelled to find that it applied its “negotiation” factor consistently in a “gender-neutral” manner. In March 2008, HCC offered Woody and Corder identical positions at the same starting salary of $41,615, based on the Compensation Department’s evaluation that Woody and Corder both warranted the same starting salary. RE-T.6, ROA.81 (Washington Aff. ¶5). Shortly thereafter, Woody and Corder both asked if they could negotiate a higher starting salary. Both posed the question to someone who did not have any authority to approve a higher starting salary (Woody to Little, the Director of HCC’s Corporate College and the future supervisor of both candidates, and Corder to Washington, an HR official whose job was to convey job offers and who lacked any authority to approve the request).

Despite these similarities, HCC officials forwarded only Corder’s request to someone who could act on it—Seymour—who then shepherded the request through the approval process with no apparent further involvement on Corder’s part. RE-T.9, ROA.90; RE-T.12, ROA.92. Indeed, the only record evidence of any “negotiation” on Corder’s part is Epps’ statement in her email to Seymour that Corder had requested a higher salary. ROA.90. There is no evidence that Corder thereafter was involved in any way in the dialogue that resulted in HCC paying him a starting salary $10,385 higher than it paid Woody.

HCC responded very differently to Woody’s request. After Woody told Director Little that she would “like to negotiate for more,” he did not convey her request to Seymour or to anyone else who could act upon it. Nor did Director Little tell Woody that he lacked the authority to negotiate a higher starting salary and she would have to contact HR directly, or that he was uncertain whether it was possible to negotiate a higher salary. Instead, he told Woody unequivocally, “Human Resources says this is the maximum we can offer and will not allow a higher salary for this position. There is no negotiating.” RE-T.5, ROA.129 (Woody Aff. ¶2).

A jury could reasonably conclude, on this record, that Little knew his statement to Woody was inaccurate when he made it because, as Director of HCC’s Corporate College, he would likely know the process for setting the compensation of the individuals who worked for him. Alternatively, a jury could reasonably find that even if Director Little did not initially know negotiation was possible, he knew soon thereafter because he was copied on emails showing that negotiation of Corder’s starting salary was underway, and a jury would be entitled to infer that Little read these emails about a candidate who had been selected to fill a position he would supervise directly.

Either way, Little’s failure to inform Woody that negotiation was an option, or to forward her request to other HCC officials so they could act on it, is evidence from which a reasonable jury could find that Director Little effectively sabotaged Woody’s efforts to secure a higher starting salary. Given this evidence, a jury would not be compelled to find that HCC offered “negotiation” to both candidates in a gender-neutral manner that satisfies the EPA’s factor-other-than-sex affirmative defense.

Even if HCC were to argue that Director Little was simply mistaken about the unavailability of negotiation, HCC would not be entitled to summary judgment on that basis because a jury could readily conclude otherwise, given Little was copied on the communications generated by Corder’s salary request. See EEOC v. Romeo Cmty. Schs., 976 F.2d 985, 988-89 (6th Cir. 1992) (employer unable to establish “mistake” as factor other than sex on summary judgment given record contained contradictory evidence). And evidence suggesting gender bias on the part of Director Little would further undermine any argument that his misleading statement to Woody was an innocent mistake. Woody asserted such evidence here in the form of comments that Little made to her after she was hired, such as telling her to rely on her husband’s salary. ROA.35 (First Amended Complaint ¶16). Given these remarks, a jury could find that Director Little intentionally misled Woody about the availability of salary negotiation. Cf. Rector v. County of Blair, 2011 WL 5439165, at *8 (W.D. Pa. Nov. 8, 2011) (supervisor’s comments about a female employee staying at home constitute evidence that employer conduct was based on gender stereotypes) (Title VII).[3]

The district court also erred when it concluded that Woody did not speak with someone “with authority to rectify her concerns” when she told Little—her future supervisor, the Director of HCC’s Corporate College, and the person to whom she had applied for the job—that she would like to negotiate a higher salary. RE-T.3, ROA.265. The court improperly faulted Woody for not taking her request directly to Washington, the person to whom Corder made his request.[4] But, as the court failed to recognize, Washington also lacked authority to approve a higher salary and simply passed Corder’s request along to Seymour. See pp.3-4, supra. Little had as much “authority” to forward Woody’s request to Seymour as Washington had to forward Corder’s request. A reasonable jury could thus reject HCC’s factor-other-than-sex defense because Corder and Woody employed comparable negotiation tactics, but HCC officials forwarded only Corder’s request to someone who could act on it.

Although the court criticized Woody for talking to Little rather than Washington, a jury could reasonably find that Little had apparent, if not actual, authority to inform Woody about the terms of her prospective employment, including whether her salary was negotiable. Apparent authority is “the power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.” Restatement (Third) of Agency § 2.03 (2006); see also Gay v. Bd. of Trs. of San Jacinto Coll., 608 F.2d 127, 128 (5th Cir.1979) (rejecting a defense of no authority because the employer “held out the supervisor as a person having authority over those under his supervision, and the plaintiff perceived him to have authority to discharge her”). A jury could find that Woody reasonably believed that Little, the Director of the Corporate College, had the knowledge and authority to inform her accurately about the terms of her employment. Certainly, Little gave Woody no reason to think he did not know whether negotiation was an option—he answered her unequivocally and did not indicate any uncertainty. See Restatement (Third) of Agency § 3.03 cmt. d (even if third party knows manager lacks final authority to commit an organization to a transaction, “factual circumstances may make it reasonable to believe that the . . . manager has authority to communicate a decision made by central authority.”). Here, Little had the power to affect HCC’s legal relation with Woody because Woody, relying on the Director’s unequivocal statement that negotiation was not available, took no further steps to negotiate her salary.

Even assuming that Woody’s negotiation failed because she employed a “poor . . . strategy,” as the district court held, RE-T.3, ROA.265, a jury would not be compelled to accept HCC’s defense as a matter of law because Seymour’s justification for paying Corder more than Woody lacks an adequate factual basis. An employer can lawfully pay one employee more than it pays another employee of the opposite sex where the higher-paid employee successfully negotiated a higher salary by pointing to different experience, work history, or skills. See, e.g., Dey v. Colt Constr. & Dev. Co., 28 F.3d 1446 (7th Cir. 1994) (male candidate had more advanced degree and history of higher prior salaries); Balmer v. HCA, Inc., 423 F.3d 606 (6th Cir. 2005) (male candidate had more relevant industry experience and history of higher salaries). HCC argued below that its counter-offer to Corder was based on “objective reasons garnered from Corder’s work experience, qualifications and skill sets.” ROA.156. But HCC officials made this assessment of Corder’s skills in a vacuum; HCC never assessed Corder’s skills as compared to Woody’s, and it did not argue below that Corder’s experience or skills, compared to Woody’s, justified paying him twenty-five percent more than Woody. Where—as here—the employer consciously and vigorously advocates a higher salary for the male candidate by pointing to his experience and skills while ignoring the female candidate’s comparable experience and skills, despite acknowledged equity concerns,[5] the employer cannot establish the factor-other-than-sex affirmative defense as a matter of law.

This Court held as much in Brennan v. Victoria Bank & Trust Co., 493 F.2d 896, 901 (5th Cir. 1974), when it reversed the district court’s judgment for an employer who paid male employees more than female employees based, in part, on “their college and work experience” and managers’ assessments of their “apparent ability.” This Court held that “subjective evaluations” of the employer, standing alone, cannot be the basis for salary discrimination under the fourth affirmative defense, reasoning that if that were the case, “‘the exception will swallow the rule.’” Id. at 902. Significantly, this Court held that the defendant could not justify the discrepancy in pay by simply invoking the male employees’ education and experience without comparison to that of the female employees, because if the defendant had actually made such a comparison, then “some of the females should have been paid more than the male standard.” Id.

Similarly, HCC could not justify the discrepancy in pay between Woody and Corder by simply invoking Corder’s prior experience and qualifications without comparing those qualifications to Woody’s. HCC’s Compensation Department concluded at the outset that Woody and Corder should be offered the same starting salary. Seymour subsequently advocated a higher salary for Corder based, in part, on Corder’s prior experience managing his own business and working previously for HCC, considerations that Seymour said set Corder apart from the other remaining candidates for the position. RE-T.11, ROA.162 (Seymour Aff. ¶5); RE-T.12, ROA.92. But if Corder’s skills warranted a higher salary than HCC originally offered, Woody’s comparable experience and skills, see pp.3, 5, supra, should have warranted the same higher salary, and a reasonable jury could conclude that HCC’s failure to apply the same standard to the male and female candidate indicates its salary-setting process is not gender-neutral. See EEOC Compliance Manual at §10-IV.F.2.a. (higher compensation to male employee based on a particular qualification not justified under EPA “if the employer does not consistently rely on such a qualification”). Seymour’s assessment of Corder occurred in a vacuum and so cannot, standing alone, establish the fourth affirmative defense. See Brennan, 493 F.2d at 902.[6]

To the extent Seymour believed that market forces required he pay the male candidate more than an equally qualified female,[7] Seymour’s rationale would not be the basis for an EPA affirmative defense. In Brennan, the employer argued it paid male employees more, in part based on considerations of “free market forces”–“that is, what salary will the best applicant accept.” This Court rejected the notion that the market force theory is “a valid consideration under the Act.” Brennan, 493 F.2d at 902; see also Corning Glass, 417 U.S. at 205 (“That the company took advantage of [a job market in which it could pay women less] may be understandable as a matter of economics, but its differential nevertheless became illegal once Congress enacted into law the principle of equal pay for equal work.”); Siler-Khodr v. Univ. of Texas Health Sci. Ctr. San Antonio, 261 F.3d 542, 549 (5th Cir. 2001) (employer’s “market forces argument is not tenable and simply perpetuates the discrimination that Congress wanted to alleviate when it enacted the EPA.”).

HCC invoked “negotiation” and not “market forces” as the differentiating factor, but “negotiation” and “market forces” are frequently intertwined. See Dreves v. Hudson Group (HG) Retail, 2013 WL 2634429 (D. Vt. June 12, 2013), at *8 (tying “negotiation” to discredited market forces defense); cf. Hodgson, 436 F.2d at 726 (“Clearly the fact that the employer’s bargaining power is greater with respect to women than with respect to men is not the kind of factor [other than sex] Congress had in mind. Thus it will not do for the hospital to press the point that it paid orderlies more because it could not get them for less.”).[8]

In Klaus v. Hilb, Rogal & Hamilton Co. of Ohio, 437 F. Supp. 2d 706 (S.D. Ohio 2006), for example, the district court ruled: “The fact that [the male employee] negotiated a better employment package standing alone . . . is not dispositive.” Id. at 723-24. The court rejected the employer’s argument regarding negotiation for much the same reason that this Court has rejected the market forces argument. Where the employer’s reliance on negotiation is not grounded in the respective candidates’ relevant experience or education, there is a concern that “‘inequality in pay among genders would be perpetuated.’” Id. (quoting Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995)). Negotiation, standing alone, thus raises a serious question as to whether it is a “bona fide” factor. See County of Washington, 452 U.S. at 170 (pay differentials must be based on a bona fide use of ‘other factors other than sex’”); see also Klaus, 437 F. Supp. 2d at 724 (fourth affirmative defense “‘does not include literally any other factor, but a factor that, at a minimum, was adopted for a legitimate business reason’”) (quoting EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1988)). A jury could find negotiation and market forces similarly intertwined here, where HCC eagerly engaged Corder and, despite acknowledging the “internal equity” concerns, was entirely dismissive towards Woody.

Finally, the court erred in granting summary judgment because even though HCC rated Woody’s job performance higher than Corder’s, HCC continued to pay her less than Corder. HCC maintained the pay disparity even after Director Little noted, in Woody’s first annual evaluation, that she had “sold more contracts and generated more revenue than anyone else in the department.” ROA.97 (emphasis added). HCC maintained the pay disparity even after Woody complained about it a few months later to HR staff who responded, remarkably, that she had “negotiated this.” Instead of eliminating the disparity, HCC actually increased the salary differential from $10,385 in 2008 to $11,280 in May 2012. See p.7, supra.

A reasonable jury could find that even if HCC had any legitimate basis to pay Woody approximately $10,000 less than Corder when they began working as Program Managers for HCC in 2008—and the record shows no such basis—any justification dissipated quickly as Woody demonstrated that she was as proficient or more proficient than Corder in performing the job. Absent any justification, such an on-going pay differential violates the EPA. See King v. Acosta Sales & Marketing, 678 F.3d 470, 474-75 (7th Cir. 2012) (even if men and women start out at disparate salary levels because of differing backgrounds, their salaries should converge over time as women demonstrate they are equally capable of performing the job at or above the employer’s expectations); Jones v. Westside Urban Health Ctr., 760 F. Supp. 1575, 1580 (S.D. Ga. 1991) (“Presumably, defendants initially hired [the female comparator] at a higher rate of pay because, in their informed judgment, they assumed that experience and education would make her perform at a higher level than [the male plaintiff,] a less-educated novice. Defendants have offered no explanation for clinging to a salary discrepancy when their underlying assumption has been proved, as plaintiff alleges, grossly incorrect.”). EEOC Compliance Manual at 10-IV.F.2.a.

Despite acknowledging the equity concerns implicated by its salary decisions, HCC decided to pay Woody less than Corder. “[E]quity” in pay regardless of sex is precisely the concern the Equal Pay Act was enacted to address. As this Court has said, when Congress sought to remedy the problem of the “outmoded belief that a man . . . should be paid more than a woman even though his duties are the same,” it “adopted a solution that ‘was quite simple in principle: to require that “equal work will be rewarded by equal wages.”’” Peters v. City of Shreveport, 818 F.2d 1148, 1152-53 (5th Cir. 1987) (quoting, inter alia, Corning Glass, 417 U.S. at 195); see also Goodrich, 712 F.2d at 1490 (Equal Pay Act “firmly establishes as federal law the ‘principle of equal pay for equal work regardless of sex’”) (quoting Corning Glass, 417 U.S. at 195). The undisputed facts demonstrate that HCC treated Woody differently than Corder with regard to their respective requests to negotiate a higher salary and then paid her a lower starting salary than Corder for the same job. HCC continued thereafter to pay Woody less despite her superior job performance as compared to Corder. The district court erred in granting summary judgment for HCC.

II. The district court erred in granting HCC summary judgment on Woody’s Title VII equal pay claim.

The district court also erred in granting HCC summary judgment on Woody’s Title VII pay disparity claim. Defendants are entitled to assert the same affirmative defenses under Title VII as under the Equal Pay Act. County of Washington, 452 U.S. at 171. For the same reasons that HCC has not established its EPA affirmative defense as a matter of law, HCC has likewise not established its affirmative defense under Title VII.

Unlike the EPA, a plaintiff claiming unlawful pay disparity under Title VII must prove discriminatory intent. Peters, 818 F.2d at 1154. The district court wrongly granted summary judgment on Woody’s Title VII claim because the record would permit a reasonable jury to find the requisite discriminatory intent here. Specifically, around the same time that Woody informed Little she wanted to negotiate a higher salary and Little told her negotiation was not available, Little knew or became aware that HCC was negotiating with Woody’s comparator, but failed to pass that information along to Woody or to tell Seymour about Woody’s interest. See RE-T.5, ROA.129 (Woody Aff. ¶2); RE-T.9, ROA.90; RE-T.12, ROA.92 (emails). Little later made gender-disparaging remarks to Woody at a staff meeting and sent her a text message urging her to rely on her husband’s salary as an additional source of income, ROA.35 (First Amended Complaint ¶16), reflecting a stereotype that women do not need to earn as much as men because they can rely on their husbands’ incomes. A reasonable jury could find, on this basis, that Little’s actions were motivated by gender-based discriminatory intent.

Conclusion

Based on the above, the EEOC respectfully asks this Court to reverse the district court’s grant of summary judgment on Woody’s EPA and Title VII claims of unequal pay and to remand this case for further proceedings.

Respectfully submitted,

P. DAVID LOPEZ

General Counsel

CAROLYN L. WHEELER

Acting Associate General Counsel

JENNIFER S. GOLDSTEIN

Acting Assistant General Counsel

/s/ Susan R. Oxford _____________________________

SUSAN R. OXFORD

Attorney

EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION

131 M St. NE, 5^thFloor

Washington, D.C. 20507

(202) 663-4791

susan.oxford@eeoc.gov

[1] Seymour’s email overstated the initial salary HCC offered Woody and Corder; it was actually only $41,615.

[2] The third HCC official, Deputy Chancellor Tyler, who had to approve the higher salary, received the request to approve Corder’s salary of $52,000 on April 1st, the day after HCC sent Corder the letter officially offering him the position at the higher salary. ROA.178. The Deputy Chancellor approved the request. ROA.177.

[3] The EPA does not require evidence of gender bias to undermine a factor-other-than-sex affirmative defense. See Peters v. City of Shreveport, 818 F.2d 1148, 1153 (5th Cir. 1987) (“Unlike the showing required under Title VII’s disparate treatment theory, proof of discriminatory intent is not required to establish a prima facie case under the Equal Pay Act.”) (abrogated on other grounds by Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)). Nevertheless, plaintiffs may use such evidence to establish an EPA violation. See Vehar v. Cole Nat’l Group, Inc., 251 Fed.Appx. 993, 1001-02 (6th Cir. 2007) (gender-biased comments created triable issue as to whether salary based on sex); Heinemann v. Howe & Rusling, 529 F. Supp. 2d 396, 417 (W.D.N.Y. 2008) (supervisor statement that plaintiff “would never ‘be paid as much as a man’” is evidence bolstering plaintiff’s EPA claim); cf. Plemer, 713 F.2d at 1137 n.8 (plaintiff must be given “full and fair opportunity” to use evidence relevant to pretext in Title VII cases to rebut employer’s factor-other-than-sex affirmative defense in EPA claim).

[4] The court incorrectly stated that Woody never “dealt with” Little during the hiring process and that “Washington discussed hiring decisions with two others but never with Little.” RE-T.3, ROA.265. In fact, Woody dealt with Little, her future supervisor, when she applied for the job by addressing her job application to him. ROA.210. And the record indicates that Little was included in the hiring process, as HR copied Little on the email to Seymour discussing Corder’s starting salary, and Seymour copied Little on both his responses. RE-T.9, ROA.90.

[5] Seymour’s two emails show that the HCC officials responsible for approving Corder’s higher salary were well aware of the “internal equity” concerns their actions presented. RE-T.9, ROA.90; RE-T.12, ROA.92.

[6] Although Seymour also lauded Corder’s foreign language/ESL skills in his second email, RE-T.12, ROA.92, nothing in the record indicates that foreign language or ESL skills were necessary or useful for the Program Manager position for which Corder and Woody were hired.

[7] In his first email advocating a higher salary for Corder, Seymour stated: “[T]o be honest, [Corder] should probably be at a higher grade level.” RE-T.9, ROA.90.

[8] See Dreves, 2013 WL 2634429, at *8 (rejecting employer’s proffered reasons for wage disparity—including employer’s assertion that the salary was negotiated and employer had to pay the man more to induce him to take the job in light of his experience—as invalid and stating, in reference to negotiation, that “[i]t would be strange indeed if an indefensible disparity could be transformed to a defensible (and larger) one whenever a comparator asked for more money than was originally offered”); Futran v. RING Radio Co., 501 F. Supp. 734, 739 (N.D. Ga. 1980) (holding that a woman’s reduced bargaining power is not an allowable defense under the EPA); Glodek v. Jersey Shore State Bank, 2009 WL 2778286 at *9 (M.D. Pa. Aug. 28, 2009) (“Though salary demands are not entirely irrelevant, it would be inequitable to permit defendant to shelter itself from liability by stating that one individual received greater compensation than another simply because he or she requested it.”).