By Jeff Hurt

Equal pay for equal work. Everyone pays lip service to the idea, but with women still making 77 cents for each dollar a man makes, it's clear there is a long way to go. In his 2015 State of the Union speech, President Barack Obama stated: "Congress still needs to pass a law that makes sure a woman is paid the same as a man for doing the same work. Really. It's 2015. It's time."

Equal pay for equal work remains an important priority for the Obama administration, but the legislative efforts to strengthen the current laws have been largely unsuccessful.

Nonetheless, the Equal Pay Act of 1963 (EPA) and the current nondiscrimination laws can be effective remedies for unequal pay in some circumstances, as illustrated by a recent case from the U.S. 10th Circuit Court of Appeals (which covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming).

What's in a name?

Kathy Riser worked for QEP Energy Company for 8 years as an administrative services representative II. Despite her title, she was actually responsible for managing a fleet of more than 250 trucks and performing various facilities management duties.

She was 42 when she began working for QEP, and her starting pay was $22.11 an hour. By the end of her employment, she was also managing construction projects at QEP field offices in several states. During the last 14 months of her employment, she worked 541 hours of overtime.

In March 2011, QEP developed a pay classification system consisting of 15 different grades based on industry compensation data. Riser's job was designated Grade 5 based on QEP's understanding of the tasks administrative assistants typically perform.

As a result of the new system, she received her first and only pay increase (to $22.78 per hour, or $47,382 a year). In setting her pay grade, QEP didn't consider Riser's actual duties. In fact, she twice asked her supervisor to change her job title and salary, but he didn't respond.

Two months later, QEP created a new position, fleet administrator, in part because of the large amount of overtime Riser had worked. She provided the information that resulted in the job description for the new position, which QEP classified as Grade 7, with a recommended starting annual salary of $62,000.

In June, QEP hired Matthew Chinn, a 39-year-old man, as the new fleet administrator at the recommended starting salary, which happened to be what he was paid by his former employer. After Riser trained him, Chinn took over fleet management along with other duties related to two new programs she had been in the process of implementing when he was hired. Riser was then told to focus on facilities management and construction projects at field offices.

In August 2011, QEP established a new "facilities manager" position. Management began talking with Jason Bryant, a 30-year-old man who had worked at QEP as a contractor's employee, to gauge his interest in the new job.

QEP fired Riser on September 8, 2011, because of alleged complaints about her work on a construction project in North Dakota that was behind schedule. She had never been disciplined, and her most recent evaluation rated her as exceeding expectations in all categories. QEP never told her about any of the complaints, and it didn't follow its policy and practice of using progressive discipline before firing her.

QEP then hired Bryant as facilities manager, also a Grade 7 position. He had declined the offer at the base salary of $62,500 and negotiated a starting salary of $66,000. His primary duties were the same functions Riser had performed, although he had some additional duties.

Former employee sues

Riser sued for pay discrimination under the Equal Pay Act (EPA), Title VII of the Civil Rights Act of 1964, and the Age Discrimination in Employment Act (ADEA); failure to promote under Title VII and the ADEA; and discriminatory discharge under Title VII and the ADEA.

The trial court granted summary judgment (pretrial dismissal) in favor of QEP on all claims. Riser appealed the dismissal of every claim except the failure-to-promote claim. The 10th Circuit reversed the lower court's ruling on the EPA and Title VII/ADEA pay discrimination claims. It found in favor of QEP on the discriminatory discharge claims.

QEP made two unsuccessful arguments in seeking to affirm the lower court's dismissal of the EPA claim. First, it contended that Riser couldn't establish that her job was "substantially equal" to the jobs of Chinn and Bryant because they had additional duties.

The court rejected that argument, noting that Chinn's fleet administration duties were "carved directly out of [Riser's] duties" and the core job functions remained the same. QEP argued that Chinn also had responsibility for implementing two new programs, but the evidence suggested that Riser had already implemented those programs before he was hired.

Second, QEP claimed that Chinn's and Riser's jobs weren't substantially equal because Chinn spent 100% of his time on fleet administration while Riser spent only about 33% of her time on that task, with the remaining 67% working in facilities management.

The court rejected that claim because Riser actually performed more duties than Chinn. The court said: "QEP has not presented evidence that the additional time Mr. Chinn spent on fleet administration necessarily meant he performed more work. Although Ms. Riser only spent 33% of her time performing fleet administration duties, a reasonable trier of fact might conclude that she was simply more efficient than Mr. Chinn at managing QEP's fleet."

The court then said a jury could also reasonably determine that Riser's job was comparable to Bryant's. QEP had to admit that both employees managed construction projects in field offices and that Riser had performed all the listed job duties it assigned to the facilities manager position.

The company contended that Bryant had four additional responsibilities that Riser didn't perform, but the court held that a jury could find those additional duties were actually a continuation of her work or only made up a small part of his normal work and may not be sufficient to create a substantial difference for EPA purposes.

Factors other than sex

QEP asserted the EPA affirmative defense, that the pay disparity was due to "a factor other than sex," claiming that its pay classification system is gender-neutral. It also asserted that its desire to pay Chinn the same salary he was making at his former job and the fact that it had to pay Bryant more to persuade him to leave his contractor job qualified as factors other than sex.

The court generally agreed but noted that simply stating those factors doesn't establish the defense. QEP also had to prove that the factors actually explained the disparity in wages.

The wage disparity between Riser and Chinn and Riser and Bryant was 31% and 39% respectively. The court pointed out that Riser's job grade wasn't based on the duties she actually performed, but was based on the duties administrative assistants typically perform, even though her supervisors knew she wasn't performing administrative assistant duties.

Because she performed the bulk of the responsibilities performed by Chinn and Bryant combined, the court held that a jury could reasonably question whether the pay difference could be explained by the reasons QEP offered.

The court agreed that QEP's desire to pay Chinn the same salary he received at his last job could be a factor other than sex, but it's only a consideration. The EPA doesn't allow an employer to rely solely on a previous salary to justify a pay disparity.

Similarly, paying a higher salary to an applicant who rejects a lower offer can be a factor other than sex. But the court held that reason could account for only $3,500 of the salary difference between Riser and Bryant, not the full $18,618.

The court found that QEP had failed to successfully prove its affirmative defense and reversed the trial court's decision in the company's favor. As a result, Riser will get a trial on her EPA claim.

The court also reversed the trial court's judgment in favor of QEP on the Title VII and ADEA pay discrimination claims. The job similarity requirements under Title VII and the ADEA are less stringent than the requirements under the EPA. Because the court found the jobs sufficiently similar for EPA purposes, it found them to be similar for purposes of the other claims.

QEP asserted that its classification system was a nondiscriminatory reason for the pay disparity, but the court concluded that because of the company's inconsistency in applying the system, a jury could reasonably reject its claim that the huge disparity in pay for the same work was based solely on the pay classification system itself. Consequently, Riser will get a trial on her Title VII and ADEA pay discrimination claims. Riser v. QEP Energy, Case No. 14-4025 (10th Cir. Jan. 25, 2015).

Lessons learned

In retrospect, QEP's actions can provide some guidance for the rest of us:

• The job title should match the duties. While job titles aren't the deciding factor, Riser's job title was wrong from the get-go, and that error ultimately contributed to her being placed in the wrong pay grade when the new classification system was adopted.
• Promotions or additional duties call for a pay review. When Riser began managing construction projects in satellite offices in addition to performing her normal duties, QEP should have reevaluated her pay in comparison to other positions with similar responsibilities.
• Management must understand job duties. QEP had an excellent opportunity to fix the problem when it created its pay classification plan. Rather than exploring what its employees were actually doing, however, it relied on "industry data" and generic job titles to create its pay grades. Listen to employees. Who is a better source of information about the actual duties of a job than the employee performing it? Riser's initial and subsequent job duties went far beyond the duties normally performed by an administrative assistant, and her manager twice ignored her requests to be reevaluated.
• Employees' pay should reflect their value to the company. QEP failed to determine the level of knowledge, responsibility, and actual value of Riser's responsibilities to the organization. Just because she was apparently "satisfied" with her pay for doing the work of three people before this dispute arose, that wasn't a good reason to continue to pay her less than her true value to the company.
• Periodically review pay equity. Note that Riser worked for nearly 8 years without any pay raises, despite her job duties increasing substantially and her apparently excellent performance. Savvy employers review compensation annually to determine if pay rates are based on relevant variables such as market value and the incumbents' recent performance evaluations.
• Use a committee to set pay for new positions. Had someone besides Riser's direct supervisor been involved, the problem might have been fixed. When Chinn was hired to take over part of her job, someone should have asked why there was such a disparity between their pay. Compensation issues should be reviewed by managers and HR.

Jeff Hurt is an employment lawyer with Foulston Siefkin LLP and an editor of Kansas Employment Law Letter. You can contact Jeff at jhurt@foulston.com or 913-253-2165.