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69-006

110TH CONGRESS

REPORT

HOUSE OF REPRESENTATIVES

2d Session

110-783

--PAYCHECK FAIRNESS ACT

JULY 28, 2008- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. GEORGE MILLER of California, from the Committee on Education and Labor, submitted the following

R E P O R T

together with

MINORITY VIEWS

[To accompany H.R. 1338]

[Including cost estimate of the Congressional Budget Office]

SECTION 1. SHORT TITLE.

SEC. 2. FINDINGS.

SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

SEC. 4. TRAINING.

SEC. 5. NEGOTIATION SKILLS TRAINING FOR GIRLS AND WOMEN.

SEC. 6. RESEARCH, EDUCATION, AND OUTREACH.

SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN THE WORKPLACE.

SEC. 8. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION.

SEC. 9. REINSTATEMENT OF PAY EQUITY PROGRAMS AND PAY EQUITY DATA COLLECTION.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

PURPOSE

When President Kennedy signed the Equal Pay Act (EPA) into law in 1963 he observed that the statute `adds to our laws another structure basic to democracy' and `affirms our determination that when women enter the labor force they will find equality in their pay envelope.' 1

[Footnote] Forty-five years later, women have made tremendous progress in the workplace. 2

[Footnote] They comprise almost half of this country's workforce and more than 6 million businesses are owned by women. 3

[Footnote] Despite these gains, women continue to be held back by wage discrimination. As a result of loopholes in the law and weak sanctions for violations, the EPA is ineffective in combating unequal pay. Women working full-time year-round earn 77 cents for every dollar earned by a man. 4

[Footnote] The Paycheck Fairness Act, H.R. 1338 modernizes the EPA and brings the country one step closer to ensuring that women earn equal pay for equal work.

[Footnote 1: U.S. Equal Employment Opportunity Commission, `The Equal Pay Act Turns 40,' available at: http://www.eeoc.gov/epa/anniversary/epa-40.html.]

[Footnote 2: 29 USC Sec. 206(d)]

[Footnote 3: U.S. Small Business Association, Women in Business: A Demographic Review of Women's Business Ownership (Aug. 2006), available at: http://www.sba.gov/ADVO/research/rs280tot.pdf.]

[Footnote 4: Jody Feder & Linda Levine, CRS Report, Pay Equity Legislation in the 110th Congress, at 1 (May 2, 2008)]

Pay disparity's long-term impact on women's lifetime earnings is substantial and can cost a woman anywhere from $400,000 to $2 million over her lifetime. 5

[Footnote] H.R. 1338 will strengthen the EPA to make it a more effective means to combat wage discrimination. Specifically the bill: (1) expands the establishment requirement so female employees to look beyond their physical workplace to find a male comparator; (2) extends anti-retaliation protections so employees are free to discuss or disclose salary information; (3) clarifies the affirmative defense of `any factor other sex'; (4) establishes a grant program to fund training programs for women on employer/employee negotiations; (5) directs the Secretary of Labor to conduct studies and provide information to employers, labor organizations and the general public on ways to eliminate pay disparities; (6) permits the Secretary of Labor to offer technical assistance to employers when carrying out wage evaluations; (7) makes it easier for women to join class action lawsuits ; (8) mandates that the Equal Employment Opportunity Commission (EEOC) survey available pay data and issue regulations to provide for the collection of pay data from employers, which identifies workers by sex, race and national origin; and (9) codifies the use of the Equal Opportunity Survey (EO) by Office of Federal Contract Compliance (OFCCP) for non-construction workers.

[Footnote 5: Institute for Women's Policy Research, Memo to John Roberts: The Gender Gap is Real (2005).]

COMMITTEE ACTION INCLUDING LEGISLATIVE HISTORY AND VOTES IN COMMITTEE

105TH CONGRESS

Senator Thomas Daschle (D-SD) introduced S. 71, the Paycheck Fairness Act, on January 21, 1997. The bill had 23 cosponsors and was referred to the Committee on Labor and Human Resources. Congresswoman Rosa DeLauro (D-CT) introduced H.R. 2023, the Paycheck Fairness Act, on June 24, 1997. The bill had 95 cosponsors and was referred to the Committee on Education and the Workforce. H.R. 2023 was then referred to the Subcommittees on Workforce Protections and Employer-Employee Relations. No further action was taken on either bill.

106TH CONGRESS

Senator Thomas Daschle (D-SD) introduced S. 74, the Paycheck Fairness Act, on January 19, 1999. The bill had 31 cosponsors and was referred to the Committee on Health, Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-CT) introduced H.R. 541, the Paycheck Fairness Act, on February 3, 1999. The bill was referred to the Committee on Education and the Workforce and the Subcommittees on Workforce Protections and Employer-Employee Relations.

The Senate Committee on Health, Education, Labor, and Pensions held a hearing on gender-based wage discrimination on June 8, 2000. The hearing, `Examining the Bureau of Labor Statistics Report which Provides a Full Picture of the Gender-Based Wage Gap, the reasons for these Gaps and the Impact this Discrimination has on Women and Families, and the Effectiveness of Current Laws and Proposed Legislative Solutions, and S. 74, to Amend the Fair Labor Standards Act of 1938 to Provide More Effective Remedies to Victims of Discrimination in the Payment of Wages on the Basis of Sex,' featured testimony from Dr. Katherine Abraham, Commissioner, Bureau of Labor Statistics; Dr. June O'Neill, professor of economics and finance, Baruch College, Zicklin School of Business; Dr. Heidi Hartmann, Director, Institute for Women's Policy Research; Anita Hattiangadi, economist, Employment Policy Foundation; Barbara Berish Brown, partner, Paul, Hastings, Janofsky & Walker, LLP; Judith Applebaum, vice president and director of employment opportunities, National Women's Law Center; and Gail Shaffer, chief executive officer, Business and Professional Women/USA. Testimony was submitted for the record by Irasema Garza, Director, Women's Bureau, U.S. Department of Labor.

107TH CONGRESS

Senator Thomas Daschle (D-SD) introduced S. 77, the Paycheck Fairness Act, on January 22, 2001. The bill had 32 cosponsors and was referred to the Committee on Health, Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-CT) introduced H.R. 781, the Paycheck Fairness Act, on February 22, 2001. The bill had 196 cosponsors and was referred to the Committee on Education and the Workforce. Once in committee, it was referred to the Subcommittees on Workforce Protections and Employer-Employee Relations. No further action was taken on either bill.

108TH CONGRESS

Senator Thomas Daschle (D-SD) introduced S. 76, the Paycheck Fairness Act, on January 7, 2003. The bill had 20 cosponsors and was referred to the Committee on Health, Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-CT) introduced H.R. 1688, the Paycheck Fairness Act, on April 9, 2003. The bill had 116 cosponsors and was referred to the Committee on Education and the Workforce. The committee referred it to the Subcommittees on Workforce Protections and Employer-Employee Relations. No further action was taken on any bill.

109TH CONGRESS

On April 19, 2005, Congresswoman Rosa DeLauro (D-CT) introduced the Paycheck Fairness Act. The bill had 111 cosponsors and was referred to the Committee on Education and the Workforce. The Committee referred it to the Subcommittees on Workforce Protections and Employer-Employee Relations. The same day that Congresswoman DeLauro introduced her bill, Senator Hillary Rodham Clinton (D-NY) introduced S. 841, the Paycheck Fairness Act. The bill had 18 cosponsors and was referred to the Committee on Health, Education, Labor, and Pensions. No further action was taken on either bill.

110TH CONGRESS

On March 6, 2007, Congresswoman Rosa DeLauro (D-CT) introduced H.R. 1338, the Paycheck Fairness Act. The bill has 230 cosponsors and was referred to the Committee on Education and Labor, where it was referred to the Subcommittee on Workforce Protections. That same day, Senator Hillary Rodham Clinton (D-NY) introduced S. 766, the Paycheck Fairness Act. The bill has 22 cosponsors and was referred to the Committee on Health, Education, Labor, and Pensions.

On Thursday, April 12, 2007, the Senate Committee on Health, Education, Labor, and Pensions held a hearing titled `Closing the Gap: Equal Pay for Women Workers.' The hearing examined enforcement of the Equal Pay Act of 1963, the Fair Pay Act and the Paycheck Protection Act. At the hearing the following people presented testimony: Evelyn Murphy, President, WAGE Project, Inc. and Resident Scholar of the Women's Research Center at Brandeis University; Jocelyn Samuels, Vice President for Education and Employment at the National Women's Law Center; Dr. Philip Cohen, Associate Professor and Director of Graduate Studies for the Department of Sociology at the University of North Carolina; and Barbara Brown, Attorney at Paul Hastings.

On Tuesday, April 24, 2007, the House Committee on Education and Labor conducted a hearing on gender based wage discrimination. At this hearing, `Strengthening the Middle Class: Ensuring Equal Pay for Women,' the Committee heard testimony describing the scope and causes of gender-based wage disparity. 6

[Footnote] Witnesses included: Congresswoman Rosa DeLauro (D-CT); Congresswoman Eleanor Holmes Norton (D-D.C. Del.); Catherine Hill, Research Director for the American Association of University Women; Heather Boushey, Senior Economist at the Center for Economic and Policy Research; Dedra Farmer, Plaintiff in the Wal-Mart sex-discrimination class action lawsuit; and Diana Furchtgott-Roth, Director of the Center for Employment Policy at the Hudson Institute.

[Footnote 6: U.S. Census Bureau, U.S. Bureau of Labor Statistics, Annual Demographic Survey (Aug. 2006).]

On Wednesday, July 11, 2007, the House Labor Subcommittee on Workforce Protections held a legislative hearing on H.R. 1338, `The Paycheck Fairness Act.' The hearing focused on H.R. 1338 and the wage disparity that exists from the moment men and women enter the workforce--a disparity that only grows over time. 7

[Footnote] Witnesses included: Evelyn Murphy, President, WAGE Project, Inc. and Resident Scholar of the Women's Research Center at Brandeis University; Joseph Sellers, Partner with the law firm of Cohen, Milstein, Hausfeld & Toll, PLLC; Marcia Greenberger, Co-President of the National Women's Law Center; and Camille A. Olson, Partner at Seyfarth Shaw, LLP.

[Footnote 7: The Paycheck Fairness Act (H.R. 1338), 110th Congress, 1st Sess. (2007) (opening statement of Congresswoman Lynn Woolsey [D-CA])]

Committee on Education and Labor Full Committee mark-up of the Paycheck Fairness Act

On Thursday, July 24, 2008, the Committee on Education and Labor met for a full committee markup of H.R. 1338. The Committee adopted by voice vote an amendment in the nature of a substitute offered by Chairman Miller and reported the bill favorably as amended by a vote of 26-17 to the House of Representatives.

The Miller amendment incorporates the provisions of H.R. 1338 with the following modifications:

Adds language to the bill's findings section about the EEOC's role in combating gender-based wage discrimination.

Narrows the `any factor other than sex' standard to provide that the bona fide factor defense shall only apply if the employer demonstrates that the such factor is not derived from or based upon a sex-based differential in compensation; is job-related with respect to the position in question; and is consistent with business necessity.

Changes the establishment requirement from a nationwide standard to a countywide standard and further provides that consistent with EEOC rules and guidance, establishment could be broader than county when, for example, there is a central administrative unit making hiring and pay decisions for employees in different locations.

Retains the anti-retaliation protections for employees who discuss or disclose wage information but limits when those protections will extend to employees who have access to payroll information as part of an essential function of their job. These employees, such as payroll and human resources personnel, are not protected if they disclose that payroll information to employees who do not otherwise have access to that information. However, their disclosure of wages will be protected if they: (1) disclose wage information with another employee who also has access to wage information such as their supervisor; (2) disclose their own wages; or (3) disclose wage information in response to or in furtherance of an internal employer or governmental investigation.

Deletes what was originally Section 7 of the bill, which directed the Secretary of Labor to develop voluntary guidelines for employers to evaluate job categories based on characteristics such as skill, education and responsibility.

Additionally, the following amendments were offered but not adopted:

Representative Cathy McMorris Rodgers (R-WA) offered an amendment to the amendment in the nature of a substitute which would have substituted the text of H.R. 6025 for the H.R. 1338. The amendment was ruled to be not germane because it did not deal with the subject matter of the underlying bill, which was to address pay discrimination against women.

Representative Tom Price (R-GA) offered an amendment to the amendment in the nature of a substitute which would have required the Secretary of Labor to conduct a study on how the bill would affect recruitment and hiring by employers. The Price amendment would have delayed implementation of the underlying bill for 90 days while the study was being conducted. The amendment failed by a vote of 17-26.

Representative Price (R-GA) offered a second amendment to the amendment in the nature of a substitute which would have limited the amount of attorneys' fees that could be awarded in a suit brought under the Equal Pay Act. However, attorneys' fees are already limited to only those which are reasonable, and the amendment raised separation of powers issues. The amendment was defeated by a vote of 17-25.

Ranking Member Howard McKeon (R-CA) offered an amendment to the amendment in the nature of a substitute which would have required the Bureau of Labor Statistics to report to Congress on the price of gasoline and its effect on women workers within 90 days of enactment of the bill. Chairman Miller ruled that Ranking Member McKeon's amendment was not germane; Mr. McKeon appealed the Chairman's ruling, and the McKeon appeal was defeated by a vote of 16-25.

SUMMARY

The Paycheck Fairness Act of 2007 updates and strengthens the EPA. Due to weaknesses in the law, the landmark 1963 legislation has not lived up to its original purpose. Women working full-time earned just 58.9 cents to the dollar that men earned when the EPA was passed in 1963. The wage gap has narrowed slightly since then--but persists as a significant problem for American women. Today women on average earn just 77 cents to the dollar that men earn. 8

[Footnote] H.R. 1338 is a critical step forward in the fight to eliminate pay disparity which `depresses wages and living standards for employees necessary for their health and efficiency; prevents maximum utilization of the available labor resources; tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce; and constitutes an unfair method of competition.' 9

[Footnote] Congress has a responsibility to amend the EPA and modernize the law so that it can better achieve its intended purpose.

[Footnote 8: U.S. Bureau of Labor Statistics data on full-time workers, See, Feder & Levine, supra note 4 at 3.]

[Footnote 9: P.L. 88-38.]

H.R. 1338 builds upon the EPA and closes numerous loopholes that have enabled unscrupulous employers to evade liability under the law. The bill strengthens the penalties available under the EPA to include compensatory and punitive damages. The bill prohibits retaliation against workers who discuss or disclose salary information 10

[Footnote] ; it expands the establishment requirement so that an employee can find a comparator at any workplace in the same county; it clarifies that one of the employer affirmative defenses against a disparity in pay must be related to the job in question and consistent with business necessity; and it reforms the class-action standard so that women with claims of unequal pay will automatically be part of a class action lawsuit unless they chose to `opt-out' of the case.

[Footnote 10: Section 3(c) 2 provides that employees who have access to wage information of other employees as part of an essential job junction are not protected if they disclose the wages to workers who do not otherwise have access to such information. These employees' wage disclosures are protected if they disclose those wages to an employee who also has access to that information, disclose their own wages, or disclose wages in the or disclose wages in response to or in furtherance of a government or internal employer investigation.]

The bill also strengthens the role government will play in combating wage discrimination. It accomplishes this by increasing the role of the EEOC and the Department of Labor (DOL). H.R. 1338 authorizes additional training for EEOC staff on recognizing and remedying wage discrimination, requires DOL to collect data and codifies the use of the EO Survey by OFCCP for non-construction contractors. Finally, H.R. 1338 authorizes DOL to award competitive grants to be used for salary negotiation education and training programs for women and girls.

STATEMENT AND COMMITTEE VIEWS

The Committee on Education and Labor is committed to protecting the rights of workers in the workplace. Forty-five years after the passage of the EPA, women continue to earn less than men for the same work. The long-term impact of pay disparity on women's earnings is substantial and can cost a woman anywhere from $400,000 to $2 million over her lifetime. 11

[Footnote] Women have been unable to utilize the protections afforded under the EPA because loopholes and ineffective sanctions have all but paralyzed the law. H.R. 1338 strengthens the EPA to more effectively combat wage discrimination. The bill builds upon Congress' efforts forty-five years ago when the EPA was enacted and is another step forward to close the wage gap between men and women.

[Footnote 11: Institute for Women's Policy Research, Memo to John Roberts: The Gender Gap is Real (2005).]

A. HISTORY OF THE EQUAL PAY ACT

In 1963, Congress first 12

[Footnote] addressed the issue of unequal pay when it passed the EPA as an amendment to the Fair Labor Standards Act (FLSA). 13

[Footnote] The purpose of the legislation was broadly remedial to eliminate once and for all gender-based discriminatory pay practices:

[Footnote 12: There was support for `equal pay' dating back to World War I when the War Board enforced regulations requiring pay equity. See: Elizabeth Wyman, The Current Framework of Sex/Gender Discrimination Law: The Unenforced Promise of Equal Pay Acts: A National Problem and Possible Solution from Maine, 55 Me. L. Rev. 23 (2004). In addition, Congress had considered `equal pay' bills as early as 1955, and the Kennedy and the two previous administrations supported equal pay legislation as well. House Committee on Education and Labor, House Report No. 309 (May 20, 1963) as found in House Committee on Education and Labor, Legislative History of the Equal Pay Act of 1963, U.S. Government Printing Office (December 1963), at 36, 59, 66, 67.]

[Footnote 13: 29 U.S.C. Sec. 206(d).]

The objective of the legislation is to insure that those who perform tasks which are determined to be equal shall be paid equal wages. The wage structure of all too many segments of American industry has been based on an ancient but out moded belief that a man, because of his role in society, should be paid more than a woman even though his duties are the same. This bill would provide, in effect, that such an outmoded belief can no longer be implemented and that equal work will be rewarded with equal wages. 14

[Footnote]

[Footnote 14: Senate Committee on Labor and Public Welfare, Senate Report No. 176 (May 13, 1963) as found in, Legislative History of the Equal Pay Act of 1963, supra note 12 at 42.]

As with minimum wages, overtime and the protection of child laborers, the EPA enshrined `equal work for equal pay regardless of sex' as another fair labor standard in the FLSA. 15

[Footnote] Other versions of equal pay legislation had been introduced in 1963 and before, but because DOL had already developed `a now familiar system of regulations and procedures for investigation, administration and enforcement,' Congress decided that a simple expansion of the FLSA to include pay equity was the `most efficient and least difficult course of action.' 16

[Footnote] Upon introduction of the bill, Senator McNamara stated:

[Footnote 15: Introduction of S. 409, Senator McNamara, House Committee on Education and Labor as found in, Legislative History of the Equal Pay Act of 1963, supra note 12 at 1, 10-11.]

[Footnote 16: Id.]

Such a utilization serves two purposes: First, it eliminates the need for a new bureaucratic structure to enforce equal pay legislation. And second, compliance should be made easier because of both industry and labor's long-established familiarity with existing fair labor standards provisions. 17

[Footnote]

[Footnote 17: Id. See also: House Report 309, as found in Legislative History of the Equal Pay Act of 1963, supra note 12 at 43.]

Some legislators felt that the bill legislation did not go far enough but voted for it because it was `a good start * * * in eliminating the unfairness of unequal pay.' 18

[Footnote]

[Footnote 18: Id,at 66.]

In passing the EPA, Congress intended that `men and women doing the same job under the same working conditions * * * [would] receive equal pay.' 19

[Footnote] Representative Frelinghuysen elaborated on the standard:

[Footnote 19: Comments of Representative Frelinghuysen as found in, Legislative History of the Equal Pay Act, supra note 12 at 43.]

* * * the jobs in dispute must be the same in work content, effort, skill and responsibility requirements, and in working conditions * * * it is not intended to compare unrelated jobs, or jobs that have been historically and normally considered by the industry to be different. 20

[Footnote]

[Footnote 20: Id. at 11.]

At the same time, `equal pay for equal work' did not mean that the jobs in question had to be identical. They were to be similar in terms of `work content, effort, skill and responsibility requirements and in working conditions.' 21

[Footnote]

[Footnote 21: Representative Frelinghuysen, `jobs in dispute must be same in work content, effort, skill and responsibility requirements and in working conditions.' Id. at 83; Representative Powell, citing the International Labor Organization Constitution which provides `men and women should receive equal remuneration for work of equal value.' Id. at 11; Representative Dwyer, referring to the `same kind of work' Id, at 61; Representative Donohue referring to `similar jobs.' Id. at 68; Senator McNamara, `it is not the intent of the Senate that jobs must be identical.' Id. at 91. See also, 29 C.F.R. Sec. 1629.13 defining equal work as work that is `substantially equal.']

In addition, the floor debate made clear that under the EPA, discrimination against one individual would be actionable and a showing of a pattern and practice of discrimination would not be required. Senator McNamara stated:

It is inconceivable that this Congress should write legislation that would permit selective discrimination which, without doubt, would occur mostly likely against those individuals who are least able to protest. It is certainly the intent of the Senate that an employer will have violated this act if he discriminates against one employee, just as he will violate it if he discriminates against many. 22

[Footnote]

[Footnote 22: Id. at 16, 81.]

While the EPA was aimed at eradicating wage differentials based on sex, it was not intended to limit other kinds of pay inequity not based on gender. As such, even though the employee might show that the employer's wages were unequal as compared to a man, the EPA does provide employers with affirmative defenses to justify the differences in pay if such differences are based on: (1) seniority systems; (2) merit systems; (3) systems that measure earnings by quality or quantity of production; or (4) `any factor other than sex.' 23

[Footnote]

[Footnote 23: 29 U.S.C. Sec. 206(d)(1).]

While the last affirmative defense was written broadly, Congress intended that any proffered reason for a pay differential be a bona fide one. In addition, the drafters made sure that the employer was shouldered with the burden of proving the legitimacy of its practice, 24

[Footnote] making clear that these affirmative defenses were never intended to `shield employers who have a plan or system in place that is devised to evade the law.' 25

[Footnote]

[Footnote 24: Legislative History of the Equal Pay Act, supra note 12 at 16.]

[Footnote 25: Id.]

B. EPA, TITLE VII, AND SECTION 1981

On July 2, 1964, President Lyndon Johnson signed the Civil Rights Act of 1964 26

[Footnote] into law. The Act was historic legislation prohibiting discrimination in employment, among other things, on the basis of race, color, religion, national origin and sex. 27

[Footnote] While the EPA and Title VII--passed only one year apart--both prohibit sex discrimination in pay and provide overlapping coverage, there are distinct differences between the application of Title VII and the EPA in sex-based wage discrimination cases. 28

[Footnote]

[Footnote 26: P.L. 88-352.]

[Footnote 27: 42 U.S.C. Sec. 2000e et. seq.]

[Footnote 28: Feder & Levine, supra note 4 at 8. In terms of coverage, under EPA all employees are covered so long as the employer has at least $500,000 in annual revenue. 29 U.S.C. Sec. 203(s)(1)(A)(ii). Under Title VII, employees who work for an employer with fewer than 15 employees will fall outside of Title VII's requirements. 42 U.S.C. 2000e(b).]

Statute of Limitations/Exhaustion of Administrative Remedies: Under the EPA, an aggrieved person has 2 years (or 3 years in a case of a willful violation) from the date of any instance of unequal pay to file a claim in court. 29

[Footnote] Under Title VII, a worker must file her claim within 180 days of a violation. 30

[Footnote] Specifically, following the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Company, Inc., 31

[Footnote] in cases of pay discrimination, she must file her charge within 180 days of the employer's decision to pay her a salary based on sex (rather than, as long-standing law had held, 180 days after each discriminatory paycheck).

[Footnote 29: 29 U.S.C. Sec. 255.]

[Footnote 30: 42 U.S.C. Sec. 2000e-5(e)(1). This deadline is extended to 300 days if the charge is also covered by a state or local antidiscrimination law. Id.]

[Footnote 31: 127 S. Ct. 2162 (2007).]

Burden of Proof: When alleging discrimination under the EPA, an employee is required to show that a man and a woman working in the same establishment and doing substantially the same job are receiving unequal pay. However, she does not bear the burden of proving that the employer intentionally committed wage-based gender discrimination. Once the employee has made a showing of unequal pay, the burden of proof shifts to the employer to show that the pay inequity is not due to gender discrimination. 32

[Footnote]

[Footnote 32: `Overview of the Equal Pay Act,' AAUW.Www.aauw.org/advocay/laf/lafnetwork/library/payequity Xepa.efm.]

By contrast, under Title VII a plaintiff must typically prove that the employer intentionally discriminated against her, and she retains the burden of proving discrimination throughout the case. However, unlike an EPA complainant, a Title VII plaintiff is not required to demonstrate that she performed substantially the same (or equal) work as higher paid males, so long as she has other evidence of discrimination such as proof that a man worked fewer hours or evidence that she would have been paid more had she been a man. 33

[Footnote]

[Footnote 33: Id.]

Damages: A plaintiff who successfully proves wage discrimination under the EPA can only recover backpay, and unless the employer can show that it acted in good faith, an equal amount in liquidated damages. 34

[Footnote] Conversely, under Title VII a plaintiff is entitled to backpay, compensatory damages, 35

[Footnote] as well as punitive damages 36

[Footnote] for `intentional' wage discrimination. 37

[Footnote] Title VII damages compensatory and punitive damages do have monetary `caps,' which vary depending on the size of the employer. 38

[Footnote] However, in no event may these damages exceed $300,000. 39

[Footnote]

[Footnote 34: 29 U.S.C. Sec. 216.]

[Footnote 35: Feder & Levine, supra note 4 at 6, which state that compensatory damages include such items as pain and suffering, medical expenses and emotional distress.]

[Footnote 36: Id. Punitive damages may be recovered when the employer acted with malice or reckless indifference.]

[Footnote 37: Id.]

[Footnote 38: Id.]

[Footnote 39: Id.]

Section 1981: While it does not cover sex-based discrimination, Section 1981 is worth comparing as well. Passed as part of the Civil Rights Act of 1866, Section 1981 forbids discrimination on the basis of race or national origin in the making and enforcement of contracts. 40

[Footnote] Such contracts may be between employee and employer or between businesses. Plaintiffs in Section 1981 cases may recover compensatory and punitive damages. But, unlike Title VII, those damages are not limited. Under current law, an employee receiving unequal pay for equal work on the basis of race may recover punitive damages without an arbitrary statutory limit, for example, but one receiving unequal pay on the basis of sex cannot.

[Footnote 40: 42 U.S.C. 1981(a).]

C. WOMEN CONTINUE TO EARN LESS THAN MEN

While progress has been made, `equal pay for women is not yet a reality in our country.' 41

[Footnote] As previously noted a woman working full-time, year-round earns 77 cents for every dollar a male earns. 42

[Footnote] Pay disparity can be even worse for minority women. Compared to men, African American women earn 66 cents to the dollar; Latinas earn 55 cents to the dollar; and Asian-American women earn slightly more than 80 cents to the dollar. 43

[Footnote] Each year, pay inequity causes American families to lose $200 billion in income, resulting in an annual loss to each working woman's family of more than $4,000. 44

[Footnote]

[Footnote 41: Closing the Gap: Pay Equity for Women Workers, Hearing Before the U.S. Senate Health, Education, Labor and Pensions Committee Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Jocelyn Samuels, Vice President for Education and Employment, National Women's Law Center, at 1) [Hereinafter Samuels' Testimony].]

[Footnote 42: Supra note 6.]

[Footnote 43: Perspectives on Wage Inequality and Workplace Solutions, Hearing Before the Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Business and Professional Women/USA and Business and Professional Women's Foundation at 4) (Hereinafter Business and Professional Women's Testimony).]

[Footnote 44: Equal Pay for Working Families, National and State Data on the Pay Gap and Its Costs, A Joint Research Project of the AFL-CIO and the Institute for Women's Policy Research at 1 (1999).]

In April 2007, the American Association of University Women (AAUW) released a study finding that not only do men earn more than women at the outset of their careers, but the wage gap grows wider as women age. 45

[Footnote] Women one year out of college make 80 percent of what men earn, and 10 years later, make only 69 percent. 46

[Footnote] As compared to men with only a high school diploma, women with graduate degrees earn only slightly more ($41,995 compared to $40,822). 47

[Footnote]

[Footnote 45: Judy Goldberg Day and Catherine Hill, Behind the Pay Gap, Association of American University Women (AAUW) (April 23, 2007).]

[Footnote 46: Id.]

[Footnote 47: Business and Professional Women's Testimony at 3.]

Many argue that the wage gap is the result of `women's choices,' including the choice of college major and occupation. 48

[Footnote] However the AAUW study found that different choices do not fully explain the pay gap:

[Footnote 48: Strengthening the Middle Class: Ensuring Equal Pay for Equal Work, Hearing Before the Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Heather Boushey, Senior Economist at the Center for Economic and Policy Research, at 1) [hereinafter Boushey Testimony].]

[AAUW's] analysis showed that men and women's different choices can explain only some of the wage gap. After controlling for factors like experience, educational attainment, enrollment status, GPA, institution selectivity, age, race/ethnicity, region, marital status and children, a five percent difference in the earnings of male and female college graduates is unexplained. It is reasonable to assume that this difference is the product of discrimination.

Furthermore, AAUW's analysis showed that in almost every field in which women work, those working full-time earn less than men, although the size of the gap varies. 49

[Footnote] Controlling for this similar set of factors, ten years after graduation there is a twelve percent difference in the earnings of recent male and female college graduates that is unexplained and attributable only to gender. 50

[Footnote] The General Accounting Office (GAO) in a 2000 study came to a similar conclusion and found that women on average earn only 80 percent of what men earn, even after considering factors that can impact earnings such as marital status, race, children and income, work patterns such as experience and hours worked. 51

[Footnote] The 20 percent pay gap between men and women was unexplained. 52

[Footnote]

[Footnote 49: Strengthening the Middle Class: Ensuring Equal Pay for Equal Work, Hearing Before the Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Catherine Hill, Research Director at the American Association of University Women, at 1) [hereinafter Hill Testimony].]

[Footnote 50: Id. at 4.]

[Footnote 51: United States General Accounting Office, Women's Earnings: Work Patterns Partially Explain Difference Between Men's and Women's Earnings, GAO-04-35 (Oct. 2003).]

[Footnote 52: Id.]

Pay disparity increases and follows women throughout their careers. A Carnegie Mellon University study 53

[Footnote] found that male students who graduated with masters degrees earned starting salaries approximately $4,000 higher than their female counterparts. Professor Deborah Brake offered this example in her testimony before the Committee: if a 22-year-old man initially earns $30,000 and the female earns $25,000 and they receive identical 3-percent annual raises, the pay gap would widen to $15,000 by the time the workers reach 60, with a total difference of $361,171 over their employment lives. If the male earns 3-percent annual interest on the difference, the total disparity would be $568,834. 54

[Footnote] Moreover, this pay gap not only impacts women's annual earnings but also has a significant impact on her retirement savings, including employer pension plans, percentage-based employer contributions to retirement savings plans and even Social Security. 55

[Footnote]

[Footnote 53: Linda Babcock and Sara Laschever, `Women Don't Ask: Negotiations and the Gender Divide' (2003). See also, The Lilly Ledbetter Fair Pay Act of 2007, Hearing Before the Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Deborah Brake, Law Professor at the University of Pittsburgh Law School, at 2) [hereinafter Brake Testimony].]

[Footnote 54: Brake Testimony, at 2.]

[Footnote 55: Id.]

The wage gap is a threat to this country's middle class and the loss of women's income represents a `huge loss to the economy in unrealized consumption and investment, as well as reduced tax revenues to governments at all levels.' 56

[Footnote] With seventy percent of all mothers in the labor force, 57

[Footnote] and with married mothers typically providing over one-third of the family income, 58

[Footnote] now more than ever, women's participation in the labor market is necessary for families to survive. 59

[Footnote] While more families have a working wife, family income has failed to grow as much as it did in the decades just after World War II. 60

[Footnote] Prior to the early 1970's, a married-couple's family income grew by 3 percent per year on average and income growth was about the same for families with and without a working wife. However, since then, income for married-couple families without a working wife grew at an annual average rate of just 0.1 percent, while the income growth for families with a working wife grew by less than one-percent. 61

[Footnote]

[Footnote 56: Id.]

[Footnote 57: Boushey at 3. Id. at 5.]

[Footnote 58: Boushey Testimony, at 4. See also, Bureau of Labor Statistics 2005.]

[Footnote 59: Id.]

[Footnote 60: Id.]

[Footnote 61: Id. at 4-5.]

a. Pay discrimination is difficult to detect

In today's workplace, pay discrimination is often extremely difficult to detect: `Unlike most personnel actions, the results of which are readily evident to many employees, the levels of compensation paid to an employee are rarely known to co-workers.' 62

[Footnote] Employees typically do not have access to information which would raise a suspicion of pay discrimination, and workplaces often discourage, if not outright prohibit, discussions between employees about salaries. 63

[Footnote] As Justice Ginsburg observed in Ledbetter v. Goodyear Tire & Rubber Co., `comparative pay information * * * is often hidden from the employee's view.' 64

[Footnote] Employee compensation is regularly kept confidential by employers and may only be known by the individual employee, payroll staff and manager(s). 65

[Footnote] In addition, many employers have policies prohibiting salary discussions. 66

[Footnote] One-third of private sector employers have adopted specific rules prohibiting employees from discussing their wages with co-workers. 67

[Footnote] Only one in ten employers has adopted a pay openness policy. 68

[Footnote] Finally, for those employees who do know what their colleagues earn, they often lack information about the contributing factors that might influence pay levels, including performance, education and/or training.

[Footnote 62: The Paycheck Fairness Act, H.R. 1338, Hearing Before the Education and Labor Committee, Subcommittee on Workforce Protections, 110th Cong. 1st Sess. (written testimony of Joseph M. Sellers, Cohen Milstein, Hausfeld & Toll PLLC at 15). [Hereinafter Sellers Testimony].]

[Footnote 63: Id.]

[Footnote 64: Ledbetter v. Goodyear Tire & Rubber Co., 127 S.Ct. 617 (2007) (Ginsburg, J. dissenting). See also, Sellers Testimony at 15.]

[Footnote 65: Sellers Testimony.]

[Footnote 66: Id.]

[Footnote 67: The Lilly Ledbetter Fair Pay Act of 2007, Hearing Before the Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written testimony of Wade Henderson, President and CEO of the Leadership Conference on Civil Rights, at 3) [hereinafter Henderson Testimony].]

[Footnote 68: Id.]

Pay discrimination is rarely accompanied by circumstances suggestive of gender discrimination. 69

[Footnote] Disparate pay might not begin with a woman's initial salary determination but can readily develop with a decision to increase the pay of male colleagues. While employees are normally aware of which employees receive promotions, they are less likely to know when colleagues receive a pay raise. 70

[Footnote] For example, an employee who receives a three-percent raise would have no reason to suspect pay discrimination when she does not know about the raises her colleagues earn. 71

[Footnote]

[Footnote 69: Brake Testimony at 4.]

[Footnote 70: Id.]

[Footnote 71: Id. at 5.]

Discussions about wages are necessary to identify pay disparity, `absent ready access to the pay levels of their co-workers and the factors that led to those pay levels, most employees lack the knowledge needed to make a viable claim of pay discrimination under the EPA.' 72

[Footnote] Once a lawsuit is filed, discovery of wage data is available to help aggrieved employees develop their case; however, in order to learn more about employee salaries, however women need to have some basis to file suit in the first place. However, because employees lack knowledge about pay levels and the reasons behind different employer pay decisions `only a small percentage [of claims] make specific allegations of pay discrimination.' 73

[Footnote]

[Footnote 72: Sellers Testimony at 16.]

[Footnote 73: Sellers Testimony. See also, Equal Employment Opportunity Commission, EEOC Litigation Statistics FY 1997 to FY 2006, Available at http: www.eeoc.gov/stats/litigation.html (out of 403 suits filed in 2006, only 10 included EPA claims).]

b. Lack of data on pay disparity

Data collection is a critical component understanding what is really happening with women's wages workplace. In addition, sufficient data about pay discrimination is an invaluable tool for those agencies--such as the EEOC and the OFCCP--charged with enforcing employment discrimination laws such as the EPA. However, experts agree that these agencies have minimal information about gender-based disparities in pay. 74

[Footnote] Additionally, the Bush Administration has halted (or attempted to halt) many of the data collection initiatives already in place for collecting information about women and men's wages.

[Footnote 74: The Paycheck Fairness Act, H.R. 1338, Hearing Before the Education and Labor Committee, Subcommittee on Workforce Protections, 110th Cong. 1st Sess. (written testimony of Evelyn Murphy, President of the WAGE Project) [hereinafter Murphy Testimony]. The Paycheck Fairness Act, H.R. 1338, Hearing Before the Education and Labor Committee, Subcommittee on Workforce Protections, 110th Cong. 1st Sess. (written testimony of Marcia Greenberger, Co-President of the National Women's Law Center) [hereinafter Greenberger Testimony].]

Bureau of Labor Statistics (BLS) Employment Statistics: For over forty years, BLS has been collecting data on female workers and comparing them to their male counterparts. This data has formed the basis for its monthly report on the employment situation. 75

[Footnote] In 2005 BLS stopped collecting this data, citing employer inconvenience. 76

[Footnote] In response, Congress passed (and the President signed into law) the 2006 Labor HHS appropriations bill, 77

[Footnote] which contained a provision mandating BLS to continue to collect data on women workers. 78

[Footnote] This language was retained for FY07 through a continuing resolution 79

[Footnote] and is also part of the 2008 Labor-HHS Appropriations bill passed by both the House and Senate but vetoed by the President. 80

[Footnote]

[Footnote 75: BLS Plans to Drop Data on Women From Payroll Survey Creates `Firestorm', BNA Daily Labor Report (March 7 2005).]

[Footnote 76: `BLS has found that employers often to not have gender information in the same place they have earnings information.' Statement of Commissioner Kathleen Utgoff, supra note 76.]

[Footnote 77: PL-109-149 (December 2006).]

[Footnote 78: The 2007 Labor-HHS appropriations bill was passed as part of a Continuing Resolution, and this provision went unchanged. The provision is contained in the 2008 Labor-HHS Appropriations bill passed by both the House and Senate but vetoed by the President.]

[Footnote 79: H.J. Res.20, which then became P.L. 110-5 on February 15, 2007.]

[Footnote 80: H.R. 3043.]

Recognizing the value of collecting these statistics, the Paycheck Fairness Act requires BLS to continue to gather these statistics.

Equal Employment Opportunity Commission (EEOC): The EEOC was created by the Civil Rights Act of 1964, and was given litigation enforcement authority in 1972. 81

[Footnote] Experts agree that enhanced data collection by the EEOC, whose mission is to eliminate unlawful employment discrimination by the enforcement of anti-discrimination laws, is essential. 82

[Footnote] The Paycheck Fairness Act requires the EEOC to survey existing data and determine what additional data is needed to enhance enforcement of the law.

[Footnote 81: EEOC, 35 Years of Ensuring the Promise of Opportunity, available at: http://www.eeoc.gov/abouteeoc/35th/history/index.html]

[Footnote 82: National Women's Law Center, Comment Letter on Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors; Equal Opportunity Survey (March 28, 2006) (letter on file with author).]

Office for Federal Contract Compliance programs (OFCCP): OFCCP is unique in that it is required by law to affirmatively conduct reviews to ensure that contractors with federal contracts are in compliance with equal employment measures, including Executive Order 11246, which prohibits discrimination in employment on the basis of race, color, religion, national origin and gender. About one-fifth of the labor force works for an employer who contacts with the federal government. 83

[Footnote]

[Footnote 83: Id.]

Equal Opportunity Survey: The EO Survey was developed over three Administrations to ensure nondiscrimination in federal employment. It was intended to track employment data and to improve the enforcement of anti-discrimination requirements--including gender-based wage discrimination--of federal contractors. 84

[Footnote] Prior to the EO survey, OFCCP conducted targeted compliance reviews. Because of limited resources, OFCCP only reviews approximately four percent of contractors each year. 85

[Footnote]

[Footnote 84: Id.]

[Footnote 85: Id. at 2.]

The EO Survey was designed to enable OFCCP to be far more effective in detecting and remedying wage discrimination and in encouraging self-awareness and self-evaluation among contractors as a means of increasing compliance. 86

[Footnote] It was developed to query employers on an annual basis (to be eventually sent to at least one-half of all contractors each year) about their affirmative action program activities, their personnel actions (e.g. hires and promotions) and their compensation of full-time employees, all aggregated by job group, race and gender. 87

[Footnote]

[Footnote 86: Id.]

[Footnote 87: Id.]

The first survey was sent out in 2000 during the Clinton Administration, but the Bush Administration which took office soon after, did not take any action on the surveys that were returned and did not follow-up on those surveys that were not returned. 88

[Footnote] In 2003 and 2004, it sent out fewer and fewer surveys until 2005, when it failed to send out any at all. In January 2006, the OFCCP proposed eliminating the EOC survey altogether. 89

[Footnote] The Paycheck Fairness Act would codify this very important enforcement tool for the OFCCP.

[Footnote 88: Id.]

[Footnote 89: 71 Fed. Reg. 3373 (Jan. 20, 2006).]

Standards in Conducting Systematic Wage Discrimination Analysis: As a way of measuring more effectively whether or not employers were engaged in gender-based wage discrimination, the Clinton Administration developed a methodology to be used in the OFCCP's compliance reviews. The OFCCP asked employers to provide data on its pay levels (or pay grades), and then using the data, compared wages based on race, ethnicity and gender. If there were any pay disparities, the OFCCP requested employers to correct them.

Generally, employers were not supportive of this analysis, arguing that differences in wages between men and women did not necessarily prove that they were engaging in gender-based discrimination. As a result, the Bush Administration published a formal guidance document that expressly prohibited OFCCP from using a `pay grade' analysis in conducting its compliance reviews. Under this guidance, OFCCP is required to conduct time-consuming analyses, including the gathering of anecdotal evidence before determining that a contractor is engaging in wage discrimination. 90

[Footnote]

[Footnote 90: 71 Fed. Reg. 35124 (June 16, 2006).]

The Paycheck Fairness Act acknowledges that the `pay grade' analysis is a useful tool (even if it does not prove wage discrimination, it indicates some evidence of it), and simply provides that OFCCP, ought to be allowed to use it, along with other tools, when performing compliance reviews. This section does not impose the `pay grade' methodology as the sole means the OFCCP can use in determining if contractors for federal contracts are in compliance, but encourages its use in conjunction with other tools.

c. Women are less likely to negotiate

Further contributing to the wage gap is the failure of high numbers of women to negotiate for higher salaries and promotions: `most women hardly negotiate when they get a job offer * * * because they look at the offer as the goal, not the beginning of a relationship.' 91

[Footnote] While negotiation is a contributing factor to the wage gap, it does not justify gender-based pay discrimination. As the Supreme Court noted: `Congress enacted the Equal Pay Act * * * recognizing the weaker bargaining position of many women and believing that discrimination in wage rates represented unfair employer exploitation of this source of cheap labor.' 92

[Footnote]

[Footnote 91: Pallavi Gogoi, For Women, a Failure to Negotiate, Business Week (April 22, 2005) (quoting Lee E. Miller, co-author of A Woman's Guide to Successful Negotiation).]

[Footnote 92: Corning Glass Works v. Brennan, 417 U.S. 188, 206 (1974)(citing the 2nd Circuit decision, 474 F.2d 226, 234 (1973).]

Researchers have found there are several reasons women fail to negotiate for themselves in the workplace. 93

[Footnote] Women often do not promote their own interests, choosing instead to focus on others and believing that employers will recognize and reward them for good work. In addition, the culture in many workplaces ostracizes women who are ambitious and advance themselves. A study 94

[Footnote] conducted by Harvard University and Carnegie Mellon University examined the starting salaries of MBA men and women who recently graduated from top business schools. Researchers noted that there was no difference between the salaries negotiated by men and women in jobs where `compensation standards were relatively clear to potential hires.' 95

[Footnote] However, in jobs where salaries were not clear, `male MBAs negotiated salaries that were $10,000 higher, on average, than those negotiated by female MBAs.' 96

[Footnote]

[Footnote 93: Linda Babcock, Nice Girls Don't Ask, Harvard Business Review (Oct. 2003).]

[Footnote 94: Dina W. Pradel, Hannah Riley Bowles and Kathleen McGinn, When Gender Changes the Negotiation, Harvard Business School (Feb. 13, 2006).]

[Footnote 95: Id.]

[Footnote 96: Id.]

The wage gap which occurs with the initial salary remains with a female worker throughout her career; over a 30-year career with an annual 3 percent raise, a woman loses $600,000. 97

[Footnote] The study did find, however, that women tend to be more successful when negotiating on behalf of others. Put in the position of negotiating for another employee, women were able to secure compensation that was 18 percent greater than what they negotiated for themselves. 98

[Footnote]

[Footnote 97: Id.]

[Footnote 98: Id.]

Researchers concluded that the hesitation women have in advocating for themselves is not unreasonable. Women who initiate negotiations with their employer are responded to differently than men, and `both men and women were likely to subtly penalize women who asked for more * * * ' 99

[Footnote]

[Footnote 99: Shankar Vedantam, Salary, Gender and the Social Cost of Haggling, WASH. POST (July 30, 2007) at A07.]

While all employees have an economic incentive to negotiate, women are more likely to consider the risk involved and `those risks are higher for women than for men.' 100

[Footnote] Employers have a responsibility to ensure that men and women are compensated equally for equal work. Consequently, if a man asks for a raise or negotiates a higher salary during the hiring process, women who perform the same or a substantially similar job should have their compensation levels adjusted accordingly. Furthermore, programs must be created to help strengthen the negotiation skills of girls and women. Linda Babcock one of the authors of the Carnegie Mellon study has begun a pilot project with the Girl Scouts creating a new `badge' for negotiation. This project seeks to help girls learn negotiating by observing adults, practicing themselves and teaching negotiation skills to others. 101

[Footnote] H.R. 1338 authorizes the Secretary of Labor to award competitive grants aimed at training girls and women on negotiation skills, an important tool in ending gender-based wage discrimination.

[Footnote 100: Id.]

[Footnote 101: `PROGRESS and Girl Scouts Create New Badge to Teach Negotiation Skills,' available at: http://www.heinz.cmu.edu/whatsnew/archives/2006/girl--scouts.html (last visited July 22, 2008).]

D. THE EQUAL PAY ACT HAS BEEN INEFFECTIVE IN ERADICATING PAY DISPARITY

A plaintiff raising a claim under the EPA carries a heavy burden of proof in establishing a case for gender-based discrimination. To make out a prima facie case, she must not only show that a pay disparity exists between employees of the same `establishment,' but she must also identify specific employees of the opposite sex holding equal positions who were paid higher wages. 102

[Footnote] Courts will look to whether the work between the plaintiff and her comparator(s) was `equal or substantially equal * * * considering such factors as skill, effort, responsibility and working conditions.' 103

[Footnote]

[Footnote 102: Greenberger Testimony at 5.]

[Footnote 103: Sellers Testimony at 3.]

While a plaintiff does not have to demonstrate the work was identical, she has to show that it is somewhere between similar and identical. As such, the meaning of `equal work' has generated significant uncertainty about what a woman must demonstrate when comparing herself to a co-worker in order to satisfy this standard. 104

[Footnote] Courts often compare `superficial features of the jobs and overlook fundamental similarities that are masked by trivial differences.' 105

[Footnote]

[Footnote 104: Id.]

[Footnote 105: Id. at 4.]

In addition, the courts have tended to define `equal work' very strictly despite the clear intent of Congress that the EPA be remedial and that `equal work' means similar not identical. 106

[Footnote] In her testimony before the House Subcommittee on Workforce Protections, Marcia Greenberger, co-president of the National Woman's Law Center cited Angelo v. Bacharach Instrument Company 107

[Footnote] as one of many examples. In that case female `bench assemblers' in light assembly alleged that they were paid less than men who were classified as `heavy assemblers.' An engineering expert testified--along with the women--that the jobs were substantially the same in terms of `skill, effort and responsibility.' Despite this, the court held that the jobs were comparable but not equal. 108

[Footnote]

[Footnote 106: Wyman, supra note 12, See also, Greenberger Testimony.]

[Footnote 107: 555 F2d 1164 (3rd Cir. 1977).]

[Footnote 108: Id. See as well: Noel v. Medtronic Electromedics, Inc., 973 F. Supp 1206 (Dist. Co. 1997), where a plaintiff failed to prove her prima facie case (substantial identity of job functions) when she showed that some but not all of her and her male comparator's job functions were identical.]

a. Establishment

The EPA states that to assert a claim, a plaintiff must find a male comparator within the same physical location is paid more; and courts have interpreted this provision strictly. 109

[Footnote] Plaintiffs must `demonstrate that pay disparity exists between employees in the same `establishment'--that is, a distinct physical place of business rather than * * * an entire business or `enterprise' which may include several separate places of business.' 110

[Footnote] This means that an employer who has two stores in nearby towns can legally pay the male manager in store A more than female manager in store B despite the fact that they do the exact same job.

[Footnote 109: Meeks v. Computer Ass'n Int'l, 15 F. 3rd 1013, 1017 (courts presume that multiple offices are not a single establishment unless unusual circumstances are demonstrated.)]

[Footnote 110: Samuels Testimony at 5 (citing Meeks v. Computer Ass'n Int'l, 15 F.3d at 232).]

The establishment requirement contributes to the difficulty that plaintiffs face when asserting an EPA claim. It limits the ability of women to bring an EPA claim, since many times, women might not have a true comparator in their physical workplace. Today's employers are much different than they were forty-five years ago when the EPA was first enacted. Many have multiple facilities at which the same jobs are performed, and some locations may have only one person in a certain position (i.e. manager, or supervisor).

The establishment requirement has particularly inhibited the ability of women who occupy higher level positions in the workplace to assert an EPA claim. In these cases, employers have been able to successfully assert that women in higher-level positions have unique job duties and therefore have no comparator in the same establishment. 111

[Footnote] In fact, as one commentator noted, women in `administrative, managerial and executive positions have experienced a high rate of dismissal of their EPA claims because their jobs are more easily viewed as unique and therefore lack an appropriate comparator.' 112

[Footnote]

[Footnote 111: Sellers Testimony at 15. (citing Juliene James, The Equal Pay Act in the Courts: A De-Facto White-Collar Exemption, 79 N.Y.U.L. REV. 1873 (2004)).]

[Footnote 112: Id.]

This is clearly illustrated by the court's decision in Georgen-Saad v. Texas Mutual Insurance Company. 113

[Footnote] In that case, the complainant was a senior vice-president of finance who was being paid less than the other senior-vice presidents in the company. The court rejected the Georgen-Saad's claim that any of the positions required `equal skill, effort and responsibility,' and elaborated:

[Footnote 113: 195 F. Supp. 2d 853 (W.D.Tex. 2002).]

According to Defendant, there are no male comparators working in a position requiring equal skill, effort, and responsibility under similar working conditions. The Court agrees. The sealed exhibits filed with Defendant's Motion for Summary Judgment include job descriptions for the Senior Vice Presidents of Investments, Insurance Services, Underwriting Services, Underwriting and Policy Holder Services, Public Affairs, Internal Audit, Benefits/Loss Prevention, Administration, Data Processing Services, and Branch Operations/Marketing.

The assertion that any one of these jobs requires `equal skill, effort, and responsibility' as Plaintiff's Senior Vice President of Finance position cannot be taken seriously. These are Senior Vice Presidents in charge of different aspects of Defendant's operations; these are not assembly-line workers or customer-service representatives. In the case of such lower-level workers, the goals of the Equal Pay Act can be accomplished due to the fact that these types of workers perform commodity-like work and, therefore, should be paid commodity-like salaries. However, the practical realities of hiring and compensating high-level executives deal a fatal blow to Equal Pay Act claims. 114

[Footnote]

[Footnote 114: Id. at 856.]

In 1986, the EEOC issued regulations interpreting the definition of establishment under the EPA. 115

[Footnote] The regulation in part provides that an establishment can encompass more than a single physical establishment when the employer has a central administrative unit charged with making salary and employee decisions. In Grumbine v. United States 116

[Footnote] the Court held that for purposes of the EPA, `the establishment' was the Civil Service in its entirety and that a woman could not be paid less than a man merely because she worked in a different location.' 117

[Footnote]

[Footnote 115: 29 C.F.R. 1620.9 provides: (a) Although not expressly defined in the FLSA, the term `establishment' had acquired a well settled meaning by the time of enactment of the Equal Pay Act. It refers to a distinct physical place of business rather than to an entire business or `enterprise' which may include several separate places of business. Accordingly, each physically separate place of business is ordinarily considered a separate establishment. (b) In unusual circumstances, two or more portions of a business enterprise, even though located in a single physical place of business, may constitute more than one establishment. For example, the facts might reveal that these portions of the enterprise are physically segregated, engaged in functionally separate operations, and have separate employees and maintain separate records. Conversely, unusual circumstances may call for two or more distinct physical portions of a business enterprise being treated as a single establishment[emphasis supplied]. For example, a central administrative unit may hire all employees, set wages, and assign the location of employment; employees may frequently interchange work locations; and daily duties may be virtually identical and performed under similar working conditions. Barring unusual circumstances, however, the term "establishment" will be applied as described in paragraph (a) of this section.]

[Footnote 116: 586 F.Supp. 1144 (D.C. 1984). Note, the U.S. Claims Court in Molden v. U.S., 11 Cl.Ct. 604 (1987) distinguished the D.C. court's application of establishment nationwide. It stated that: `Grumbine adopted an evaluation on a nationwide basis in order to give effect to the legislative purpose of providing equal pay for equal work. In contrast, defendant has acknowledged in the case at bar that plaintiffs have demonstrated equal skill, effort, and responsibility with other employees in the two Chicago offices.' As a result `there [was] no need to expand the definition of an `establishment' to include the Civil Service in its entirety as in Grumbine.']

[Footnote 117: Id.]

The plaintiff in Grumbine was a Regional Counsel of Customs Service working in Baltimore, Maryland and was the only female among the nine Regional Counsels. The counsels were spread out among nine regions; however the eight males were paid more than the one female counsel. Consequently, the plaintiff raised a claim of pay discrimination under the EPA. The government argued that the Regional Counsels each worked in different `establishments' for purposes of the EPA. The court rejected this defense and found: 118

[Footnote] `It would hardly make sense to permit an employer to rely on geographic `establishment' concept in defense of an equal pay practice when that employer has itself adopted a uniform, non-geographic pay policy and system.' 119

[Footnote]

[Footnote 118: Id.]

[Footnote 119: Id. at 1148.]

Courts apply the EEOC regulation to apply establishment can include more than one physical location. In 2000, a court 120

[Footnote] held that a female district sales manager in the Dallas/Fort Worth facility could compare herself other district sales managers in the State of Texas for purposes of the plaintiff's EPA claim. The plaintiff in the case had no comparator in her physical establishment. As a result, the court reasoned that limiting her comparators to a single physical establishment `would effectively permit a large employer with national operations to exempt its managerial staff (each of whom is in charge of a single facility) from the reach of the EPA.' 121

[Footnote] The 5th Circuit held that a school district with 182 schools was a single establishment for purposes of an EPA claim 122

[Footnote] as were thirteen elementary schools operated by a single school district near Houston Texas. 123

[Footnote]

[Footnote 120: Vickers v. Intern'l Baking Co., 2000 U.S. Dist. LEXIS 17995 (N.D. Tex.).]

[Footnote 121: Id. at *15.]

[Footnote 122: Marshall v. Dallas Indep. Sch. Dist., 605 F.2d 191, 194 (5th Cir. 1979).]

[Footnote 123: 519 F.2d 53 (5th Cir. 1975).]

Numerous courts have recognized that there is a trend in the law interpreting `establishment' to include all places of business of one corporation or a multi-employer. 124

[Footnote] Under these circumstances the courts have recognized that accountability flows from the decision making structure. It is clear that the single-location establishment interpretation is an unworkable standard in today's workplace and threatens to eliminate a large number of women from the Act's protections.

[Footnote 124: Brownlee v. Gay & Taylor Inc., 642 F.Supp. 347, 350 (D. Kan. 1986); Vickers v. Intern'l Baking Co., 2000 U.S. Dist. LEXIS 17995 (N.D. Tex.).]

Recognizing that the single-site establishment has limited women's ability to assert an EPA claim, H.R. 1338 expands where a worker can look to find a comparator. Under the bill, a woman can look to a similarly situated male co-worker anywhere in the same county or similar political subdivision of a state. Workplaces in the same county operate under the same cost of living and labor market conditions. County-wide comparisons are already the law in Illinois under the state's Equal Pay Act. 125

[Footnote] However, consistent with EEOC rules and guidance, including 29 CFR 1620.9, the bill does not restrict courts from applying establishment more broadly than county.

[Footnote 125: ILL. 93rd G.A., P.L. 93-6]

b. Any factor other than sex

Under the EPA, employers can affirmatively defend and justify unequal pay if it is based on: (1) seniority systems; (2) merit systems; (3) systems that measure earnings by quality or quantity of production; or (4) `any factor other than sex.' 126

[Footnote] Historically, courts have interpreted the `any factor other than sex' criteria so broadly that it embraces an almost limitless number of factors, so long as they do not involve sex. 127

[Footnote] Consequently, it is the fourth affirmative defense that has posed the `greatest problems for women pressing an EPA claim,' 128

[Footnote] and employers have been able to prevail in these cases by asserting a range of `other than sex' factors.

[Footnote 126: 629 U.S.C. Sec. 206(d)(1).]

[Footnote 127: See for example: Fallon v. Ill, 882 F. 2d 1206 (7th Cir. 1989); AAUW supra note 34.]

[Footnote 128: Wyman, supra note 12 at34.]

Moreover, there is no consensus among the circuit courts as to whether a factor other than sex under the EPA needs to be business related, and the Supreme Court has failed to resolve this issue. It denied certiorari in the case of Randolph Cent. Sch. Dist. v. Aldrich 129

[Footnote] with three justices dissenting and acknowledging the conflict among the circuits. 130

[Footnote]

[Footnote 129: 506 U.S. 965 (1992).]

[Footnote 130: Id.]

To the detriment of an effective Equal Pay Act, many courts have found that the `factors other than sex' need not be business-related or even related to the particular position in question. In addition, employers are able to successfully raise factors such as market forces and prior salaries (even if they are based on a discriminatory wage) that in themselves undermine the goals of the Equal Pay Act. 131

[Footnote] Marcia Greenberger explains:

[Footnote 131: Corning Glass Works 417 U.S. 188 (1974); Greenberger Testimony at 6.]

Cases such as these undermine both the spirit and analytical approach of the Equal Pay Act. What was intended to be an affirmative defense for an employer--a defense that demands that the employer carry the burden of proving that its failure to pay equal wages for equal work is based on a legitimate reason--has instead been converted by these courts into a requirement merely that an employer articulate some obstensibly nondiscriminatory basis for its decisionmaking. Because their basis can so easily mask criteria that are at bottom based on sex, the courts' failure to engage in searching analysis circumvents the burden Congress intended employers to bear. 132

[Footnote]

[Footnote 132: Greenberger Testimony at 6-7.]

To ensure a broadly remedial statute, designed to eradicate the gender pay gap for women and men performing equal work, the Equal Pay Act's affirmative defense of a factor other than sex must be clarified to require that the factor be job-related, not derived or based upon a sex-based differential, and consistent with business necessity. A review of court cases reveals the loopholes that these reforms would fix.

Job-Relatedness: In Boriss v. Addison Farmers Insurance Co., 133

[Footnote] the plaintiff brought an EPA claim alleging that in the ten years she worked for the employer as an underwriter, she was paid less than her male colleagues while performing substantially equal work. When comparing the plaintiff to three of her male colleagues, the employer alleged that the difference in pay was due to factors other than sex, including more underwriting experience and a college education, even though a college degree was not a prerequisite for the position.

[Footnote 133: 1993 U.S. Dist. LEXIS 10331.]

The court found that the employer successfully met its burden; the difference in pay was due to a `factor other than sex.' It noted, but did not consider, the fact that the higher salaries of the male employees were based on the pay they received at their prior employment. 134

[Footnote] In the end, it relied on a very broad interpretation of the `factor other than sex' and that the factor need not be related to the `requirements of the particular position in question, nor that it be a `business-related' reason.' 135

[Footnote] All that needs to be evaluated is `whether the factor is discriminatorily applied or if it causes a discriminatory effect.' 136

[Footnote]

[Footnote 134: Id. at 23.]

[Footnote 135: Id. citing, Covington v. SIU, 816 F.2d 317, 321-22 (1987). See also, Fallon v. State of IL, 882 F.2d 1206 (7th Cir. 1989).]

[Footnote 136: Id.]

In addition, the court held that employers can lawfully pay a male more than a similarly situated female employee if the motivation is to induce the male worker to take the job and/or if employers take into account what the employee was making at his prior job. Despite the fact that these situations may result in female employee[s] being paid less, the court stated that none of these situations violate the EPA.

In addition, just this year, in the case of Warren v. Solo Company, 137

[Footnote] reaffirmed its position that the Defendant need not show that a `factor other than sex' is related to the requirements of the particular position or a `business-related' decision, when it found that unequal pay was justified because the male employee had a college degree and two masters degrees, despite the fact that the degrees were unrelated to the jobs they were both performing.

[Footnote 137: 516 F. 3d 627 (7th Cir. 2008).]

Derived from or based upon sex-based differentials: In 1974, the Supreme Court held that `market forces'--such as the value given by the market to men's and women's work or the more effective bargaining power that men historically have--cannot be cited as a factor other than sex to evade liability. 138

[Footnote] The court in Corning Glass Works noted that the company's decision to pay women less for the same work men performed `took advantage of the market and was illegal under the EPA.' 139

[Footnote]

[Footnote 138: 417 U.S. 188 (1974). See, Greenberger Testimony at 6.]

[Footnote 139: Id.]

Despite clear direction from the Supreme Court, lower courts, as recently as 2006, have accepted market forces as a defense to a pay disparity. In Merillat v. Metal Spinners, Inc., 140

[Footnote] for example, the plaintiff, who had been with the company for nearly 20 years, was promoted to a Senior Buyer position in the materials department. Around that time, the employer created a new position entitled `Vice President of Procurement and Materials Management.' While the duties of both jobs were similar, the new position also included managing materials department employees (including the plaintiff). The job was offered to a male with a starting salary of $62,500. At that time, the plaintiff earned $49,800, and she helped to train the new employee for his position.

[Footnote 140: 470 F.3d 685 (7th Cir. 2006).]

The Merillat plaintiff brought an EPA claim against the employer who asserted the affirmative defense that the pay disparity was due to factors other than sex such as education, experience and market forces. The employer alleged that the plaintiff was paid more, in part because of education and experience, but also because his salary represented the market rate for the position in question. The court agreed and held that the pay disparity was due to factors other than sex, including education, experience and `the market forces at the time of [his] hire.' 141

[Footnote] The court noted that it had previously `held that an employer may take into account market forces when determining the salary of an employee,' 142

[Footnote] although cautioning in a footnote against employers taking advantage of market forces to justify discrimination.

[Footnote 141: Id. at 698.]

[Footnote 142: Id. at 697.]

Similarly, the 3rd Circuit, in the case of Hodgson v. Robert Hall Clothes, 143

[Footnote] found that the employer was justified in paying the female workers less than the male workers because the `economic benefits to the employer justified a wage differential even where the men and women were performing the same task.' 144

[Footnote] In Hodgson, the court was comparing the higher wages of male sales people working in the men's department of a store with the lower wages being paid to female sales people working in the ladies' department.

[Footnote 143: 473 F. 2d 589 (3rd Cir. 1973).]

[Footnote 144: Id, In addition, in this case females were not allowed to apply to work in the men's department.]

In finding for the employer, the court based its decision on the fact that the men's department was more profitable than the ladies' department even though the products sold by the women were of lesser quality and cost less than the goods sold in the men's department. It concluded: `Without a more definite indication from Congress, it would not seem wise to impose the economic burden of higher compensation on employers. It could serve to weaken their competitive position.' 145

[Footnote]

[Footnote 145: Id. at 596.]

Some courts have also held that it is acceptable for an employer to pay male employees more than similarly situated female employees based on the higher prior salaries enjoyed by the male workers. In addition, employers can successfully justify paying a male employer more if the higher salary is a business tactic to lure [or retain] an employee.

In Drury v. Waterfront Media, Inc. 146

[Footnote] the plaintiff was hired as the Director of Project Management, responsible for organizing and managing all corporate projects, at a salary of $85,000 with an annual bonus of $15,000, and $25,000 in stock options (in her previous position, she had earned $85,000). Over a year later she was promoted to Vice-President of Production and Operations with a salary of $95,000 and a bonus potential of $20,000.

[Footnote 146: 2007 U.S. Dist. LEXIS 18435 (S.D.N.Y. Mar. 8, 2007).]

However, another vice-president (for customer service) was paid $110,000 with the possibility of a $25,000 bonus and $50,000 in stock options. This difference was the basis of the plaintiff's equal pay claim. In asserting its affirmative defense, however, the employer claimed that it was forced to pay the male vice-president more, not based on any sex-based wage differential but in order to lure him away from his prior employer. The court agreed and held that `salary matching and experience-based compensation are reasonable, gender-neutral business tactics, and therefore qualify as `a factor other than sex.' 147

[Footnote]

[Footnote 147: Id.]

The same conclusion was reached in Glunt v. GES Exposition Services, 148

[Footnote] where the plaintiff brought a claim that her employer violated the EPA in two ways. First, she alleged that in her capacity as a project coordinator she was paid less than three male co-workers while performing essentially the same function. Second, she alleged that after being promoted to account executive, her employer failed to raise her salary to a level parallel to the starting salaries of the three male account executives. The court found that in each case, factors other than sex justified the employer paying Glunt less than her similarly situated male co-workers.

[Footnote 148: 123 F. Supp. 2d 847 (D. Md. 2000).]

In its decision the court noted that `offering a higher starting salary in order to induce a candidate to accept the employer's offer over competing offers has been recognized as a valid factor other than sex justifying a wage disparity.' 149

[Footnote] Furthermore, `prior salary may be one of several gender-neutral factors employed in setting the higher salary of a male coming in from the outside.' 150

[Footnote] In cases where a male employee is transferred or reassigned, `it is widely recognized that an employer may continue to pay [a transferred or reassigned employee] his or her previous higher wage without violating the EPA, even though the current work may not justify the higher wage.' 151

[Footnote]

[Footnote 149: Id. at 859.]

[Footnote 150: Id.]

[Footnote 151: Id.]

Several other court decisions have similarly upheld such pay disparities. In Horner v. Mary Institute 152

[Footnote] the Eighth Circuit Court allowed a private school to justify paying a male teacher it wanted to hire from the outside more pay because such payment was necessary to secure him for the position. In Englemann v. NBC, 153

[Footnote] the Court found that `salary matching' was a valid defense to pay disparity; and in Sobol v. Kidder, Peabody & Co., 154

[Footnote] the Court held that a pay disparity is permissible when an employer paid males more as a `premium to attract and hire talented new bankers.' 155

[Footnote]

[Footnote 152: 613 F. 2d 706 (8th Cir.)]

[Footnote 153: 1996 U.S. Dist. LEXIS 1865 (S.D.N.Y. 1996).]

[Footnote 154: 49 F. Supp. 2d 208, 220 (S.D.N.Y. 1999)]

[Footnote 155: Id.]

Finally, in Kouba v. Allstate Ins. Co., 156

[Footnote] and Wernsing v. Department of Human Services, 157

[Footnote] the courts allowed the employer to use prior salaries as a justifiable `factor other than sex.' In Kouba, the Ninth Circuit found that the employer had shown that the prior salary at issue corresponded roughly to `the employee's ability * * * and predict [ed] a new employee's performance as a sales agent,' while in Wernsing, the Seventh Circuit upheld the policy of the Illinois Department of Human Services that based its salary levels on prior earnings.

[Footnote 156: 691 F. 2d 873 (9th Cir. 1982)]

[Footnote 157: 427 F. 3rd 466 (7th Cir. 2005).]

In all of these cases, the courts essentially relied upon `market force' or `prior pay' arguments for pay differentials between men and women without requiring further evidence of the nature of that market force. Such evidence might include, for example, evidence that women's earnings in a given position are not frequently or consistently lower than men's, thereby demonstrating that the lower pay offer to a woman at hiring did not piggy-back on a sex-based differential. While market forces may be a legitimate basis for determining pay, market forces tainted with sex discrimination are not. The broadly remedial purpose of the EPA is undermined where a seemingly gender-neutral excuse for unequal pay between similarly situated employees of opposite sex is based on or derived from a sex-based differential.

Business Necessity: Under Title VII, in order to justify an employment practice that has the effect of discriminating against an employee on the basis of race, color, religion, national origin or sex (a disparate impact case), an employer must assert that the practice is consistent with business necessity. Like a disparate impact case, cases brought under the EPA, do not require a showing of intent. So a practice (which includes the payment of wages) that may be `fair in form but discriminatory in operation' 158

[Footnote] is prohibited under Title VII. The same is true with regard to the EPA.

[Footnote 158: Griggs v. Duke Power, 515 F.2d 86 (4th Cir. 1975).]

Both Title VII and the EPA afford the employer opportunities to defend their practices, but as previously explained, the `factor other than sex' defense under the EPA has been interpreted by the courts so broadly that nearly any explanation for a wage differential is acceptable. 159

[Footnote] This is one of the main reasons that the EPA is ineffective.

[Footnote 159: AAUW supra note 34.]

The business necessity defense originated in the case of Griggs v. Duke Power Co, 160

[Footnote] decided in 1975. In that case, the Supreme Court determined that an employment practice, which resulted in the exclusion of black employees from certain jobs could only be justified in the case of business necessity (`The touchstone is business necessity.'). 161

[Footnote] However, because the Court also introduced the concept of `job relatedness,' and appeared to use the two concepts interchangeably, there was some confusion over the years as what the correct standard should be. 162

[Footnote] This culminated in the case of Wards Cove Packing Co., Inc. et. al. v. Antonio et. al., 163

[Footnote] where the Court abandoned the concept of business necessity altogether:

[Footnote 160: 401 U.S. 424 (1971).]

[Footnote 161: Id. at 431.]

[Footnote 162: See: Earl M. Maltz, The Legacy of Griggs v. Duke Power Co.: A Case Study in the Impact of a Modernist Statutory Precedent, 1994 Utah L. Rev. 1353(1994) at pp. 1371-1372.]

[Footnote 163: 490 U.S. 642 (1989)]

* * * the dispositive issue is whether a challenged practice serves, in a significant way the legitimate employment goals of the employer [citations omitted]. The touchstone of this inquiry is a reasoned review of the employer's justification for his use of the challenged practice. A mere insubstantial justification will not suffice * * * At the same time, though, there is no requirement that the challenged practice be `essential' or `indispensible' to the employer's business. 164

[Footnote]

[Footnote 164: Id. at 659.]

Congress responded, with the passage of the Civil Rights Act of 1991, which overturned Wards Cove Packing and its brethren and enshrined the business necessity defense into law in Title VII disparate income cases. 165

[Footnote] Under 42 U.S.C. 2000e(o)(1)(B) business necessity requires employment practices to `bear a significant relationship to a business objective of the employer.' 166

[Footnote] For the purposes of showing business necessity, `unsubstantiated opinion and hearsay are not sufficient; demonstrable evidence is required.' 167

[Footnote] Subsequent cases applying the business necessity standard illustrate that the more rigorous showing an employer must make to justify disparate treatment furthers the remedial purposes of Title VII. 168

[Footnote]

[Footnote 165: 42 U.S.C. Sec. 2000e(o)(1).]

[Footnote 166: In 42 U.S.C. Sec. 2000e(o)(1)(A), Congress also established the business necessity standard in case of employment practices involving selection: `the practice must bear a significant relationship to successful performance of the job.' Since EPA cases involve wages and wage scales, it is highly unlikely that a circumstance will arise where this definition will be applied.]

[Footnote 167: 42 U.S.C.Sec. 2000e(o)(2).]

[Footnote 168: Lanning v. SEPTA, 308 F. 3d 286 (3rd Cir. 2002); United States v. Delaware, 2004 U.S. Dist. LEXUS 4560 (D. Del 2004).]

The Paycheck Fairness Act seeks to strengthen the EPA by insisting that the `factor other than sex defense * * * be confined to business practices shown to serve compelling and legitimate interests of the employer.' 169

[Footnote] Requiring an employer to show that a job is consistent with business necessity applies a term that is already specifically defined in civil rights law 170

[Footnote] and thereby provides workers and employers with a known legal standard for assessing pay disparities.

[Footnote 169: Sellers Testimony.]

[Footnote 170: 42 U.S.C. Sec. 2000e(o)(1).]

c. Class actions

The EPA requires plaintiffs to affirmatively `opt-in' to a class action lawsuit. This is contrary to other employment discrimination laws, which allow women with a pay discrimination claim within a certified class to `opt-out' of a multiple-claim case pursuant to Rule 23 of the Federal Rules of Civil Procedure. 171

[Footnote] Title VII, for example, provides for claimants to `opt-out' of multi-party claims. 172

[Footnote]

[Footnote 171: Sellers Testimony at 10.]

[Footnote 172: 42 U.S.C. Sec. 2000e-2(n).]

Allowing plaintiffs to opt-out, rather than requiring them to affirmatively opt-in, is important. The current EPA rule excludes women who may not be aware they have a claim and also excludes women who may even be aware they have a claim but are afraid that they will be retaliated against in the workplace if they affirmatively opt in. H.R. 1338 puts claimants under the EPA in the same position as other victims of discrimination who automatically become part of a class-action unless they affirmatively opt-out of the class. 173

[Footnote]

[Footnote 173: Sellers Testimony at 11]

d. Damages

Damages under the original EPA are limited to backpay and liquidated damages in the form of double back pay. No compensatory or punitive damages are available, and liquidated damages may only be recovered if the employer fails to demonstrate good faith and reasonable grounds for believing it was in compliance with the Act. 174

[Footnote] By contrast, Title VII of the Civil Rights Act (Title VII) permits successful complainants to recover compensatory and punitive damages.

[Footnote 174: `. . . if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act of 1938, as amended [29 USCS Sec. 201 et seq., generally; for full classification, consult USCS Tables volumes], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 16 of such Act [29 USCS 216].' 29 USCS 260. In addition, one commentator has stated that even when `liquidated damages are unavailable . . . the amounts available to compensate plaintiffs tend to be insubstantial.' Greenberger Testimony at 7.]

EPA sanctions are inadequate and `deprive women subjected to pay discrimination of full relief.' 175

[Footnote] In addition, they do nothing to deter future discrimination in the workplace and are often viewed by employers simply as the cost of doing business. Joseph Sellers, testifying before the Subcommittee on Workforce Protections in July 2007, explained:

[Footnote 175: Id.]

The remedy fails to provide an adequate incentive for employers to engage regularly in the examination of their own compensation practices and to investigate and address any pay disparities that may be detected. Even the payment of lost wages doubled where an employer has failed to demonstrate it acted in good faith permits employers to tolerate the risk that employment practices resulting in gender-based pay disparities will be detected and challenged, as they can compute precisely the economic exposure and determine whether it is a tolerable cost of doing business. 176

[Footnote]

[Footnote 176: Sellers Testimony.]

Damages under Title VII are capped and can be no more than $300,000. 177

[Footnote] These caps do little to further the actual purpose of punitive damages, which is to punish the defendant and deter future misconduct by the defendant and others similarly situated. 178

[Footnote] As such, the Paycheck Fairness Act does not limit damages in this regard.

[Footnote 177: Id.]

[Footnote 178: The Ineffectiveness of Capped Damages in Cases of Employment Discrimination: Solutions Toward Deterrence; Ruggles, Vanessa; Connecticut Public Interest Law Journal; Vol. 6:1 at 147 (2006) citing Kemezy v. Peters, 79 F.3d 33, 34 (7th Cir. 1996) (noting that `deterrence is a purpose of punishment, rather than, as the formulation implies, a parallel purpose, along with punishment itself, for imposing the specific form of punishment that is punitive damages')]

The unfairness of damage limitations is illustrated in Brady v. Wal-Mart Stores, Inc. 179

[Footnote] where the plaintiff Patrick Brady brought a suit against Wal-Mart and the store manager, alleging violations of the American with Disabilities Act (ADA) and the New York Human Rights Law. In his suit, Brady, who has cerebral palsy, claimed Wal-Mart subjected him to adverse work conditions and a hostile work environment based on his disability. The jury agreed with Brady and awarded him a settlement for back pay and emotional pain and suffering, and $5 million award in punitive damages. Unfortunately, the ADA's remedies are capped and the judge was required to reduce the award to $300,000. 180

[Footnote] In his opinion, Judge Orenstein stated that his ruling `respects the law, but it does not achieve a just result,' 181

[Footnote] especially for one of the biggest companies in America. 182

[Footnote]

[Footnote 179: 2005 U.S. Dist. LEXIS 12151 (2005).]

[Footnote 180: Id.]

[Footnote 181: Brady, 2005 U.S. Dist. LEXIS 12151, at 10, aff'd 2008 U.S. App. LEXIS 13850 (2d Cir.).]

[Footnote 182: Supra note at 180.]

Punitive damages, especially uncapped punitive damages, are necessary to deter unscrupulous businesses from harming workers and consumers to gain a competitive advantage. 183

[Footnote] Often, without punitive damages, a business may treat its labor violations as merely a cost of doing business. Furthermore, empirical studies conducted by the US Department of Justice's Bureau of Justice Statistics estimated that from 1991-92 and in the years 1996 and 2001, punitive damages were awarded in less than one percent of all civil actions. 184

[Footnote] Juries awarded punitive damages in only 5.7 percent of tort and contract cases when the plaintiff prevailed at trial. 185

[Footnote] The Department of Justice also studied awards made in the nation's seventy-five largest counties in 2001 and found that out of seventy products liability cases, plaintiffs received punitive damages in only three cases. Out of three-hundred and eleven medical malpractice cases, plaintiffs received punitive damages in just fifteen cases. 186

[Footnote]

[Footnote 183: In Defense of Punitive Damages in Products Liability: Testing Tort Anecdotes with Empirical Data; Rustad, Michael; Iowa Law Review; 78 at 12 (1992-1993).]

[Footnote 184: Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of State Courts, 1992: Civil Jury Cases and Verdicts in Large Counties, Bureau of Justice Statistics Special Report NCJ 154346 (July 1995) [hereinafter `Bureau of Justice Statistics July 1995']; Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of State Courts, 1996: Civil Trial Cases and Verdicts in Large Counties, 1996, Bureau of Justice Statistics Bulletin, NCJ 173426 (Sept. 1999) [hereinafter `Bureau of Justice Statistics September 1999']; Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of State Courts, 2001: Civil Trial Cases and Verdicts in Large Counties, 2001, NCJ 202803 (Apr. 2004) [hereinafter `Bureau of Justice Statistics April 2004']; Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of State Courts, 2001: Tort Trials and Verdicts in Large Counties, 2001, NCJ 206240 (Nov. 2004) [hereinafter `Bureau of Justice Statistics November 2004']; Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of State Courts, 2001: Punitive Damage Awards in Large Counties, 2001, NCJ 208445 (Mar. 2005) [hereinafter `Bureau of Justice Statistics March 2005']]

[Footnote 185: Brief of Amici Curiae in support of respondent in Philip Morris USA v Mayola Williams No. 05-1256 at 5.]

[Footnote 186: Id at 9.]

There is precedent for uncapped damages against employers who discriminate; 187

[Footnote] damages awarded under Section 1981 for race or national origin discrimination are not subject to statutory limitations.

[Footnote 187: 42 U.S.C. Sec. 1981.]

Still, even in those cases, courts generally do not award unjustifiable or excessive damages and base relief based on sound factors, such as the willfulness or egregiousness of the violation 188

[Footnote] and the effectiveness of damages as a deterrent. 189

[Footnote] Because decisions are made by each court on a case by case basis, courts are able to strike the needed balance between assessing penalties based upon particular facts and circumstances and assessing the severity of the discrimination. 190

[Footnote]

[Footnote 188: Court found it improper to award punitive damages in the absence of evidence of egregious conduct, willfulness, or malice on the part of the employer. Beauford v. Sisters of Mercy-Province of Detroit, Inc. 816 F2d. 1104 (6th Cir. 1987)]

[Footnote 189: The appellate court reduced the punitive award amount when it found that the employer's discriminatory act was minor and quickly remedied. Circuit court reasoned that a higher amount would remove monetary incentive to remedy minor violations, and would remove incentive from escalating minor discrimination into major discrimination. Lust v. Sealy, Inc., 383 F3d. 580 (7th Cir. 2004); See also, Jones v. Western Geophysical Co., 761 F.2d 1158 (5th Cir. 1985) (Employer who has been found to have engaged in racial discrimination need not pay punitive damages to plaintiff if said employer is taking steps to eliminate discrimination, and if evidence against employer is, at times, ambiguous and does not necessarily lead to the conclusion that the employer behaved maliciously in practice of racial discrimination); Beauford v. Sisters of Mercy-Province of Detroit, Inc., 816 F.2d 1104 (6th Cir. 1987) (holding that it was improper to award punitive damages to employee alleging race discrimination without evidence that employer acted egregiously, willfully, or maliciously in failing to promote an plaintiff because of his race); Stephens v. South Atlantic Canners, Inc., 848 F.2d 484 (4th Cir. 1988) (holding that extraneous materials submitted to the jury relating to discharged employee's infractions warranted reversal of punitive damages issued against his former employer in his discriminatory discharge case brought under 42 USCS Sec. 1981 and Title VII.); Edward v. Jewish Hospital, 855 F.2d 1345 (8th Cir. 1988) (Court denied reducing punitive damages award of $25,000 to reflect reduction in actual damages from $50,000 to $1 nominal damages because of lack of a general proportionality rule requiring nominal damages to invalidate punitive damages award.)]

[Footnote 190: The Court distinguished the need to address levels of discrimination in terms of appropriate amount for recovery, reasoning that a higher amount would remove monetary incentive to remedy minor violations, and would remove incentive from escalating minor discrimination into major discrimination. Lust v. Sealy, Inc., 383 F3d. 580 (7th Cir. 2004)]

The Paycheck Fairness Act provides for uncapped damages and as such `redresses the deficiencies in the remedies available under the EPA [and] eliminates a shortcoming of the EPA that has long diminished in its value as a vehicle for addressing unlawful pay disparities.' 191

[Footnote] Longstanding judicial discretion under Sec. 1981 directly addresses these concerns of frivolous and excessive claims for relief. 192

[Footnote]

[Footnote 191: Testimony of Joseph Sellers at 14.]

[Footnote 192: See generally, Jones v. Western Geophysical Co., 761 F.2d 1158 (5th Cir. 1985) (Employer who has been found to have engaged in racial discrimination need not pay punitive damages to plaintiff if said employer is taking steps to eliminate discrimination, and if evidence against employer is, at times, ambiguous and does not necessarily lead to the conclusion that the employer behaved maliciously in practice of racial discrimination); Beauford v. Sisters of Mercy-Province of Detroit, Inc., 816 F.2d 1104 (6th Cir. 1987) (holding that it was improper to award punitive damages to employee alleging race discrimination without evidence that employer acted egregiously, willfully, or maliciously in failing to promote an plaintiff because of his race); Stephens v. South Atlantic Canners, Inc., 848 F.2d 484 (4th Cir. 1988) (holding that extraneous materials submitted to the jury relating to discharged employee's infractions warranted reversal of punitive damages issued against his former employer in his discriminatory discharge case brought under 42 USCS Sec. 1981 and Title VII.); Edward v. Jewish Hospital, 855 F.2d 1345 (8th Cir. 1988) (Court denied reducing punitive damages award of $25,000 to reflect reduction in actual damages from $50,000 to $1 nominal damages because of lack of a general proportionality rule requiring nominal damages to invalidate punitive damages award.)]

e. Retaliation for discussing or disclosing salary information

The EPA does not explicitly protect employees who discuss or disclose salary information. As previously noted, many employers discourage and may even have workplace policies against the sharing of salary information. This makes it extremely difficult to detect pay discrimination. For example, Lilly Ledbetter was paid less than her male co-workers for years but she did not realize it. A company policy prohibited her from discussing her pay with her co-workers. The only reason she discovered the pay discrimination when someone sent her an anonymous note. 193

[Footnote]

[Footnote 193: Ledbetter supra note 65.]

The National Labor Relations Act (NLRA) prohibits retaliation against employees 194

[Footnote] who share salary information for the purposes of union organizing. Section 7 protects the right of employees to join a union and `engage in * * * concerted activities for the purpose of collective bargaining or other mutual aid or protection * * *' 195

[Footnote] Concerted activity includes the right to discuss wages, hours and other terms and conditions of employment. 196

[Footnote] It also bans blanket prohibitions on discussing wages. 197

[Footnote] Even with the National Labor Relations Board's recent turn to roll back worker protections, this basic rule has been upheld. 198

[Footnote] However, supervisors are not protected under the NLRA and can be prevented and reprimanded for discussing and/or sharing salary information.

[Footnote 194: 29 U.S.C. Sec. 152(3)]

[Footnote 195: 29 U.S.C. Sec. 157]

[Footnote 196: Id.]

[Footnote 197: 29 U.S.C. 158(a)(1) provides that it is an unfair labor practice for an employer to interfere, retrain or coerce employees in the exercise of the rights guaranteed in section 157.]

[Footnote 198: See, Northeastern Land Services, Ltd. 352 NLRB No. 89 (June 27, 2008) ([Respondent's] confidentiality provision is unlawful * * * the provision, by its clear terms, precludes employees from discussing compensation). See also, Dickens, Inc. and Wenqing Lin. 352 NLRB No. 84 (May 30, 2008)([the employer] admitted * * * he in