Eleventh Circuit Finds Failure to Increase Salary After New Employee Becomes Proficient May Violate the Equal Pay Act

In Bowen v. Manheim Remarketing, Inc., 882 F.3d 1358 (11th Cir. Feb. 21, 2018), the court upheld a female arbitration manager’s pay disparity claim despite the employer’s reliance on proof that the employee who was paid more had more experience and started with a higher salary.

In late 2005, Manheim promoted Ms. Bowen from a non-management position to arbitration manager. As part of that process, the facility’s General Manager and Assistant General Manager set Ms. Bowen’s starting salary at $32,000. In contrast, Manheim paid the male arbitration manager that Ms. Bowen replaced $46,350 during his first year in that position. Moreover, even after Ms. Bowen established herself in the job, she continued to be paid less than her predecessor.

Ms. Bowen subsequently sued Manheim for alleged violations of the federal Equal Pay Act (the EPA) and Title VII of the Civil Rights Act of 1964, both of which prohibit employers from paying different wages to employees because of their sex.

To prevail on an EPA claim, a plaintiff must show that the employer paid different wages to employees of opposite sexes for equal work on jobs requiring equal skill, effort, and responsibility, and under similar working conditions. Once a plaintiff makes such a showing, the employer can avoid liability only if it proves that the wage differential was justified by a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or some factor other than sex.

The district court in this case ruled for the employer. But on appeal, the court ruled that Ms. Bowen had produced enough evidence to take her EPA claim to trial. The court observed in pertinent part as follows:

A reasonable jury could find that Manheim has failed to [prove that the discrepancy was due to a factor other than sex]. Manheim did not simply pay Bowen's male predecessor a much greater starting salary; it set the predecessor's salary near the midpoint of the compensation range for arbitration managers but consistently set Bowen's salary at the bottom of the range. A jury could find that prior salary and prior experience alone do not explain Manheim's disparate approach to Bowen's salary over time. Once Bowen established herself as an effective arbitration manager, prior salary and prior experience would not seem to justify treating her different than the predecessor. (Emphasis added.)

The Bowen case highlights the risk that, even if an employer lawfully sets a new employee’s starting salary lower than his or her predecessor, once the employee becomes proficient in the job, continuing the discrepancy can be problematic.