Under the Equal Pay Act (“EPA”), form matters over substance. As the employer in Riser v. QEP Energy learned, tying compensation to job titles, rather than job duties, can create liability. Pursuant to court records, in the QEP case the employer initially employed a female as the Administrative Services Representative. In this role she was responsible for managing construction projects, facilities, and a fleet of several hundred vehicles. The female was compensated at the annual rate of $47,382.
Later, the company created a new position – Fleet Administrator. The new position was similar to the Administrative Services Representative. In fact, the company directed the Administrative Services Representative to train the new (male) Fleet Administrator. The new Fleet Administrator was compensated at the (higher) annual rate of $62,500.
Once the new male Fleet Administrator was settled, the female Administrative Services Representative was informed that she was no longer responsible for the company’s fleet of vehicles. Shortly thereafter, the female Administrative Services Representative was fired for poor performance.
The company then created another new position – Facilities Manager. The Facilities Manager’s responsibilities included the duties that used to be performed by the Administrative Services Representative before she was fired. The new Facilities Manager was male, and he was compensated at the annual rate of $66,000.
The fired female employee sued her former employer, alleging that the company violated the Equal Pay Act because it paid two male employees, the Fleet Administrator and Facilities Manager, more than it paid her, yet her job was “substantially equal” to the two male employees. The company responded by asserting that the female’s responsibilities were different, and attributed the pay differential to “a bona-fide, gender neutral pay classification system.” On summary judgment, the District Court ruled in favor of the company and dismissed the complaint.
The Court of Appeals (10th Circuit), however, disagreed. The higher court found that the female performed all of the Fleet Administrator and Facilities Manager duties until those responsibilities were passed to the new hires. The court determined that a reasonable jury could “certainly question how 31 and 39 percent pay gaps could be explained by legitimate business related differences in work responsibilities for the particular position at issue.”
To avoid this type of situation, employers must periodically review actual job responsibilities, irrespective of formal job titles, and assess employee salaries to ensure that employees are properly compensated.