In Bowen v. Manheim Remarketing, Inc., No. 16-17237 (February 21, 2018), the Eleventh Circuit Court of Appeals reinstated the Equal Pay Act and Title VII sex discrimination claims of a former manager of a car auction facility who alleged that she had been paid less than the male manager whom she replaced.

Background

Manheim Remarketing Inc. operated a car auction facility in Georgia. In late 2005, Manheim promoted Qunesha Bowen to a managerial position and set her salary at $32,000. Although this salary represented an increase over the amount Bowen had been earning in her prior role with the company, it was less than the $46,350 that Bowen’s male predecessor had earned in his first year in the position. Bowen received salary increases in the ensuing years, but she continued to be paid below a midpoint identified in Manheim’s compensation guidelines, and she did not achieve her predecessor’s starting salary until her sixth year in the position.

In 2015, Bowen filed suit against Manheim in the U.S. District Court for the Northern District of Georgia. Following discovery, Manheim filed a motion for summary judgment. The district court concluded that Bowen had failed to rebut Manheim’s nondiscriminatory reasons for the pay differential between Bowen and her predecessor and entered judgment in Manheim’s favor. Although Bowen relied in part on an affidavit of Manheim’s former human resources manager, the district court concluded that the affidavit contained inadmissible hearsay and did not establish that the decisions concerning Bowen’s salary resulted from gender bias.

The Eleventh Circuit’s Decision

The Eleventh Circuit vacated the district court’s entry of summary judgment. Examining the evidence adduced in support of the Equal Pay Act claim, the court determined that a jury could conclude that differences between Bowen’s salary and experience and her male predecessor’s salary and experience at the time that each assumed the managerial position do not explain Manheim’s decision to continue to pay Bowen below the midpoint for the position, even after she had gained experience and established a track record of performance.

Holding that an employer in an Equal Pay Act case must prove one of the affirmative defenses and show that none of the decision-makers was influenced by sex bias, the court of appeals concluded that Bowen had identified sufficient evidence to warrant a trial on her Equal Pay Act claim by demonstrating that Manheim kept her salary at the bottom of its compensation range long after she had been promoted, by pointing to evidence which suggested that sex had been a factor in personnel decisions, and by showing that a general manager had commented on a female employee’s appearance and engaged in physical interactions with female employees that were uncharacteristic of the treatment of male employees. The court also held that with respect to the Title VII claim, the record was sufficient to enable a jury to conclude that Bowen’s gender was a motivating factor for the challenged pay decisions.

Key Takeaways

The Eleventh Circuit’s decision demonstrates the difficulty that employers can face when attempting to show that differences in wages paid to men and women holding the same positions are justified by factors other than sex.

Manheim emphasized the fact that Bowen’s salary at the time of her promotion to manager was significantly lower than the salary earned by her predecessor when he was placed into the position, arguing that the male predecessor had possessed prior managerial experience and mechanical knowledge that Bowen did not have, which justified the differences in starting pay. In addition, Manheim contested the adequacy of the pay investigation conducted by its former human resources manager, but it did not come forward with evidence concerning the application of procedures and factors actually utilized to set Bowen’s salary, which might have negated the possibility that sex had factored into the prolonged wage differential. As a result, the court of appeals concluded that Bowen was entitled to present her Equal Pay Act claim to a jury because a significant pay gap persisted even after Bowen had accumulated several years of experience in the managerial position. Although Manheim made two equity adjustments to Bowen’s salary, there was no evidence that Manheim instituted any long-term changes to its compensation policies and practices to prevent the recurrence or continuation of unexplained differences in pay.

In addition to underscoring the potential pitfalls of relying on an employee’s salary history as a basis for initial and ensuing salary determinations, the decision highlights the potential consequences of failing to fully address disparities in pay when an internal audit or other investigation demonstrates the existence of differences between the salary of male and female employees performing the same work. The decision also underscores the value of thoroughly assessing whether pay adjustments should be coupled with measures tailored to address other workplace behaviors or practices which have been identified, and which, if continued, could lead to allegations or findings that an employer has violated antidiscrimination laws. Manheim conducted employee surveys which revealed a perception that female employees did not receive opportunities or compensation equal to those afforded male employees—but there was seemingly no evidence presented that it thereafter took steps to educate and hold managers accountable for maintaining a culture in which all employees were afforded equal treatment and opportunity.

As a result, Manheim’s defense relied in large part on disputing the relevance and admissibility of a former human resources manager’s testimony about sex-based comments and inappropriate workplace conduct of the individuals who held the position of general manager when decisions about Bowen’s pay were made. Manheim’s short-lived success in narrowing the evidence that would be considered at the summary judgment stage provides a cautionary note for employers seeking to minimize the likelihood or extent of future, adverse legal outcomes.