On February 20, 2008, the 7th Circuit Court of Appeals re-affirmed that companies may pay males and females holding a similar job different wages as long as the company can establish a bona fide, gender-neutral rationale for the discrepancy in pay. (Warren v. Solo Cup Company, No. 06-3504, (7th Cir. 2008).
In 1999, Betty Warren (“Warren”) became an employee of Solo Cup Company (the “Company”). In 2000, Warren became a tool crib attendant, earning $6.31 per hour. She received three raises and eventually reached $7.52 per hour. When Warren first began as a tool crib attendant, the Company tracked it parts inventory via a manual card process, but the Company eventually began using a computer software system, making it important for the tool crib attendants to possess computer skills.
In 2002, the Company offered an open tool crib position to Don Lorenz (“Lorenz”), one of its security guards, who was being laid-off due to the outsourcing of the security function. Lorenz was offered the position at $7.75 per hour. Upset that Lorenz was making $7.75 per hour and she was making 7.52 per hour for similar work in the tool crib, Warren complained to her supervisors that “she knew more than Lorenz”. Shortly thereafter, she was fired for “generating too many orders.” Warren then filed a complaint alleging that the Company compensated her male coworker at a higher hourly rate based on his gender in violation of the Equal Pay Act and Title VII.
In analyzing Warren’s argument, the court noted that to establish a prima facie case of wage discrimination under the Equal Pay Act, Warren had to show by a preponderance of the evidence that (1) higher wages were paid to male employees, (2) for equal work requiring substantially similar skill, effort and responsibilities and (3) the work was performed under similar working conditions. She did not need to establish a discriminatory intent by the Company.
Assuming that Warren met these requirements, the court noted that the burden then shifts to the Company to establish one of four statutory defenses. The statutory defenses available to employers in explaining differences in pay can be attributed to (1) a seniority system, (2) a merit system, (3) a system which measures earnings by quantity or quality of production, or (4) a differential based on any other factor other than sex. The court noted that the justification need not be a “good reason” but merely a gender neutral one.
In reviewing the facts, the Court found that the Company did establish a gender neutral rationale for the discrepancy in pay. Specifically, under the Equal Pay Act, differences in education and experience may be considered “factors other than sex”. Here, Lorenz was found to be more skilled than Warren because he had a bachelor’s degree and two master’s degrees. In contrast, Warren had a high school diploma and admitted that her computer skills were deficient. Further, the evidence established that Warren went out of her way to avoid using a computer at work because it was unfamiliar to her.