Gender Pay Equity—
A Storm on the Horizon?

As an employment lawyer practicing in the Southeast, my experiences defending claims under the Equal Pay Act (“EPA”) historically have gone smoothly—but I wonder whether that is just because of our sunny weather. The EPA requires that employers pay male and female employees equal wages for equal work in the same establishment. Equal work connotes skill, effort, and responsibility. An employer can defend unequal pay when it is based upon seniority, merit, quantity or quality of production, or any other factor than sex, which can include prior salary in some jurisdictions. The problem with relying on prior salary, of course, is that women are often dogged by unfair pay practices, and this defense just perpetuates the unfairness. Often, the EPA claims I handle are tacked-on to other discrimination claims, and differences in pay are justified by real differences in experience and work qualifications. Easy peasy. And very typical I think for this sleepy legal market—for now.

But try this one on, from a not so sleepy market. A new lawsuit filed against the law firm Steptoe & Johnson, LLP alleges that the nationally ranked law firm systematically pays its female associate lawyers less than its male lawyers for equal work. Ji-In Houck, v. Steptoe & Johnson, LLP, 2:17-cv-04595 (USDC CD Cal. 6/22/17). Houck’s suit (PDF) alleges she was paid less than male associates who began practicing law in 2011, the same year she obtained her law license, and further claims that the unlawful pay discrimination began during her tenure as a contract lawyer doing the very same work male associate lawyers were then doing. She further alleges that the pay discrimination continued after she was “promoted” to associate attorney thereafter.

Her lawsuit is a great read for employment lawyers, both the plaintiffs’ and defense bar. My favorite passages from the complaint fault Steptoe’s own employment law section for apparently being “asleep at the wheel” while the entire law firm was allegedly committing wholesale violations of federal discrimination laws regarding pay:

  1. Steptoe handles “a broad range of advisory and litigation matters on behalf of employers” and regularly advises clients on issues affecting equal employment opportunity and wrongful discharge. Steptoe’s litigation experience is equally broad, ranging from “assisting clients at all level of administrative and judicial litigation to having represented clients in leading employment class action and sexual harassment cases before the Supreme Court.”
  2. As Steptoe explains on its website: “Proactive employers can prepare themselves to address pay discrimination claims. . . First, employers should adopt procedures to review and document all performance and pay determinations. Second, employers should consider an internal audit of compensation practices to identify discrepancies, particularly those that may affect employees with protected characteristics. Finally, document retention policies should be reviewed with long-term storage in mind…Of course, employers should train managers and supervisors on all non-discrimination policies, including those that prohibit pay discrimination.”
  3. Had Steptoe taken Plaintiff Houck’s complaints seriously over the years—as it counsels its clients to do—this lawsuit would have likely been averted.

Now as a reminder, a lawsuit is a collection of allegations—unproven so far. But as I constantly warn my clients, employment claims are proven most often circumstantially, so it’s a battle of the inferences. What do the dots look like once they are connected? Well, in the Steptoe matter, the complaint makes them look really bad, because Houck has really good lawyers.

But what if the law firm isn’t actually guilty of the motive of cheating its female lawyers out of fair compensation? What if Steptoe, like other BigLaw firms, cynically misclassified Houck as an independent contractor when she started (she functioned exactly as an associate—an employee—and was an even better lawyer than her male counterparts, according to her written evaluations) to justify paying her half what the firm paid its associates, only to perpetuate the pay disparity once she was hired as an associate? Let’s call it…negligence.

Under the Fair Labor Standards Act (EPA falls under FLSA), Steptoe is still liable. Yep. So here is my message, employers who are inattentive to gender pay equity in the workplace could be running an enormous risk. If a sophisticated law firm’s Los Angeles office can make this mistake, what about small to medium sized companies in the Southeast?

Gender pay inequality is getting more media coverage than at any time I can remember. Long gone are the days when companies were safe to forbid employees to discuss salary—that’s an obvious violation of the National Labor Relations Act. It’s just a matter of time before boutique plaintiffs’ firms train their sights on us—a place where companies like to relocate and travel magazines extol our well-deserved virtues.

The Basics: Do a wage and salary study. Identify differences in pay between the genders in the same jobs, job categories, etc., and use caution not to place too much hope in job titles. Consider the actual work. Once you’ve determined the reasons your company pays people differently, either by the hour or on a salary basis, consult able counsel either to vouch for the logic or point out the weaknesses. A robust body of case law exists that can apply to your situation.

Or, you could just sleep through the storm. It’s coming.

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The author, Peter Rutledge, is an Employment Lawyer and Partner at Rutledge Law, Greenville, SC. You can contact him via these channels:
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If a sophisticated law firm’s
Los Angeles office can make this mistake, what about small to medium sized companies in the Southeast?

–Peter Rutledge, Rutledge Law