Steven L. Brenneman, Becky L. Kalas, Editors
Ford & Harrison LLP

Vol. 18, No. 9
April 2008

EQUAL PAY

Wage disparity justified by superior skill and education

A male employee and a female employee perform the same job. The male employee has more education, but his advanced degrees aren't required for or even related to the job. The female employee has more experience performing the job. Can you pay the male employee a higher wage? According to the Seventh Circuit, you can.

Fill my cup

Betty Warren began working as a packer for Solo Cup Company in 1999. A year later, she changed positions to a tool crib attendant, making $6.31 per hour. She received three raises over the next two years, eventually earning $7.52 per hour. When she first began working as a tool crib attendant, Solo was manually tracking its inventory. A short time later, the company computerized its inventory system. That required all tool crib attendants to be familiar with and comfortable using a computer ― something Warren admittedly was not comfortable doing.

In 2002, Solo decided to add a tool crib attendant to the third shift. Around the same time, it also decided to lay off all its part-time and full-time security guards. The company offered the third-shift tool crib attendant position to Joe Lorenz, a former security guard for the company. As a guard, Lorenz was making $7.43 per hour. In his new position, he would be earning $7.75 per hour ― $.23 per hour more than Warren.

Warren complained to her supervisor about the discrepancy. She was told that the company had a "book" that determined all starting salaries. Warren protested that she knew more than Lorenz and should be making at least as much if not more than him. Solo then fired Warren, stating she was generating too many orders ― not a good thing for a tool crib attendant.

Warren sued Solo under Title VII and the Equal Pay Act (EPA), claiming that the company discriminated against her by paying a male coworker a higher wage for the same position. The company explained that Lorenz was paid a higher salary because he was proficient with computers and because he had a college degree and two advanced degrees. In comparison, Warren had only a high school diploma and admittedly was mediocre with computers. The trial court agreed with Solo before trial, and Warren appealed.

Lorenz's cup runneth over

To succeed on her wage discrimination claim under the EPA, Warren had to show that (1) the company was paying higher wages to a male employee (2) for equal work requiring substantially similar skill, effort, and responsibilities, and (3) the work was performed under similar working conditions. Once the employee demonstrates that the employer is paying members of one sex more for the same work, the employer must articulate a bona fide gender-neutral justification for the discrepancy.

Solo claimed that Lorenz was paid a higher rate than Warren because he was more skilled with computers and because he had a college degree and two advanced degrees. Warren, on the other hand, had only a high school diploma, and she admitted that her computer skills were deficient. Her supervisor reported that she was unfamiliar with computers and often went out of her way to avoid using them at work. The Seventh Circuit agreed that the differences in education and experience between the two workers constituted a bona fide gender-neutral basis for the wage discrepancy. Therefore, Solo was found not to have violated the EPA.

Warren didn't fare any better on her Title VII discrimination claim. The court stated that for her claim to move forward, she had to show that she was treated less favorably than a similarly situated employee. An employee is similarly situated if she is comparable in all significant respects. Whether the employees have comparable experience, education, and other qualifications may be considered in determining if employees are comparable, but only if the employer considered those factors in making its employment decision.

Lorenz's college degree, two advanced degrees, and proficiency in computers set him apart from Warren. The court found that because of the differences in education, experience, and computer aptitude, Lorenz and Warren weren't comparable. So although Warren may have been treated less favorably than Lorenz, she couldn't establish that she was treated less favorably than a similarly situated employee.

Warren argued that Lorenz's higher education and advanced computer skills were irrelevant because the tool crib job description didn't require either. The court, however, stated that an employer is permitted to compensate employees differently based on skills that aren't specifically required in a given job description provided it considers those skills when making its hiring decision. Thus, Solo could consider those differences in deciding to pay Lorenz a higher wage for the same position. Warren v. Solo Cup Company, No. 04 C 2270 (7th Cir., Feb. 20, 2008).

Is the cup half full or half empty?

Most every employer knows that it must pay male and female employees the same rate to perform the same job ― unless there's some basis other than gender for the discrepancy. Experience and education are among the most common bases for paying an employee a different rate. As this case shows, education and experience that is not required for, or even related to, the job can be a valid basis for paying a higher wage so long as you can show that you considered that criteria in making your decision. This is yet another reason you should maintain complete and accurate personnel files and document all employment decisions.

Copyright 2008 M. Lee Smith Publishers LLC

ILLINOIS EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Illinois employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.