2d Circuit clarifies equal pay claims under federal and state law

The Second Circuit has clarified the scope of the federal Equal Pay Act and its New York State counterpart, noting that the two laws are applied differently. This ruling revives the plaintiff's state law claim even as it brings her federal equal pay claim to an end.

The case is Eisenhauer v. Culinary Institute of America, issued on October 17. The Culinary Institute is one of the premier cooking schools in the United States, located in Hyde Park, New York. Plaintiff sued CIA because a male professor was earning more money than she was. CIA argued that the pay discrepancy was the product of its sex-neutral compensation plan, which "requires fixed pay increases triggered by time, promotion, and degree completion. It does not provide for “equity” adjustments. Each year, in accordance with the compensation plan, all faculty members receive the same percentage increase in their salaries." As a consequence, the Court of Appeals (Cabranes, Leval and Livingston) notes, "the pay disparity between Eisenhauer and Perillo continues to grow."

The federal EPA claim is dismissed on summary judgment because the statute says a pay disparity is legal if the differential is based on "any factor other than sex." What does that language mean? Plaintiff argues that this language means the pay differential must be job-related. If that is the case, then plaintiff could win the case, as she and the male comparator had similar positions and duties. Some federal courts around the country interpret that language to mean the pay difference must be job-related, but the Second Circuit provides an extended discussion on statutory interpretation and rejects the "job-related" angle, noting the EPA articulates no such interpretation and that "any factor other than sex" means that, "To establish the EPA's 'factor other than sex' defense, a defendant must prove that the pay disparity in question results from a differential based on any factor other than sex." This interpretation makes it easier for employers to win these cases. This interpretation also highlights a Circuit-split that might land this issue in the Supreme Court some day.

Under this interpretation, CIA wins the case. The record shows that the pay differential in this case stems from the sex-neutral compensation plan that gave the male professor the pay advantage because, for various sex-neutral reasons, he was earning more when he began teaching there and the compensation plan applies to everyone.

As for the state law claim, the state law counterpart to the EPA was amended in 2016 to include the "job-related" language that is absent in the EPA. Under state law, any pay differential must be job-related or the differential violates the New York Labor Law. Since the district court did not interpret the state statute that way, the case is remanded to properly apply the law to plaintiff's equal pay claim.