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How Your Business Can Prevent Wage Discrimination Claims

Author: Ronald E. Lyons Date: 05/16/2013

Categories: Corporate and Business Law, Employment Law & Litigation

Do you have a fair and well-thought-out policy for how your business sets employee compensation? It can go a long way towards preventing a claim for discrimination. A recent federal case arising out of Arkansas illustrates this point.

Lakishia Hill was an employee for the City of Pine Bluff, working in its office of Inspection and Zoning. That office also employed two zoning officials, Danny Birdsong and Greg Garner, who had both worked as zoning officials for 20-30 years. When Mr. Birdsong retired, Ms. Hill applied for his position and was promoted to a zoning official. Birdsong was earning $41,000 per year and Garner’s annual compensation was $35,422. The two men shared responsibility for training Hill.

In her new position, Hill was paid approximately 20% less than that of Garner. She demanded a retroactive increase. Hill’s salary was increased to an amount virtually identical to that of Garner. Notwithstanding the increase in pay, Hill elected to sue the City asserting unlawful gender-based wage discrimination.

The federal Circuit Court upheld the lower court’s determination that Hill had failed to prove her claim of wage discrimination. For Hill to have prevailed, she needed to prove two things: (1) that she received unequal pay for equal work and (2) that the unequal pay was motivated by discrimination based upon hostility.

The Circuit Court based its dismissal of Hill’s claim on two grounds. First, the Court determined that she had failed to prove that her position, as a zoning official, required an equivalent level of skill, effort and responsibility and was performed under similar working conditions as the positions of Birdsong and Garner, both of whom had far more seniority and supervisory responsibilities. In other words, Hill’s new position was not substantially equal to the position of either of the senior supervisory officials that she replaced. Second, the Court accepted the position of the City that the reason for the disparity in salary was based entirely on its seniority system which was found to be both legitimate and nondiscriminatory and not used as a pretext for unlawful gender discrimination.

The lesson for employers is to confirm that they have a fair and rational basis for setting compensation that is tied to the skills and experience of the employee along with the requirements of the position. We can assist you with the review of your employee manual, procedures for evaluating employees as well as your internal policies.

For more information regarding this and similar matters, contact Ronald Lyons at rlyons@mcmillanmetro.com.