52 | Developments in Equal Pay Litigation 2026 ©2026 Seyfarth Shaw LLP However, in Hollis v. Morgan State Univ.,364 the Fourth Circuit held that an employer cannot rely on a salary schedule or compensation system as a ‘factor other than sex’ under the Equal Pay Act when the employer retains discretion over how that system is applied. The court emphasized that an employer meets its burden only if the record establishes that its reasons in fact explain the wage disparity, not merely that they could explain it.365 Relying on its prior decision in U.S. Equal Emp. Opportunity Comm’n v. Maryland Ins. Admin.,366 the court explained that a facially neutral salary schedule does not foreclose EPA liability where the employer exercises discretion in assigning pay levels or adjusting salaries, because such discretion allows for the possibility that gender influenced the wage-setting process.367 Applying that principle to Hollis, the court observed that MSU repeatedly exercised discretion in denying her promotion‑based raises and merit adjustments, which caused her salary to remain lower than that of her male colleagues, creating a triable question of fact as to whether sex discrimination explained the disparity.368 Also consider Kent-Friedman v. New York State Insurance Fund,369 where a female Supervising Attorney for a state agency who was temporarily appointed to an Acting Assistant Director position alleged she was paid less than the person who was eventually hired into the same role as a permanent Assistant Director, in violation of the EPA. The employer argued that the pay disparity was justified by the fact that the agency did not have the discretion or authority under state law to increase plaintiff’s salary, because she officially still held the title of Supervising Attorney.370 The court rejected this argument outright, noting that the employer could not hope to rely on state law restrictions to justify a pay disparity that was illegal under federal law. “Even if [agency] did not have discretion under state law to increase [plaintiff’s] salary for acting as Assistant DCI Director while she remained in a competitive class job, federal law forbids [agency] from paying women employees less than men on the basis of mere job titles.”371 The employer argued that it had applied the state law in good faith and in a gender-neutral manner, noting that several employees, both male and female, had served in various roles in acting capacities without receiving any increase in pay or official change to their civil service title.372 The court rejected this argument as well, holding that it “amounts to a claim that two prima facie EPA violations cancel each other out if they are inadvertent and are committed respectively against a woman and a man.”373 Although the court agreed that the uniform application of gender-neutral personnel policies can constitute an acceptable factor other than sex, it can only do so if it evidences that a pay differential is the result of some other non-sex factor. In other words, the uniform application of a policy must be a mechanism through which some other gender-neutral factor operates, e.g., a policy that pays more for certain types of experience or that treats employees differently based on date of hire. The court pointed out the absurdity of the contrary conclusion, reasoning: “Indeed, if the uniform application of a facially neutral policy could be an end in itself for EPA purposes, a policy whose inadvertent result is less pay for women would be immune from the EPA for no other reason than that the policy was followed, even if no factor other than sex could explain its discriminatory effect.”374 Relying on tools such as third-party job grading software may be sufficient to support a pay disparity, even if arguably gender-neutral, depending on how they are implemented and the surrounding circumstances. In Moazzaz v. Met Life, Inc.,375 the court analyzed the use of a third-party job grading software tool that determined the grade for the role. The employer argued that the pay disparity between the plaintiff and the alleged comparator was justified by the comparator’s higher job grade, and his higher 364 Hollis v. Morgan State Univ., 153 F.4th 369, 385-87 (4th Cir. 2025). 365 Id. at 385. 366 U.S. Equal Emp. Opportunity Comm’n v. Maryland Ins. Admin., 879 F.3d 114 (4th Cir. 2018) 367 Hollis, 153 F.4th at 387. 368 Id. at 386-87. 369 Kent-Friedman v. N.Y. State Ins. Fund, No. 18-cv-4422(VM), 2023 WL 6292693 (S.D.N.Y. Sept. 27, 2023). 370 Id. at *12. 371 Id. at *13. 372 Id. at *16. 373 Id. 374 Id. at *17. 375 19-CV-10531 (JPO), 2024 WL 1312995, at *5 (S.D.N.Y. Mar. 26, 2024).
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