©2023 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 29 Some courts will refuse to conduct the “establishment” analysis at all at the conditional certification stage. For example, in Santiago v. Information Resources, Inc.,223 two plaintiffs sought conditional collective action certification of all female analysts, consultants, principals, vice presidents, and senior vice presidents who worked in or out of the employer’s New York office. One of the Plaintiffs, a consultant, alleged that she was paid 10% less than male consultants for the same work. She sought to represent a broad collective action of other female employees of various job titles, arguing that the employer subjected female employees to “biased treatment and standards due to their gender,” and permitted “a culture that ‘marginalized’ women and limited their career opportunities.”224 The court noted the relatively lenient standard governing conditional certification, as well as the early procedural posture of the case, which prevented it from delving too deeply into fact or credibility determinations.225 Moreover, the court also declined to analyze in any detail the merits of the employer’s establishment defense. While the court acknowledged that there was some limited authority to suggest that courts must engage in the establishment analysis at the conditional certification stage, it held that this was an issue of fact and declined to do so. Instead, it limited its analysis to a review of the employer’s website, which suggests that the employer had only one location in New York.226 The court ultimately granted conditional certification, but only with respect to the consultant position.227 Even if plaintiffs are successful in obtaining conditional certification of a collective action, that collective action may later be decertified after discovery has revealed substantial differences among collective action members, which makes certification through trial untenable, or that compensation decisions are not as centralized as was claimed. In particular, if an employer can show that the relevant compensation decisions were made at the local level, or with significant input from local managers, that can sometimes defeat certification of sprawling collective actions that extend beyond a single establishment. For example, in O’Reilly v. Daugherty Systems, Inc.,228 the District Court for the Eastern District of Missouri conditionally certified a collective action of female consultants and support staff of an information technology consulting services company who complained that they were paid less than similarly situated male employees performing equal work. On the strength of Plaintiffs’ evidence, the court concluded they had met their burden of providing “substantial allegations” that the employer “had a single decision, policy, or plan to pay female employees less than male employees doing the same work.”229 But the court later decertified the collective action after discovery revealed that the employees who opted into the case lacked the similarity necessary to proceed to trial as a collective action.230 The court found that the evidence “does not support the existence of a single, FLSA-violating policy because [employer] did not impose a top-down compensation structure; rather, compensation decisions occurred at the branch 223 Santiago v. Info. Res., Inc., No. 20-cv-7688(AT)(SN), 2022 WL 476091 (S.D.N.Y. Feb. 16, 2022). 224 Id. at *2. The employer, a data analytics and market research company, organized its employees into separate departments, each focused on a different client industry, and according to three progression levels based on their competencies and skills acquired through experience and training. Employees’ salaries are based on factors such as business needs, employee duties and responsibilities, education, certification and licensure, training, and market salary reference data, and they are negotiable. Salary increases and bonuses are based on a performance evaluation system. 225 The court held: “[the employer’s] argument that Plaintiff cannot assert plausible EPA claims, ‘much less’ obtain conditional certification, fails,” because, “Courts do not weigh the merits of a plaintiff's claim at the conditional certification stage of EPA litigation, and “[employer] also cannot defeat Plaintiff's motion by attacking her credibility,” because, ”on a motion for conditional certification, the Court will not make credibility determinations.” Id. at *4. 226 Id. 227 Although the Plaintiff alleged she had conversations with other employees—including one who claimed to have access to the employer’s payroll data—they had not provided sufficient detail about those conversations to show they had personal knowledge of any position other than her own: “Plaintiff's use of ‘Consultants’ to refer to all levels of [the employer’s] employees, . . . also unnecessarily muddies the waters. It is unclear whether [Plaintiff’s] near weekly conversations about pay disparity were only with consultants or also with employees of other levels. It is similarly unclear whether the female principal with access to [employer’s] payroll data said that [employer] paid only female consultants less or all female employees less.” Id. at *5 (emphasis in original). 228 O’Reilly v. Daugherty Sys., Inc., No. 4:18-cv-01283 SRC, 2020 WL 1557174 (E.D. Mo. Mar. 31, 2020). 229 Id. at *3. Plaintiffs had presented the court with two declarations that alleged that the employer used a centralized decisionmaking process to set compensation for all employees, regardless of job title, salary grade, or geographic location. They had also presented an employee handbook and limited compensation data that showed that male employees were the top earners in some or all departments in the St. Louis, Atlanta, Minneapolis, Dallas, and Chicago branches. Id. at *2-3. 230 O’Reilly v. Daugherty Sys., Inc., No. 4:18-cv-01283 SRC, 2021 WL 4514293 (E.D. Mo. Sept. 30, 2021).
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