40 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP Those decisions are often left for the jury, meaning that employers face the unpalatable prospect of a jury trial, even if they have a meritorious defense.319 Courts can be reluctant to interpret the “factor other than sex” defense in a way that provides an easy path out of litigation for employers. Although broad in terms of what it will recognize as legitimate bases to justify a pay disparity, the defense ultimately hinges on a fact and case-specific analysis that allows for few bright line rules. That provides an advantage to plaintiffs and plaintiffs’ lawyers because, when facing the cost and uncertainty of trial, many employers may choose to settle at an inflated value rather than continue to defend a lawsuit on the merits. 2. Additional State Law Requirements To Establish The Factor Other Than Sex Defense As with the standards for establishing a prima facie case, the affirmative defenses allowed to a defendant under state laws may arguably vary from what is allowed under the federal EPA. For example, under the California Fair Pay Act, the “factor other than sex” defense is subject to some additional requirements. Under California’s statute, a defendant must demonstrate “[a] bona fide factor other than sex, such as education, training, or experience.”320 The statute further clarifies that “this factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity.”321 The California statute also requires that any affirmative defense must be “applied reasonably” and “account for the entire wage differential.”322 Finally, the statute explicitly excludes the use of prior salary as a justification for a wage disparity.323 Most of these additional requirements were enacted in 2015 and became effective on January 1, 2016. The courts are still working out how they should be interpreted and applied, and how exactly they depart from the federal requirements. This many years later, there are still very few cases interpreting these differences. But so far, it appears that courts are applying those laws in a way that is mostly consistent with federal law. For example, in Basting v. San Francisco Bay Area Rapid Transit District,324 the District Court for the Northern District of California held that the employer established the factor other than sex defense under both federal and California law. That case involved an employer that classified its non-represented employees into various pay bands. It commissioned a study of its compensation practices, the result of which was that the employer bumped salaries to the midpoint of a pay band for all employees who had two or more years of service within a classification.325 The court found that the study’s recommendations had been applied 319 See, e.g., Bowen v. Manheim Remarketing, Inc., 882 F.3d 1358, 1363 (11th Cir. 2018) (reversing summary judgment and emphasizing employer’s “heavy burden” to establish that a factor other than sex can account for the pay differential where plaintiff’s salary had consistently been set at the low point of the compensation range, even after she had established herself in the position and demonstrated that she was an effective arbitration manager, and where plaintiff had presented evidence that the employer’s managers’ decisions were influenced by sex bias and that they took sex into account when making personnel decisions: “affidavit testimony establishes that sex-based pay disparities were common at [employer], that the managers refused to remedy the disparities, and that the managers repeatedly exhibited an unwillingness to treat women equally in the workplace”); Gonzales v. Cnty. of Taos, No. 17-cv-582-F, 2018 WL 3647206, at *15 (D.N.M. Aug. 1, 2018) (refusing to weigh an employer’s “other factors” at the summary judgment stage, and holding that relative levels of experience and qualifications “are questions of fact for a jury to decide and are not appropriate for summary judgment”); Ackerson v. Rector & Visitors of the Univ. of Va., No. 3:17-cv-11, 2018 WL 3209787, at *7 (W.D. Va. June 27, 2018) (holding that two university administrators were paid at different rates because of their different credentials, experience, and achievements, but holding that while such “potential differences in qualifications, certifications, and employment history could explain the wage disparity between the claimants and [comparator], the EPA requires that a factor other than sex in fact explains the salary disparity”) (emphasis in original). 320 Cal. Lab. Code § 1197.5(a)(1)(D). 321 Id. The statute further clarifies that “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.” Id. 322 Id. § 1197.5(a)(2-3). 323 Id. § 1197.5(a)(4). 324 Basting v. S.F. Bay Area Rapid Transit Dist., No. 20-cv-5981-SI, 2021 WL 5771137 (N.D. Cal. Dec. 6, 2021). 325 Id. at *1. The plaintiff had only been in her classification for 18 months and so did not receive a salary increase. Her comparators had all received salary increases because they had been in their classification for at least two years at the time the study was conducted. Id.
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