©2025 Seyfarth Shaw LLP Developments in Equal Pay Litigation 2025 | 65 Similarly in Dixon v. Edward D. Jones & Co., L.P.,478 a female financial advisor alleged she was discriminated against in pay due to the discriminatory operation of the employer’s asset and office sharing plan. Under that plan, senior financial advisors can transfer assets to more junior advisors to increase their portfolio capacity to manage more lucrative assets.479 More junior financial advisors depend on the asset transfers from more senior advisors, so lack of access to those transfers in an advisor’s career can impair their income and advancement opportunities. The plaintiff alleged that those asset transfers disproportionately went to white male financial advisors with equal or less experience. The employer sought to dismiss the complaint, alleging it was defective on its face because it did not allege that the employer paid different rates to male and female advisors and/or because the facts, as alleged, showed that the employer paid its employees under a system that measures the quality and quantity of production, i.e., an affirmative defense under the EPA.480 The court agreed with plaintiff that this was a mischaracterization of the complaint, which begged the central question of the case: “whether assets under management’ are, in fact, an ‘objectively verifiable criterion’ on which to base compensation, . . . or those assets are allocated in a way that improperly favors male employees—in favor of Defendants.“481 Because at the pleading stage the court is bound to draw reasonable inferences in favor of plaintiffs, it rejected the employer’s arguments, holding that a more searching inquiry into the employer’s pay practices would be needed before it could reach a conclusion. 4. Other Affirmative Defenses A “factor other than sex” is the most commonly asserted defense in equal pay litigation. The other defenses are available, however, and they can be just as successful. If employers choose to justify a pay disparity based on a seniority or merit system, or on a system that bases pay on the quantity or quality of output, they must be careful that those systems are well documented and communicated to employees. A system that appears ad hoc or that is inconsistently applied risks being met with skepticism by a court. Merit Systems. A merit system is perhaps the second most frequently relied upon defense, because many employers tie compensation increases to performance metrics. For example, in Shen v. Automobile Club of Missouri, Inc.,482 a software developer alleged that she was paid less than male employees in the same role. The employer pointed to its merit system, i.e., its system of administering performance evaluations, which was used to determine salary increases and bonuses. The court first recognized that “[a] merit system must be known to employees, must not be based on sex, and must be an organized and structured procedure whereby employees are evaluated systematically according to predetermined criteria.”483 The court then held that the employer’s merit system met those requirements. Among other things, the court found that the employer’s system: “utilize[ed] non-gender based performance factors to determine an employee's rating,” and left supervisors “little leeway” to make small adjustments to evaluations because “pay performance calculations were performed within a calculation tool and all recommendations had to be approved by upper management.”484 The court also rejected plaintiff’s arguments that the merit system was biased, finding that “no one at [employer] ever made derogatory comments about her gender or told her they were making an employment decision based on her gender,” and that “the undisputed facts show that plaintiff made more salary than the average male employee and more than half the males had lower salaries than plaintiff.”485 Accordingly, plaintiff failed to rebut *10. But plaintiffs had alleged that taking away their sales opportunities was part of the discriminatory pattern they faced. The Court explained that “[t]aking away sales opportunities cannot defeat a sex discrimination claim when taking away sales opportunities was an act of sex discrimination.” Id. at *11. 478 Dixon v. Edward D. Jones & Co., L.P., No. 4:22-cv-00284-SEP, 2023 WL 2755266 (E.D. Mo. Mar. 31, 2023). 479 Id. at *1. 480 Id. at *3. 481 Id. at *4. 482 Shen v. Auto. Club of Mo., Inc., No. 4:20-cv-626-SNLJ, 2023 WL 3948859 (E.D. Mo. June 12, 2023). 483 Id. at *8 (quoting Price v. N. States Power Co., 664 F.3d 1186, 1193 (8th Cir. 2011)). 484 Id. 485 Id.
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