Does a “Factor Other Than Sex” Need to Be Job-Related to Justify a Pay Differential?

In seeking to simplify the analysis of a “factor other than sex” under the Equal Pay Act (EPA), the U.S. Court of Appeals for the Second Circuit has complicated the matter by breaking from its sister Circuits.

The EPA prohibits pay discrimination on the basis of sex for equal work on jobs requiring equal skill, effort and responsibility performed under similar working conditions. However, pay disparities are permitted when they arise from: (1) a seniority system; (2) a merit system; (3) an earnings system based on quantity or quality of production; and (4) a differential based on “any other factor other than sex.”

Until now, the federal Circuit Courts have generally required this last factor to be job-related. And that is what the employee argued in Eisenhauer v. Culinary Institute of America, in claiming that the pay disparity between her and a male colleague violated the EPA. The Second Circuit, however, rejected this interpretation, asserting that “[t]he term has sowed needless uncertainty and confusion among our sister circuits,” and that, “[i]ts meaning, we think, is about as simple as it sounds.” Thus, according to the Second Circuit, nothing in the text of the statute or its legislative history requires “a factor other than sex” to be job-related, and it was intended to be a broad, general exclusion.

In so holding, the Second Circuit has diverged from the position taken by other Circuits, meaning that different standards will apply depending on where an employer is located. But this case also reminds employers that state law may provide different or additional protections to employees than federal law as well – here, the Second Circuit noted that the New York Labor Law’s equal pay provision contains similar exclusions, but that the last factor, “a bona fide factor other than sex,” is required under law to be job-related to the position in question. Thus, although the employee’s federal EPA claim failed, her state law claim was remanded to the trial court and may yet survive.