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Employee Does Not Have to Seek Raise to Maintain Pay Discrimination Action

    Client Alerts
  • November 02, 2015
Title VII and related federal anti-discrimination laws prohibit employers from discriminating against persons based on their membership in a protected category. These discrimination prohibitions include pay disparities. What happens, however, when an employee sues for pay discrimination after being given a salary in excess of that requested during the recent hiring process? A new decision from the Eighth Circuit Court of Appeals demonstrates that such expectations do not eliminate the ability to compare salaries with persons outside of the protected category.

In Smith v. URS Corp., the plaintiff was an African-American applicant who was hired at a salary $11,000 above what he requested during the hiring process. He later sued for race discrimination based on the company’s subsequent hiring of a white employee he identified as working at a similar job but at a substantially higher salary. The employer contended that the plaintiff had not suffered any adverse employment action, because he received pay well in excess of that he had recently requested.

In a 2-1 decision, the Eighth Circuit panel disagreed, allowing the claim to proceed to trial. The court noted that a continuing pay disparity violates anti-discrimination laws even for times prior to the point where the plaintiff requests a raise. In other words, objective pay discrepancies violate the law even if the lower paid employee receives pay in excess of what he sought in negotiations with the employer.

Although dealing here with race discrimination, this case echoes recent federal decisions addressing pay discrimination based on gender. In those cases, courts have resisted approving pay discrepancies justified on the basis of the employees’ relative negotiating skills. Pay for the same work must be equivalent regardless of the process by which individual employees’ salaries are set.