The Lilly Ledbetter Fair Pay Act allows plaintiffs to pursue equal pay claims based on prior actions that continue to have a negative effect on their salaries. Last month, the Seventh Circuit Court of Appeals reversed a grant of summary judgment against a plaintiff who alleged that her starting salary was negatively affected by gender-based assumptions.
In Kellogg v. Ball State University, the plaintiff alleged that she was paid less than similarly situated male colleagues. The employer offered non-gender based business reasons for the discrepancy, and the district court granted summary judgment for the defendant. On appeal, the plaintiff argued that during her hiring process in 2006, her supervisor stated that she did not need a higher starting salary because her husband already worked for the university and made a good living.
This alleged comment was enough for the Seventh Circuit to reverse the grant of summary judgment and remand the case for trial. The court noted that the statement attributed to the defendant was exactly the type of bias the Lilly Ledbetter law was intended to address. The alleged statement was evidence of pretext regardless of the fact that it was made years ago.
This decision demonstrates the increasing attention courts and regulatory agencies pay to how employers set starting salaries. If these initial salaries are dependent on the new employee’s negotiating strategy or are based on pay history at prior jobs, this can result in bias – especially against female candidates – that can continue to depress income throughout those employees’ careers. Employers are better served by pay polices that establish initial salaries based on pay bands using non-discriminatory factors such as education, experience, and skill sets.