Joyce Allen began working at Staples in 2006 as a sales representative. In March 2015, she took a position as an outside facilities area sales manager (ASM). While holding this position she reported to a field sales director (FSD). In the summer of 2017, Allen was promoted to FSD. In February 2019, several FSD’s, Allen included, were laid off because of a corporate reorganization.
In March 2019, Allen sued Staples for violating California’s Equal Pay Act (EPA), gender discrimination, sexual harassment, and other claims under the Fair Employment and Housing Act (FEHA). Allen’s claims were dismissed via summary judgment. Allen then appealed to the California Court of Appeal.
The Court of Appeal first considered the EPA claim. At the relevant times during Allen’s employment, Labor Code Section 1197.5 stated that “No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.” (Note that Labor Code Section 1197.5 was amended, effective January 2019 to make it more employee-friendly.)
To show a prima facie case of sex-based wage discrimination under the EPA, an employee must establish that the employer pays different wages to employees of the opposite sex who are doing substantially similar work under similar conditions. Then, the burden shifts to the employer to prove the wage disparity is based on a bona fide factor other than sex.
Here, the Court of Appeal found that Allen showed that she was paid $22,000 less in base salary than a male ASM and $48,000 less in base salary than a male FSD. This, the Court of Appeal held was enough to establish a prima facie case.
Staples reported that the salary differences were based on time with the company and overall experience. However, Staples only showed this in a general sense and did not show the specific factors that caused the pay differences between Allen and the specific male ASM’s and FSD’s who were paid more. As a result, Staples had not fully carried its burden and the Court of Appeal reversed the summary judgment.
Allen then argued that her success in showing a prima facie case of unequal pay also proved a prima facie case of sex discrimination under the FEHA. The Court of Appeal analyzed Allen’s argument under the McDonnell Douglas burden-shifting framework: “a plaintiff may establish a prima facie case for unlawful discrimination by providing evidence that ‘(1) he [or she] was a member of a protected class, (2) he [or she] was qualified for the position he [or she] sought or was performing competently in the position he [or she] held, (3) he [or she] suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive.”
Once that prima facie case is established, the burden shifts to the employer to show that its action was motivated by legitimate, nondiscriminatory reasons. A reason is legitimate if it is facially unrelated to prohibited bias, and which if true, would thus preclude a finding of discrimination. If the employer meets this burden, the employee then must show that the employer’s reasons are pretexts for discrimination, or produce other evidence of intentional discrimination.
Here, the Court of Appeal held that, even though Allen made a prima facie case of unequal pay discrimination, she could not satisfy the burden of establishing a connection between the pay disparity and her gender. None of the evidence Allen provided regarding allegedly discriminatory workplace conduct was linked to salary decisions. Instead, Staples’ evidence showed that female ASM’s were paid more on average than male ASM’s, and some male AMS’s and FSD’s were paid lower salaries than Allen. The Court of Appeal found the trial court properly granted summary judgment on the FEHA discrimination claim.
Allen v. Staples, Inc., 84 Cal. App. 5th 188, 299 Cal. Rptr. 3d 779 (2022).
Note:
This case highlights the different evidence needed to prove an EPA wage claim and a FEHA sex discrimination claim. On the EPA claim, the employer lost because it did not provide evidence of a bona fide factor other than sex to explain why a specific male employee received a higher wage than the female employee who sued. On the FEHA sex discrimination claim, the employer won because the female employee could not link her lower pay to any act of alleged sex discrimination. Employers can prevent EPA claims by using pay practices and procedures that are based on bona fide factors other than sex and by documenting the legitimate bases for pay decisions.
