Landmark Ruling: Court Resolves Critical Issue in Gender Pay Gap Lawsuit

In Eisenhauer v. Culinary Institute of America, No. 21-2919-CV (2d Cir. Oct. 17, 2023), the New York State Court of Appeals answered the critical question of what a defendant must prove to establish affirmative defenses to pay-discrimination claims under the Equal Pay Act, 29 U.S.C. § 206(d), (“EPA”) and New York Labor Law § 194(1).

As a way of background, Eisenhauer (“Plaintiff”), a female professor at the Culinary Institute of America (“Defendant”), alleged that Defendant violated the aforementioned state and federal laws by compensating her less than a male professor.  To this claim, Defendant stated that their sex-neutral compensation plan, which incorporates a collective bargaining agreement and employee handbook, was a “factor other than sex” that justified the pay disparity.  Defendant’s compensation plan requires fixed pay increases triggered by time, promotion, and degree completion but does not provide for “equity” adjustments.  Therefore, all faculty members receive the same percentage increase in their salaries each year.  However, a pay disparity existed because Plaintiff started with a lower salary than her colleague.  Plaintiff then argued that the compensation plan could not qualify as a “factor other than sex” to justify the pay disparity because it created a pay disparity unconnected to differences between her job and her colleague’s job.

Equal Pay Act Claim

The EPA provides four affirmative defenses to its prohibition of pay disparities based on sex: “(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.”

The Court primarily relied on the case of Aldrich v. Randolph Central School District, where the defendants attempted to justify the pay disparity between the plaintiff, a cleaner, and two male custodians by citing the existence of a civil-service exam that custodians, but not cleaners, were required to take which ultimately led to defendants paying cleaners less. The Aldrich court ultimately rejected that a sex-neutral job classification system could explain a sex-based pay differential “without more.”

The Eisenhauer court then declined to follow the job-relatedness analysis in Aldrich, finding that the meaning of the ‘factor other than sex’ test takes into account ‘any other factor other than sex’ means ‘every’ ‘additional’ factor ‘except for’ those based (intentionally or unintentionally) on sex. Therefore, for a defendant to establish the ‘factor other than sex’ defense, they must prove that the pay disparity at issue is based on any factor other than sex, regardless of whether or not it is job-related.

Ultimately, the Court determined that no reasonable jury could find that the pay disparity between Plaintiff and her male colleague was based on sex and affirmed the district court’s summary judgment on the EPA claims.

New York Labor Law Claim

The NYLL’s Equal Pay Law is similar to the EPA in that it prohibits pay discrimination on the basis of “status within one or more protected class or classes” instead of sex alone, along with the same potential defense being “a bona fide factor other than status within one or more protected class or classes.”  However, under the NYLL, the defendant must show that the pay disparity results from a differential based on a job-related factor.

Ultimately, it was decided that the district court erroneously reviewed Plaintiff’s EPA and NYLL claims under the same standard.  The district court should have analyzed Plaintiff’s claims separately to account for the NYLL’s clear ‘job-relatedness’ standard.  In light of this mistake, the Court vacated the summary judgment related to Plaintiff’s NYLL claim and remanded the issue back to the district court.

While the Court’s holding in Eisenhauer ultimately ruled in favor of the employer, it is essential to note that the holding did not wholly close employees’ chances of winning a pay disparity case. The Court in Eisenhauer drew a clear line between what the state of New York requires and what federal law requires in order to establish an unlawful wage disparity claim.

If you have questions regarding a potential wage disparity based on sex, please contact Borrelli & Associates, P.L.L.C., to schedule a free consultation through one of our websites, www.employmentlawyernewyork.com, www.516abogado.com, or any of our phone numbers: (516) 248-5550, (516) ABOGADO, or (212) 679-5000.