Expect Increase in Gender Pay Litigation
Posted at Arkansas Employment Law by M. McClure on 06/08/2009
The Eighth Circuit Court of Appeals recently found that an employer had not met its burden of explaining the discrepancy in pay between a female and male Human Resources Manager and reversed the trial court's grant of summary judgment.  Drum v. Leeson Electric.

The employer hired a male Human Resources Manager from outside the company to replace a female Human Resources manager, who had been promoted. The company paid the male manager nearly $21,000 more annually than the female manager.  The employer argued that the difference in pay was based on the male manager’s negotiation of salary at the time of hire. The Eighth Circuit rejected this reason as “insufficient as a matter of law.”  The employer bore the burden to prove that the pay difference was due to a factor other than sex, and it failed to do so.

The Bottom Line: The simplest lesson an employer can take away from the court’s decision is to not play fast and loose with the pay of HR professionals.  It’s their job to spot legal issues, so pay HR correctly!

On a more serious note, with the passage of the Lilly Ledbetter Law and Congress’ consideration of The Paycheck Fairness Act, employers can expect an increase in gender pay litigation.  Employers may want to consider a review of their pay practices.  A review may suggest that its time for some strategic changes to your compensation practices.  It’s always better for an employer to fix a compensation problem proactively, rather than to resolve it in litigation.