Avoid Sex-Based Faculty Pay Discrimination

Colleges and universities increasingly face complaints of pay discrimination from female faculty. A National Education Association study of professional pay in higher education cited 2020-21 Department of Education data showing that although pay gaps varied by higher institution type, women faculty at research universities were paid 82 cents for every $1 men received.

Moreover, effects of the “Great Resignation” — high turnover and difficulty making new hires — can make educational institutions more vulnerable to pay discrimination claims as they struggle to retain and replace departing faculty.

Sex-based pay discrimination is illegal under federal and most state laws. Violations can have serious financial consequences. Working with legal counsel with expertise in pay discrimination issues, examine your institution’s compensation practices for discrepancies between male and female faculty pay. If any sex-based disparities exist, address them proactively. (While this article focuses on faculty pay disparities, you should apply the same principles throughout your workforce.)

In addition, institutions that are federal contractors must have affirmative action programs that include in-depth analyses of their “total employment process,” including compensation systems, to find disparities based on sex (as well as race and ethnicity).

The Legal Landscape

The primary federal law addressing sex-based pay discrimination is the Equal Pay Act of 1963 (EPA), which amended the Fair Labor Standards Act (FLSA). It prohibits paying male and female employees differently based on sex “for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.”

The EPA applies to all forms of pay, including:

• Salaries
• Bonuses
• Benefits

Employers can’t reduce pay rates of either sex to comply with the law.

For a faculty member to prove sex-based pay discrimination under the EPA, that employee must first show a pay disparity with an opposite-sex faculty member (a “comparator”). The choice of appropriate comparators is fact specific. Job titles aren’t determinative. The duties of the positions being compared need not be identical; however, they must be substantially equal.

An appeals court held a female professor improperly selected as comparators two men who were former administrators, taught in different departments, and had different duties and skills, noting the university “systematically pays engineering professors more than humanities professors.”

If a faculty member establishes a pay disparity, the institution must then show a sex-neutral justification for it to avoid liability.

The EPA cites four such justifications (or “affirmative defenses”):

• A seniority system
• A merit system
• A system that measures earnings by quantity or quality of production
• Any differential based on a factor other than sex

In court, successful plaintiffs can recover an array of damages:

• Backpay, or the amount by which they were underpaid, for two years (or three years for a “willful” violation, meaning the employer knew or showed reckless disregard for whether its conduct was illegal)
• “Liquidated” damages (for “an especially malicious or reckless act of discrimination”) in an amount equal to backpay
• Interest, costs, and attorney fees (usually substantial due to the complexity of these claims)

In addition, some employers that willfully violate the EPA can face fines of $10,000, imprisonment for six months, or both.

A faculty member complaining about sex-based wage discrimination could file an individual lawsuit or a collective action on behalf of other “similarly situated” faculty. Depending on your institution’s size, a collective action might mean dozens of plaintiffs, with the potential for multiple backpay, liquidated damages, and attorney fee awards.

Title VII

Sex-based discrimination in pay and benefits is also unlawful under Title VII of the Civil Rights Act of 1964. Title VII requires proof of discriminatory intent, whereas the EPA doesn’t. But under Title VII, jobs need not be substantially equal to prove discrimination. Moreover, Title VII — unlike the EPA — allows compensatory (including emotional distress) damages and punitive damages, in addition to backpay and attorney fees.

Depending on the situation, faculty could challenge alleged pay disparities under the EPA, Title VII, or both. Your institution could also face state law claims, which may be more difficult to defend than alleged federal law violations.

State Laws

Understanding state (and any local) equal pay laws is critical. Despite broad similarities to the EPA, significant differences — favoring employees — frequently exist. Examples include:

• Oregon bans pay disparities “for work of comparable character,” which is less restrictive for potential plaintiffs than the federal standard.
• New Mexico eliminated the fourth “catch-all” affirmative defense (any “factor other than sex”), while other states narrowed it.
• Although salary history could be a factor other than sex, it’s sometimes viewed as perpetuating past discrimination. Multiple states (such as Colorado, Illinois, and Washington) prohibit employers from asking about or considering salary history, as do cities like Cincinnati and Philadelphia.
• Various states, including Connecticut and Maryland, have wage transparency provisions requiring employers to disclose salary information.
• New Jersey and New York allow six years of backpay for wage discrimination, and New York authorizes liquidated damages for willful violations up to three times backpay.

As of early 2022, Mississippi was the only state without its own equal pay law. Schools in other states should consult legal counsel about applicable requirements and consider how they might affect your faculty compensation practices.

Key Actions

We recommend these steps to help your institution avoid a pay discrimination claim:

• Evaluate faculty job descriptions. Ensure written job descriptions for every department accurately capture the duties for each position, including teaching, service, and scholarship. Be specific; if a department expects tenure-track faculty to produce a minimum number of publications per year, make this clear.
• Document the reasons for pay decisions. A host of factors can be involved, including education; professional qualifications; other experience and training; seniority; academic rank when first hired; and quality of research/scholarship, service, and teaching.
  
  Require people making pay decisions to document these and other reasons for them, such as market factors (for example, on average faculty in accounting, business and economics earn more than those in education, history and philosophy). However, avoid basing decisions on illegal or (at best) troublesome justifications, like salary history, that you may later need to defend. Preserve documentation according to your document retention policy.
  
  If you use student evaluations to assess teaching performance, be cautious about potential bias in the responses. One study found that students generally rated male instructors as more accurate, better educated, and easier to understand than female instructors — and penalized men less for being “tough graders.”
• Train personnel. Train employees who make decisions or communicate about compensation issues, including provosts and department chairs, on federal and state pay equity legal requirements, including avoiding retaliation.
• Consider — and prepare appropriately for — a pay audit. Institutions conduct pay equity audits for various reasons, such as responding to internal pay discrimination complaints or as part of periodic compensation reviews (in which case they may share the results with faculty). Depending on institutional culture and needs, pay audits (sometimes called pay reviews or pay studies) may use internal resources or be outsourced.
  
  While reviewing pay practices offers potential benefits — including avoiding a “willfulness” finding in eventual litigation if a sex-based pay disparity exists or establishing an affirmative defense to a pay discrimination claim in states like Massachusetts and Oregon — it poses substantial risks to your institution if done improperly.
  
  In 2013 a university admitted in writing a “significant pay disparity” (averaging almost $20,000) between male and female law school faculty but took no corrective action. The Equal Employment Opportunity Commission (EEOC) sued, obtaining a settlement under which the university paid $2.66 million in damages to seven female professors, increased their salaries, and agreed to other terms, including publishing salary information annually.
  
  Before examining your pay practices, it’s critical to consult an appropriate expert (usually a labor economist) for advice on approach and methodology, including pinpointing permissible factors other than sex that influenced initial pay and identifying potentially “substantially similar” faculty positions within and between departments. United Educators (UE) strongly suggests working closely with legal counsel with expertise in pay discrimination matters who can help find qualified experts. Counsel’s involvement from the beginning also may protect confidentiality of an audit if litigation develops.
  
  However, institutions that are federal contractors face potential complications with confidentiality of pay equity audits. In a March 2022 directive, the Office of Federal Contract Compliance Programs (OFCCP) stated that contractors can’t claim confidentiality for required audits showing compliance with agency regulations — and suggested they conduct separate audits to obtain privileged legal advice. If your institution is a federal contractor, consult an attorney experienced with OFCCP procedures.
• Realize litigation is costly. Even for schools that successfully defend lawsuits, litigating pay discrimination claims is expensive. These cases are fact intensive. Your institution may have to find and produce records going back decades, and multiple outside experts are often necessary. Also consider the significant nonmonetary costs of litigation, including lost time and productivity, as well as damage to employee morale and institutional reputation.

Additional Resources

Littler: Minding the Pay Gap

Seyfarth: 50 State Pay Equity Desktop Reference

Seyfarth: Developments in Equal Pay Litigation