Federal Appeals Court Revives VA Pharmacist’s Gender Discrimination Claim

The United States Court of Appeals for the Federal Circuit has just revived the case of a female pharmacist who claimed gender discrimination after a male pharmacist was hired at a higher pay.

Just the Facts

Dr B was a female pharmacist hired by the Veterans Affairs Medical Center in Birmingham, Alabama, in 2015. Six months later, the same VA center hired a male clinical pharmacist. Both pharmacists were hired according to the federal hiring system–the General Schedule or “GS” system. Dr B was hired as a GS-12, Step 7, with a starting salary of $115,364, partly because her prior salary was $115,003. The male pharmacist was hired as a GS-12, Step 10, with a starting salary of $126,223. He had previously been earning $130,000.

Three years after she was hired, Dr B discovered the pay discrepancy. Dr B eventually filed suit in the United States District Court, alleging an Equal Pay Act (EPA) violation. The EPA codifies the principle of “equal pay for equal work regardless of sex.” There are exceptions, however, when the pay differential is made due to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based on any other factor than sex.

Dr B argued that she was more qualified than the male pharmacist as she had 7 more years of experience and mental health work experience. The government argued that the male pharmacist was more qualified in other ways as he had a master’s degree in biology in addition to his PharmD. Ultimately, the government argued that the male pharmacist’s higher previous pay was the factor other than sex, which caused him to have a higher government salary. The court agreed with this argument, holding that prior pay alone could establish an affirmative defense to a case under the EPA. The court granted summary judgment for the government and dismissed the case against it. Dr B appealed.

Court of Appeals Revives Case

First, the Court of Appeals looked at what Federal Circuit courts have decided in the past and noted that the courts have had differing opinions. The Fourth and Seventh Circuit courts have held that prior pay is a factor other than sex and that it can, by itself, justify differential treatment. The remaining circuits have rejected this approach, holding that prior pay alone cannot be a factor other than sex. The Appeals Court noted that one circuit–the Ninth–has held that prior pay can never justify unequal pay.

The Court of Appeals noted that sex discrimination can be inherent in prior pay. The concern with the use of prior compensation is that the prior compensation itself may be lower because it reflects gender discrimination. “Using prior compensation alone,” wrote the Court in its opinion “could undermine a core concern of the EPA–to eliminate gender discrimination in compensation.” The Court also noted that 21 states and 22 localities have enacted laws prohibiting the use of salary history in setting pay.

The Court ultimately held that “because it is undisputed that prior pay can perpetuate systemic gender discrimination, the best interpretation of the phrase ‘other factor other than sex’ does not include prior pay alone (unless the prior pay itself can be shown to be not based on sex).” “In summary,” wrote the Court, “the employer can only rely on prior pay if either (1) the employer can demonstrate that prior pay is unaffected by sex-based pay differentials or (2) prior pay is considered together with other, non-sex-based factors.” The Court reversed the lower Court’s holding, dismissed the case, and remanded it back to the lower Court for further proceedings.

Reference

Boyer v US. US Court of Appeals Federal Circuit. 1:20-cv-00438-ZNS.