Employers defending against claims by persons aggrieved by what they believe to be unfair differentials in compensation may confront two theories of liability. The Equal Pay Act of 1963 (EPA), by its terms and title, requires equal pay for "equal work on jobs, the performance of which requires equal skill, effort and responsibilities, which are performed under similar working conditions," subject to certain exceptions. Title VII of the Civil Rights Act of 1964 (Title VII) prohibits, less apparently, "discriminat[ion] against any individual with respect to his [or her] compensation … because of such individual's … sex." While the narrower goal of the EPA is reflected in the broader goals of Title VII, the proofs and defenses for each intersect and diverge by equal measure, demanding forethought and agility in litigation.

A plaintiff pursuing an EPA claim faces a prima facie burden of establishing: (1) the employer pays different wages to employees of the opposite sex; (2) the employees perform work on jobs requiring equal skill, effort, and responsibility; and (3) the jobs are performed under similar working conditions. If met, the burden of proof shifts to the employer to establish one of four statutory affirmative defenses—that the differential is justified by: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) a differential based on any factor other than sex that is supported by a legitimate business reason. Following such proof by the employer, the plaintiff must prove the factor put forward is pretext by demonstrating that the employer has not "used the factor reasonably in light of the employer's stated purpose as well as its other practices."

A plaintiff pursuing a Title VII pay discrimination claim faces a prima facie burden of establishing: (1) she is a member of a protected class; (2) she was qualified for the job in question; (3) she was paid less than men for the same work; and (4) the circumstances suggest that sex was a motivating factor in the compensation decision. If that burden is met, the burden of production shifts to the employer to demonstrate that the compensation disparity is the product of a legitimate, non-discriminatory business reason. The plaintiff must then prove the advanced reason to be pretext for a discriminatorily motivated reason.

District courts and practitioners have often invoked the Second Circuit's 1995 announcement in Tomka v. Seiler, 66 F.3d 1295, 1310 (2d Cir. 1995) that "[a] claim of unequal pay for equal work under Title VII … is generally analyzed under the same standards used in an EPA claim" as a basis for prosecuting and defending pay disparity claims coextensively. Anecdotal matters seem to support this approach. For example, the Bennett Amendment of 1976 incorporated the EPA's four affirmative defenses directly into Title VII, suggesting a substantial degree of similarity between the two. Likewise, the fourth element of a Title VII prima facie case is often established by evidence of the differential treatment (or compensation) of similarly situated male comparators, much like the EPA's directive to compare workers performing a "substantially equivalent" role. And, of course, any differences between the two theories are often obfuscated by the tendency of EPA and Title VII claims to rise and fall together.

As the Second Circuit recently "clarified" in Lenzi v. Systemax, Inc., No. 18-979 (2d Cir. Dec. 6, 2019), however, there are differences and they are meaningful. To begin, a Title VII plaintiff must produce evidence of discriminatory intent to meet her burden. The EPA, in contrast, is akin to a strict liability scheme whereby liability is all but assumed in the face of a wage differential for a substantially equivalent role if an affirmative defense is not established.

This distinction impacts the relevance of certain types of evidence under one theory versus another. A Title VII claim, for instance, may involve discovery and litigation concerning stray comments, statistics concerning relative compensation between males and females across the workforce, and an employer's valuation of male and female workers by reference to market factors, whereas an EPA claim likely will not. So too, claims under the EPA are generally limited to a comparison of workers in the "same establishment," whereas Title VII is not so limiting and may involve discovery concerning workers across the company. The "same actor" defense or defenses predicated on the preferential treatment of other workers of the same sex will also fall to the wayside in defending an EPA claim.

There is also a distinction between the requisite intent under Title VII and the willfulness component—which allows for an expanded recovery period—under the EPA. Employers may focus their efforts on defending against the claim of willfulness in the belief that its absence precludes a finding of intent under Title VII. Recent case law, however, has largely nullified the argument: "There is a difference between acting in good faith for Title VII purposes and not acting in a knowing and reckless way so as to violate EPA willfully." An employer must therefore be careful to mount a defense to each independent claim.

Title VII also protects against a broader array of unfair pay practices. A claim under the EPA is only actionable if the plaintiff can identify a male comparator in a "substantially equivalent" role who earns greater wages that are not explainable by any of the four affirmative defenses. While relief could be sought for this circumstance under Title VII as well—cast, perhaps, in the more traditional Title VII language of a "similarly situated" male earning greater wages—Title VII does not independently require a plaintiff to establish that she performed equal work for unequal pay. Under Title VII, a female employee might be employed in a solitary role within a company but offer evidence proving that, had she been male, she would have been paid more. An employer should not therefore comfortably assume it can defend based upon the absence of a male comparator if other evidence supports a discriminatory motive. Stated differently, a violation of the EPA is not a prerequisite to a violation of Title VII.

These differences do not rob EPA-type evidence of all utility in defending Title VII claims as the four affirmative defenses expressly incorporated into Title VII may remain useful. For example, even in the absence of the male comparator necessary to establish an EPA violation, an employer can defend a Title VII compensation claim on the grounds that the challenged wage rate was based on seniority, merit, quantity or quality of production, or a factor other than sex. Employers are reminded, however, that: (1) these are affirmative defenses for which an employer bears the burden of proof rather than the burden of production; and (2) Title VII renders a claim actionable if sex played any role in the compensation decision, which may dilute the value of these EPA defenses depending upon the facts.

There are other technical, but equally important, distinctions about which practitioners must be aware. Under the EPA, but not Title VII, there is no administrative exhaustion requirement before the Equal Employment Opportunity Commission. The limitations period for claims under the EPA is two or, in the case of a willful violation, three years, whereas under Title VII it is generally 300 calendar days from the last paycheck impacted by the discriminatory pay decision. The damages available under the EPA are capped at double the amount of lost wages, whereas Title VII provides for greater and more significant relief, including punitive damages.

These strategic and evidentiary considerations are most acute in the litigation posture and demand a careful assessment of available evidence and discovery needs. Employers can proactively seek to avoid the courtroom, however, through thoughtful consideration of current pay practices and pay equity audits performed with the assistance of counsel.

Brian D. Murphy is a partner in the labor and employment practice group at Sheppard, Mullin, Richter & Hampton in New York, the co-author of The Wage & Hour Manual for New York Employers, and the co-author of Recognizing and Remediating Gender Pay Equity Issues in the Workplace. He can be reached at [email protected].