4th Circuit Decision and the Equal Pay Act

On December 3, 2021, the U.S. Court of Appeals for the Fourth Circuit ruled in favor of Tracy Sempowich’s claim under the Equal Pay Act. Ms. Sempowich was represented by employment law attorney Katie Abernethy, a partner at The Noble Law.

The ruling– which will likely influence other cases that allege sex-based pay discrimination– stated that courts should evaluate the equality of pay on the basis of wage rate, not total compensation.  This means that courts will evaluate each component of overall compensation (i.e., salary, commission plan, bonuses, stock awards, etc.), rather than aggregating all such sources when comparing pay of men and women. 

Equal Pay Act Claims Upheld

Tracy Sempowich, a former sales manager at Tactile Systems Technology, sued her former employer alleging that she received less base pay than a male coworker and was removed from her position to facilitate his promotion.

A lower court had previously ruled that Sempowich’s claims under the federal Equal Pay Act were not valid since court filings indicated that she had earned additional commissions and therefore netted a higher total income than her male coworker.

The Equal Pay Act of 1963 Law requires that men and women be provided equal pay for equal work. Judge Diana Gribbon Motz of the U.S. Court of Appeals for the Fourth Circuit, writing for a unanimous panel, said the lower court’s ruling was “likely the result of misreading the definition of ‘wages’ in the Equal Employment Opportunity Commission’s Equal Pay Act regulations.”

Wage Rate, Not Total Compensation, Determine Equal Pay

Katie Abernethy, joined by the Equal Employment Opportunity Commission, argued that the lower court had in fact misread the Equal Pay Act, and a panel of The Fourth Circuit  agreed. In the decision, the judge said that the plain language of the Equal Pay Act emphasizes wage rates, and that a “total compensation” approach to determining whether pay is equal does not comport with the statute’s plain language and meaning.

Judge Motz -provided the example that an employer could not pay women a lower hourly wage and then schedule them to work more hours to make up the pay difference. In a previous amicus brief, the EEOC contended that a woman working longer hours and earning higher commissions just to attain pay equality with a male colleague is an Equal Pay Act violation.

This recent 4th Circuit ruling became the subject of appellate briefing in the Ninth Circuit in the Equal Pay Act case filed by the United States women’s national soccer team. Discriminatory wages for similar work have compelled many employees to file claims under the Equal Pay Act and Title VII.

Legal Counsel for Equal Pay Labor Claims

For skilled assistance in matters involving equal pay laws, reach out to The Noble Law for a confidential consultation. Our team can be your trusted counsel for workplace disputes. We have litigated cases in state and federal courts across the United States and are proud to serve North Carolina, South Carolina, and the NYC metro area.

We listen. We hear you. We understand.

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