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Denial of class certification of discrimination, equal pay claims filed by female employees of Rolls Royce affirmed

Female employees of a Rolls-Royce aircraft plant were properly denied class certification of their Title VII and Equal Pay Act (EPA) claims alleging that they were paid less than comparable male employees, ruled the Seventh Circuit (Randall v Rolls-Royce Corp, March 30, 2011, Posner, R). Because the named plaintiffs were more highly compensated and they had authority within the company over the compensation of some of the unnamed class members, the district court properly found that they were inadequate class representatives.

Discrimination claims. The plaintiffs claimed that Rolls-Royce discriminated against women by setting the base pay of female employees in their compensation categories below that of male employees in the same categories, and in denying the women promotions they would have received had they been men. The average base pay of male employees in Rolls-Royce’s 20 compensation grades was about five percent higher for male employees than for female employees in those grades, and Rolls-Royce failed to erase the disparity in base pay that existed at the outset of the complaint period. If the women outperformed the men, they might catch up and then exceed them in pay by virtue of performance adjustments. Nevertheless, the women would exceed their male counterparts by less than if their base pay had been equal to the mens’ at the outset. If the difference were attributable to sex discrimination, Rolls-Royce’s failure to eliminate the difference would, by perpetuating discrimination, violate Title VII.

With respect to the EPA claim, because the plaintiffs were unable to identify any male worker who satisfied the stringent statutory requirement of equal job skills, the district court was right to grant summary judgment to Rolls-Royce, concluded the Seventh Circuit. Further, Rolls-Royce was able to show that sex-correlated differences in base pay disappeared after correcting for differences in the jobs performed by male and female employees in each compensation category. Consequently, if more male than female employees were in jobs that commanded a higher market wage, the average compensation of male employees would exceed that of female employees in the same job category for a reason unrelated to sex discrimination. Thus, the plaintiff’s theory of discrimination in base pay under Title VII also failed.

Class certification denial. Turning to class certification, the Seventh Circuit held the district court properly denied certification here. Because the named plaintiffs were highly compensated, the district court correctly concluded that they were not adequate class representatives, since their claims were weaker than unnamed class members at lower pay levels. Further, their claims were not typical of the claims or defenses of the class. The adequacy of their representative status was further undermined by the existence of a conflict of interest, since they had authority over the compensation rates of some of the unnamed class members.

The Seventh Circuit also disagreed with the plaintiff’s argument that, if only equitable relief is sought, a class action may be maintained under FRCP Rule 23(b)(2) even if the equitable relief is mainly monetary. The proper approach in this case would have been for the plaintiffs to seek class certification under FRCP Rule 23(b)(3), which requires full notice so that class members can opt out if they want to bring an independent suit for damages or other monetary relief. It is only when the primary relief sought is injunctive that Rule 23(b)(2) is applicable because the claims of the class members are uniform.

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