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School superintendent’s pay for dual role based on factors other than sex, including prior salary

By Cynthia L. Hackerott, J.D.

Even though a woman was paid less for her role as superintendent over two schools than her male processor at one of the schools had been paid, the pay discrepancy was not due to sex but rather due to other factors, including budget constraints and an applicable state pay law, the Seventh Circuit concluded. Therefore, it affirmed a district court’s grant of summary judgment in favor of her employer, the Illinois Department of Human Services, on her pay bias claims brought under the Equal Pay Act, Title VII, and the Equal Protection Clause of the Fourteenth Amendment (Lauderdale v. Illinois Department of Human Services, November 30, 2017, Kanne, M.).

Two-school superintendent role created. In 2010, the Illinois Department of Human Services paid the plaintiff a base salary of $83,856 plus a 5 percent bilingual pay bonus, for a total of $88,048, for her job as the superintendent of the Illinois School for the Deaf (ISD). That year, a male superintendent resigned his position as superintendent for the School for the Visually Impaired (ISVI) for which the department had paid him $121,116 per year. The department decided to create one combined superintendent role to cover both schools, and offered the plaintiff that role. Pay negotiations ensued, with the plaintiff asking to be paid as much or more than the male superintendent had been paid.

While some department employees believed the plaintiff was entitled to a large pay raise because she was taking on two roles, others noted budget constraints and expressed concern that the Illinois Department of Central Management Services would not authorize a 30 percent pay increase for a public employee. Ultimately, the plaintiff accepted a salary of $106,500; although that was less than what the male was paid as superintendent of ISVI, it was a 21 percent increase from the plaintiff’s salary as superintendent of ISD.

Equal Pay Act claim. The Seventh Circuit found it was clear that she sufficiently alleged she was paid less for work that was equal to, if not more demanding than, the work performed by the male superintendent. The department conceded that the plaintiff sufficiently established a prima facie case under the Equal Pay Act, but argued that the pay discrepancy was based on several nondiscriminatory bases: Illinois’s CMS Pay Plan, the plaintiff’s and the male superintendent’s prior salaries, and budget concerns.

Illinois’s CMS Pay Plan. The Illinois Administrative Code sets forth a detailed pay plan for state employees in which positions are assigned established salary ranges, and raises and bonuses are based on the established applicable range. Pay increases are based primarily on the employee’s prior salary. An employee’s increase in pay upon promotion is generally limited to 5 percent of the employee’s current base salary. The increase can be greater if necessary to meet the minimum rate of the salary range for a new position, but the increase cannot exceed the maximum rate of the salary range. Any other increase greater than 5 percent is considered a “special salary adjustment,” which must be approved by the Director of Central Management Services.

The plaintiff asserted that there was no evidence in the record the department believed the pay plan applied when someone is hired for a newly created position. Disagreeing, the Seventh Circuit found the record contained compelling evidence that the department believed the pay plan was applicable. This evidence included forms establishing the new position, classifying the new position within the pay plan, and setting the salary range for the new position, and corresponding and corroborating email communications. Moreover, the record included a CMS-163 “Special Salary Request” form, which indicated that the department sought approval for her pay increase since it was over 5 percent.

Prior salaries. Noting that ithas repeatedly held that a difference in pay based on the difference in what employees were previously paid is a legitimate ‘factor other than sex,’ the Seventh Circuit stated that even if the department did not strictly follow the pay plan, it was clear that prior salary was a factor in determining what increase was appropriate. Basing pay on prior wages could be discriminatory if sex discrimination led to the lower prior wages, but the plaintiff did not assert that was the case here.

Budget concerns. The record here detailed concerns beyond the normal attempts to balance budgets, the appeals court noted. To illustrate, the court pointed out that employees of ISD and ISVI, including the plaintiff, had been required to take furlough days and were aware that the schools might have to close entirely due to funding cuts. The plaintiff and several of the defendants spoke about the ongoing budget crisis and potential cuts in their depositions. Nevertheless, the plaintiff argued that budget concerns could not genuinely be the basis for her lower salary because the department was already eliminating one entire position by having her serve both roles and the maximum rate for the dual superintendent salary range was set at $126,000. While the department could have indeed paid the plaintiff more and still saved money, the court said it was not its role to determine how agencies should spend their money, so long as they are not discriminating. Further, email communications in the record showed that the department was genuinely concerned about the budget when deciding to offer the plaintiff a salary lower than the male superintendent’s. Thus, the Seventh Circuit held that the Equal Pay Act claim was properly dismissed.

Title VII and Equal Protection claims. As to her Title VII and equal protection claims, the defendants did not challenge the plaintiff’s assertions that she was a member of a protected class, that she performed well, and that she was paid less than the male superintendent. Although, the male superintendent and the plaintiff did not have identical roles, the court found it was logical to consider them similarly situated because: (1) they answered to the same supervisor, (2) the qualifications and education requirements for both the dual superintendent role and his position were very similar, and (3) as superintendents, the plaintiff and the male superintendent carried out many of the same duties. The only difference was that the plaintiff held these responsibilities at two schools instead of one. Thus, the plaintiff sufficiently established her prima facie case.

Again, the department explained that budget concerns were the primary cause of the pay discrepancy, along with the pay plan and the plaintiff’s and the male superintendent’s prior salaries. The plaintiff countered this explanation by repeating many of the same arguments discussed above, and the court rejected those arguments for the same reasons it used in addressing her EPA claims.

In addition, the plaintiff argued, supported by her deposition testimony, that no one ever told her that budget concerns prevented the department from paying her more. But her deposition statements also revealed that she was aware the department was facing considerable budget concerns. And again, email communications sent while the salary negotiations were on-going demonstrated that the individuals involved were concerned about giving the plaintiff a very large pay increase in light of budget concerns and in light of concerns for how the public would react to such a large increase for a public employee at a time when other services were being cut.

Finally, the plaintiff pointed to the job posting for the dual superintendent position, which stated that the maximum salary was $126,000, which was $20,000 more than she was paid. Yet, the department explained that the salary range listed on the bulletin reflected the maximum salary for all jobs in that classification, not what was actually budgeted for the dual superintendent role for that year.