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Walmart paid male pharmacy managers more due to prior pay, experience, not sex

By Dave Strausfeld, J.D.

The allegedly higher salaries Walmart paid to male pharmacy managers at one of its stores was due to “factors other than sex,” held a federal district court in Alabama, granting summary judgment to the giant retailer. While it is unlawful to base salaries on prior pay alone, Walmart sufficiently showed that it took into account both prior pay and experience (along with other factors), and thus was able to establish an affirmative defense to a pharmacist’s Equal Pay Act claim, in which she alleged she performed work substantially equal to male pharmacy managers but was paid less (Gosa v. Wal-Mart Stores East, LP, February 2, 2017, Granade, C.).

Walmart employs licensed pharmacists in many of its stores. When a permanent pharmacy manager is not available in a store, a staff pharmacist is elevated to the position of Pharmacist in Charge (PiC) to temporarily fill the role. This temporary elevation comes with a one dollar per hour raise, which reverts to a staff pharmacist’s original salary at the end of the PiC role. By contrast, permanent pharmacy managers receive greater compensation.

During her time as a staff pharmacist and PiC at a Walmart store in Selma, Alabama, the employee worked with three different male permanent pharmacy managers and one female permanent manager. The employee and one other female pharmacist worked as PiCs. The employee claimed that Walmart was engaged in pay discrimination.

Substantially equal jobs. On her Equal Pay Act claim, the employee bore the initial burden of showing that the PiC and permanent manager positions were substantially equal. This determination “focuses solely on the primary duties of each job, not duties that are incidental or insubstantial,” and job titles are not controlling, the court noted. Here, the court had no need to delve in detail into the issue of whether the positions were substantially equal, because Walmart “appears to concede” that the role of PiC and permanent manager were substantially equal.

Walmart’s salary-setting criteria. The burden thus shifted to Walmart to establish an affirmative defense under the EPA. Walmart relied on the catchall defense that the pay differential was based on “factors other than sex.” Specifically, Walmart presented evidence that when hiring laterally, it based salary offers on an applicant’s current salary as well as the applicant’s skill and experience. In addition, the company took into account “fluctuations in the job market.”

Prior pay plus experience. This was sufficient to establish an EPA defense, the court concluded. While it would be unlawful to set salaries based on prior pay alone, “there is no prohibition on utilizing prior pay as part of a mixed-motive, such as prior pay and more experience,” as the Eleventh Circuit explained in Irby v. Bittick. Put differently, “prior pay plus experience establishes an affirmative defense under the EPA,” in the words of an earlier decision from the federal district where this case was brought, White v. ThyssenKrupp Steel USA, LLC.

Under this case law, Walmart established an affirmative defense because it was able to show that in setting salaries for the PiCs and permanent managers, the retailer “incorporated both prior pay and prior experience.” In other words, any pay disparity was based on factors other than sex, the court held.

Actual gender-based disparity? The court also seemed to question whether the employee established an actual gender-based disparity, because the “mere fact that two women” held the lower-paid position of PiC “does not indicate gender bias in the payment disparity.” In addition, a current permanent manager at the Selma store was female, and she was highly compensated.

Title VII pay discrimination. The employee also did not succeed on her Title VII pay discrimination claim, which used a different framework. There was no evidence of pretext, the court suggested. Further, “[t]he temporary nature of the job, as well as the lack of required managerial experience, justifies the difference in payment between the PiC and Pharmacy Managers.”

Other claims. The employee fared no better on her other claims. She alleged she was disciplined more harshly than Caucasian coworkers, but her evidence did not support this contention, so she could not proceed on her race discrimination claim. Her retaliation claim failed because she did not show that she explicitly or implicitly communicated her belief that she was being disfavored because of her race. And her breach of contract claim failed because Walmart’s employee handbook did not give rise to a binding employment contract, the court held.