Earlier this month, the Federal Circuit heard oral argument in Boyer v. United States. In this case, the Federal Circuit is reviewing a decision by the Court of Federal Claims to grant the government’s motion for summary judgment of a pay discrimination claim under the Equal Pay Act. The appeal relates primarily to the plaintiff’s argument that the trial court incorrectly relied only on salary history to establish its affirmative defense. Judges Dyk, Chen, and Stoll heard the parties’ arguments. This is our argument recap.
L. William Smith argued for Boyer. He began by asserting that, in an Equal Pay Act case, “the court should hold that prior pay alone may not serve as a . . . factor other than sex for purposes of establishing an affirmative defense for the employer.” One judge sought clarification on whether Boyer argued for the Ninth Circuit’s approach. He replied by arguing that, for this case, the court need not go as far as the Ninth Circuit given the “undisputed admissions by the decision makers” that the hiring authorities only considered prior pay when determining salaries. Smith, instead, asked the court to adopt the approach of the Tenth and Eleventh Circuits, in which prior pay may be considered along with other factors, but where prior pay alone is insufficient to justify disparate pay.
Smith turned to discuss the “sworn admissions” by employees “who were common to the pay-setting decisions,” asserting the government considered only prior pay when hiring Boyer. One judge proposed that, “when viewing the facts in favor of Dr. Boyer, . . . it was a reasonable inference” that prior pay was the sole reason for the differential. Smith argued this fact means “the plaintiff does not have to prove discriminatory intent.” He argued “the government conceded the prima facia case” and as a result “the burden is on the government to prove that . . . the differential came from some factor other than sex.”
When asked how the court should proceed if it adopts Boyer’s position, Smith responded that the Federal Circuit should reverse the judgment and grant summary judgment for Boyer. One judge questioned whether the court “would be better off” remanding the case for reconsideration of the competing summary judgment motions “under the proper understanding of the statute.” Smith said “no,” arguing the trial court abused its discretion and failed to hold the government to its burden.
One judge asked how the government “should have operated under the law.” He questioned whether, when the government hired Boyer, it was “wrong for them to hire her at $115,000” or was the “real problem” that it should have raised her salary when it hired her male coworker at $126,000. In the alternative, the judge asked, should the government not have hired her male coworker at that salary at all? Smith responded by arguing that, because the “cognizable” pay disparity did not exist until Veterans Affairs hired the male employee, it should have hired him at a lower salary or increased Boyer’s salary at that time.
Another judge asked what employers may consider as other “job-related” factors. Smith gave several examples, including seniority, merit, or factors other than sex that employers value. The judge asked for guidance on implementing the approach of the Tenth and Eleventh Circuits, where employers may “consider prior pay along with a mix of other factors” so long as prior pay does not dominate the equation. Smith, referencing case law, asserted that the “employer has to prove that it relied on the other factors it is asserting.”
Kara Westercamp argued for the United States. Westercamp began by contending “there is no point in remand as the trial court correctly found in federal law, prior pay alone is a factor other than sex” that employers can use as an affirmative defense in an EPA dispute. One judge asked if the government’s position is that the lower court made a decision based on a statutory interpretation for federal employees that differs for non-federal employees. Westercamp agreed that is the government’s position. Another judge then asked whether she knew “of any statute at all in which that has occurred–that is, that there is the same language, the same statute, and [a court] applies [it] differently to different people.” Westercamp said “no,” but argued that the differing application here is due to additional federal statutes and regulations. She contended “Congress itself has stated that there’s [a] list of factors that may be considered, and prior pay or existing pay is one of [the factors].”
One judge, in response, asked whether the federal hiring statutes and the EPA were inconsistent, or instead why an employer couldn’t “set somebody’s pay based on prior salary and then also comply with the EPA by making sure that any differential is based on a factor other than sex.” Westercamp responded by arguing these statutes were not inconsistent. She argued that, in this case, VA hired the male employee after Boyer, and the federal employment statutes apply only to the time of hire. Moreover, she argued, there is no process to “level up” employees. In response, one judge proposed that the Equal Pay Act provides this process. He suggested that the “intent was to bring federal employees under the Equal Pay Act and apply the same rules to them as to private employers or state employers.” The judge continued, asking how the government’s argument that the rules aren’t the same for federal and private employees can be consistent with the EPA when “the whole purpose . . . was to create an equal approach.” Westercamp responded by arguing the provisions are consistent when considered alongside the federal hiring statutes, which allow the government to consider “an individual’s existing pay and higher or unique qualifications.”
One judge asked whether the court should adopt the middle ground of the Tenth and Eleventh Circuits. Westercamp, in response, argued it would create inconsistency because the regulations do not say you cannot consider prior pay alone.
Westercamp turned the conversation to the existence of executive orders and proposed rulemaking addressing the issue of prior pay. One judge mentioned that the proposed rulemaking “eliminates the ability to look at prior pay” when hiring a federal employee and asked when it goes into effect. Westercamp responded by arguing that the rule-makers had yet to decide what to do. Westercamp also argued that, even if prior pay alone is insufficient to justify a difference, “there were other factors considered . . . such as experience [and] education.” Westercamp asserted that, although Boyer had seven additional years of experience, the male employee’s past jobs and additional degrees distinguished him.
In his rebuttal, Smith repeated that “there is no need for remand in this case.” He argued the statute applies to federal and non-federal employees. He asserted that the federal hiring statute’s “permissive structure” gives the agency discretion. In particular, he argued, “it has the freedom to constrain its discretion to comply with the EPA and avoid a pay disparity that would otherwise be cognizable solely by reference to the prior pay.”
We will continue monitoring this case and report on developments.