State equal pay act gets first test in the courts

Plaintiff's attorney John Franco says Wendi Dreves should receive over $180,000 in backpay, after a Burlington court hearing on March 19, 2013. Photo by Nat Rudarakanchana

Plaintiff’s attorney John Franco says Wendi Dreves should receive over $180,000 in backpay, after a Burlington court hearing on Tuesday. Photo by Nat Rudarakanchana

At a federal court hearing in Burlington on Tuesday, a state equal pay act passed in 2002 faced its first test in the courts.

A former Hudson News employee sued the company when she discovered that she’d been paid thousands of dollars less than her male replacement.

Plaintiff Wendi Dreves, a former general manager for Hudson Group Retail, which owns the Hudson News kiosk in Burlington International Airport, filed suit in November 2011. It’s the first such lawsuit filed under the Vermont Equal Pay Act.

The state act mandating equal pay for equal work provides stronger protections than its federal counterpart of 1963.

Women’s rights advocate Cary Brown, who leads the state’s Vermont Commission on Women, said the lack of lawsuits doesn’t mean there haven’t been instances of unequal pay for equal work in the last decade.

Brown said she’s fielded plenty of complaints on the topic. She added that a reluctance to publicly battle employers in court, or unawareness of the act among potential plaintiffs, could also account for the lack of legal action.

Dreves’ counsel John Franco argued that Hudson News paid Dreves’ replacement, Jarrod Dixon, about $16,100 annually more than Dreves for the same work, despite Dreves’ seniority and depth of experience.

Dreves earned $34,356 when she first started work in September 2000. She earned $48,230 when she was fired from the job in September 2010 amid substantiated claims that she’d performed poorly and systematically abused her subordinates.

Around that time Hudson News offered Dixon, already an employee and next in line for promotion, $52,500 to move from Manchester, N.H., for the same position, according to oral arguments in court. Dixon was later accused of sexual harassing his subordinates, according to an amicus brief filed for the plaintiff.

Before presiding Judge William Sessions III, Hudson’s counsel Joseph Kernen countered that Dixon’s unique qualifications and experience, along with the requested move from New Hampshire, justified the extra pay, which he put at about $4,000 by comparing Dreves’ final salary with Dixon’s first salary.

The 2002 state act permits different wages based on the seniority or merit of the two employees, based on “any factor other than sex,” or in other words, for a legitimate, business-related reason for a difference in pay.

Kernen argued that the firm offered Dixon a higher salary for defensible and bona fide business reasons, and not on arbitrary grounds as an excuse for unequal pay. He pointed to Dixon’s record at the time as an excellent employee, repeating that the extra money was reasonable and necessary to “induce” Dixon to his new position.

Franco argued that the defendant’s case too closely resembled the debunked classic argument that vague “market forces” meant businesses simply had to offer higher salaries to men. The courts have previously ruled this “market forces” justification as an unconvincing legal excuse.

“We have a patriarchal society that pays men more than women, and statistics bear that out,” said Franco at the hearing, linking his case to a history of discrimination. He said that if courts too readily accepted the exception of “business-related reasons,” the state equal pay statute loses its teeth, and may as well not exist.

But Kernen said that the factors explaining Dixon’s higher salary were “real, legitimate, and certainly business-related.” He added that ruling in his favor wouldn’t come close to defanging state statute or undermining legislative intent. He also raised the fact that seven women testified in affidavits that they were abused by Dreves, and that Dreves had withdrawn a past claim of wrongful termination.

Sessions grilled each attorney thoroughly, questioning whether Kernen understood the law’s intent to provide equal pay for equal work, regardless of the qualifications of job candidates. He asked Franco, in turn, if employers could be held strictly liable, regardless of whether they intend to discriminate, given the broadness of the “business related” exemption.

Questioning Kernen, Sessions said: “You look to the job and what the job is worth. … His [Dixon’s] qualifications frankly become less significant.” Sessions also pondered whether he should rule on subtle differences between the state and federal equal pay acts in his eventual decision.

After the hearing, Vermont Law School professor Cheryl Hanna said that greater education, experience, or job responsibility could justify different wages, under the state act. She noted that the state’s law provides greater protection than federal law because it covers employees of small businesses (the federal act doesn’t do so) and because it allows plaintiffs to request more money for restitution.

Vermont Law School professor Cheryl Hanna discusses the importance of the court case, the first filed under the state's Equal Pay Act, in front a Burlington courthouse on March 19, 2013. Photo by Nat Rudarakanchana

Vermont Law School professor Cheryl Hanna discusses the importance of the court case, the first filed under the state’s Equal Pay Act, in front a Burlington courthouse on Tuesday. Photo by Nat Rudarakanchana

Hanna authored an amicus brief for the plaintiff, joining state lawmakers, the Vermont Commission on Women, Vermont Legal Aid, and several other national women’s rights groups in support of the lawsuit.

She called today’s hearing “historic” because “it’s the first time a federal judge has interpreted what Vermont’s equal pay statute means, and how courts going forward should interpret it … It’s the first time a court is going to decide what the Vermont Legislature intended when it passed the law.”

She hoped the case would illuminate the problem of unequal pay and encourage other women to come forward to discuss or litigate the issue.

The Vermont Commission on Women’s Cary Brown added: “A lifetime of limited earnings [for women] really has ripple effects. Women are more economically insecure than men are; they have a higher unemployment rate; they have lower rates of savings.”

She cited U.S. Census data which shows that women in Vermont only earn 84 cents per dollar earned by men. Women here earn more than their counterparts in other states, however, with women nationally earning 77 cents on average per dollar earned by men.

Dreves is seeking about $230,000 in total relief. This includes about $93,000 in allegedly owed backpay, doubled under Vermont statute to restitution of $186,000, along with $40,000 in interest and attorney’s fees of over $100,000.

The civil case also includes allegations that Dufry, the Swiss multinational which now owns Hudson News, did not justly compensate Dreves for overtime and that they discriminated against Dreves based on age.

In the political arena, lawmakers will consider expanding equal pay legislation on the House floor this week, with a bill requiring employers to formally consider requests for flexible work schedules, or face civil fines and investigations.

The legislation has been questioned by the business community, which views it as unnecessary and potentially burdensome, but backed by House Speaker Shap Smith at a press conference on Monday.

A similar case, in which a state corrections worker sued the state for allegedly paying a male counterpart $10,000 more for the same work, is in discovery phase of litigation, according to former Human Rights Commission director Rob Appel.

Hanna is hesitant to predict outcomes in the Dreves case. A decision could come as early as this summer, though there’s no mandated timeframe.

But Hanna’s considered view is that the law clearly favors Dreves, because the burden of proof lies squarely on an employer to show that they didn’t dole out unequal pay for equal work, and because the United States 2nd Circuit, under which Vermont’s court falls, has often ruled in favor of unequal pay for plaintiffs in the past, adopting stringent legal standards for employers.

[Note: The case originated in January 2011 as an age and sex discrimination action, but later came to include a count of equal pay violation, by November 2011, after Dreves’ attorney discovered how much Dixon earned.]

Nat Rudarakanchana

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  • sandra bettis

    and yet, when you mention to people that men are still getting paid substantially more than women, they look at you like you have 3 eyes….

  • Pam Ladds

    Vermont’s Act from 2002 and the Lily Ledbetter act, passed in 2009, clearly do not have enough teeth. One of the most frustrating things is that the onus is on the women to know that they are being paid less. Clearly the evidence is there, in the census, and yet women have no way to know this. There are some fields where pay scales are transparent but not many. Until women start asking questions and demanding the information it is very hard to get any change.

    Over the years this inequality makes a tremendous difference to the lives of women, and those of their children. The amount adds up and effects every life stage, including Social Security at retirement. Inequality in pay is condemning people to poverty. And while the men who are being paid more may not want to rock their relatively comfortable boat by disclosing, to the women with whom they work, their pay amount remind them to think about their wives and daughters. Do they really want to see them paid less for equal work?

    • Steve Comeau

      Pam,
      There are frequently many people involved in employment pay amounts, including business owners, managers, and HR. In order for there to be widespread and systematic pay discrimination against women, most of the people who make these decisions would be knowingly discriminating and breaking the law as well. Of course it happens sometimes, but is likely rare. The people involved in pay decisions are women and men whose primary interest is hiring persons who are capable workers and paying them an appropriate amount. So what really would be the motivation to systematically discriminate in this way and who are the bad actors here? Even if they could in theory save some money by systematically underpaying some people, why “overpay” other people?

  • John Greenberg

    If this case is being contested under Vermont state law, could someone please explain why it is being argued in federal court and not in a Vermont court? Just curious.

  • Lester French

    Seems like the law was written to address pay differences in blue collar and lower level staff positions, not in the upper level management positions where a job description is generally very broad and doesn’t really address actual performance expectations of the job.

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