Pregnancy and Pay Discrimination Suit Reversed on Appeal

Judge's gavel. Statue of Themis on a thick book in the background.
Lenzi v. Systemax, Inc.: Pregnancy and Pay Discrimination Under Title VII

{5 minutes to read} Our client, Plaintiff Lenzi, was the Vice President of Risk Management for Systemax, Inc. She alleged that she was paid below-market rate for her position, while the male executives at the company were paid above market rate. She repeatedly asked the CFO to be paid the same as the other male executives. She claims that for this she was demoted and subjected to an audit — the first of its kind at the company, and also faced pervasive sex-related comments from the CFO. Soon after, she disclosed her pregnancy to the company. Less than a month later, she was fired. The plaintiff sued Systemax, alleging pregnancy discrimination and sex-based pay discrimination. The district court initially ruled in favor of Systemax, but in a December 6, 2019 opinion, the Second Circuit reversed that ruling.

Pregnancy Discrimination Claim

Congress enacted the Pregnancy Discrimination Act (PDA) in 1978. The PDA prohibits employers from discriminating against an employee on the basis of pregnancy. PDA plaintiffs are required to show that the employer’s action, such as firing, occurred in circumstances that give rise to an inference of unlawful discrimination. Such an inference can be supported by close temporal proximity between the employee disclosing her pregnancy and the employer firing her. PDA plaintiffs face only a minimal burden in establishing a PDA claim.

In this case, Systemax fired the plaintiff less than a month after she disclosed her pregnancy to the company. Such little time between her disclosure and firing, when coupled with additional allegations demonstrating gender animus, were enough to support an inference that Systemax discriminated against her because of her pregnancy.

Title VII Pay Discrimination

Under Title VII of the Civil Rights Act of 1964, it is unlawful for an employer to “discriminate against any individual with respect to his [or her] compensation…because of such individual’s…sex.” A similar statute, the Equal Pay Act (“EPA”), requires employers to provide men and women with equal pay for equal work. Thus, one way for a plaintiff to state a claim under either statute is to show that she performed work equal to another man in the same position but was paid less (the “unequal pay for equal work” standard).

The court noted that although the EPA and Title VII both attack sex-based pay discrimination, the standards used for the two statutes are different. Importantly, plaintiffs who bring a Title VII pay discrimination claim may prevail by proving disparate treatment other than via the standard of unequal pay for equal work. In other words, a Title VII plaintiff does not need to show that another employee of the opposite sex was paid more for performing the same job duties. Instead, a Title VII plaintiff just needs to show that she suffered some form of sex-based pay discrimination. For example, a female employee might work in a unique position at a company but receive less pay than she would if she were male. Despite not meeting the “unequal pay for equal work standard,” she would still have a Title VII pay discrimination claim.

In our client’s case, the district court erroneously looked only to the unequal pay for equal work standard in assessing the plaintiff’s Title VII claim. The district court held that because the plaintiff could not show that her male counterparts performed substantially the same work as she did, she did not have a Title VII claim. The Second Circuit reversed that opinion and held that the plaintiff did have a Title VII pay discrimination claim because she was able to allege disparate treatment based upon compensation benchmarking data. The court noted that the plaintiff was paid below the market rate for her position. Her male counterparts, although performing different job duties, were paid above the market rate. This pay disparity, in addition to the CFO’s pervasive sex-related comments in the workplace, supported a Title VII sex-based pay discrimination claim.

For more information relating to pregnancy and pay discrimination, or any other employment-related dispute, please feel free to contact us.

James A. Vagnini
Partner
email: jvagnini@vkvlawyers.com
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