Debunking the Market Myth in Pay Discrimination Cases

Abstract

Despite the enactment of the Equal Pay Act (EPA) almost 50 years ago, the pay gap between men and women stubbornly persists. While the pay gap can be attributed to many causes, one of the primary causes explored here is courts’ willingness to allow employers to use “market excuses” to defend pay discrimination suits under the EPA’s fourth affirmative defense. The market excuses we refer to occur when employers defend their decisions to pay a man more than a woman doing equal work because of an applicant’s prior salary, an outside competitive offer given to an employee, or the fact that a man negotiated for more pay. Employers defend these cases by arguing that the pay differential is not based on sex; it is based on the market, which is alleged to be neutral. This Article argues that the market is not neutral but is instead tainted with gender bias. Relying on the social science literature, we demonstrate that unconscious discrimination causes employers to value men more than women and also influences how women value themselves. Both of these phenomena cause pay bias to perpetuate. The recently defeated bill, the Paycheck Fairness Act (PFA), had the potential to foreclose employers’ reliance on market excuses because it would require employers to prove that the factor causing the pay disparity between a man and a woman performing equal work is “job related” and “consistent with business necessity.” Despite the failure of the PFA, we continue to believe it has great potential to not only minimize the use of market excuses but also to clarify and reinforce the EPA’s strict liability framework, which will hopefully revive the suffering statute. Perhaps a modified PFA – one that maintains the important revisions to the fourth affirmative defense but modifies the highly criticized damages provision – will bring us one step closer to ending the pay gap.

Keywords: discrimination, pay gap, market, EPA