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May 12, 2011
Did Factory Pay Women Less?

An Indiana plant where aircraft, industrial, and marine engines are made employs many women as well as men. Asserting that, across the board, women were paid less and afforded fewer opportunities for promotion, two women sought to sue on behalf of all 500+ women employed at the plant. Read on to see how their quest fared.

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What happened. At this Rolls-Royce plant, two women sued for violation of Title VII and the Equal Pay Act. Testimony in federal district court showed the employer’s complex compensation strategy: Employees are first grouped into large classes depending on management’s perception of their value to the company. The judge called these ‘compensation categories.’ Next, narrower ranges within the broader ones are created based on prevailing market wages for each job in question.

The class that the two plaintiffs sought to have certified was spread over 5 compensation categories and 20 different compensation grades, covering supervisors and hourly employees with hugely varying salaries. And, to that the employer added performance bonuses based on a percentage of base pay. The plaintiffs said men earned some 5 percent more than women in the same grades, and women’s performance bonuses were always smaller because of lower base pay.

At trial, a Rolls-Royce’s expert showed that more men held jobs requiring higher wages to meet competition, and he noted other statistical errors by the plaintiffs’ statistician. Finally, he showed that in the 5 compensation categories plaintiffs cited, women were promoted more rapidly than men. Plaintiffs lost and appealed to the 7th Circuit, which covers Illinois, Indiana, and Wisconsin.

What the court said. Appellate judges approved the trial judge’s rulings on the pay claims but considered an entirely different question—how the plaintiffs sued under the Federal Rules of Civil Procedure (FRCP), which governs class action suits. When plaintiffs seek only an injunction—the employer must stop using an illegal procedure—they use one provision of FRCP, while another provision is for plaintiffs to seek monetary damages. These plaintiffs used the injunction provision but also sought back pay; judges balked.

Judges said plaintiffs’ attorneys like the injunction provision because it’s easier: They needn’t notify class members of the class or allow them to drop out. Judges again ruled against the plaintiffs. Randall et al. v. Rolls-Royce, U.S. Court of Appeals for the 7th Circuit, No. 10-3446 (3/30/11).

Point to remember: The same FRCP provisions are at issue in the huge Dukes v. Walmart proposed class action suit soon to be ruled on by the Supreme Court. We’ll see if justices go the way the 7th Circuit did.

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