How a Quirk of the Equal Pay Act Causes Some Women to Miss Out

February 19, 2014

President Obama promised in his 2014 State of the Union address to fight unequal pay between men and women in America. While the statistics are often debated, there is no question that women in the US do often make less than men for the same work. While President Obama has outlined an agenda for addressing this problem, there’s one thing he hasn’t addressed, which has stymied a number of people who come to my office asking for help. A bizarre intersection of two laws has resulted in numerous people, who think they are doing everything right to protect their rights, completely losing their ability to sue under the Equal Pay Act—precisely the law designed to effectuate the equality the President was talking about. Before the President starts up too many task forces, maybe he should consider simply ensuring that people are able to use the laws already on the books.

First, a little background. There are two laws in the US that make it unlawful to pay men and women differently for equal work: Title VII of the Civil Rights Act, and the Equal Pay Act. Title VII outlaws discrimination “because of sex,” i.e. to treat men better because they are men. The Equal Pay Act simply states that it is unlawful to pay men and women differently for equal work (i.e., work involving the same skill, experience, and responsibilities).

To file a lawsuit under Title VII, people first have to complaint to the Equal Employment Opportunity Commission (EEOC). The EEOC is charged with investigating all complaints made to them, though they have broad discretion in determining how thoroughly to investigate, especially given their ballooning workloads. If the EEOC investigates and finds “probable cause” to think that discrimination happened, they try and get both sides to settle out of court. If that fails, then the person can go ahead and file a lawsuit. If the EEOC simply never gets around to investigating, the person can still go to court, but the EEOC doesn’t have to let them until 180 days after they’ve filed their complaint. That means that anyone who wants to file a lawsuit against their employer under Title VII needs to file a formal EEOC charge, and then most likely wait six months before their lawsuit can start. If they want a probable cause finding, then they likely have to wait much longer.*

But what happens to people’s claims while they’re tied up in the EEOC? Most laws have a statute of limitations—a time period after which you can’t file a lawsuit. The statute of limitations on Title VII complaints is quite short—180 days in some states, 300 days in others—but the good news is that the statute stops running when the complaint is being investigated—it’s “tolled.” So if you were fired by a sexist boss in January, and you go to the EEOC in June but nothing happens until December, you haven’t lost your right just because the EEOC investigation prevented you from going to court within 300 days. The statute of limitations was tolled.

The Equal Pay Act is different. You don’t have to go to the EEOC before you can file a lawsuit alleging unequal pay. You can go straight to court. This seems like a good thing—after all, the EEOC can be a time consuming process, and people often lose their will to push forward with an injustice when things languish for so long in a process that is out of their control.

However, the EEOC has statutory authority to investigate Equal Pay Act claims, just like Title VII claims. So if you go to the EEOC, alleging violations of Title VII and the Equal Pay Act, the EEOC will investigate both claims.

So, you’ve complained to the EEOC about unequal pay, and they tell you they’re investigating. You know you can’t bring your Title VII claim until either the EEOC is finished, or 6 months have passed, and maybe you want to wait to see what the investigation uncovers, which might take even longer. So, you’ve protected yourself right? All you have to do now is wait and cooperate with the investigation.

But the statute of limitations under the Equal Pay Act is not tolled by filing a complaint with the EEOC. That means the clock keeps running the whole time your complaint is being investigated. I’ve had a number of potential clients come to me for help, explaining that, not only did they go to the EEOC—just like the law requires—but the EEOC investigated and found “probable cause” that they were victims of discriminatorily unequal pay. Great, time to go to court and prove our case! Except that their complaint languished in the EEOC for years. So many years, in fact, that the statute of limitations** under the Equal Pay Act has expired.

The first question is: why does this matter? Don’t you still have Title VII claims? Who cares if you can’t sue under two laws at once?

The answer is that the laws are very different, and those differences can mean everything.

For example, under Title VII, a person has to prove that a certain inequality happened “because of sex,” e.g., that female employees were treated worse because they were female. So let’s say a woman works with 15 men in her department, all doing the same job. She knows she gets paid less than all of them. But is she getting paid less “because” she’s a woman, or is it “because” of some other reason? Under Title VII, all the employer has to do is make some excuse—any excuse, without having to provide any proof—to explain away the difference. It’s the employee who has the burden to prove by a “preponderance of the evidence” that the employer’s excuse is bogus (that it is “pretext”). So if the employer, say, states that the plaintiff was a worse employee than all 15 of the men in the department, it’s the woman and her lawyers who now have the burden of proving that this isn’t true, which can involve an incredible amount of time and expense—especially given the fact that the employer has much more information about these guys than the employee. What if the employer offers multiple different excuses? She was a worse employee and her job duties are ever so slightly different and she once took a sick day on the very day promotions were given out, and so on, and so forth. The burden nonetheless falls on her and her lawyer to prove that each and every one of these flimsy excuses is untrue.

The Equal Pay Act has a much simpler burden: the employee only needs to show that she’s being paid less than men who perform work requiring the same skills, experience, and responsibility. It is then the employer’s burden to prove that there’s a good reason for the disparity. Now they can’t simply throw every excuse at the wall to see what sticks. If they want to claim that she’s paid less because she’s a worse employee, they actually have to prove that their pay system is merit based, rather than being arbitrary or based on favoritism. This makes sense, after all, since the employer is the one with the most knowledge about all the employees in the department. They’re in the best position to make this kind of defense and to access all the necessary proof.

So the fact that people who file EEOC claims often lose their Equal Pay Act claims means that people are losing their ability to bring a law that is more favorable to employees.

But that’s not all people lose when their Equal Pay Act claims expire while the EEOC investigates—they also lose money, potentially a lot of money. The Equal Pay Act was passed to rectify a longstanding history of unequal pay between men and women. It doesn’t just exist to compensate individual women who bring lawsuits, but to deter employers from paying women less in the hopes that so few women will complain that it’ll all wash out in their favor in the end. So the Equal Pay Act included a 100% “liquidated damages” provision, which just means an automatic doubling of damages to the plaintiff. If you’ve been paid $10,000 a year less than men in your department for the same work, the Equal Pay Act allows you to recover $20,000 per year in damages. This can result in an extra $20,000-30,000 in damages, above and beyond what Title VII offers in back pay compensation.

Title VII doesn’t have a liquidated damages provision. It has other provisions (emotional distress damages, say, or punitive damages), but such provisions are capped. Moreover, the point is that losing one’s right to bring an Equal Pay Act claim not only means that people can’t avail themselves of a slightly more employee-friendly law, but it can mean that they lose the ability to even ask for money that the law entitles them to.

Well, you might say that the EEOC should just warn people about this when they file a claim. That’s smart, and the EEOC already does that. Currently, along with the various and sundry notices people receive from the EEOC after making their complaint of unequal pay, is a notice warning people that their Equal Pay Act claims aren’t tolled.

But honestly, if you knew the federal government was investigating your claim of unequal pay, and are then told that your Equal Pay Act claims were not being “tolled,” and you hadn’t read this article, would you have any idea what that meant?

And even if you had a vague idea of what it meant, would you actually go and pay a lawyer to take your case to court, when the federal government is investigating the claim anyway? Wouldn’t you assume that the federal agency had your back, or at the very least, that you should let the agency take a shot at resolving it before dragging yourself and your former boss into court? Isn’t that the whole point of the federal agency?

The solution is actually quite simple—Congress simply needs to amend the Equal Pay Act to state explicitly that unequal pay complaints made to the EEOC automatically toll the statute of limitations. That’s it. I can’t imagine there would be substantial congressional interest in something so minor and relatively obscure, let alone backlash. And it would undoubtedly help many people, like those who come into my office, to preserve their rights, and allow the Equal Pay Act to actually be enforced.


* If the EEOC investigates and does not find reason to believe there’s been a violation, it can issue a Right to Sue letter before 6 months is up
** The statute of limitations under the Equal Pay Act is 2 years, 3 years if the violation was “willful.”

Christine Clarke is an employment lawyer at Beranbaum Menken LLP in New York City. She has published in Slate and writes an employment law blog at Wage Against the Machine. She’s a regular contributor to the blog.