Equal pay litigation is continuing to surface as more legislation comes forth requiring pay transparency from employers. The latest issue involves a female psychology professor from the University of Oregon, Dr. Jennifer Freyd.

In May 2020, the Ninth Circuit Court of Appeals heard an oral argument on the issue of whether Freyd was underpaid relative to her male colleagues. At the trial court, a federal district judge found that Professor Jennifer Freyd, a “remarkable teacher and well-respected scholar” with over thirty years’ experience, failed to identify suitable comparators to establish her equal pay claim, despite her identifying four different potential male comparators in her lawsuit. All of which were professors in the Psychology Department at the University of Oregon, who received higher compensation than she did.

Yet, the central focus of the decision was the distinctions present in the comparators’ job functions when compared to Professor Freyd’s. In other words, the District Court found that, for various reasons, each of the male comparators identified by Professor Freyd were incomparable for purposes of the EPA.

At the outset of its opinion, the Court acknowledged that higher learning may present a unique set of obstacles for claimants seeking redress for gender-based wage discrimination: “When applied to a university setting, the notion of ‘equal pay for equal work’ has unique complexities that are not found in other institutions.”

Fortunately for Professor Freyd, in March 2021, the Ninth Circuit Court of Appeals reversed its decision and ruled in favor of her claim, “finding that she had alleged sufficient facts to proceed with a suit against the University of Oregon for pay discrimination based on significant pay disparities with male faculty members.”

An article released by the University of Oregon goes on to say that the psychology department conducted an internal and external self-study of its salary structure, and found that the salary gap was perpetuated by “retention raises given to professors who pursued outside offers of employment.”

In response to the Ninth Circuit Court of Appeals, the University of Oregon announced that it is considering appealing the decision to the U.S. Supreme Court, insisting that “professors are not subject to the law because they do not perform equal work, and the disparate impact of its salary policies on women is justified.”

In an effort to stop the University from asserting a “damaging” interpretation of the Equal Pay Act of 1963, 47 groups have filed briefs against the institution’s position. A petition letter is circulating now pleading the University to stop its pursuit to appeal the Ninth Circuit court decision. At this time it is unknown if the University will proceed with its appeal to the Supreme Court.

Freyd’s equal pay claim demonstrates the difficulty in assessing and objectively identifying pay disparities amongst workers. The challenge becomes even greater across industries, such as education, as there are additional factors that need to be considered in evaluating reasons for pay differences.

Employers reviewing this situation from the outside should take note of two things. First, reviews of claims regarding employee compensation and discrimination are being closely examined, and with the current political climate, increasing legislation requiring pay transparency is imminent. Similar court cases such as Freyd’s are continuing to surface across the U.S. and with similar outcomes.

Second, pay equity audits are key for identifying and rectifying pay disparities amongst workforces large and small.

Experts from legal, social, and data backgrounds recommend approaching pay equity auditing proactively, instead of reactively as the Oregon psychology department did. In fact, in certain states, like Oregon, employers can qualify for a litigation safe harbor by proactively performing a pay equity audit with the intent to rectify any identified pay disparities.

Employers would be wise to approach equal pay auditing proactively, as more legislation is coming to require employers to achieve workplace equality. Congress recently held a hearing on pay equity and proposed two pieces of legislation aimed at closing gender and racial pay gaps.

If you’re new to pay equity and unsure of how to get started, download our white paper Designing a Successful Pay Equity Policy for Your Organization to learn about the key differentiators for planning and developing a pay equity strategy.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.