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CHRISTIANA v. METROPOLITAN LIFE INS. CO.

December 13, 1993

VICTORIA CHRISTIANA, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Defendant.



The opinion of the court was delivered by: VINCENT L. BRODERICK

 VINCENT L. BRODERICK, U.S.D.J.

 I

 This case involves an alleged violation of the Equal Pay Act (the "Act"), 29 USC § 206(d)(1), brought by the plaintiff Victoria Christiana (the "plaintiff") against her employer Metropolitan Life Insurance Company (the "employer"). It presents the question of whether a company-wide or location-wide salary retention policy is a legitimate defense under the Act as a "seniority system" or "factor other than sex," justifying a wage disparity between individual employees of different genders and so as not to constitute a violation of the Equal Pay Act. I answer the question affirmatively as applied to this case, grant the defendant's motion for summary judgment and deny the plaintiff's cross motion.

 II

 The core facts are not in dispute. Plaintiff, a woman employee of the employer who continues to work for it, has received continued pay increases over recent years. Her duties involve reviewing insurance claims and handling fraud investigations.

 The employer has a company-wide salary retention program designed to permit it to keep experienced employees. Application of this program led male employees with greater longevity with the company and earning higher sums, when transferred so as to perform functions equivalent to plaintiff, to receive higher pay than plaintiff at plaintiff's location, a unit of the Kingston, New York regional office of the large national employer. The same program has led to women receiving higher pay than male employees in similar circumstances in other locations.

 III

 The Equal Pay Act was enacted in 1963 seeking to remedy wage discrimination based on gender in private industry. See Usery v. Bettendorf Community School Dist., 423 F. Supp. 637 (D Iowa 1976). The Act's declaration of policy articulates Congress' desire to overcome the harmful repercussions that result for the underpaid sex. Congress found such wage differentials to

 
(1) depress wages' and living standards for employees necessary for their health and efficiency; (2) prevent the maximum utilization of the available labor resources; (3) tend to cause labor disputes thereby burdening, affecting and obstructing commerce; (4) burden commerce and the free flow of goods in commerce; and (5) constitute an unfair method of competition.

 Pub L No 88-38, § 2, 77 Stat 56 (1963).

 The Act provides that "no employer . . . shall discriminate . . . between employees on the basis of sex," 29 USC § 206 (d)(1), by paying lower wages to employees of one sex than another, for work "which requires equal skill, effort, and responsibility, and which is performed under similar working conditions." Id. The Act permits an employer to justify a wage disparity between employees if due to a differential based on "(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) . . . any other factor other than sex." Id.

 Congress included the "factor other than sex" defense to prevent "bona fide job evaluation systems used by American businesses [from] otherwise being disrupted." County of Washington v. Gunther, 452 U.S. 161, 171 n 11, 68 L. Ed. 2d 751, 101 S. Ct. 2242 (1981). Courts hesitate to substitute their judgment for that of the employer "who has established and applied a bona fide job rating system," Gunther, 452 U.S. at 171, quoting 109 Cong Rec 9209 (1963) provided that it does not discriminate on the basis of gender. See also Hodgson v. Robert Hall Clothes, Inc., 473 F.2d 589 (3d Cir), cert. denied 414 U.S. 866, 38 L. Ed. 2d 85, 94 S. Ct. 50 (1973).

 The language of the Act implies that any factor other than gender could qualify as a legitimate defense to a charge of wage discrimination. This term was chosen to provide a "broad general exception" because Congress realized it would be "impossible to list each and every" conceivable yet legitimate business need justifying a wage disparity. H Rep 309, 88th Cong, 1st Sess (1963), reprinted in 1963 US Code Cong & Admin News 687 (Purpose and Summary of Major Provisions). An exclusive list of factors would be incomplete and might hinder the operation of a valid job classification system used by a company with peculiarities requiring a differential not specifically enumerated - but a bona fide business reason nonetheless. *fn1"

 Only a "bona fide job classification program that does not discriminate on the basis of sex will serve as a valid defense to a charge of discrimination." H Rep 309, 88th Cong., 1st Sess (1963), reprinted in 1963 US Code Cong & Admin News 687 (Purpose and Summary of Major Provisions).

 Gender-neutral business-related factors that are purely job related will justify a wage disparity between employees of different sexes. See City of Los Angeles Dep't of Water & Power v. Manhart, 435 U.S. 702, 55 L. Ed. 2d 657, 98 S. Ct. 1370 (1978) (rejecting the cost of employing one sex compared to the other as a bona fide factor other than sex necessary to justify a wage disparity).

 IV

 This case involves an alleged violation of the Equal Pay Act by the employer due to the payment of a lower salary to the plaintiff, a woman, than to her male co-workers, Employees A, B and C. *fn2"

 Plaintiff was hired as a Junior Claim Approver trainee on a part-time basis by the employer in October, 1985, and was appointed to a full time position in the Kingston Fraud Unit on July 20, 1987. Plaintiff's management level *fn3" as of February 1, 1988 was at WO4 with a salary of approximately $ 17,000 per year, and was increased in February of 1989 to a management level of WO5 with a corresponding raise in salary to $ 19,773. In May of 1989, the plaintiff began to prepare law files *fn4" and in 1990 was spending one-fourth of her time conducting fraud investigations. Plaintiff was promoted to the position of Procedure Assistant, with a higher management level of WO6, in July of 1991, and her yearly salary was increased to $ 25,480. *fn5" In 1991, the plaintiff began investigating fraud claims, negotiating settlements, and testifying in court, on a full time basis. *fn6" In November of 1992, plaintiff was again evaluated and received a promotion to a management level of WE7 with the title of Procedure Analyst I, and a corresponding salary increase to $ 27,560. Plaintiff continues to be employed by the employer.

 V

 Employee A, a male, has been employed by the employer since February 1969. Prior to 1985 Employee A was both the Divisional Manager and the Divisional Director of the Kingston Claims Unit, with over 500 people reporting to him. His management level was RO8, and he earned a salary of $ 56,500. In 1985, the employer lost the primary contract that Employee A's unit handled, and during the next two years, his unit was reorganized and eventually phased out. Employee A maintained his management level and salary until 1987 when Employee A's unit was moved to a different office. In July of 1987, Employee A was transferred to the Kingston Fraud Unit. From July of 1987 to June of 1991, Employee A investigated fraudulent claims, negotiated their settlements and testified in court. Although he kept his previous salary, Employee A's management level was reduced from RO8 to RO6, and from 1988 to 1991 he did not receive any further salary increases. Employee A retired in July 1991.

 Employee B has been continuously employed by the employer since March of 1961. *fn7" Prior to his transfer to the Kingston Fraud Unit in 1990, Employee B had held the positions of both Manager and Associate Manager of the Kingston Claims Office. As a manager, Employee B was responsible for over 150 employees, including Claims Supervisors, and was experienced in claims operations in general for the division. Through experience and years of service, Employee B had attained a management level of RO5 with a salary of approximately $ 45,600. Employee B began working in the Kingston Fraud Unit in 1990, *fn8" and left in July ...


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