Reference no: EM131451252

Question: American Federation of State, County, and Municipal Employees, AFL-CIO (AFSCME) v. State of Washington 770 F.2d 1401 (9th Cir. 1985)

The state of Washington conducted studies of prevailing market rates for jobs and wages in order to determine the wages for various state jobs and found that female-dominated jobs were paid lower wages than male-dominated jobs. The state then compared jobs for comparable worth and after finding that female-dominated job salaries were generally about 20 percent less than wages in male-dominated jobs, legislated that it would begin basing its wages on comparable worth rather than the market rate, over a 10-year period. State employees wanting the scheme to go into effect immediately brought a Title VII suit against the state alleging it was a violation of Title VII for the state to know of the wage differences and not remedy the situation immediately. The court held that since the state was not responsible for the market rates, it did not violate Title VII.

Kennedy , J.

It is evident from the legislative history of the Equal Pay Act that Congress, after explicit consideration, rejected proposals that would have prohibited lower wages for comparable work, as contrasted with equal work. In the instant case, the district court found a violation of Title VII, premised upon both the disparate impact and the disparate treatment theories of discrimination. AFSCME's disparate impact argument is based on the contention that the State of Washington's practice of taking prevailing market rates into account in setting wages has an adverse impact on women, who, historically, have received lower wages than men in the labor market. Disparate impact analysis is confined to cases that challenge a specific, clearly delineated employment practice applied at a single point in the job selection process. The instant case does not involve an employment practice that yields to disparate impact analysis.

The decision to base compensation on the competitive market, rather than on a theory of comparable worth, involves the assessment of a number of complex factors not easily ascertainable, an assessment too multifaceted to be appropriate for disparate impact analysis. Unlike a specific, clearly delineated employment policy contemplated by precedent such as those requiring a height and weight requirement or a certain score on an exam, the compensation system in question resulted from surveys, agency hearings, administrative recommendations, budget proposals, executive actions, and legislative enactments. A compensation system that is responsive to supply and demand and other market forces is not the type of single practice that suffices to support a claim under disparate impact theory.

Such cases are controlled by disparate treatment analysis. Under these principles and precedents, we must reverse the district court's determination of liability under the disparate impact theory of discrimination. Under the disparate treatment theory, our review of the record indicates failure by AFSCME to establish the requisite element of intent by either circumstantial or direct evidence. AFSCME contends discriminatory motive may be inferred from the Willis study, which finds the State's practice of setting salaries in reliance on market rates creates a sex-based wage disparity for jobs deemed of comparable worth. AFSCME argues from the study that the market reflects a historical pattern of lower wages to employees in positions staffed predominantly by women, and it contends the State of Washington perpetuates that disparity, in violation of Title VII, by using market rates in the compensation system.

The inference of discriminatory motive which AFSCME seeks to draw from the State's participation in the market system fails, as the State did not create the market disparity and has not been shown to have been motivated by impermissible sexbased considerations in setting salaries. The requirement of intent is linked at least in part to culpability. That concept would be undermined if we were to hold that payment of wages according to prevailing rates in the public and private sectors is an act that, in itself, supports the inference of a purpose to discriminate. Neither law nor logic deems the free market system a suspect enterprise. Economic reality is that the value of a particular job to an employer is but one factor influencing the rate of compensation for that job. Other considerations may include the availability of workers willing to do the job and the effectiveness of collective bargaining in a particular industry. Employers may be constrained by market forces to set salaries under prevailing wage rates for different job classifications.

We find nothing in the language of Title VII or its legislative history to indicate Congress intended to abrogate fundamental economic principles such as the laws of supply and demand or to prevent employers from competing in the labor market. While the Washington legislature may have the discretion to enact a comparable worth plan if it chooses to do so, Title VII does not obligate it to eliminate an economic inequality that it did not create. Title VII was enacted to ensure equal opportunity in employment to covered individuals, and the State of Washington is not charged here with barring access to particular job classifications on the basis of sex. We have recognized that in certain cases an inference of intent may be drawn from statistical evidence. We have admonished, however, that statistics must be relied on with caution. Though the comparability of wage rates in dissimilar jobs may be relevant to a determination of discriminatory animus, job evaluation studies and comparable worth statistics alone are insufficient to establish the requisite inference of discriminatory motive critical to the disparate treatment theory.

The weight to be accorded such statistics is determined by the existence of independent corroborative evidence of discrimination. We conclude the independent evidence of discrimination presented by AFSCME is insufficient to support an inference of the requisite discriminatory motive under the disparate treatment theory. AFSCME offered proof of isolated incidents of sex segregation as evidence of a history of sex-based wage discrimination. The evidence consists of "help wanted" advertisements restricting various jobs to members of a particular sex. These advertisements were often placed in separate "help wanted-male" and "help wanted- female" columns in state newspapers between 1960 and 1973, though most were discontinued when Title VII became applicable to the states in 1972. At trial, AFSCME called expert witnesses to testify that a causal relationship exists between sex segregation practices and sex-based wage discrimination, and that the effects of sex segregation practices may persist even after the practices are discontinued. However, none of the individually named plaintiffs in the action ever testified regarding specific incidents of discrimination. The isolated incidents alleged by AFSCME are insufficient to corroborate the results of the Willis study and do not justify an inference of discriminatory motive by the State in the setting of salaries for its system as a whole.

Given the scope of the alleged intentional act, and given the attempt to show the core principle of the State's market-based compensation system was adopted or maintained with a discriminatory purpose, more is required to support the finding of liability than these isolated acts, which had only an indirect relation to the compensation principle itself. We also reject AFSCME's contention that, having commissioned the Willis study, the State of Washington was committed to implement a new system of compensation based on comparable worth as defined by the study. Whether comparable worth is a feasible approach to employee compensation is a matter of debate. Assuming, however, that like other job evaluation studies it may be useful as a diagnostic tool, we reject a rule that would penalize rather than commend employers for their effort and innovation in undertaking such a study.

The results of comparable worth studies will vary depending on the number and types of factors measured and the maximum number of points allotted to each factor. A study that indicates a particular wage structure might be more equitable should not categorically bind the employer who commissioned it. The employer should also be able to take into account market conditions, bargaining demands, and the possibility that another study will yield different results. We hold there was a failure to establish a violation of Title VII under the disparate treatment theory of discrimination, and reverse the district court on this aspect of the case as well. The State of Washington's initial reliance on a free market system in which employees in maledominated jobs are compensated at a higher rate than employees in dissimilar female-dominated jobs is not in and of itself a violation of Title VII, notwithstanding that the Willis study deemed the positions of comparable worth. Absent a showing of discriminatory motive, which has not been made here, the law does not permit the federal courts to interfere in the market-based system for the compensation of Washington's employees. REVERSED

1. Do you think that using comparable worth is an effective way to determine salaries?

2. Why do you think male-dominated jobs tend to pay less than female-dominated jobs, even if both have virtually the same value to the employer?

3. What would you do to avoid this situation?