A recent court case, stemming from an Iowa employer, may have a significant impact on how employers throughout Nebraska and Iowa view pay differential between employees. On April 3, 2017, the Eighth Circuit Court of Appeals ruled in Dindinger v. Allsteel, Inc., a case pertaining to gender based pay discrimination. In the ruling, the Court suggested that market forces and economic conditions, often used as an affirmative defense in pay discrimination claims, may not be sufficient as a defense without a clear connection. The result is that an employer may not be able to assert that economic conditions are the reason for pay differential between men and women without being able to show how the economic conditions caused the pay differential for the specific employees in question.
This case stems from an Iowa furniture manufacturer, where three female employees claimed gender based pay discrimination. As an affirmative defense, the business argued that market forces and economic conditions were the reason for the pay differential, not gender discrimination. This affirmative defense is often raised by employers and, generally, does not require a specific correlation between the economic condition and the employee. However, the Court in this case noted that to successfully argue the “factor other than sex” defense, the business must show how economic conditions directly resulted in the pay differential. For employers in the Court’s jurisdiction, including those in Nebraska and Iowa, an increased burden may exist when asserting the market forces affirmative defense and could necessitate taking action before any potential pay discrimination claims arise.
Employers should recognize the added challenge of defending pay discrimination lawsuits and, potentially, take preemptive action by auditing current pay and employment practices. A copy of the opinion can be found at the following link: http://media.ca8.uscourts.gov/opndir/17/04/161305P.pdf
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