Opinion ID: 733284
Heading Depth: 3
Heading Rank: 3

Heading: Defendant's Affirmative Defenses

Text: 31 However, not all differences in pay for equal work constitute violations of the Act. Once the plaintiff has carried her burden of proving a prima facie case of wage discrimination, the burden shifts to the employer to establish by a preponderance of the evidence that the differential is due to: (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. 29 U.S.C. § 206(d)(1); see Corning Glass Works, 417 U.S. at 196-97, 94 S.Ct. at 2229. Moreover, the burden of proving that a factor other than sex is the basis for a wage differential is a heavy one. Brennan v. Owensboro-Daviess County Hosp., 523 F.2d 1013, 1031 (6th Cir.1975), cert. denied, 425 U.S. 973, 96 S.Ct. 2170, 48 L.Ed.2d 796 (1976). If proven, though, the defendant is absolved of liability as a matter of law. Mulhall v. Advance Sec., Inc., 19 F.3d 586, 591 (11th Cir.), cert. denied, 513 U.S. 919, 115 S.Ct. 298, 130 L.Ed.2d 212 (1994). 32 Defendant relies on two affirmative defenses. First, it asserts that the initial wage disparity resulted from an inadvertent misapplication of a bona fide (sex-neutral) job classification system. Second, defendant contends that the continuation of the wage disparity through application of the wage restriction policy to Esser's position falls within the merit system exception or constitutes a factor other than sex. Plaintiff argues that defendant cannot assert mistake or its restriction policy as affirmative defenses under the Act. We disagree. 33
34 This Circuit has acknowledged that an employer's argument that a wage disparity was due to a mistake is a defense within the fourth exception of the Act. See EEOC v. Romeo Community Schs., 976 F.2d 985, 988-89 (6th Cir.1992). In Romeo Community Schools, we concluded that the plaintiff had proven a prima facie case under the Act and went on to consider the employer's affirmative defense that the disparity was due to a mistake. Id. We determined that a genuine dispute of material fact precluded a grant of summary judgment, but not because we found a defense of mistake invalid. Id. at 989. Rather, we found that certain contradictory facts suggested that a mistake was not the true reason for the wage disparity. Id. In other words, an employer may argue that a wage disparity is due to a mistake, i.e. a factor other than sex, but, as with all affirmative defenses under the Act, the employer must prove that  'sex provides no part of the basis for the wage differential.'  Owensboro-Daviess, 523 F.2d at 1031 (emphasis added) (quoting 29 C.F.R. 800.142 (1974)). 35 Here, defendant showed that when Esser's position was reclassified in 1989, the committee that factored his position was advised that life insurance policies could be considered more complex than other types of insurance. Further, it was told that the credit insurance area was a lucrative line of business for insurance companies and that, as a result, the companies would submit materials for approval that would make the program specialist's job more complicated and complex. In 1991, when plaintiff's position was reviewed, the committee found that it had been overly optimistic when it had factored Esser's position, although if the program specialist positions were viewed in a spectrum, the Timmer position would fall towards the low end of the VII level and the Esser position would come out on top of the VII level. Given the elaborate civil service system defendant must apply, we are not surprised that unfortunate errors occur, but as long as such errors are sex-neutral, they are not violations of the Act. Cf. Marshall v. J.L. Hudson Co., No. 4-72932, 1979 WL 1850, at  6 (E.D.Mich. Feb.28, 1979) (acknowledging that mistake may be a defense in the context of an elaborate civil service system). 36 In sum, defendant has come forward with substantial evidence that the wage disparity was caused by an inadvertent misapplication of the job classification system. There is no evidence to the contrary. While under the Act the plaintiff is not required to prove pretext, she still must come forward with evidence demonstrating the existence of a triable issue of fact. See FED.R.CIV.P. 56(e). She has not done so. 37
38 Although defendant argues that the restriction policy falls under the merit system defense, we think its alternative argument--that the policy creates a red-circle rate which results in a disparity based on a factor other than sex--is the correct one. The Act's regulations specify that a red-circle rate can be a valid factor other than sex. 29 C.F.R. § 1620.26 (1995). Generally defined, the term red-circle rate describes certain unusual, higher than normal, wage rates which are maintained for reasons unrelated to sex. Id. The legislative history of the Act indicates that Congress intended to include the practice of red circling as a § 206(d)(1)(iv) factor other than sex to explain a wage differential. See H.R.REP. NO. 309, 88th Cong., 1st Sess. 3 (1963), reprinted in 1963 U.S.C.C.A.N. 687, 689. 39 Defendant's evidence shows that as soon as the mistake was brought to its attention, it undertook to remedy the situation by restricting Esser's position in accordance with the rules of the Michigan Civil Service Commission. Defendant demonstrated that the restriction policy is sex-neutral and has been applied when the Civil Service has determined that a position has been over-allocated. Such a policy avoids demoralizing employees whose classifications have changed through no fault of their own. 40 Plaintiff argues that defendant's policy does not fall within the examples listed in the regulations. See 29 C.F.R. § 1620.26. However, the regulations merely provide illustrations of legitimately maintained red-circle rates. Red circling has yet to be defined in all of its manifestations. The flexibility of the red circling concept has been preserved in anticipation of the need to reconcile legitimate business interests with the Act's purpose. Gosa v. Bryce Hosp., 780 F.2d 917, 919 (11th Cir.1986). 41 This is not a situation where wage rate differentials have been or are being paid on the basis of sex to employees performing equal work, [and the] rates of the higher paid employees may not be 'red circled' in order to comply with the Act. 29 C.F.R. § 1620.26. Such a situation would indeed perpetuate the inequities that Congress intended the Act to cure. Here, however, the record establishes that the wage differential that existed before Esser's job was restricted was not the product of unlawful, sex-based discrimination. The evidence further shows that the restriction policy was not based on considerations of sex and was not discriminatory in application.