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Beware double damages when sued under EPA

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

Here’s something to consider when reviewing your pay and compensation packages: Employers that lose an Equal Pay Act (EPA) claim may end up paying double damages. That’s because the law makes such payments automatic unless the employer can show it acted in good faith when it paid members of one sex less than the other. That’s hard to do.

Recent case: Dr. Angela King is an anesthesiologist who worked for the University Healthcare System at Tulane University Hospital. She worked under an employment contract, as did other anesthesiologists.

When Hurricane Katrina hit New Orleans, King and other physicians were assigned to another of the health system’s hospitals. Because many staff members had fled the hurricane, remaining staff worked extremely long hours to handle the patient load.

Later, when contracts were up for renewal, the agreement included an additional lump sum payment of around $33,000 as a bonus. King believed that the payment was too low for the additional work and re­­fused to sign. Another anesthesiologist, a man, also didn’t sign, but he ended up receiving the bonus anyway.

King sued after her contract was not renewed at all, claiming she was due the money because her male colleague received it.

A jury concluded that she suffered discrimination because of her sex, and the judge ordered damages doubled because the University Healthcare System had no reasonable explanation for treating the male anesthesiologist differently. It couldn’t show good faith and was zapped with a double payment as punishment. (King v. University Healthcare System, No. 09-30794, 5th Cir., 2011)

Final note: The EPA allows different pay for any other reason than sex, including different salaries for different experience, seniority and the like. There was nothing to justify King being passed over for the bonus.

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