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Paying women less, hoping for the best is recipe for Equal Pay Act disaster

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

Ignoring an employee’s persistent complaints that she’s being paid less than her male counterparts may amount to a willful violation of the Equal Pay Act (EPA). And willful violations add a year onto the two years of back-pay liability.

Recent case: Jean Grover rose through the ranks at Smarte Carte, an airport locker and cart service. She eventually became vice president and earned about $160,000 per year. Two male counterparts earned more—as much as $300,000.

Grover complained often and loudly to upper management about the difference. Finally, after hounding a senior manager for a year, she got stock options as partial compensation, although the company never admitted she was underpaid.

Later, she was terminated in a reduction in force in which she was the only employee cut. Grover sued, alleging EPA violations.

Smarte Carte argued that because she sold her stock options for over $1 million, that should be added to her total compensation. If that were the case, she out-earned the men.

The court disagreed. It said that averaging pay over many years after an employer remedies a complaint isn’t fair to the employee and would mean employers could wait until pushed to respond and avoid liability.

Then the court said that Grover could go back a full three years with her annual claims, because by ignoring her pleas for pay equity, the company willfully violated the EPA. (Grover v. Smarte Carte, No. 09-3282, DC MN, 2011)

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