High-level managers have pay discretion? You’re courting a class-action lawsuit — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

High-level managers have pay discretion? You’re courting a class-action lawsuit

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in Discrimination and Harassment,Human Resources

Review exactly how much say top managers have over salary levels. Broad discretion about compensation at the bottom of the pay scale usually prevents employees from pursuing a class-action lawsuit similar to the one in the Supreme Court’s 2011 landmark Wal-Mart v. Dukes case. However, all bets are off if the issue is pay for higher-level employees.

The 4th Circuit Court of Appeals, which has jurisdiction over North Carolina employers, recently ruled that such a case can proceed as a class-action lawsuit.

Recent case: A group of female Family Dollar managers sued the retailer over alleged pay discrimination. They claimed that women were systematically paid less than male managers and wanted to pursue their case as a group, representing all women who managed Family Dollar stores.

As part of their claim, they alleged that high-level supervisors have leeway to change salaries for store managers and disproportionately do so to the benefit of men and disadvantage of women.

Family Dollar argued that like the Wal-Mart case, the fact that supervisors had discretion to change salaries meant there could be no central “plan” to discriminate. They wanted the case dismissed.

The court disagreed. It said that when higher-ups make discretionary decisions, the impact is greater and those decisions can be used to prove a pattern of paying men more than women. (Scott, et al., v. Family Dollar, No. 12-1610, 4th Cir., 2013)

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