American Federation of State, County, & Municipal Employees v. Washington
770 F.2d 1401 (1985)
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Rule of Law:
An employer's reliance on prevailing market rates to set employee compensation does not constitute sex discrimination under Title VII, even if it results in lower pay for female-dominated jobs compared to male-dominated jobs of comparable worth, unless there is evidence of discriminatory intent.
Facts:
- The State of Washington has a long-standing practice of setting its employees' salaries based on prevailing market rates, determined through comprehensive biennial surveys of public and private sector employers.
- In 1974, the State commissioned a study by Norman Willis to determine if a wage disparity existed between jobs held predominantly by men and those held predominantly by women.
- The study evaluated dissimilar jobs on four criteria (knowledge and skills, mental demands, accountability, and working conditions) to determine their 'comparable worth'.
- The 1974 study, and subsequent ones in 1976 and 1980, found a wage disparity of about 20% disadvantaging employees in female-dominated jobs compared to male-dominated jobs deemed to be of comparable worth.
- Between 1960 and 1973, the State had placed 'help wanted' advertisements that restricted various jobs to members of a particular sex, though most of these were discontinued in 1972.
- In 1983, before the district court's final ruling, the State of Washington enacted legislation to implement a compensation system based on comparable worth over a ten-year period.
Procedural Posture:
- In 1981, the American Federation of State, County, and Municipal Employees (AFSCME) filed charges with the Equal Employment Opportunity Commission (EEOC).
- After the EEOC took no action, the Department of Justice issued notices of a right to sue.
- In 1982, AFSCME filed a class-action lawsuit against the State of Washington in the U.S. District Court for the Western District of Washington, alleging sex-based wage discrimination in violation of Title VII.
- The district court (a court of first instance) found in favor of AFSCME, concluding the State was liable under both disparate impact and disparate treatment theories of discrimination.
- The district court ordered injunctive relief and back pay for the class members.
- The State of Washington (appellant) appealed the district court's decision to the U.S. Court of Appeals for the Ninth Circuit, with AFSCME as the appellee.
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Issue:
Does an employer's reliance on the prevailing market rate to set employee compensation, which results in lower pay for female-dominated jobs compared to male-dominated jobs of comparable worth, constitute sex discrimination in violation of Title VII?
Opinions:
Majority - Kennedy, J.
No. An employer's reliance on a market-based compensation system, even if it results in wage disparities between female-dominated and male-dominated jobs of comparable value, does not violate Title VII without proof of discriminatory intent. The court rejected both the disparate impact and disparate treatment claims. The disparate impact theory is inapplicable because a compensation system responsive to complex market forces is not the type of 'specific, clearly delineated employment practice' that the theory is designed to evaluate. For the disparate treatment claim, the plaintiffs (AFSCME) failed to prove the requisite discriminatory intent. The State's decision to follow prevailing market rates does not, by itself, create an inference of discriminatory motive, as the State did not create the market disparity. Job evaluation studies showing a disparity are insufficient on their own to prove intent, and the isolated historical incidents of sex-segregated 'help wanted' ads were not enough to corroborate a system-wide discriminatory animus. Furthermore, penalizing an employer for commissioning a comparable worth study would deter employers from engaging in self-analysis and reform.
Analysis:
This decision significantly curtailed the 'comparable worth' theory of liability under Title VII, establishing that market forces are a legitimate, non-discriminatory reason for wage differentials between different job classifications. The court drew a sharp line between pay discrimination for equal work and pay disparities for dissimilar jobs of supposedly comparable value. By requiring proof of discriminatory intent for claims challenging broad, market-based pay systems, the ruling protects employers from liability based solely on statistical disparities they did not create. This precedent makes it much more difficult for plaintiffs to challenge systemic wage gaps between different professions under Title VII, shifting the focus from the 'worth' of the job to the employer's motive.
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