Jenny Wernsing v. Department of Human Services, State of Illinois
87 Empl. Prac. Dec. (CCH) 42,152, 2005 U.S. App. LEXIS 22725, 427 F.3d 466 (2005)
Rule of Law:
Under the Equal Pay Act, an employer may use an employee's prior wages to determine starting salary as a 'factor other than sex,' and the employer is not legally required to demonstrate an 'acceptable business reason' for this practice.
Facts:
- Wernsing was hired by the Illinois Department of Human Services in 1998 as an Internal Security Investigator II.
- The Department utilized a lateral entrant salary practice where new hires received a salary at least equal to their prior earnings, plus a potential raise.
- Wernsing, who had previously earned $1,925 monthly at a small non-profit, was hired at a starting salary of $2,478.
- Around the same time, the Department hired Charles Bingaman for the exact same position.
- Because Bingaman had earned a higher salary ($3,399 monthly) at his previous job, the Department set his starting salary at $3,739.
- Consequently, Bingaman and Wernsing performed the same work under similar conditions, but Bingaman was paid significantly more due solely to his higher salary history.
- Wernsing requested a raise to match Bingaman's salary, arguing her lower prior pay was incidental to her previous employer's size, but the pay gap persisted.
Procedural Posture:
- Wernsing sued the Department of Human Services in the United States District Court for the Central District of Illinois claiming violations of the Equal Pay Act.
- The Department filed a motion for summary judgment.
- The District Court granted summary judgment in favor of the Department, ruling that prior wages constitute a 'factor other than sex.'
- Wernsing appealed the judgment to the United States Court of Appeals for the Seventh Circuit.
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Issue:
Is an employer's practice of setting starting salaries based on employees' prior wages a valid defense under the Equal Pay Act's 'factor other than sex' exception, even if the employer does not provide an 'acceptable business reason' for the practice?
Opinions:
Majority - Judge Easterbrook
Yes, basing starting pay on prior wages is a valid 'factor other than sex' regardless of business reasonableness. The court reasoned that the text of the Equal Pay Act only asks whether a pay differential is based on a factor other than sex, not whether the employer has a 'good' or 'acceptable' reason for using that factor. While other circuits (such as the 9th and 11th) require an 'acceptable business reason,' the 7th Circuit rejects this requirement as having no basis in the statutory text. The court emphasized that markets are impersonal and lack intent; therefore, relying on market wages is not sex discrimination unless the plaintiff can prove that the specific market wages used as a baseline were themselves the product of sex discrimination. Since Wernsing offered no evidence that her prior employer or Bingaman's prior employer discriminated based on sex, the Department's reliance on those figures was lawful.
Analysis:
This decision reinforces a significant circuit split regarding the 'factor other than sex' defense in Equal Pay Act litigation. By rejecting the 'acceptable business reason' requirement adopted by the 2nd, 6th, 9th, and 11th Circuits, the 7th Circuit (along with the 8th) adopts a strict textualist approach that makes it significantly easier for employers to defend pay disparities resulting from salary history. The ruling implies that unless a plaintiff can empirically prove that the specific prior salaries used for calculation were tainted by sex discrimination—a difficult evidentiary burden—employers in this jurisdiction may perpetuate historical market-based wage gaps between men and women without violating the Equal Pay Act.
