Employment – Equal Pay Act – Individual Liability

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Where a plaintiff, who resigned from her position as president and chief executive officer of a hospital foundation, seeks to hold the defendant directors of the foundation liable under the Equal Pay Act for paying the plaintiff’s male successor a higher salary for the same work, summary judgment is inappropriate with respect to certain defendants who may have participated in the approval of the successor’s salary.

The remaining defendants should be awarded summary judgment because they were not “employers” within the meaning of the Equal Pay Act, 29 U.S.C. Sect. 203(d).

Judge’s Analysis

“The Equal Pay Act generally prohibits an employer from discriminating ‘between employees on the basis of sex by paying wages to employees … at a rate less than the rate at which he pays wages to employees of the opposite sex … for equal work on jobs the performance of which requires equal skill, effort, and responsibility.’ 29 U.S.C. Sect. 206(d)(1). As under the Fair Labor Standards Act, an ’employer’ may be not only the formal legal entity, such as a corporation, that employs the worker, but includes as well ‘any person acting directly or indirectly in the interest of an employer in relation to an employee.’ 29 U.S.C. Sect. 203(d).

“[Plaintiff Abbie A.] Taylor claims that the individual defendants, as directors of the Foundation, fall within this statutory definition of ’employer’ and that they violated the act by approving unequal salaries for her and [Charles S.] Kinney for equal work. Whether each individual director should be considered an ’employer’ will depend on a factual evaluation of the ‘economic reality’ of the Foundation’s operational management. … With respect to directors who participated in the decisions to approve the salaries of both Taylor and Kinney, that specific factual question cannot be resolved by this motion for summary judgment. Those directors included the defendants [Emily] Bramhall, [David] Raley and [James] Reynolds. There is also a dispute as to the level of participation, if any, by the defendant [Earle] Ray in the approval of the plaintiff’s salary, so his possible status as an ’employer’ also cannot be resolved on summary judgment.

“All the other individual defendants, however, participated in only one, but not both, of the salary decisions. The defendants [Cynthia] Mitchell and [Russell] Hoxsie voted on Taylor’s salary, but not Kinney’s. Even if their acts in voting on Taylor’s salary made each of them her ’employer’ for purposes of the statute, they were not responsible for the salary differential, which arose only after they had left the board. The plaintiff acknowledges as much, conceding that Count II does not state a claim against persons in the position of these defendants.

“On the other hand, the defendants [Douglass] McMaster, [William] Graham, [Gregory] Culley, [Jonathan] Barnett, [Gerald] DeBlois, [Anthony] Fisher, [Leonard] Jason, [Charles] Simberg, and [Randi] Vega voted on Kinney’s salary, but not Taylor’s. Even if the statute may be violated by the Foundation by paying different salaries, serially, to Taylor and Kinney, a substantial question not presented by this motion, these directors never acted as ’employers’ with respect to the setting of Taylor’s salary. They did not act directly or indirectly in the interest ofthe Foundation in relation to her as an employee, see 29 U.S.C. Sect. 203(d), because they did not act at all with respect to her salary. It seems clearly consistent with both the language and the purpose of Sect. 203(d), as well as Sect. 206(d)(1), to conclude that individual liability cannot attach unless the individual has acted for the corporate employer with respect to both necessary sides of the discrimination. Where that occurs, the person may be said to have acted for the entity to accomplish the comparative discrimination. Where one person does one act, someone else does another, and so on, the entity itself may be responsible for the sum of the acts of all its agents and liable if those acts add up to discrimination. However, it would stretch the scope of individual liability beyond what the statute aims at to conclude that each separate individual actor in the corporate structure becomes answerable when his own act, insufficient in itself to constitute discrimination, is aggregated with other acts he has had nothing to do with. …

“Accordingly, the motion of the defendants Russell Hoxsie, Douglas McMaster, William Graham, Gregory Culley, Jonathan Barnett, Gerald DeBlois, Anthony Fisher, Leonard Jason, Charles Simberg, and Randi Vega is granted as to Count II of the Complaint.

“The plaintiff also alleged state law claims against Hoxsie and Mitchell. Because no federal claims against these defendants endure, there is no basis for jurisdiction over the state claims except under 28 U.S.C. Sect. 1367. The Court declines jurisdiction over these state claims against Hoxsie and Mitchell under 28 U.S.C. Sect. 1367(c)(3), and they are dismissed without prejudice.

“The motion of the defendants David Raley, Emily Bramhall, Earle Ray, and James Reynolds for partial summary judgment as to Count II is denied.”

Taylor v. Martha’s Vineyard Hospital Foundation, Inc., et al. (Lawyers Weekly No. 02-112-98) (4 pages) (O’Toole, J.) (Civil Action No. 96-12322-GAO).