Petition for Writ of Certiorari — General Motors Corp. v. Glenn
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88-2 63 FILED
AUG 12 1988
No. | YOSEPH F. SPANIOL, JR,
t CLERK
Iu the Suprenw Court of the United States
OCTOBER TERM, 1988
GENERAL MoToRS CORPORATION, PETITIONER
V.
SHEILA ANN GLENN, PATRICIA F. JOHNS AND
ROBBIE NUGENT, RESPONDENTS
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
CHARLES A. POWELL, III KENNETH S. GELLER *
BARRY V. FREDERICK STEPHEN M. SHAPIRO
Powell, Tally & JAMES D. HOLZHAUER
Frederick Mayer, Brown & Platt
Suite 700
2000 Pennsylvania Ave., N.W.
New South Federal Bldg. Washington, D.C. 20006
21 First Avenue North (202) 463-2000
Birmingham, AL 35203
(205) 324-4996
DAVID M. DAVIS
MARK R. FLORA
General Motors Corporation
Office of General Counsel
8031 West Grand Boulevard
Detroit, MI 48202
(313) 556-5000 * Counsel of Record
WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001
QUESTIONS PRESENTED
Plaintiffs, who are female employees of General Motors
Corporation (“GM”), sued GM under the Equal Pay Act,
claiming that they were paid less than their male counter-
parts for doing the same work. GM demonstrated that
the pay differentials were due to its practice of retaining
the pay level of employees who transfer from hourly-wage
jobs to lower-paying salaried positions within the com-
pany. The court of appeals held that this practice was
not based on a “factor other than sex” under the Act, 29
U.S.C. § 206(d).
The questions presented are:
1. Whether an employer’s practice of maintaining the
pay level of employees who transfer between jobs in a
company is a practice lawfully based on a “factor other
than sex” under the Equal Pay Act.
2. Whether an employer’s utilization of such a prac-
tice may be characterized as a “willful” violation when
the employer relied on a widely-accepted interpretation
of the Equal Pay Act subsequently rejected by the court
of appeals.
3. Whether an employer’s utilization of such a prac-
tice may be characterized as “bad faith” conduct when
the employer’s representatives were found by the district
court to have acted in the “good faith belief” that they
were adhering to lawful company policy.
(i)
ii
PARTIES TO THE PROCEEDING
AND RULE 28.1 STATEMENT
The caption includes all of the parties to the proceed-
ing.
The affiliates and subsidiaries of General Motors Cor-
poration, other than wholly-owned subsidiaries, are listed
in App. G, infra, 57a-58a.
TABLE OF CONTENTS
Page
EEE AT eS a 1
I I RE A a 1
STATUTORY PROVISIONS INVOLVED .................... 2
ee SS 2
REASONS FOR GRANTING THE PETITION ............ 8
I. The Court Of Appeals’ Construction Of The
Equal Pay Act Is Incorrect And Conflicts With
The Decisions Of This Court And Of Other
EEE RR Se eR 9
A. The court of appeals erred in rejecting
GM’s “factor other than sex” defense ........... 9
B. The court of appeals’ application of a three-
year statute of limitations conflicts with this
Court’s decision in Richland Shoe ................. 19
C. The court of appeals’ decision that plaintiffs
were entitled to double damages conflicts
with this Court’s decision in Richland Shoe.. 22
Il. The Court Of Appeals’ Decision Threatens To
Disrupt The Settled Practice Of —
Throughout The Country . Ss Eo 23
dah che etrintibnstenenvacicesttcamenatunsenantsoansneseni 26
a ia csssash eeersepseenticsnaeonntsoonenans la
I ala desaip cneneinadicnectietieatuiciteesestanencsanesinnnts 20a
|
EEE EE Se ee ee ine ee
EE 52a
ad cas cechccedisnnicoetcsncnens .... 57a
iv
TABLE OF AUTHORITIES
Cases: Page
Adams v. University of Washington, 106 Wash.
ei Be, £ A & oy. — Raeceeee Bat Ee 16, 26
Blocker v. AT & T Technology Systems, 666 F.
ee, SE Cee ls PE cee 21, 26
Coleman Vv. Jiffy June Farms, Inc., 458 F.2d 1139
(5th Cir. 1971), cert. denied, 409 U.S. 948
RIIIII ich scnetacsechtncancceareatin babtbioaadeeanse Landaa 6, 8, 19, 20
Corning Glass Works vy. Brennan, 417 U.S. 128
ERD IMIR. SGN NOLS OES Le OE 9,14
Coston Vv. Plitt Theatres, Inc., 831 F.2d 1321 (7th
Cir. 1987), vacated and remanded, 108 S. Ct.
| PNR rn SEM ARC AN erent Dear ee ED 22
County of Washington vy. Gunther, 452 U.S. 161
RCE Ra se 2 AI 11
Covington v. Southern Illinois University, 816 F.2d
317 (7th Cir.), cert. denied, 108 S. Ct. 146
SINED snnctickdcsniditnusdatdecbidd tte he OS 7, 13, 14
Derouin vy. Louis Allis Div., 618 F. Supp. 221
(E.D. Wis. 1984) _...... spccdeiptebbhasdipiainsehieniplddan ieciets 16
EEOC vy. Aetna Ins. Co., 616 F.2d 719 (4th Cir.
tec NTL NITE LE ite a Ar TMS RAE OTE 17, 18
EEOC v. Samedan Oil Corp., 29 Empl. Prac. Dec.
(CCH) 32,901 (E.D. Okla. 1982). 16
Groussman Vv. Respiratory Home Care, Inc., 40
Fair Empl. Prac. Cas. (BNA) 122 (C.D. Cal.
RD sthstsdentd cack ee 16
Grove v. Frostburg Nat’l Bank, 549 F. Supp. 922
Oe perenne anor tes ee SN ee 16
Kouba v. Allstate Ins. Co., 691 F.2d 873 (9th Cir.
RNAP CONN me in. Naa ores i ee 17
Mangiapane vy. Adams, 20 Fair Empl. Prac. Cas.
(BNA) 699 (D.D.C. 1979), affirmed, 24 Empl.
Prac. Dec. (CCH) { 31,277 (D.C. Cir. 1980)... . 16, 26
Marshall v. Liggett & Myers, Inc., 22 Empl. Prac.
Dec. (CCH) § 30,591 (M.D.N.C. 1979), affirmed
in part and vacated in part on other grounds,
690 F.2d 1072 (4th Cir. 1982)... 16, 26
McLaughlin v. Richland Shoe Co., 108 S. Ct. 1677
CE caetiikckctaciiinkdnidnue ete ae 19, 20, 21, 22, 23
v
TABLE OF AUTHORITIES—Continued
Page
Pettway v. American Cast Iron Pipe Co., 494 F.2d
211 (5th Cir. 1974), cert. denied, 439 U.S. 1115
(2GTD) .2.....0.-..seocesnsanascusensesnnsnsscnscnsssssesssscseneasssnsonse 24
Rengers v. WCLR Radio Station, 825 F.2d 160
(7th Cir. 1987), vacated and remanded, 198
Gh, Ch. 1000 CROIB) aa nnnnnncncccrcncnncnsnsics sss sascscsncssssernesees 22
Trans World Airlines v. Thurston, 469 U.S. 111
(DBD) anccccecensccenercnicnsnesnsnscsescnsnnnanasnstanaaanasead 6, 8, 19, 20, 22
United States v. Bethlehem Steel Corp., 446 F.2d
GER (BA Cle. 1971) .........200c0.snncesnosrcnsencoccecasesscsasness 25
United States v. N.L. Industries, Inc., 479 F.2d
DBE CBM Cie, DTD) ics ncccscanncncecccncescscsscccccenssscnnessene 25
Statutes and regulation:
Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et
COB. ccasantsnansnnnsonncentnmenecnssoenananinnnamnenannnanietenteTinnennean 11
Equal Pay Act, 29 U.S.C. § 206(d) ...............-.....-.-. passim
Fair Labor Standards Act, 29 U.S.C. §216(b).... 6, 22
Portal-to-Portal Act of 1947:
ID ver iricssnciccanicadcacesesacnaecesmonlonedaetens 6, 19
EI idnisissiiiciniteecd onithanbpscinamecncuntonencestonal 6, 7, 22
ae ae I cccnnsneinccsinntccpettnncigmseenspraancyenians 12, 24
Miscellaneous:
D. Belcher & T. Atchison, Compensation Admin-
I | ID iconic nesteesscndbnienans 25
109 Cong. Rec. (1963) :
RE OE eae NIRS KA eS BD oP YD 10, 15
te 11, 15
i TEED saisoissosiseantihataenibiemasiadshelnasiahiaaditsiiddiabelisdalbesia 11
E.E.0.C. Conciliation Standards § 632.6 (1973),
reprinted in 2 EEOC Comp. Man. (BNA)
IE CE o ehssanntin tac aatintateenatadnniensed.: 25
8 Employment Coordinator (Research Inst. Am.)
ET I edbiiiicaeecacinstice Mactan eiceinntise stirs 25
H.R. Rep. No. 309, 88th Conze., Ist Sess. (1963)... 10, 12
R. Henderson, Compensation Management: Re-
warding Performance (2d ed. 1979)... 25
vi
TABLE OF AUTHORITIES—Continued
Hulme & Bevan, The Blue Collar Worker Goes on
Salary, 52 Harv. Bus. Rev. 104 (1975)...
1 Moody's Industrial Manual (1987)
T. Patten, Pay: Employee Compensation and In-
centive Plans (1977) SS are
Reed & Kroll, Red-Circle Employees: A Wage
Seale Dilemma, 66 Personnel Journal 92 (Feb.
1987) |
S. Rep. No. 176, 88th Cong., Ist Sess. (1963)...
R. Sibson, Compensation (American Management
Sees: TH eid
Wallace, Industrial Relations in a Job-Loss En-
vironment, 31 Lab. L. J. 473 (1980)
ses @
o &
ome ete a ee
Ce em ee Oe .
Iu the Supreme Court of the United States
OcTOBER TERM, 1988
No.
GENERAL MoTorS CORPORATION, PETITIONER
v.
SHEILA ANN GLENN, PATRICIA F. JOHNS AND
ROBBIE NUGENT, RESPONDENTS
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
General Motors Corporation petitions for a writ of
certiorari to review the judgment of the United States
Court of Appeals for the Eleventh Circuit in this case.
OPINIONS BELOW
The opinion of the court of appeals (App., infra, la-
19a) is reported at 841 F.2d 1567. The initial opinion
of the district court (App., infra, 20a-34a) and its sub-
sequent opinion on motion for attorneys’ fees (App., in-
fra, 35a-49a) are reported at 658 F. Supp. 918.
JURISDICTION
The judgment of the court of appeals was entered on
April 15, 1988 ‘App., infra, 50a-5la)}. Pursuant to an
order issued by Justice Kennedy, the time for filing a pe-
tition for a writ of certiorari was extended to and in-
2
cluding August 13, 1988 (App., infra, 52a). The juris-
diction of this Court is invoked under 28 U.S.C. § 1254
(1).
STATUTORY PROVISIONS INVOLVED
The Equal Pay Act, 29 U.S.C. § 206(d), Section 16(b)
of the Fair Labor Standards Act, 29 U.S.C. § 216(b),
and Sections 6(a) and 11 of the Portal-to-Portal Act of
1947, as amended, 29 U.S.C. §§ 255(a) and 260, are set
forth at App., infra, 53a-56a.
STATEMENT
This case involves the common employment practice of
allowing employees who transfer from a higher-paying
job to a lower-paying job within the same company to
retain the level of pay they received in their former job.
Employers follow this practice, often called “rate (or
wage) retes?.on” or “income maintenance,” for a variety
of legitimate reasons: to encourage transfers (particu-
larly to supervisory or salaried positions), to maintain
employee morale, to enable minority employees to move
into job lines with greater promotional opportunities, to
develop a more flexible work force with a greater variety
of skills, to retain skilled employees who may be needed
in the future, to ease the burden on employees during
times of economic contraction, and to accommodate work-
ers who are no longer able to perform their previous jobs.
General Motors Corporation (“GM”) pays employees
who transfer from hourly wage jobs to lower-paying
salaried positions at least as much as they previously
earned. Because that sex-neutral practice fortuitou-’,
resulted in a disparity between the wages received by
men and women in one nine-employee job unit at GM’s
facilities at Athens, Alabama, the court of appeals held
that GM violated the Equal Pay Act. The court below
reached this conclusion even though it made no finding
that sex played any role whatsoever in the company’s
employment, compensation or transfer decisions. Beyond
3
this, the court of appeals held that GM’s violation was
“willful” (i.e., in reckless disregard of its legal obliga-
tions), even though it conformed to the decision of the
only other court of appeals to have decided the issue and
to the rulings of several district courts. Finally, the
court of appeals held that GM acted in “bad faith,” even
though the district court expressly held that the company
officials who made the pay decisions had a good-faith be-
lief they were following a lawful company policy.
1. This action was brought by three female plaintiffs
employed as salaried “follow-up” workers in the Materials
Management Department of three GM plants near
Athens, Alabama. The three-plant department had a total
of nine follow-up workers. Follow-up workers were re-
sponsible for ensuring that an adequate supply of tools
and operating materials were on hand. They ordered
needed tools and materials, dealt with salespersons, man-
aged inventories, and made special or “emergency” pur-
chases for their plants. App., infra, 3a, 21a.
The three plaintiffs and the male employees with whom
they were compared in this litigation arrived at their
follow-up jobs through distinctly different routes. All
but one of the men transferred to their jobs from higher-
paying hourly wage positions. App., infra, 22a-25a. They
thus benefitted from GM’s practice of paying employees
who transfer from hourly wage jobs to salaried positions
at least the amount they had earned previously.' By con-
trast, plaintiff Robbie Nugent was hired “off the street”
as a follow-up worker and accordingly began at the bot-
tom of the salary scale for the job. The other two plain-
1 One of the seven male comparators, Steven D. Greenlee, had not
been working for GM when it hired him as a follow-up worker in
April 1979. Greenlee had been employed by a GM supplier and was
hired to purchase the parts he had previously supplied. His special
skills and expertise warranted a higher salary. Tr. Vol. 2 at 69-70;
Tr. Vol. 3 at 106. “Tr.” references are to the trial transcript in the
district court.
4
tiffs, Sheila Glenn and Patricia Johns, transferred to
follow-up jobs from relatively low-paying salaried posi-
tions as stenographer and secretary. Jd. at 21a-22a. None
of the employees, male or female, who transferred to
follow-up jobs from other positions at the company suf-
fered a reduction in pay. Most received a small increase.
The largest increase (10%) was received by a woman,
plaintiff Glenn. Jd. at 22a.”
GM officials testified that the compensation of the em-
ployees who transferred from hourly wage jobs to sala-
ried follow-up positions was set in accordance with a
longstanding, sex-neutral, company-wide practice of pay-
ing such employees at least as much as they made in their
hourly jobs. Although there was no formal written docu-
ment establishing or describing the practice, it was ac-
knowledged and discussed in a 1975 Report of the com-
pany’s Personnel Analysis Group. Defendant’s Exhibit
No. 2, at 18-19. The purpose of GM’s practice was to
encourage employees to move into salaried positions; man-
agement officials understandably believed that employees
would be reluctant to transfer if that resulted in a cut in
pay. App., infra, 28a.
Thus, some follow-up workers were paid more than
plaintiffs because they transferred to their jobs from
higher-paying hourly wage positions, while plaintiffs were
either hired “off the street” at the bottom of the salary
2 The district court opinion indicates that the monthly salaries
of men who transferred from hourly jobs to salaried follow-up
positions changed as follows: Stephen Downs, salary increased
from $932.35 to $975.00 per month (4.5%); Harold Wales, first
transfer, from $1,216.57 to $1,230.00 (1%); Robert Stephenson,
first transfer, $1,171.51 to $1,220.00 (4.1%); Billy White, $1,608.22
to $1,656.46 (2.9%). App., infra, 23a-24a.
Of the two women who transferred from salaried clerical posi-
tions to salaried follow-up jobs, the court gave the pre- and post-
transfer salary of only one, Sheila Glenn. Her salary was increased
from $1,310.40 to $1,441.44 (10%). App., infra, 22a.
5
scale (and worked up from there) or transferred from
lower-paying clerical positions. App., infra, 2la-25a. In
this instance, the follow-up workers who transferred from
higher-paying jobs were men; plaintiffs, whom GM hired
“off the street” or who transferred from lower paying
jobs, were women. In other job categories, however, fe-
male employees received the benefit of GM’s practice and
earned higher pay than their male counterparts. Tr. Vol.
3 at 99-102. By focusing on the effect of GM’s sex-neutral
practice on only a single small department, plaintiffs al-
leged that the practice resulted in men illegally being paid
more than women.
2. Plaintiffs brought this action in the United States
District Court for the Northern District of Alabama in
October 1983, claiming that GM paid them less than men
doing equal work, in violation of the Equal Pay Act, 29
U.S.C. § 206(d).* The district court found that plaintiffs
had established a prima facie case by showing that they
did equal work as follow-up employees but received less
pay than men in the same job. App., infra, 28a.
The district court rejected GM’s affirmative defense
that the pay disparity was due to a “factor other than
sex” (29 U.S.C. § 206(d) (1) (iv)—namely, the com-
pany’s sex-neutral practice of not requiring employees to
take a pay cut when transferring from hourly wage jobs
to salaried positions. Significantly, the court did not find
that GM’s compensation decisions were based on sex. To
3 The district court issued its original Opinion and Order on
July 10, 1986, resolving all issues except the computation of damages
and attorneys’ fees and plaintiffs’ entitlement to prejudgment in-
terest. App., infra, 20a-32a. On February 4, 1987, the district
court issued an addendum to its Opinion and Order. Jd. at 35a-
49a. The addendum discusses and decides several other issues, in-
cluding the statute of limitations and liquidated damages. We will
refer to the district court’s July 10, 1986 opinion as its “initial
opinion” and to the February 4, 1987 opinion as its “subsequent
opinion.”
6
the contrary, the court expressly concluded that the in-
dividual GM officials who made the pay decisions “held a
good faith belief that General Motors had adopted a
‘transfer pay policy.’” App., infra, 40a. The court none-
theless held that GM violated the Equal Pay Act, noting
that its transfer pay policy “is not in writing” and “is
in fact not a policy at all, but merely one aspect of a
practice. In practice GM simply pays Follow-Ups what
it takes to induce them to accept the employment.” Jd.
at 28a.
The district court then turned to the question of the
applicable statute of limitations. 29 U.S.C. § 255(a)
provides for a two-year limitations period, except that
“a cause of action arising out of a willful violation may
be commenced within three years after the cause of ac-
tion accrued.” In its initial opinion, the district court
applied the “in the picture” test established in Coleman
v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir.
1971), cert. denied, 409 U.S. 948 (1972), and held that
GM’s violation was willful because the company knew
that the Equal Pay Act was “in the picture.” App., infra,
30a-3la. In its subsequent opinion, the court noted that
even if it were to apply the “reckless disregard” standard
of Trans World Airlines v. Thurston, 469 U.S. 111
(1985), it would find that the violation was willful be-
cause GM ignored unidentified “clear signs that its prac-
tices were illegal. A violation rises to the level of reck-
less disregard when an employer has the resources to
conform its conduct to the law, but declines to make the
effort.” App., infra, 38a-39a (footnote omitted).
In addition, the district court held that plaintiffs were
entitled to double the amount of their actual losses under
the liquidated damages provisions of 29 U.S.C. §§ 216 (b)
and 260. In its initial opinion, the district court declined
to award double damages because “GM’s violation of the
Equal Pay Act, while ‘willful’ * * *, was in good faith
and predicated upon reasonable grounds. * * * GM knew
ON abaya ave
Be eS AID 6+ ow
7
that their conduct was governed by the Equal Pay Act,
but created the pay disparity concerning plaintiffs in
good faith believing the disparity justified on the basis
of their hourly transfer pay ‘policy.’” App., infra, 31a-
32a. But in its subsequent opinion, the district court
modified its order and awarded liquidated damages. The
court held that the good faith exception to Section 260
did not apply and that it “ha[d] no choice but to award
liquidated damages,” because GM “adduced neither case
law nor administrative rulings to demonstrate that there
were reasonable grounds to support a belief that its acts
were in conformity with the law.” Id. at 41a.
3. The court of appeals affirmed the district court’s
decision with respect to liability and damages under the
Equal Pay Act. The court of appeals held that GM’s
practice was not properly based on a “factor other than
sex” within the meaning of 29 U.S.C. § 206(d) (1) (iv).
Although it did not disturb the district court’s fact find-
ing that GM officials made the pay decisions in “good
faith” based on what they believed to be a company
policy of not reducing wages when hourly employees
transfer to a salaried position, the Eleventh Circuit held
that “prior salary alone cannot justify pay disparity.”
App., infra, 9a. The Eleventh Circuit narrowly limited
the statutory “factor other than sex” defense to situa-
tions where “the disparity results from unique character-
istics of the same job; from an individual’s experience,
training, or ability; or from special exigent circum-
stances connected with the business.” Jd. at 8a.
In holding that GM could not justify salary disparities
on the basis of prior compensation, the court of appeals
acknowledged that its decision “contradict[ed] the
Seventh Circuit’s holding in Covington v. Southern IIli-
nois University, 816 F.2d 317 (7th Cir.), cert. denied,
U.S. ——, 108 S.Ct. 146 (1987).” The Eleventh
Circuit stated, however, that GM’s defense in this case,
and the Seventh Circuit’s approval of an employer’s “‘sex-
8
neutral policy of maintaining an employee’s salary upon
a change of assignment,” impermissibly depended on a
“market force theory to justify the pay disparity and
* * * ignored congressional intent as to what is a ‘factor
other than sex.’” App., infra, 9a.
The court of appeals also concluded that GM’s viola-
tion of the Equal Pay Act was willful and that the three-
year statute of limitations applied under the Jiffy /une
“in the picture” standard. App., infra, 10a-12a. In the
alternative, the court held that, even under the Thurston
“reckless disregard” standard, the violation was willful
because “GM sought to rely on the market force theory, a
theory long discredited by this Court and the Supreme
Court.” Jd. at 13a. On the same grounds, the court be-
low held that GM’s actions were not taken in good faith
and that plaintiffs therefore were entitled to liquidated
damages as a matter of law. /d. at 13a-14a.
REASONS FOR GRANTING THE PETITION
When Congress enacted the Equal Pay Act in 1963,
some employers paid women less than men for the same
work simply because they were women. The Act was
designed te prohibit that unfair and intolerable practice.
But it was not intended to be a sweeping regulation of
employment practices generally. Thus, the Act prohibits
only wage discrimination, not discrimination in hiring or
promotions or any other form of employment discrimina-
tion. And it prohibits only wage discrimination based on
sex, not legitimate sex-neutral practices that in particular
instances may result in lower pay for some female em-
ployees. The Equal Pay Act does not require that all
employees doing the same work receive the same com-
pensation. It simply prohibits pay inequalities based on
sex.
The Eleventh Circuit’s decision in this case wrenches
the Equal Pay Act from its foundations, ignores its plain
language and legislative history, and threatens to disrupt
=
3
~
a
9
a longstanding, sex-neutral employment practice utilized
by both large and small employers (including the federal
government) nationwide. Moreover, the decision below
invalidating GM’s transfer pay practice conflicts with the
Seventh Circuit’s construction of the Act and with nu-
merous district court rulings. Finally, the court of ap-
peals’ conclusion that GM’s conduct was “willful” and
“in bad faith” is flatly inconsistent with a recent decision
of this Court. It is essential that the Court grant the
petition for a writ of certiorari to resolve these conflicts
and to prevent the needless destruction of an important
and widespread employment practice of benefit to em-
ployers and employees alike.
I. The Court Of Appeals’ Construction Of The Equal Pay
Act Is Incorrect And Conflicts With The Decisions Of
This Court And Of Other Courts Of Appeals
A. The court of appeals erred in rejecting GM’s “factor
other than sex” defense.
1. The Equal Pay Act, 29 U.S.C. § 206(d), prohibits
employers from discriminating ‘on the basis of sex” by
paying unequal wages to men and women doing equal
work. To reinforce the fact that the Act only prohibits
wage discrimination based on sex, Congress listed four
affirmative defenses. Differences in pay do not violate
the Act when they are
made pursuant to (i) a seniority system; (ii) a
merit system; (iii) a system which measures earn-
ings by quantity or quality of production; or (iv) a
differential based on any other factor other than sex.
29 U.S.C. § 206(d) (1) (emphasis added).
The legislative history of the Equal Pay Act makes it
abundantly clear that the “factor other than sex” excep-
tion was intended to be “a general catchall provision,”
Corning Glass Works v. Brennan, 417 U.S. 188, 196
(1974), designed to ensure that the Act penalized em-
10
ployers only for making distinctions based on sex. As
the House Report explained:
Three specific exceptions and one broad general
exception are also listed. It is the intent of this
committee that any discrimination based upon any
of these exceptions shall be exempted from the opera-
tion of this statute. As it is impossible to list each
and every exception, the broad general exclusion has
been also included.
H.R. Rep. No. 309, 88th Cong., 1st Sess. 3 (1963). Rep-
resentative Griffin, one of the principal supporters of the
bill, made the same point in commenting on the fourth
exception during the debates on the Act:
[R]oman numeral iv * * * makes clear and explic-
itly states that a differential based on any factor or
factors other than sex would not violate this legis-
lation. In other words, even though jobs involve the
same skill, equal effort, equal responsibility, and are
performed under the same working conditions, if
there is any other factor not based on sex upon
which a differential is based, then no violation of
this law can be found.
109 Cong. Rec. 9203 (1963) (emphasis added). The
Senate Report reiterated Congress’s firm understanding
that the Act only prohibited pay disparities based on sex:
S. 1409 is designed to eliminate any wage rate
differentials which are based on sex. Neither the
committee nor anyone proposing equal-pay legislation
intends that other factors cannot be used to justify
a wage differential.
S. Rep. No. 176, 88th Cong., 1st Sess. 4 (1963).
The language and legislative history of the statute
thus confirm that an employer does not violate the Act
when pay disparities that may appear to burden one sex
more than another are based on any “factor other than
sex.” As this Court remarked in contrasting the Equal
pe! un ee .
ee ee Oe eee ee ee ee a
11
Pay Act with Title VII of the Civil Rights Act of 1964,
42 U.S.C. $§ 2000e et seq.:
Title VII’s prohibition of discriminatory employment
practices was intended to be broadly inclusive, pro-
scribing “not only overt discrimination but also prac-
tices that are fair in form, but discriminatory in
operation.” Griggs v. Duke Power Co., 401 U.S. 424,
431 (1971). The structure of Title VII litigation,
including presumptions, burdens of proof, and de-
fenses, has been designed to reflect this approach.
The fourth affirmative defense of the Equal Pay Act,
however, was designed differently, to confine the ap-
plication of the Act to wage differentials attributable
to sex discrimination. Equal Pay Act litigation,
therefore, has been structured to permit employers
to defend against charges of discrimination where
their pay differentials are based on a bona fide use
of “other factors other than sex.”
County of Washington v. Gunther, 452 U.S. 161, 170
(1981). Therefore, under the Equal Pay Act, courts are
not permitted to “substitute their judgment for the judg-
ment of the employer” and should not “judge the reason-
ableness or unreasonableness of [an employer’s] differ-
entiation among employees, except as it shows a clear
pattern of discrimination” based on sex. 109 Cong. Rec.
9209, 9208 (1963) (remarks of Rep. Goodell, a “prin-
cipal exponent on the Act”). See County of Washington
v. Gunther, 452 U.S. at 170-171.
From the beginning, it was contemplated that the
“factor other than sex” defense would encompass trans-
fer pay practices similar to the one involved in this case.
For example, the House Report expressly stated that the
defense
recognizes certain special circumstances, such as
“red circle rates.” This term is borrowed from War
Labor Board parlance and describes certain unusual,
higher than normal wage rates which are maintained
for many valid reasons. For instance, it is not un-
12
common for an employer who must reduce help in a
skilled job to transfer employees to other less de-
manding jobs but to continue to pay them a premium
rate in order to have them available when they are
again needed for their former jobs.
H.R. Rep. No. 309, supra, at 3. Similarly, a regulation
promulgated by the Department of Labor shortly after
passage of the Equal Pay Act recognized “red-circling”
as a factor other than sex. The regulation stated that
“fulnder the ‘red circle’ principle the employer may con-
tinue to pay the employee his or her present salary, which
is greater than that paid to the opposite gender employ-
ees, for the work both will be doing.” 29 C.F.R.
$ 1620.26 (a).
The Eleventh Circuit’s decision conflicts with this ac-
cepted understanding of the Equal Pay Act and contra-
dicts the very concept of “wage retention,” of which
“red-circling” is but one example. The court below stated
that it would allow such practices only “when the dis-
parity results from unique characteristics of the same
job; from an individual’s experience, training, or abil-
ity; or from special exigent circumstances connected with
the business.” App., infra, 8a. Uniform transfer pay
practices, including “red-circle” rates, however, are by
definition anomalous and unrelated to the job in question
or the employee’s ability to perform the job. Indeed, the
federal regulation concerning “red-circle”’ rates gives a
specific example that would not meet the Eleventh Cir-
cuit’s defixition: an employee who is transferred to a
lower-pay'ngy job because he is no longer able to perform
his previous job due to ill health. 29 C.F.R. § 1620.26(a).
In that case, as in most other transfer pay situations, the
disparity in pay is due not to the characteristics of the
job or the individual employee’s experience, training or
ability, but rather to the personal circumstance of the
employee being transferred. Unless that personal cir-
cumstance is based on sex, such differential treatment
does not violate the Equal Pay Act.
13
2. In light of the statutory language, the legislative
history and the applicable federal regulation, it is hardly
surprising that the only court of appeals previously to
decide the very issue presented in this case held that an
employer’s “salary retention policy qualifies as a factor
other than sex.” Covington v. Southern Illinois Univer-
sity, 816 F.2d 317, 322 (7th Cir.), cert. denied, 108
S. Ct. 146 (1987). In that case, the plaintiff claimed that
the university paid her less than it paid her male prede-
cessor in the position of art advisor. The university ad-
mitted the pay disparity, but contended that the former
art advisor had transferred to that position from a
higher-paying teaching position. The university followed
the practice of not reducing the pay of faculty members
who transferred to lower-paying jobs.
The Seventh Circuit held that the university’s employ-
ment practice did not violate the Equal Pay Act, reject-
ing the claim that “factors other than sex * * * are
limited either to business-related reasons or, more nar-
rowly, to factors that relate to the requirements of the
job or to the individual’s performance of that job.” 816
F.2d at 321. The court held that the Act does not pro-
hibit salary differentials based on the previous salary
paid by the same employer, “unless this policy is discrim-
inatorily applied or unless there is evidence independent
of the policy which establishes that the employer dis-
criminates on the basis of sex.” Jd. at 323.
The Eleventh Circuit reached precisely the opposite
conclusion in this case. Even though there was no finding
that GM’s transfer pay policy was discriminatorily ap-
plied or that pay rates for “follow-up” positions were set
on the basis of sex, the Eleventh Circuit held that GM’s
practice violated the Equal Pay Act. Even though the
Act expressly permits pay differentials based on any
“factor other than sex,” the Eleventh Circuit flatly held
that “prior salary alone cannot justify pay disparity.”
App., infra, 9a. And even though Congress designed the
14
“factor other than sex” defense to be a broad, “catchall
provision,” the Eleventh Circuit announced that it “ap-
plies [only] when the disparity results from unique char-
acteristics of the same job; from an individual’s experi-
ence, training, or ability; or from special exigent circum-
stances connected with the business.” /d. at 8a. In
sum, even though the Act clearly was intended to permit
nondiscriminatory wage practices, the Eleventh Circuit
concluded that GM violated the Act simply because, in
one small department, its sex-neutral transfer pay
practice fortuitously resulted in men being paid more
than women.
In all of these respects, the Eleventh Circuit’s construc-
tion of the Equal Pay Act is in direct conflict with the
Seventh Circuit, as the court below conceded (App.,
infra, 9a):
We recognize that our holding may contradict the
Seventh Circuit’s holding in Covington v. Southern
Illinois University, 816 F.2d 317 (7th Cir.) * * *.
The flaws of the Covington decision are that the
Seventh Circuit implicitly used the market force
theory to justify the pay disparity and that the
Seventh Circuit ignored congressional intent as to
what is a “factor other than sex.” Consequently, we
reject Covington because it ignores that prior salary
alone cannot justify pay disparity.
3. The Eleventh Circuit’s assertion that the Covington
decision, or GM’s defense in this case, relied on the “mar-
ket force theory” is inexplicable. The market force theory
holds that it is permissible to pay women less than men
because they are willing to work for lower wages. See
Corning Glass Works v. Brennan, 417 U.S. at 204-205.
But Southern Illinois University did not pay the male
art advisor more than it paid Covington because she was
willing to work for less. It paid him more because he had
transferred from a higher-paying job, just as it would
have continued to pay Covington her higher salary if
15
she had transferred to a lower-paying job. By the same
token, GM did not pay plaintiffs less than their male
counterparts because they were willing to work for lower
wages. Rather, it paid them less because the men hap-
pened to have transferred from higher-paying hourly
jobs, just as it paid women more than their male counter-
parts when those women transferred from hourly jobs to
lower-paying salaried positions. GM’s practice thus bears
no resemblance to the discredited market force theory,
and GM has never relied on that theory.
The district court and, to a lesser extent, the court of
appeals also relied on the fact that GM did not show that
it had a consistent, company-wide, written policy of not
reducing wages when hourly employees transferred to
salaried positions. Instead, the courts found, individual
company officials declined to reduce the pay of the hourly
workers because they believed, in good faith, that such a
policy existed. See App., infra, 7a & n.8, 38a-39a n.4.*
But whether the pay decisions were made pursuant to
company policy (as GM maintains) or in accordance with
the good-faith belief of individual officials that such a
policy existed (as the courts below found), the undis-
puted fact is that the pay decisions were based on the
prior salary of the transferred workers and were not
based on sex. Accordingly, the practice did not violate
the Equal Pay Act.
* Petitioner does in fact have such a policy. The testimony of
GM officials involved in setting salaries, Tr. Vol. 3 at 94-95, 198,
and defendant's Exhibit No. 2, a 1975 internal GM report discuss-
ing the transfer pay policy, demonstrate the existence of a clear.
consistently enforced, unwritten policy. The legislative history of
the Equal Pay Act emphasizes that a practice or policy need not
be in writing to qualify as a “factor other than sex.” See 109 Cong.
Rec. 9203, 9208 (1963) (statements of Reps. Griffin, Fountain.
Goodell and Waggoner).
16
4. Whether employment practices such as that fol-
lowed by GM in this case are properly based on a “factor
other than sex” under the Equal Pay Act is a frequently-
recurring question of federal law. The Eleventh Circuit’s
decision conflicts not only with the Seventh Circuit’s deci-
sion in Covington but also with decisions of several dis-
trict courts on similar issues. See Groussman v. Respira-
tory Home Care, Inc., 40 Fair Empl. Prac. Cas. (BNA)
122, 123, 125-126 (C.D. Cal. 1986); Derouin v. Louis
Allis Div., 618 F. Supp. 221, 223-225 (E.D. Wis. 1984)
(the employer’s practice of limiting promotional salary
increases to “a specified percentage (10%-20%) of the
employee’s present salary” was based on a factor other
than sex); Grove v. Frostburg Nat’l Bank, 549 F. Supp.
922, 937 (D. Md. 1982) (the “practice of not reducing
salaries when employees were transferred or their job as-
signments changed” was based on a factor other than
sex); EEOC v. Samedan Oil Corp., 29 Empl. Prac. Dec.
(CCH) { 32,901 at 26,268 (E.D. Okla. 1982) (a “com-
pany policy not to reduce salaries when employees are
demoted from a higher paying job to a lower paying one”
rested on a factor other than sex); Mangiapane v.
Adams, 20 Fair Empl. Prac. Cas. (BNA) 699, 700-701
(D.D.C. 1979), affirmed, 24 Empl. Prac. Dee. (CCH)
(D.C. Cir. 1980) (a federal government decision to “red-
circle” employees when their positions were downgraded
from GS-13 to GS-12 was based on a factor other than
sex); Marshall v. Liggett & Myers, Inc., 22 Empl. Prac.
Dec. (CCH) 30,591 at 14,184 (M.D.N.C. 1979), af-
firmed in part and vacated in part on other grounds, 690
F.2d 1072 (4th Cir. 1982) (a “company’s practice of
continuing to pay the same wage to employees who trans-
fer from higher to lower paying positions” was based on
a factor other than sex). See also Adams vy. University
of Washington, 106 Wash. 2d 312, 722 P.2d 74, 77-82
(1986) (interpreting state legislation “virtually identical
to” the Equal Pay Act to hold that an employer’s practice
of not reducing the salaries of printers whose skills had
17
become obsolete when they were transferred to lower-
paying jobs was a factor other than sex).
Beyond this, the Eleventh Circuit’s decision cannot be
reconciled with the reasoning of the Ninth Circuit in
Kouba vy. Allstate Ins. Co., 691 F.2d 873 (1982), or the
Fourth Circuit in EEOC v. Aetna Ins. Co., 616 F.2d 719
(1980). In Kouba, the employer argued that its policy
of considering the previous salary paid to employees by
another employer justified a pay disparity. In such a
case, it is of course far more difficult for the new em-
ployer (or for a court) to determine whether the prior
salary itself was based on sex. Nevertheless, the Ninth
Cireuit held that “the Equal Pay Act does not impose
a strict prohibition against the use of prior salary.” /d.
at 878. The Ninth Circuit determined that in order to
find that Allstate’s use of prior salary violated the Act,
“the [district] court must find that the business reasons
given by Allstate do not reasonably explain its use of that
factor * * *.” Ibid.
In this case, there was no finding that GM took sex
into account in setting salaries, approving transfers, or
deciding whether to continue to pay a transferred em-
ployee at his or her previous wage rate. Yet the Eleventh
Cireuit rejected the company’s defense without even con-
sidering whether “the business reasons given by [GM]
reasonably explain its use of [prior salary].” Kouba v.
Allstate Ins. Co., 691 F.2d at 878. GM stated that it
followed its transfer pay practice in order “te encourage
people to move out of hourly wage jobs into salaried
tracks * * *.” App., infra, 6a. Consistent with the Ninth
Cireuit’s ruling, the Eleventh Circuit should have con-
sidered whether GM’s stated reason reasonably explained
its practice. The court below refused to do so and in-
stead flatly held that “prior salary alone cannot justify
pay disparity.” Jd. at 9a.
In EEOC vy. Aetna Ins. Co., a six-year employee
claimed that the company paid a newly-hired man more
18
than it paid her for the same work. The employer con-
tended that the pay disparity was justified on two
grounds. First, the company asserted that it had “two
distinct and separate merit systems: one for incoming
employees; and another for persons already employed at
the company.” 616 F.2d at 722. The system for incom-
ing employees was regularly reviewed and upgraded in
order to attract the best prospects, but the system for
existing employees was not regularly readjusted. Second,
the employer contended that the man’s higher salary was
justified by his “ability and more substantial prior under-
writing and managerial experience * * *.” Ibid.
The Fourth Circuit held that both of the employer’s
justifications were “factor[s] other than sex” under the
Equal Pay Act. It concluded that “the differential was
attributable to the existence of two distinct salary pro-
grams” and “by [the man’s] experience and background
** *.” 616 F.2d at 726. In this case, GM also had sep-
arate pay systems, one for hourly employees, and the
other for salaried employees. Because neither system
was based on sex, the Eleventh Circuit’s holding that
GM violated the Act is inconsistent with the Fourth Cir-
cuit’s holding that Aetna did not violate the Act.
This disagreement between the Eleventh Circuit and
numerous other courts on a recurring and important
question of federal law requires this Court’s resolution.
As we explain at pages 23-26, infra, the unsettled state
of the law casts doubt upon a sex-neutral employment
practice common throughout the United States. Compa-
nies such as GM, with operations nationwide, are in a
particularly difficult position when their practices appear
to violate federal law in one circuit but to be lawful in
others. This Court should grant review to settle the
matter.
Tee ee ON eee
ee ee ye ee, ee
19
B. The court of appeals’ application of a three-year
statute of limitations conflicts with this Court’s de-
cu ‘on in Richland Shoe.
The Equal Pay Act was enacted as an amendment to
the Fair Labor Standards Act (“FLSA”), and the pro-
cedural and remedial provisions of the latter Act apply.
29 U.S.C. § 255(a) provides that Equal Pay Act cases
must be brought “within two years after the cause of
action accrued, except that a cause of action arising out
of a willful violation may be commenced within three
years after the cause of action accrued.”
Prior to this Court’s recent decision in McLaughlin v.
Richland Shoe Co., 108 S. Ct. 1677 (1988), there was a
conflict among the circuits as to the meaning of the term
“willful” in Section 255(a). Several circuits applied the
standard first articulated by the Fifth Circuit in Cole-
man v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142
(1971), cert. denied, 409 U.S. 948 (1972), which re-
garded a violation as willful if the employer knew that
the federal Act was “in the picture.” Other courts fol-
lowed the approach established by this Court in a differ-
ent context in Trans World Airlines v. Thurston, 469
U.S. 111 (1985), which considered a violation to be
willful only if the employer “ ‘knew or showed reckless
disregard for the matter of whether its conduct was pro-
hibited by the FLSA.’” McLaughlin v. Richland Shoe
Co., 108 S. Ct. at 1680 (emphasis in the original).
Last Term, this Court rejected the Jiffy June standard
and held that the Thurston “reckless disregard” standard
applied to FLSA cases. McLaughlin v. Richland Shoe
Co., 108 S. Ct. at 1682. The Court emphasized that
neither negligence nor unreasonableness is enough to meet
this standard of willfulness. Thus, the Court expressly
rejected a definition proposed by the Secretary of Labor
that would have “permit|ted] a finding of willfulness to
be based on nothing more than negligence, or, perhaps, on
a completely good-faith but incorrect assumption that a
20
pay plan complied with the FLSA in all respects.” bid.
As the Court explained (id. at 1682 n.13) : ‘
If an employer acts reasonably in determining its
legal obligation, its action cannot be deemed willful
under either [the Secretary’s] test or under the
standard we set forth. If an employer acts unrea-
sonably, but no. recklessly, in determining its legal
obligation, then, although its action would be con-
sidered willful under [the Secretary’s] test, it should
not be so considered under Thurston or the identical
standard we approve today.
The lower courts in this case, acting prior to the
Richland Shoe decision, applied the now-repudiated Jiffy
June “in the picture” standard and held that GM’s con-
duct was willful. App., infra, 12a, 3la. That ruling is
plainly no longer tenable. In the alternative, the courts
also held that GM’s conduct was willful under the Thurs-
ton standard, but in doing so they clearly misconstrued
that standard. First, the district court held, and the
court of appeals agreed, that GM acted recklessly under
Thurston because it did not
make a “reasonable effort to determine whether the
plan [it was] following would constitute a violation
of the law.” * * * General Motors chose to ignore
clear signs that its practices were illegal. A viola-
tion rises to the level of reckless disregard when an
employer has the resources to conform its conduct
to the law, but declines to make the effort.
App., infra, 37a-39a (footnotes omitted) ; see also id. at
13a. Second, the court of appeals held that GM violated
the “reckless disregard” standard because it “sought to
rely on the market force theory, a theory long discred-
ited by this Court and the Supreme Court.” bid.
These interpretations of the Thurston “reckless disre-
gard” standard cannot be squared with this Court’s sub-
sequent ruling in Richland Shoe. The Court made it
erystal clear in Richland Shoe that an employer does not
21
act “willfully” simply because it has not made a reason-
able effort to determine its legal obligations. 108 S. Ct.
at 1682 & n.13. Indeed, it is completely anomalous to
hold, on the one hand, that GM acted willfully and reck-
lessly while acknowledging, on the other hand, that its
legal position was accepted by the only appellate decision
to consider the very issue. See App., infra, 9a. The
Eleventh Circuit’s finding of “reckless disregard” is even
more untenable given the support for GM’s legal position
in the decisions of several other courts. See cases cited at
page 16, infra; see also Blocker v. AT & T Technology
Systems, 666 F. Supp. 209, 214 (M.D. Fla. 1987)
(“[d]efendants’ policy of paying transferred, qualified
employees whose position has been eliminated their pre-
vious salary is not based upon sex * * * and * * * fits
within the ‘factor other than sex’ exception to the Equal
Pay Act”).
In fact, the Eleventh Circuit held that GM recklessly
disregarded its legal obligations even though no other
federal court had ever held that a transfer pay practice
like GM’s was unlawful. And it held that GM acted reck-
lessly even though there was no evidence of reckless con-
duct in the record. To the contrary, the recdrd demon-
strates—and the district court twice found (App., infra,
31a, 40a)—that GM officials acted in the good faith be-
lief that they were following a valid company policy. A
holding that such conduct is “reckless” would “permit
a finding of willfulness to be based on nothing more than
negligence, or * * * on a completely good-faith but incor-
rect assumption that [the employer’s conduct] complied
with the [Act] in all respects.” 108 S. Ct. at 1682. It
would once again “virtually obliterate[] any distinction
between willful and nonwillful violations.” Jd. at 1681.
This Court rejected that standard in Richland Shoe and
should do so here as well.®
5 If this were the only issue presented by this case, it would be
appropriate for the Court to grant the petition, summarily vacate
22
C. The court of appeals’ decision that plaintiffs were
entitled to double damages conflicts with this
Court’s decision in Richland Shoe.
An employer who violates the Equal Pay Act must pay
the plaintiff an amount representing lost wages plus “an
additional equal amount as liquidated damages.” 29
U.S.C. § 216(b). However, another provision of the stat-
ute gives the district court discretion not to award liq-
uidated damages “if the employer shows to the satisfac-
tion of the court that [his conduct] was in good faith
and that he had reasonable grounds for believing that
his [conduct] was not a violation of the [Act].” 29 U.S.C.
§ 260.
Both courts below held that the district court was re-
quired by statute to award liquidated damages in this
case because GM did not act in good faith. App., infra,
13a-14a, 40a-4la (“|tjhe court concludes that it has no
choice but to award liquidated damages’). This ruling
was closely intertwined with the decision on the statute of
limitations issue: the determination that GM had will-
fully violated the Act by relying on a “discredited” legal
theory “preclude[d] a finding of good faith on the part
of GM.” Id. at 14a n.14.
the court of appeals’ decision, and remand for reconsideration in
light of Richland Shoe. The Court recently vacated and remanded
for reconsideration in light of Richland Shoe two Seventh Circuit
decisions that interpreted Thurston similarly to the district court
in this case. Coston v. Plitt Theatres, Inc., 831 F.2d 1321, 1327 (7th
Cir. 1987) (a violation is willful if the employer “knew or reason-
ably should have known that its actions were in violation of the
law”), vacated and remanded, 108 S. Ct. 1990 (1988); Rengers v.
WCLR Radio Station, 825 F.2d 160, 166 (7th Cir. 1987), vacated
and remanded, 108 S. Ct. 1990 (1988). But because the case raises
other issues warranting plenary review, we believe that the Court
should grant the petition to make clear that a finding of willfulness
requires a showing of recklessness, not merely one of negligence,
unreasonableness or good-faith error.
23
We doubt that a finding that an employer acted will-
fully should in every case preclude a finding of good
faith. But even if it did, because the court of appeals’
holding that GM acted willfully conflicts with this Court’s
decision in Richland Shoe, the conclusion that GM, ipso
facto, did not act in good faith conflicts with Richland
Shoe as well. This Court should grant the petition to
conform the Eleventh Circuit’s liquidated damages ruling
to the legal standard announced in Richland Shoe.
II. The Court Of Appeals’ Decision Threatens To Disrupt
The Settled Practice Of Employers Throughout The
Country
The impact of the Eleventh Circuit’s decision goes far
beyond GM and its transfer pay practice. Thousands of
employers throughout the country utilize transfer pay
and other wage retention practices for many legitimate
reasons. By their nature, every such practice will result
in some employees being paid more than others for the
same work. Particularly when small employers are in-
volved, or when courts focus on small subdivisions of
large companies (such as GM’s nine-employee unit in-
volved in this case), such practices may at times result
in pay disparities between men and women. But those
disparities are not based on sex. They are based on sex-
neutral practices that benefit employees of both sexes
(by allowing them to change jobs without loss of pay)
and that benefit employers (by helping them to fill job
vacancies).
The Eleventh Circuit’s decision subjects employers to
liability under the Equal Pay Act even though they have
acted in good faith and in a nondiscriminatory manner.
And the potential liability is substantial: back pay, plus
an equal amount of liquidated damages, plus attorneys’
fees. To avoid that liability, employers will have little
choice but to abandon beneficial, nondiscriminatory trans-
fer pay practices.
24
The decision below leaves GM, and thousands of sim-
ilarly-situated employers, with no reasonable alternative.
If forced to abandon its transfer pay policy, a company
could require all employees who transfer into lower-paying
jobs to take a pay cut. But few employees would accept a
transfer under such conditions. Or the company could
prohibit employees from transferring into lower-paying
jobs. But that would leave jobs unfilled, or at least pre-
vent the best people from filling them. Or it could pre-
serve the present practice but then readjust the salaries
of all the other employees when an employee transfers
into a lower-paying job. But that would be extraordinar-
ily expensive and would make the company reluctant to
transfer higher-paid employees (leaving them in dead-
end jobs). None of these outcomes would advance any of
the purposes of the Equal Pay Act.
GM followed its transfer pay practice in good faith in
order to encourage employees to transfer from hourly
wage jobs into salaried positions. Other companies fol-
low similar practices for a variety of reasons, including
to accommodate employees who can no longer perform
their regular jobs,’ to ease the burden on employees dur-
ing times of economic contraction,® to allow minority em-
ployees to move into career tracks with better promo-
tional opportunities,’ or to bolster morale and ease the
® This serves a legitimate purpose, as evidenced by the fact that
many employers have sought to move all of their employees into
salaried positions. See Hulme & Bevan, The Blue Collar Worker
Goes on Salary, 52 Harv. Bus. Rev. 104 (1975).
7 See 29 C.F.R. § 1620.26(a).
8 See, e.g., Wallace, Industrial Relations in a Job-Loss Environ-
ment, 31 Lab. L. J. 473, 476 (1980).
® See, e.g., Pettway Vv. American Cast Iron Pipe Co., 494 F.2d 211,
247-248 & n.99 (5th Cir. 1974), cert. denied, 439 U.S. 1115 (1979)
(“Red circling is a standard remedy for eliminating past discrimina-
tion which prevented employees from reaching higher jobs and is
recognized as necessary since otherwise employees could not afford
25
burden on employees who are demoted.”
Experts in the field of compensation administration
acknowledge that a “cluster of special situations” warrant
“red-circle” and other income maintenance practices. T.
Patten, Pay: Employee Compensation and Incentive
Plans 285 (1977). See also D. Belcher & T. Atchison,
Compensation Administration 413 (2d ed. 1987) ; R. Hen-
derson, Compensation Management: Rewarding Perform-
ance 443 (2d ed. 1979); R. Sibson, Compensation 83-84
(American Management Associations 1974) (examining
a variety of circumstances under which higher-than-
normal “red-circle,” “gold-circle,” and “silver-circle” rates
apply). A recent study of financial institutions in the
Southwest demonstrates that “red-circle” practices are
quite common; over 70% of the administrators who re-
sponded to a survey had at least some “red-circled” em-
ployees at the time. Reed & Kroll, Red-Circle Employees:
A Wage Scale Dilemma, 66 Personnel Journal 92 (Feb.
1987).
The Eleventh Circuit’s decision creates intolerable un-
certainty as to the legality of this very common practice.
GM has over 875,000 employees." As the cases demon-
strate, other large employers (including the federal gov-
ernment), and thousands of smaller ones, follow prac-
to take training jobs paying lower wages”); United States v. N.L.
Industries, Inc., 479 F.2d 354, 375-376 (8th Cir. 1973) (employees
who transfer “shall not be paid at a lower hourly rate than that
which he received on the job from which he transferred”); United
States v. Bethlehem Steel Corp., 446 F.2d 652, 660 (2d Cir. 1971)
(“Rate retention * * * ha[s] been used to correct continuing dis-
criminatory effects”). See also 8 Employment Coordinator (Re-
search Inst. Am.) 81,516 (1988) (“ ‘red circling’ is a necessary
element of a Title VII remedy in many cases”); E.E.0.C. Concilia-
tion Standards § 632.6 (1973), reprinted in 2 EEOC Comp. Man.
(BNA) 910:0002 (1975).
10 See, e.g., D. Belcher & T. Atchison, Compensation Administra-
tion 413 (2d ed. 1987).
11 1 Moody’s Industrial Manual 1325 (1987).
26
tices similar to the one invalidated in this ecase.’** These
employers need uniform rules; they cannot tailor their
employment practices to suit the Eleventh Circuit. Thus,
the decision below will force them to abandon perfectly
legitimate, sex-neutral practices, which are beneficial to
employers and employees alike. That unfortunate result
should not be allowed to occur without this Court’s re-
view.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted.
CHARLES A. POWELL, III KENNETH S. GELLER *
BARRY V. FREDERICK STEPHEN M. SHAPIRO
Powell, Tally & JAMES D. HOLZHAUER
Frederick Mayer, Brown & Platt
Suite 700 2000 Pennsylvania Ave., N.W.
New South Federal Bldg. Washington, D.C. 20006
21 First Avenue North (202) 463-2000
Birmingham, AL 35203
(205) 324-4996
Davin M. DAVIs
MARK R. FLORA
General Motors Corporation
Office of General Counsel
3031 West Grand Bowlevard
Detroit, MI 48202
(313) 556-5000 * Counsel of Record
AUGUST 1988
12 See, e.g., Blocker v. AT & T Technology Systems, 666 F. Supp.
at 214; Mangiapane v. Adams, 20 Fair Empl. Prac. Cas. (BNA) at
700-701; Marshall v. Liggett & Myers, Inc., 22 Empl. Prac. Dec.
(CCH) at 14,184; Adams v. University of Washington, 722 P.2d
at 78-82.
la
APPENDIX A
UNITED STATES COURT OF APPEALS
° ELEVENTH CIRCUIT
No. 87-7171
SHEILA ANN GLENN, PATRICIA F. JOHNS,
and ROBBIE NUGENT,
Plaintiffs-A ppellees,
v.
GENERAL MOTORS CORPORATION,
Defendant-A ppellant,
SAGINAW STEERING GEAR DIVISION,
Defendant.
April 15, 1988
Appeal from the United States District Court
for the Northern District of Alabama
Before JOHNSON and CLARK, Circuit Judges, and
DUMBAULD*”, Senior District Judge.
JOHNSON, Circuit Judge:
* Honorable Edward Dumbauld, Senior U.S. District Judge for
the Western District of Pennsylvania, sitting by designation.
tie
2a
Sheila Ann Glenn, Patricia Johns, and Robbie Nugent
filed suit against General Motors Corporation (GM) and
its Saginaw Steering Gear Division, alleging violation of
the Equal Pay Act.’ The United States District Court for
the Northern District of Alabama found for the appellees
and awarded damages. See Glenn v. General Motors
Corp., 658 F.Supp. 918 (N.D.Ala. 1987). GM * timely ap-
peals the district court’s (1) determination that the ap-
pellees proved a prima facie case of gender discrimina-
tion, (2) rejection of GM’s affirmative defense of a
“factor other than sex” as the reason for the pay dispar-
ity, (3) determination that the willful character of GM’s
actions required application of the three-year, rather than
two-year statute of limitations, (4) determination that
an award of liquidated damages was appropriate, and
(5) award of expenses. We affirm in part, and reverse
and remand in part.
' The Equal Pay Act of 1963 provides in relevant part:
No employer having employees subject to any provisions of
this section shall discriminate, within any establishment in
which such employees are employed, between employees on the
basis of sex by paying wages to employees in such establish-
ment at a rate less than the rate at which he pays wages to
employees of the opposite sex in such establishment for equal
work on jobs the performance of which requires equal skill,
effort, and responsibility, and which are performed under simi-
lar working conditions, except where such payment is made
pursuant to (i) a seniority system; (ii) a merit system; (iii)
a system which measures earnings by quantity or quality of
production; or (iv) a differential based on any other factor
other than sex: Provided, That an employer who is paying a
wage rate differential in violation of this subsection shall not,
in order to comply with the provisions of this subsection,
reduce the wage rate of any employee.
29 U.S.C.A. § 206(d)(1).
?The Equal Employment Advisory Council, substantially com-
posed of employers subject to the Equal Pay Act, filed a brief
amicus curiae in support of GM’s position.
3a
1. Prima Facie Case
“In order to make out a case under the Act, the [appel-
lees] must show that an employer pays different wages to
employees of opposite sexes ‘for equal work on jobs the
performance of which requires equal skill, effort, and re-
sponsibility, and which are performed under similar work-
ing conditions.’” Corning Gass Works v. Brennan, 417
U.S. 188, 195, 94 S.Ct. 2223, 2228, 41 L.Ed.2d 1 (1974)
(quoting 29 U.S.C.A. § 206(d)(1)); accord Brock v.
Georgia Southwestern College, 765 F.2d 1026, 1032 (11th
Cir.1985).
The three appellees are employed in the Materials Man-
agement Department (previously Tool Stores Depart-
ment) of the Saginaw Division of GM in three different
plants near Athens, Alabama. The appellees currently
work in the positions of Materials Management Expediter
and Materials Follow-up Clerk. previously designated
Follow-up and Associate Follow-up Tool and Die respec-
tively. A follow-up basically ensures that adequate sup-
plies of tools and operating materials are on hand in the
GM plants to meet the minimum levels necessary to keep
the plants running. Normally, each plant has three fol-
low-ups, although GM has used less than three at times.
Up to the time of suit, four women, including the appel-
lees, (as well as men) had worked in the follow-up posi-
tion. Appellee Nugent was hired in 1975, the first per-
son to hold a follow-up position.’
No doubt exists that through 1985 all three appellees
earned less than all their male comparators in the follow-
up position in the Tool Stores Department. In fact, the
most highly paid appellee made less through 1985 than
the lowest paid man.* In addition, all the appellees re-
3 We take the facts set forth in this paragraph from the district
court’s opinion. See 658 F. Supp. at 920.
4In 1985 the monthly salaries (along with gender and starting
date as a follow-up) were: Stephen Downs (man, Feb. 1977)
4a
ceived lower starting salaries as compared to those re-
ceived by men hired near the same time.*®
GM argued at trial, and argues in its brief on appeal,
that the follow-up positions held by the female appellees
were not the same follow-up positions as held by their
male comparators.* Specifically, GM argues that the male
follow-ups who handle items ordered from blueprints
need different skills than those follow-ups, including the
appellees, who do not. The district court rejected this
distinction :
$2775; Jerry Pepper (man, July 1981) $2740; Billy White (man,
April 1981) $2600; Harold Wales (man, Jan. 1981) $2485; Robbie
Nugent (woman, 1975) $2385; Sheila Ann Glenn (woman, Feb.
1981) $2370; and Patricia Johns (woman, Feb. 1981) $2271. See
658 F. Supp. at 920-22.
5 Robbie Nugent (woman) made $600/month when she started
in 1975. Richard Tanley (man) started two months later and made
$660/month. Sheila Ann Glenn (woman) and Patricia Johns
(woman) had monthly salaries of $1441.44 and $1316.64 respectively
when they started in February 1981. Billy White (man) started
two months later with a salary of $1656.46 per month. See 658
F. Supp. at 920-22.
®GM did not take this position at the start of the case. In its
Dec. 20, 1983 answer, GM stated, “The defendant admits that male
and female ‘followups’ perform the same work... .” On April 1,
1986, GM filed an amended answer, stating that “[t]he defendant
denies that the jobs occupied by the plaintiffs are the same or sub-
stantially the same as jobs occupied by the males to whom they
compare themselves.”
Although GM contested this issue in its brief on appeal, GM ap-
peared to abandon its challenge on this issue at oral argument. At
oral argument, GM’s counsel stated, “This case is, as I’ve said,
brought under the Equal Pay Act by three ladies who contend that
they made less money for doing the same work than men who were
—who were under the same job titles. That contention is correct.
We’ve never denied that.” In addition, when GM’s counsel listed the
issues on appeal at oral argument, he did not include a challenge to
whether the appellees had proved a prima facie case. Nonetheless,
we address the merits of this contention.
Ba
The court finds that for all purposes material to
this case the positions of Blueprint Follow-Up and
Follow-up are identical. The court notes that GM
has never treated Follow-Ups differently for compen-
sation purposes on the basis of items handled. When
plaintiff Nugent handled blueprint items, for exam-
ple, she still made less than a male Follow-Up who
did not. Some of the men handling blueprint items
currently make less money than other men who do
not work with blueprint items.
658 F.Supp. at 923. Consequently, the district court con-
cluded that the appellees had proved a prima facie case.
Appellate review examines whether this determination
was “clearly erroneous.” Georgia Southwestern, 765
- F.2d at 1033. Under the “clear error” standard of re-
view, evidence in the record as a whole does not indicate
that the blueprint reading, even if it is an actual distinc-
tion, makes the jobs not “substantially equal.” See id.
at 1032 (“The jobs held by employees of opposite sexes
need not be identical, rather, they must only be ‘sub-
stantially equal.’ It is important to bear in mind that
the prima facie case is made out by comparing the jobs
held by the female and male employees and showing
that these jobs are substantially equal, not by comparing
the skills and qualifications of the individual employees
holding those jobs.” (citations and footnote omitted)
(emphasis in original) ).
II. GM’s Affirmative Defense
Once the appellees established a prima facie case, the
burden shifted to GM to prove that the difference in pay
was justified by one of the four exceptions in the Equal
Pay Act: (i) a seniority system; (ii) a merit system;
(iii) a system which measures earnings by quantity or
quality of production; or (iv) a differential based on any
factor other than sex. 29 U.S.C.A. § 206(d)(1); see
6a
Corning Glass Works, 417 U.S. at 196, 94 S.Ct. at 2229;
Georgia Southwestern, 765 F.2d at 1036.
GM seeks to justify the pay disparity on the fourth
ground—a “factor other than sex.” From 1977 to its
first collective bargaining agreement with the United
Auto Workers (UAW) in 1982, GM, in an attempt to
maintain a nonunion Alabama production force, set
hourly wages at levels of parity with the national UAW
contract in other locations.’ Prior to 1977, another
hourly wage schedule applied to all hourly employees,
regardless of gender.
In the present case, Nugent was hired “off the street”
as a salaried follow-up. Glenn and Johns transferred
from their salaried secretarial positions. In contrast, the
male comparators transferred from hourly wage jobs.
GM contends that to encourage people to move out of
hourly wage jobs into salaried tracks, it maintains a
longstanding, unwritten, corporate-wide policy against
requiring an employee to take a cut in pay when trans-
ferring to salaried positions such as those at issue in
the present case. GM thus argues that this “policy” con-
stitutes a “factor other than sex” and legitimizes the
pay disparity.
The district court found that the “policy” suffered
from a fatal flaw:
[T]his so-called salary “policy” is in fact not a pol-
icy at all, but merely one aspect of a practice. In
practice GM simply pays Follow-Ups what it takes
to induce them to accept the employment. The court
notes that historically companies may and do hire
women at lower starting salaries. The court is thus
7 Since 1982, the hourly wage rates are governed by the collective
bargaining agreement between GM and the UAW. The collective
bargaining agreement is irrelevant to the present case because all
of the female appellees and the male comparators became follow-ups
before 1982.
Ta
unconvinced of GM’s attempted justification for the
pay disparity. The three femal plaintiffs are being
paid less money than their maie counterparts for
equal work without justification.
658 F.Supp. at 924. Consequently, the district court held
that GM had failed to prove an affirmative defense justi-
fying the pay disparity.*
We affirm the district court. GM seeks to defend the
pay disparity as a result of the market force theory.
This Court and the Supreme Court have long rejected
the market force theory as a “factor other than sex”:
“'T he argument that supply and demand dictates that
women gua women may be paid less is exactly the kind
of evil that the [Equal Pay] Act was designed to elim-
inate, and has been rejected.” Georgia Southwestern,
765 F.2d at 1037 (citing Corning Glass Works, 417 U.S.
at 205, 94 S.Ct. at 2233 (“The differential arose simply
because men would not work at the low rates paid women
inspectors, and it reflected a job market in which Corn-
ing could pay women less than men for the same work.
That the company took advantage of such a situation
may be understandable as a matter of economics, but its
differential nevertheless became illegal once Congress
enacted into law the principle of equal pay for equal
work.”); Brennan v. Victoria Bank & Trust Co., 493
F.2d 896, 902 (5th Cir.1974) (market force theory that
a woman will work for less than a man is not a valid
consideration under the Equal Pay Act); Brennan v.
City Stores, Inc., 479 F.2d 235, 241 n. 12 (5th Cir.1973)
8 GM argues that the district court erred by requiring that the
“policy” be in writing to qualify as an affirmative defense. We do
not read the district court’s language, see 658 F. Supp. at 923-24,
as relying on the absence of a writing per se. Rather, we read the
district court as concluding that the absence of a writing in the
context of other written policies provides independent support for
its finding that the “policy” was, in fact, an illegal practice.
8a
(same) ; Hodgson v. Brookhaven General Hosp., 436 F.2d
719, 726 (5th Cir.1970) (same) ).
GM argues that the legislative history supports its con-
tention that prior salary can be a “factor other than
sex.” Under the facts of the present case, GM’s argu-
ment is without merit. The relevant legislative history
provides:
Three specific exceptions and one broad general
exception are also listed. It is the intent of this com-
mittee that any discrimination based upon any of
these exceptions shall be exempted from the opera-
tion of this statute. As it is impossible to list each
and every exception, the broad general exclusion has
also been included. Thus, among other things, shift
differentials, restrictions on or differences based on
time of day worked, hours of work, lifting or mov-
ing heavy objects, differences based on experience,
training, or ability would also be excluded. It also
recognizes certain special circumstances, such as
“red circle rates.” This term is borrowed from War
Labor Board parlance and describes certain unusual,
higher than normal wage rates which are main-
tained for many valid reasons. For instance, it is
not uncommon for an employer who must reduce
help in a skilled job to transfer employees to other
less demanding jobs but to continue to pay them a
premium rate in order to have them available when
they are again needed for their former jobs.
H.R. Rep. No. 309, 88th Cong., 1st Sess. 3, reprinted in
1963 U.S. Code Cong. & Admin. News 687, 689.
The legislative history thus indicates that the “factor
other than sex” exception applies when the disparity re-
sults from unique characteristics of the same job; from
an individual’s experience, training, or ability; or from
special exigent circumstances connected with the busi-
ness. The pay disparity at issue here does not result
9a
from any of these reasons. Consequently, resort to the
legislative history does not support GM’s position, but
rather buttresses the district court’s conclusion that a
“factor other than sex” does not explain the pay dis-
parity.
We recognize that our holding may contradict the Sev-
enth Circuit’s holding in Covington v. Southern Illinois
University, 816 F.2d 317 (7th Cir.), cert. denied, ——
U.S. ——, 108 S.Ct. 146, 98 L.Ed.2d 101 (1987). In
Covington, the defendant university argued that its sal-
ary retention policy, its financial emergency, and the
male comparator’s education and experience justified the
pay disparity. The Seventh Circuit agreed with the uni-
versity, and examined whether the salary retention pol-
icy alone could be a “factor other than sex.”
The university had a sex-neutral policy of maintaining
an employee’s salary upon a change of assignment within
the university. Covington argued that
factors other than sex for purposes of the [Equal
Pay Act] ... are limited either to business-related
persons or, more narrowly, to factors that relate to
the requirements of the job or to the individual’s
performance of that job. Covington contend[ed]
that [the university]’s policy of retaining the salary
of employees who change assignments does not fall
within either of these categories.
816 F.2d at 321. The Seventh Circuit rejected Coving-
ton’s argument. The flaws of the Covington decision are
that the Seventh Circuit implicitly used the market force
theory to justify the pay disparity and that the Seventh
Circuit ignored congressional intent as to what is a
“factor other than sex.” Consequently, we reject Coving-
ton because it ignores that prior salary xlone cannot
justify pay disparity.®
® Contrary to GM’s gloss, Kouba v. Allstate Ins. Co., 691 F.2d 873
(9th Cir. 1982), does not stand for the proposition that prior salary
10a
III. Statute of Limitations
The applicable statute of limitations for the present
ease is provided in 29 U.S.C.A. §255(a): “[E]very
feause of] action shall be forever barred unless com-
menced within two years after the cause of action ac-
erued, except that a cause of action arising out of a will-
ful violation may be commenced within three years after
the cause of action accrued.’ The district court first
determined that under the Jiffy June “in the picture”
standard,’® GM’s actions were willful. 658 F. Supp. at
926.
alone can justify pay disparity. In Kouba, the Ninth Circuit held
that “the Equal Pay Act does not impose a strict prohibition against
the use of prior salary.” Jd. at 878. The Ninth Circuit added that
“while we share the district court’s fear that an employer might
manipulate its use of prior salary to underpay female employees,
the [district] court must find that the business reasons given by
[defendant] Allstate do not reasonably explain its use of the factor
before finding a violation of the Act.” Id. Allstate had claimed that
it used prior salary to predict a new employee’s performance as a
sales agent. Jd. The Ninth Circuit held that strict relevant consid-
erations needed to be evaluated on remand to decide whether Allstate
could rely on prior salary. Kouba is consistent with the present case
because the Ninth Circuit would permit use of prior salary where
the prior job resembled the sales agent position and where Allstate
relied on other available predictors. In the present case, GM does
not argue that the males’ hourly wages serve to predict that males
will be better follow-ups than the female appellees. Nor does the
evidence in the record as a whole support that GM could resort to
any other factor than the prior salary to justify the pay disparity.
Nor does EEOC v. Aetna Ins. Co., 616 F.2d 719 (4th Cir. 1980),
support GM’s position. Contrary to GM’s gloss, Aetna does not
stand for the proposition that pay disparity is justified when it
results from two distinct nondiscriminatory merit systems. Rather,
the Fourth Circuit validated the differential because of the male
comparator’s experience and background. 7d. at 726. In contrast,
GM justifies the disparity on the basis of the systems alone, without
record support that experience and background justify the pay
disparity.
10 This Court’s predecessor examined the meaning of “willful” in
Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139 (5th Cir. 1971),
lla
GM does not contend that it met the Jiffy June “in
the picture” standard, but rather argues that the Su-
preme Court disavowed that standard in Trans World
Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613,
83 L.Ed.2d 523 (1985). Thurston addressed the defini-
tion of “willful” for liquidated damages under the Age
Discrimination in Employment Act. The Supreme Court
rejected the Jiffy June standard and held that a violation
was “willful” if “the employer either knew or showed
reckless disregard for the matter of whether its conduct
was prohibited by the ADEA.” Id. at 128-29, 105 S.Ct.
at 625. The Court, however, expressly did not determine
if the “in the picture” standard was appropriate for stat-
ute of limitations purposes. Jd. at 127-28, 105 S.Ct. at
624-25.
After the Supreme Court decided Thurston, however,
this Court applied the Jiffy June standard to the precise
issue presented by this appeal (i.e., the definition of
“willfulness” for a statute of limitations connected with
an Equal Pay Act claim). Georgia Southwestern, 765
F.2d at 1038-39. GM seeks to avoid Georgia Southwest-
cert. denied, 409 U.S. 948, 93 S.Ct. 292, 34 L.Ed.2d 219 (1972).
The Court reasoned:
The entire legislative history of the 1966 amendments of the
{Fair Labor Standards Act] indicates a liberalizing intention
on the part of Congress. Requiring employers to have more
than awareness of the possible applicability of the FLSA would
be inconsistent with that intent. Consequently, we hold that
employer’s decision to change his employees’ rate of pay in
violation of FLSA is “wilful” [sic] when, as in this case, there
is substantial evidence in the record to support a finding that
the employer knew or suspected that his actions might violate
the FLSA. Stated most simply, we think the test should be:
Did the employer know the FLSA was in the picture?
458 F.2d at 1142 (emphasis added).
11Qn October 5, 1987, the Supreme Court granted certiorari on
this issue. See Brock v. Richland Shoe Co., —— U.S. ——, 108
S.Ct. 63, 98 L.Ed.2d 27 (1987).
l2a
ern’s binding character by pointing out, and correctly so,
that this Court did not discuss Thurston’s impact in
that case. Even if the lack of discussion concerning
Thurston would allow us to examine the controlling char-
acter of Georgia Southwestern, we would adhere to the
Jiffy June standard. The district court persuasively
noted that the liquidated damages provision is punitive
in nature, and that the statute of limitations has a res-
titutionary function. 685 F. Supp. at 926 n.1. Conse-
quently, “willful” can have differing definitions based
upon the underlying purpose of the provision.’*
12 Our holding accords with the post-Thurston decisions of the
First, Fourth, Ninth, and Tenth Circuits. See Secretary of Labor
v. Daylight Dairy Prods., Inc., 779 F.2d 784, 789 (1st Cir. 1985);
Donovan v. Bel-Loc-Diner, Inc., 780 F.2d 1113, 1117 (4th Cir.
1985); Brock v. Shirk, 833 F.2d 1326, 1329 (9th Cir. 1987);
Crenshaw v. Quarles Drilling Corp., 798 F.2d 1345, 1349-50 & 1350
n.6 (10th Cir. 1986).
Our holding conflicts with the post-Thurston decisions of the
Second, Third, Fifth, and Seventh Circuits. See Brock v. Superior
Care, Inc., 840 F.2d 1054, (2d Cir. 1988); Brock v. Richland
Shoe Co., 799 F.2d 80 (3d Cir. 1986), cert. granted, ——— U.S. ——-,
108 S.Ct. 63, 98 L.Ed.2d 27 (1987); Peters v. City of Shreveport,
818 F.2d 1148, 1167-68 (5th Cir. 1987), petition for cert. filed
(Oct. 19, 1987); Walton v. United Consumers Club, Inc., 786 F.2d
$03, 308-12 (7th Cir. 1986).
We recognize that the Fifth Circuit no longer adheres to Jiffy
June, a decision binding on us in the Eleventh Circuit. In Salazar-
Calderon v. Presidio Vailey Farmers Association, 765 F.2d 1334
(5th Cir. 1985), cert. denied, 475 U.S. 1035, 106 S.Ct. 1245, 89
L.Ed.2d 353 (1986), the Court, in a case not involving the FLSA
or a statute of limitations issue, remarked that Thurston over-
turned Jiffy June’s definition of willful. Jd. at 1345. Seizing on
this language, the Court held in Peters, a case addressing the statute
of limitations under thre Equal Pay Act, that Salazar-Calderon’s
remark was controlling. 818 F.2d at 1167. See Halferty v. Pulse
Drug Co., 826 F.2d 2 (5th Cir. 1987) (Peters requires that panel
vacate its earlier holding that Jiffy June required a three-year
stat te of limitations). We choose not to follow the Fifth Circuit’s
disapproval of Jiffy June, especially because the Fifth Circuit did
not examine the restitutionary policy underlying the statute of
limitations.
13a
The district court alternatively held that GM failed
Thurston’s reckless disregard standard. 658 F. Supp. at
927. We affirm the district court on this alternative
ground as well. GM showed reckless disregard because,
as noted above, GM sought to rely on the market force
theory, a theory long discredited by this Court and the
Supreme Court.**
IV. Liquidated Damages
Under 29 U.S.C.A. § 216(b), affected employees shall
recover liquidated damages from their employer for vio-
lations of the Equal Pay Act. An employer may avoid
the mandatory nature of an award of liquidated damages
if the court chooses not to make an award where the
employer shows its actions were in good faith and shows
it had reasonable grounds for believing that those actions
did not violate the Equal Pay Act. See 29 U.S.C.A.
§ 260.
The district court initially held that GM’s violation
of the Equal Pay Act was in good faith and predicated
upon reasonable grounds. It therefore did not award
liquidated damages. 658 F. Supp. at 925. The district
court later awarded liquidated damages, determining
that, although individual GM officials held a good faith
belief that GM had adopted a transfer pay policy, GM
lacked reasonable grounds to support a belief that its
acts were in conformity with the law. Id. at 928.
18 Because of our holding we express no view on the merits of
the district court’s observation that
[a]s an explanation for its conduct during settlement negotia-
tions, General Motors has brought to this court’s attention its
policy of obtaining the resignation of employees who file dis-
crimination claims as a condition precedent to settlement. This
court feels obliged to point out that a policy of retaliatory dis-
charge may be per se “willful” under Thurston.
658 F. Supp. at 927 n.5; see Powell v. Rockwell International Corp.,
788 F.2d 279, 286 & n.6 (5th Cir. 1986).
l4a
We affirm the district court. As noted above, this Cir-
cuit and the Supreme Court have long discredited the
market force theory. Consequently, GM could not have
had reasonable grounds to support a belief that its acts
were in conformity with the law."
V. Expenses
In addition to awarding damages to the appellees and
awarding attorney fees to the appellees’ counsel, the dis-
trict court also awarded the appellees’ counsel $34,979.44
in expenses, which the district court found “to have been
reasonably expended under the circumstances for para-
legals, law clerks, fee counsel, general office litigation ex-
penses and expert witnesses.” 658 F. Supp. at 932. GM
challenges the district court’s award of expenses, particu-
larly $12,614 as fees for two expert witnesses.” As sup-
port for its position, GM relies on Crawford Fitting Co.
v. J.T. Gibbons, Inc., —— U.S. ——, 107 S.Ct. 2494, 96
L.Ed.2d 385 (1987), a case decided after the district
court awarded expenses in the present case.
We begin our analysis with the language of 29
U.S.C.A. § 216(b), which provides in relevant part that
“[t)he court in [an Equal Pay Act] action shall, in addi-
tion to any judgment awarded to the plaintiff or plain-
tiffs, allow a reasonable attorney’s fee to be paid by the
defendant, and costs of the action.” We note from the
outset that this Court has never determined whether Sec-
44 We note that our conclusion in the context of the discussion on
the statute of limitations issue that GM's actions met Thurston's
definition of “willful” precludes a finding of good faith on the part
of GM. See Castle v. Sangamo Weston, Inc., 837 F.2d 1550, 1561
(11th Cir. 1988) (“[U]nder the Thurston definition to find ‘good
faith’ after a finding of ‘willful’ violation is illogical: the two terms
are now mutually exclusive.” ).
“The district court awarded $8,120 for Dr. Paul Lees-Haley,
who was deposed, but did not testify, and awarded $4,494 for Dr.
William Farrar, who was deposed and did testify.
15a
tion 216(b) permits an award of expenses for expert
witness fees.**
An analogy, however, is possible. This Court permits
an award of expert witness fees in civil rights cases.
Jones v. Diamond, 636 F.2d 1364, 1382 (5th Cir. Jan.
1981) (en banc), cert. dismissed, 453 U.S. 950, 102 S.Ct.
27, 69 L.Ed.2d 1033 (1981).‘7 The en bane Court looked
to congressional intent and determined that recovery for
expert witness fees allowed citizens to recover what it
costs them to vindicate civil rights in court. /d.“ Similar
policies underlie Section 216(b), thereby suggesting that
the district court properly awarded expert witness fees
to the appellees.
Our analysis, however, would not be complete without
an examination of the Crawford Fitting decision. In that
case, the Supreme Court held “that absent explicit statu-
tory or contractual authorization for the taxation of the
expenses of a litigant’s witness as costs, federal courts
are bound by the limitations set out in 28 U.S.C. § 1821
16 In King v. McCord, 621 F.2d 205 (5th Cir. 1980), the prevail-
ing plaintiff sought attorney fees of $30,000 and costs for expert
witnesses of $5,888.45. The district court awarded a lump-sum
figure of $2,000 for attorney fees and costs. This Court's predeces-
sor expressly noted that the “[a]ppellant filed this appeal on the
basis of the alleged inadequate fee award only.” /d. at 206. Conse-
quently, the expert witness costs question was not addressed.
17 The Fifth Circuit has overruled this aspect of the Jones v.
Diamond opinion. International Woodworkers of Am. v. Champion
Int'l Corp., 790 F.2d 1174, 1175, 1180 (5th Cir. 1986) (en banc).
18 The Court recognized that its holding contradicted the general
rule that 28 U.S.C. § 1821 limits the expert witness fees award
(currently a limit of $30 per day). This Circuit adheres to that
general rule. See Kivi v. Nationwide Mutual Ins. Co., 695 F.2d
1285, 1289 (11th Cir. 1983) (“[I)}t is well settled that expert witness
fees cannot be assessed in excess of witness fees provided in
§ 1821.”); see also Osterneck v. E.T. Barwick Industries, 825 F.2d
1621, 1530 n.15 (11th Cir. 1987) (dicta).
l6a
and § 1920.” Jd. 107 S.Ct. at 2499. —— the
Court broadly observed that
{a]lthough Congress responded to our decision in
Alyeska [Pipeline Service Co. v. Wilderness Society,
421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975) ]
by broadening the availability of attorney’s fees in
the federal courts, see . . . 42 U.S.C. § 1988, it has
not otherwise “retracted, repealed, or modified the
limitations on taxable fees contained in the 1853
statute and its successors.” Thus, we are once again
asked to hold that a specific congressional enactment
on the shifting of litigation costs is of no moment.
We think that, as in Alyeska, Congress has made its
intent plain in its detailed treatment of witness fees.
We will not lightly infer that Congress has repealed
§§ 1920 and 1821, either through Rule 54(d) or any
other provision not referring explicitly to witness
fees.
Id. (citations omitted) (emphasis added).
The Supreme Court’s broad statement suggests that
the district court erred in awarding expert witness fees
because Section 216(b) does not refer explicitly to them.
Cf. The Equal Access to Justice Act, 28 U.S.C.A. § 2412
(d)(1)(A) (“[{A] court shall award to a prevailing
party other than the United States fees and other ezx-
penses, in addition to any costs awarded [as enumerated
in 28 U.S.C.A. § 1920]... .” (emphasis added)); see
also International Woodworkers of America v. Champion
International Corp., 790 F.2d 1174, 1179 & n.7 (5th Cir.
1986) (en banc) (collecting the “numerous statutes ex-
pressly allow[ing] federal courts to award the full
amount of expert witness’ fees as costs of litigation.”).
1% Section 1920(3) provides that witness fees may be taxed as
costs. Section 1821(b) provides that a “witness shall be paid an
attendance fee of $30 per day for each day's attendance.”
17a
One basis for distinguishing Crawford Fitting from
the present case has been suggested.” Because Crawford
Fitting involved only the award of costs pursuant to
Federal Rule of Civil Procedure 54(d),™ that case did
not necessarily determine whether expert witness fees
could be awarded pursuant to a fee-shifting statute.”
We hold that the broad language in Crawford Fitting
does not permit a distinction based upon whether or not
the award is made under a fee-shifting statute.™ The
2 Three Supreme Court Justices noted that Crawford Fitting did
not address whether a district court may award expert witness
fees under Section 1988, an explicit fee-shifting statute. 107 S.Ct.
at 2499 (Blackmun, J., concurring); id. at 2500 n.1 (Marshall, J.,
dissenting) (joined by Brennan, J.).
21 Rule 54(d) provides in relevant part: “Except when express
provision therefor is made either in a statute of the United States
or in these rules, costs shall be allowed as of course to the prevailing
party unless the court otherwise directs. .. .”
22 The District Court of Massachusetts has seized on this distinc-
tion to award expert witness fees pursuant to Section 216(b).
Freeman v. Package Machinery Co., 1987 Westlaw 16456, at 13
(D. Mass. Sept. 2, 1987) (“Defendant's reliance on Crawford is
misplaced because that opinion was inapplicable to cases involving
explicit fee shifting statutes. .. .). But see Eivins v. Adventist
Health System/Eastern & Middle America, Inc., 660 F. Supp. 1255,
1264 (D. Kan. 1987) (expert witness fees under § 216(b) limited to
$30 per day); cf. Furr v. AT & T Technologies, Inc., 824 F.2d 1537,
1550 (10th Cir. 1987) (Section 216(b) may permit expert witness
fees as part of attorney fees, but parties stipulated to amount of
attorney fees and court would not address issue; court implicitly
held that expert witness fees could not be part of costs awarded).
3 Post-Crawford Fitting cases examining the issue pursuant to
Section 1988 or other civil rights fee-shifting provisions have not
permitted awards for expert witness fees. See Boring v. Kozakie-
wiez, 833 F.2d 468, 474 (3d Cir. 1987) (“A prevailing party in a
civil rights case is not entitled to tax [expert witness] fees as
costs.” (citing Crawford Fitting)); Leroy v. City of Houston, 831
F.2d 576, 584 (5th Cir. 1987) (“Although [Crawford Fitting] ex-
pressly considered whether [Rule] 54(d) could, in an antitrust case,
override the statutory limit on witness fees, the Court’s general
18a
broad language in Crawford Fitting indicates that, al-
though a statute may shift attorney fees, the statute does
not operate to shift witness fees unless the statute refers
explicitly to witness fees. In the present case, Section
216(b) does not refer explicitly to witness fees. In addi-
tion, nothing in the legislative history associated with
Section 216(b)’s passage suggests that Congress intended
the term “costs of the action” to differ from those costs
as now enumerated in 28 U.S.C.A. § 1920. Consequently,
we hold that the district court erred in awarding expert
reasoning leaves us no room to construe the Voting Rights Act
provision here otherwise. The Voting Rights Act does not specifi-
cally allow recovery of expert witness fees, and we must reverse this
portion of the district court’s award.” (citation omitted) ); ECOS,
Inc. v. Brinegar, 671 F. Supp. 381, 404 n.12 (M.D.N.C. 1987)
(Crawford Fitting persuasive authority for holding that $30 per
day limit governs § 1988 award for expert witness fees); Alberti
v. Gheciff of Harris County, F. Supp. ——, (S.D. Tex.
Au;. 2U, 1987) (same). See also Catlett v. Missouri Highway &
Transportation Commission, 828 F.2d 1260, 1272 (8th Cir. 1987)
(in light of Crawford Fitting, defendant in Section 1983 Title VII
case “will be free [on remand] to challenge the assessment against
it of the class” expert witness fees). Cf. Mennor v. Fort Hood
National Bank, 829 F.2d 553, 557 (5th Cir. 1987) (in Title VII
case, district court could award attorney’s out-of-pocket costs be-
cause 28 U.S.C.A. § 1920 does not regulate those costs). But see
United States v. Yonkers Board of Education, 118 F.R.D. 326, 330
(S.D.N.Y. 1987) (Crawford Fitting does not preclude award of ex-
pert witness fees). But cf. Jones v. City of Chicago, 1987 Westlaw
19800, at 8-9 (N.D. Ill. Nov. 10, 1987) (“[{A]lthough the costs
defendants object to are in large part no longer allowable under
Section 1920, they are allowable as part of the reasonable attorney’s
fees obtainable by the plaintiff under Section 1988 [for out-of-pocket
expenses incurred by the attorney in preparation of trial].’”).
We recognize that, in contrast to the language of Section 1988
and 42 U.S.C. § 2000e-5(k) (Title VII’s fee-shifting provision), the
language of Section 216(b) is mandatory, favors plaintiffs only,
and separates attorney fees from costs. In light of Crawford Fit-
ting’s broad language and the absence in Section 216(b)’s legislative
history of congressional intent to compensate plaintiffs fully for
expert witness fees as part of the costs of the action, we attach no
significance to the difference in statutory language.
19a
witness fees in excess of the amount permitted by 28
U.S.C.A. § 1821 and 28 U.S.C.A. § 1920. We thus remand
this case to the district court so it may tailor the award
of expert witness fees in accordance with this opinion.
On remand, the district court also must ensure that only
those items permitted to be taxed as costs are included in
the award of expenses and that the amount of the award
attributable to each of those items falls within the statu-
tory limit as to that amount.
VI. Conclusion
In conclusion, we AFFIRM that the appellees estab-
lished a prima facie case under the Equal Pay Act. We
AFFIRM that GM failed to prove the pay disparity re-
sulted from a “factor other than sex.” We AFFIRM
that the three-year statute of limitations applied. We
AFFIRM that liquidated damages were appropriate. We
REVERSE and REMAND as to expenses awarded.
20a
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
Civil Action No. CV-83-V-5777-NE
SHEILA ANN GLENN, et al.,
Plaintiffs,
versus
GENERAL MOTORS CORPORATION,
Defendant.
[Filed July 10, 1986]
OPINION AND ORDER
The factual and legal statements incorporated in this
opinion constitute the court’s findings of fact and conclu-
sions of law required by Fed. R. Civ. P. 52(a). In this
case plaintiffs, Sheila Ann Glenn (“Glenn”), Patricia J.
Johns (“Johns”), and Robbie Nugent (“Nugent”), claim
that the defendant, General Motors Corporation (“GM”),
violated the Equal Pay Act, 29 U.S.C. § 206(d).2
129 U.S.C. § 206(d) (1) provides:
No employer having employees subject to any provisions of
this section shall discriminate, within any establishment in
which such employees are employed, between employees on
the basis of sex by paying wages to employees in such estab-
lishment at a rate less than the rate at which he pays wages
to employees of the opposite sex in such establishment for equal
work on jobs the performance of which requires equal skill,
effort, and responsibility, and which are performed under simi-
lar working conditions, except where such payment is made
2la
The three plaintiffs are employed in the Materials Man-
agement Department (previously Tool Stores Depart-
ment) of the Saginaw Division of GM in three different
plants near Athens, Alabama. The plaintiffs currently
work in the positions of Materials Management Expediter
and Materials Follow-Up Clerk, previously designated
Follow-Up and Associate Follow-Up Tool and Die respec-
tively. A Follow-Up basically insures that adequate sup-
plies of tools and operating materials are on hand in the
GM plants to meet the minimum levels necessary to keep
the plants running. A portion of the information used
in the job is computer-generated. Normally, each plant
has three Follow-Ups, but at times GM has used less than
three. Up to the time of this suit, four women, including
plaintiffs, have worked in the Follow-Up position—all
other Follow-Ups have been men.
The Plaintiffs
Plaintiff Nugent was hired by GM “off the street”
(from outside GM) in 1975 as a level 4 Associate Follow-
Up Tool and Die, with salary of $600.00 per month. She
was employed in Plant 21. Nugent was the first person
hired by GM in a Follow-Up capacity. Nugent was told
by GM that she was starting at the bottom of the salary
scale but that in six months she would be evaluated on
her ability. Nugent became a level 5 Follow-Up with no
change in job duties during the second quarter of 1978
at a base monthly salary of $1,100.00. During 1984, her
job title was changed to Materials Management Expedi-
ter. In 1985, her base monthly salary was $2,385.00. At
pursuant to (i) a seniority system; (ii) a merit system; (iii)
a system which measures earnings by quantity or quality of
production; or (iv) a differential based on any other factor
other than sex: Provided, That an employer who is paying a
wage rate differential in violation of this subsection shall not,
in order to comply with the provisions of this subsection, reduce
the wage rate of any employee.
22a
time of trial, her base monthly salary was $2,505.00, ef-
fective January 1986.
Plaintiff Glenn was hired “off the street” by GM in
September 1977 as a salaried employee in Plant 21.
Glenn was hired into a level 3 stenographer position with
a base salary of $755.00 per month. In February 1981
Glenn transferred from the position of stenographer, at
a base salary of $1,310.40, to the position of level 4 As-
sociate Follow-Up Tool and Die in Plant 23. Glenn’s base
salary, after transfer, was $1,441.44 per month. In 1984,
Glenn’s job title was changed to Materials Follow-Up
Clerk. In 1985 her base salary was $2,370.00 per month.
At time of trial, her base monthly salary was $2,550.00,
effective January 1986.
Plaintiff Johns was hired “off the street” by GM in
October 1978 as a salaried employee in the position of
secretary to the Plant 22 superintendent. In February
1981 Johns became a level 4 Associate Follow-Up Tool
and Die in Plant 22 with a base monthly salary of
$1,316.64. Johns currently holds the title of Materials
Follow-Up Clerk, and her 1985 base salary was $2,271.00
per month. Her monthly salary at time of trial was
$2,405.00, effective January 1986.
The Plaintiffs’ Male Counterparts
In September 1975, Richard Tanley transferred from
the hourly tool crib job at GM to the position of Associate
Follow-Up Tcol and Die alongside plaintiff Nugent in
Plant 21, at a monthly base salary of $660.00. In April
1978 Tanley was given the level 6 position of supervisor,
Tool Stores Department, Plant 22. In 1985 he was the
Receiving and Inspection Supervisor. Tanley’s job duties
did not change when he was promoted from Associate
Follow-Up to Follow-Up.
Stephen Downs was hired as an hourly employee at the
Saginaw plant in January 1976. His job position was
23a
skilled trades—70 Rate, however, he held the position of
forklift driver. His base monthly equivalent salary was
$932.35. Downs transferred from hourly to salaried em-
ployment, taking the position of Associate Follow-Up Tool
and Die in February 1977. He worked in Plant 21 along-
side Robbie Nugent. His monthly base salary was
$975.00, which increased to $1,075.00 in April 1977. Nu-
gent’s monthly base salary for the same period was
$878.94. In April 1978 Downs became a Follow-Up, with
a base monthly salary of $1,250.00. His job duties did not
change. Plaintiff Nugent’s base monthly salary at that
time was $1,100.00: In 1985 Downs’ job title was changed
to Materials Management Expediter. In May 1985 he
took the position of Senior Materials Management Ex-
pediter, a level 6 position. His job duties did not change.
In 1985 his monthly base salary was $2,775.00; Plaintiff
Nugent’s was $2,385.00.
Steven D. Greenlee was hired in April 1979 as an As-
sociate Follow-Up Tool and Die for Plant 22. His
monthly base salary was $1,175.00. Greenlee remained
an Associate Follow-Up until he was laid off during June
1980. At the time of his layoff, his base monthly salary
was $1,545.40. Greenlee was recalled during January
1981 to the same position he had previously held, at a
base monthly salary of $1,545.54. During June 1981
Greenlee assumed a level 5 position of supervisor-in-
training, and in September 1981 he became a production
supervisor. In June 1985 Greenlee held the position of
production supervisor.
Harold Wales was hired by GM during June 1977 at an
hourly rate as a job setter—30 Rate. He received a
monthly equivalent wage of $1,216.57. In May 1978 he
transferred to the salaried position of Follow-Up Tool
and Die alongside plaintiff Nugent in Plant 21 at a
monthly base salary of $1,230.00. One month later he
returned to an hourly position. In January 1981 Wales
left his position of machine operator—20 Rate, with a
24a
monthly equivalent wage of $1,608.22, and resumed the
position of Follow-Up Tool and Die in Plant 21, with a
monthly base salary of $1,608.22. Harold Wales cur-
rently holds the position of Materials Management Ex-
pediter. His job duties have not changed. In 1985 his
base monthly salary was $2,485.00.
Robert Stephenson was hired by GM in March 1978
as an hourly employee, machine operator—20 Rate; how-
ever, in fact he was a crib attendant. His monthly equiv-
alent pay was $1,171.51. Stephenson testified he applied
for a salaried Tool Stores position but was hired as an
hourly tool crib attendant. During September 1978 he
transferred to the salaried position of Associate Follow-Up
Tool and Die in Plant 22 at a monthly base salary of
$1,220.00. Stephenson held this position until June 1980,
at which time he returned to an hourly position as a tool
crib attendant, and was paid $1,293.44 per month. He
remained an hourly employee until January 1981, at
which time he transferred to the position of Associate
Follow-Up in Plant 22, with a base monthly salary of
$1,564.00. Sometime between September 1982 and Sep-
tember 1983, Stephenson took the level 5 position of Fol-
low-Up. In September 1984 his job title changed to Ma-
terials Management Expediter, fifth level. His base
monthly salary increased from $1,752.96 to $1,875.66, but
his job duties remained the same. GM admitted that
Bobby Stephenson was transfered to the position of As-
sociate Tool and Die Follow-Up in 1978 at GM’s Plant 22
at a higher base salary than Robbie Nugent was being
paid in Plant 21 at the time of Stephenson’s transfer.
Billy White was hired by GM in December 1978 as an
hourly employee. He held the position of machine opera-
tor—20 Rate, with a monthly equivalent pay of $1,608.22.
In April 1981 he took the position of Associate Follow-Up
Tool and Die in Plant 23, with a monthly base salary of
$1,656.46. In 1984 his job title was changed from Asso-
ciate Follow-Up to Materials Follow-Up Clerk, and dur-
25a
ing May 1985, he was given a level 5 position as a Mate-
rials Management Expediter. White’s job duties remained
the same. His base salary in 1985 was $2,600.00. White
was hired nearest in time to plaintiffs Glenn and Johns.
Jerry Pepper became an Associate Follow-Up in July
1981 at a monthly salary of $1,656.00. Jerry Pepper’s
job title was changed to Materials Follow-Up Clerk in
1984. In June 1985 Pepper became a level 5 Materials
Management Expediter. Despite the change in job, Pep-
per’s duties have remained the same. His 1985 base
monthly salary was $2,740.00.
The Pay Disparity
Through 1985 all three plaintiffs earned less than all
of-their male counterparts in the Follow-Up position in
the Tool Stores Department. In fact, the most highly-paid
plaintiff made less through 1985 than the lowest-paid
man. Plaintiff Nugent was hired as an Associate Follow-
Up two months before Richard Tanley was hired in the
same capacity, yet Tanley’s monthly salary was $60
higher. Plaintiffs Johns and Glenn were hired as Asso-
ciate Follow-Ups two months before Billy White, yet
White’s starting Associate Follow-Up salary was $215
per month higher than Glenn’s and $336 per month higher
than Johns’.
Plaintiffs Glenn, Johns and Nugent each received an
“inequity adjustment” shortly after plaintiffs Johns and
Glenn filed their EEOC charges. No one else in the Tool
Stores Department received an “inequity adjustment.”
In determining whether to give an “inequity adjustment”
to salary, the GM salaried personnel administration looks
at the employee’s salary in relation to a new hire’s sal-
ary, the employee’s performance and length of service.
In August 1983 plaintiff Glenn received an “inequity ad-
justment” of $150.56. Defendant’s stated reason for the
adjustment was “due to review of salary structures of
Tool Stores Department.” In August 1983 plaintiff Johns
26a
received an “inequity increase” in the amount of $142.82.
The defendant’s stated reason for the adjustment was
“due to review of salary structure of Tool Stores Depart-
ment.” Plaintiff Nugent was the only employee in her
department to get an inequity adjustment. The “inequity
adjustment,” made in August 1983, was in the amount
of $159.74.
GM quibbles about whether the Follow-Up job handled
by the three women plaintiffs and the men are compar-
able, and attempts to distinguish them on the basis of
specific items handled by Follow-Ups. The function of
the Tool Stores Department is generally to provide for
all non-productive material that is used within the plants.”
It involves the management of inventories and mainten-
ance of the plants to keep the plants running. It also
includes management of janitorial supplies. Specific
functions include ordering non-productive material for the
three Alabama plants, specifying order quantities, main-
taining tooling crib stock levels, and making special or
“emergency” buys. The positions held by plaintiffs and
their male counterparts in October 1983 were “Follow-
Up Tool and Die” and “Associate Follow-Up Tool and
Die.” These titles were changed in September 1984 to
“Materials Management Expediter,” “Materials Follow-
Up Clerk,” and “Senior Materials Management Expedi-
ter,” although the job requirements and functions re-
nm eined the same under all five of these titles. Except for
0ix months in 1983 when all Tool Stores Departments for
2 “Non-productive” materials are materials required to operate
the plant and maintain machinery to build the parts for a GM
automobile. Such materials include, but are not limited to: bear-
ings; chains; seals; power transmission parts (such as sprockets,
couplings, reducers and gear boxes); electrical parts; blueprint
tooling; stationery items (such as paper, forms, tags, pencils) ;
spare parts; cutting tools; hand tools; tool holders; abrasives;
grinding wheels; maintenance and tool steel oils; chemicals; lubri-
cants; nuts, bolts, and screws; charts; springs; janitorial supplies
and other miscellaneous supplies.
OTE aR PN RS RRR
27a
the three plants were consolidated, each plant has had a
separate Tool Stores Department. A Follow-Up and As-
sociate Follow-Up in Tool Stores orders and disburses
non-productive materials, confirms orders, processes emer-
gency orders, and processes daily paper work. They set
up new items of inventory, and they deal with outside
salesmen.
GM contends that the male Follow-Ups who handle
items ordered from blueprints need different skills than
those Follow-Ups, including the plaintiffs, who do not.
The court finds that for all purposes material to this case
the positions of Blueprint Follow-Up and Follow-Up are
identical. The court notes that GM has never treated
Follows-Ups differently for compensation purposes on the
basis of items handled. When plaintiff Nugent handled
blueprint items, for example, she still made less than a
male Follow-Up who did not. Some of the men handling
blueprint items currently make less money than other
men who do not work with blueprint items. The only
current Follow-Up who has had college training in work-
ing with blueprints is plaintiff Johns, and she does not
handle blueprint items at present.
The court does not doubt that increased familiarity
with blueprint items may enable the Follow-Ups who
handle them to work with them in a more meaningful
way, but GM does not require formal blueprint training.
The court does not credit any evidence presented by GM
indicating that Blueprint Follow-Ups actually interpret
blueprints. GM has skilled “troubleshooters” and engi-
neers present to carry on this function, and the court
finds it highly unlikely that GM would rely on unskilled
Follow-Ups to interpret blueprints to its suppliers when
the continued viability of the plants is at stake. The
Blueprint Follow-Ups provide the vendors with only rou-
tine information that can be obtained from the blue-
prints without actually interpreting them.
28a
GM attempts to justify the pay disparity between the
male and female Follow-Ups by emphasizing the route by
which each Follow-Up progressed by the Follow-Up posi-
tion. GM contends that the male Follow-Ups transferred
into their positions from higher-paid hourly jobs within
GM, and that GM maintained this higher level of pay to
encourage them to make the move to a salaried Follow-
Up position. The higher hourly salaries were the result
of collective bargaining which did not affect the salaried
positions. The women plaintiffs, GM argues, came from
lower-paid salaried positions within GM. GM asserts
that their salary policies are gender-neutral, and are
uniformly applied in determining entry salaries for
Follow-Ups.
GM’s asserted policy to encourage employees to trans-
fer from hourly positions to salaried positions by main-
taining the same rate of pay after transfer is not in
writing. GM maintains a written salaried administra-
tion plan or manual, commonly referred to as the “black
book,” which contains no mention of the “transfer pol-
icy.” GM also maintains a written merit plan, to deter-
mine certain pay increases, which contains no reference
to the “transfer policy.”
The court finds that this so-called salary “policy” is
in fact not a policy at all, but merely one aspect of a
practice. In practice GM simply pays Follow-Ups what it
takes to induce them to accept the employment. The
court notes that historically companies may and do hire
women at lower starting salaries. The court is thus un-
convinced of GM’s attempted justification for the pay
disparity. The three female plaintiffs are being paid less
money than their male counterparts for equal work with-
out justification.
In order for plaintiffs to establish a prima facie case
under the Equal Pay Act, they must show “that an em-
ployer pays different wages to employees of opposite sexes
‘for equal work on jobs the performance of which re-
quires equal skills, effort, and responsibility, and which
are performed under similar working conditions.’”
Corning Glass Works v. Brennan, 417 U.S. 188, 195
(1974); Morgado v. Birmingham-Jefferson County Civil
Defense Corps, 706 F.2d 1184, 1187-88 (11th Cir. 1983),
cert. denied, 104 S. Ct. 715 (1984). The Equal Pay Act
“also establishes four exceptions—three specific and one
a general catchall provision—where different payment to
employees of opposite sexes ‘is made pursuant to (i) a
seniority syctem; (ii) a merit system; (iii) a system
which measures earnings by quantity or quality of pro-
duction; or (iv) a differential based on any other factor
other than sex.’” Corning, 417 U.S. at 196. The court
is convinced that plaintiffs have carried their burden of
establishing a prima facie case of liability under the
Equal Pay Act, and that the defendant GM has failed
to establish any of the Act’s four exceptions justifying
a pay disparity."
On the issue of damages, the court must determine the
applicable statute of limitations for this Equal Pay Act
action. 29 U.S.C. § 255(a) provides that such actions
“may be commenced within two years after the cause of
action accrued, and every such action shall be forever
barred unless commenced within two years after the
cause of action accrued, except that a cause of action
arising out of a willful violation may be commenced
within three years after the cause of action accrued.”
The court in Brock v. Georgia Southwestern College, 765
F.2d 1026 (11th Cir. 1985), provided these guidelines for
determining when a “willful” violation has occurred ne-
* Plaintiffs also alleged a claim of retaliation against GM. Plain-
tiffs contended at trial that various actions taken by GM consti-
tuted improper acts in retaliation for plaintiffs having brought
this suit. The court finds a paucity of evidence to support a claim
of retaliation and therefore denies the claim.
30a
cessitating the application of the three-year statute of
limitations:
[A] violation is willful if the employer knows or
has reason to know that his or her conduct is gov-
erned by the [Equal Pay] Act. Brennan v. Heard,
491 F.2d 1 (5th Cir. 1974). An employer need not
proceed with knowledge that his or her actions are
contrary to the Act in order for willfulness to be
found. Id. An action is “willful” if the employer
knew that the Act was “in the picture” regardless
of the defendant’s good faith. Coleman v. Jiffy
June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir.
1971), cert. denied, 409 U.S. 948, 93 S. Ct. 292, 34
L. Ed.2d 219 (1972). See also Marshall v. A & M
Consolidated Independent School District, 605 F.2d
186, 190-91 (5th Cir. 1979) (actual awareness of
the law is unnecessary to establish willfulness;
knowledge is imputed).
Brock, 765 F.2d at 1039.* Clearly, in this case GM knew
*The court notes that the Supreme Court’s decision in Trans
World Airlines, Inc. v. Thurston, 105 8S. Ct. 613 (1985), is in-
apposite. In TWA the Court defined a violation of the Age Dis-
crimination in Employment Act as “willful” if “the employer either
knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the ADEA.” TWA, 105 S. Ct. at 625.
TWA, however, concerned the award of liquidated damages, not the
determination of the applicable statute of limitations. The Court
noted: “Even if the ‘in the picture’ standard were appropriate for
the statute of limitations, the same standard should not govern a
provision dealing with liquidated damages.” /d. The Court em-
phasized the distinction between defining the term “willful” in the
context of the liquidated damages provision of the ADEA, and
defining “willful” in terms of 29 U.S.C. § 255(a) concerning the
applicable statute of limitations in Equal Pay Act cases. This
circuit in a post-TWA decision has clearly adhered to the “in the
picture” definition of “willful” in the Equal Pay Act statute of
limitations context, and the court’s application of this standard is
therefore not affected by the TWA decision. See Brock, 765 F.2d
at 1039.
8la
more than that the Equal Pay Act was merely “in the
picture.” GM was aware at all times material to this
litigation that the Equal Pay Act governed their conduct
concerning plaintiffs. In fact GM has admitted that it
knew about the Equal Pay Act three years prior to the
date of the filing of plaintiffs’ lawsuit (October 1983).
The court will therefore apply a three-year statute of
limitations in determining the damage award for plain-
tiffs.
Plaintiffs further contend that they are entitled to
liquidated damages pursuant to 29 U.S.C. § 216(b) which
provides as follows:
Any employer who violates the provisions of section
206 or section 207 of this title shall be liable to the
employee or employees affected in the amount of
their unpaid minimum wages, or their unpaid over-
time compensation, as the case may be, and in an
additional equal amount as liquidated damages.
29 U.S.C. § 216. Section 260, however, provides that “if
the employer shows to the satisfaction of the court that
the act or omission giving rise to such action was in good
faith and that he had reasonable grounds for believing
that his act or omission was not a violation of the Fair
Labor Standards Act of 1938, as amended, the court
may, in its sound discretion, award no liquidated dam-
ages....” 29 U.S.C. § 260. For this court to exercise
its discretion, GM “must show that [its] failure was
both in good faith and predicated upon such reasonable
grounds that it would be unfair to impose liquidated
damages upon [it].” Hays v. Republic Steel Corp., 531
F.2d 1307, 1309 n.3 (5th Cir. 1976). This court is con-
vineed that GM’s violation of the Equal Pay Act, while
“willful” as that term is defined by this circuit in this
context, was in good faith and predicated upon reason-
able grounds. As stated in Brock, an act may be “ ‘will-
ful’ if the employer knew that the [Equal Pay] Act was
‘in the picture’ regardless of the defendant’s good faith.”
82a
Brock, 765 F.2d at 1039. GM knew that their conduct
was governed by the Equal Pay Act, but created the
pay disparity concerning plaintiffs in good faith believ-
ing the disparity justified on the basis of their hourly
transfer pay “policy.” The court, therefore, will not
award liquidated damages.
Because the parties have not fully presented their re-
spective contentions concerning the computation of dam-
ages, the court directs the plaintiffs to submit a memor-
andum within twenty days from this date addressing in
itemized detail the precise method of computation of
plaintiffs’ damages and presenting their authority for
the award of prejudgment interest. Defendant shall
thereafter have fifteen days for the filing of a counter-
memorandum. The parties should be mindful of the
court’s ruling that liquidated damages will not be
awarded and that the three-year statute of limitations
applies. The issue of the award of attorney’s fees pre-
viously was reserved in this case for future considera-
tion, and the court further directs that within twenty
days following the date of this opinion plaintiffs shall
submit their application for attorney’s fees with support-
ing memorandum. If defendant desires to respond to
plaintiffs’ attorney’s fees memorandum it may do so
within fifteen days following the filing of plaintiffs’ ap-
plication and memorandum. The court admonishes both
parties that they should attempt to reach an agreement
on both damages and attorney’s fees and should promptly
communicate such agreement to the court. If no agree-
ment is reached by the expiration of the time allowed
above for the filing of defendant’s fees response, the
court will set a hearing to consider the computation of
damages and attorney’s fees.
DONE and ORDERED this 10th day of July, 1986.
/s/ Robert S. Vance
United States Circuit Judge
Sitting by Designation
83a
APPENDIX C
* in nee ras
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
Civil Action No. CV83-V-577NE
SHEILA ANN GLENN, PATRICIA F. JOHNS
and ROBBIE NUGENT,
Plaintiffs,
versus
GENERAL MoToRS CORPORATION,
Defendant.
JUDGMENT
In consideration of the findings of fact and conclusions
of law contained in this court’s Opinion and Order en-
tered July 10, 1986 and in the Memorandum of Decision
filed contemporaneously herewith, it is by the court
ORDERED, ADJUDGED and DECREED that plain-
tiffs have and recover of defendant the amounts indicated
by their respective names as follows:
Sheila Ann Glenn: Twenty-four thousand nine hun-
dred ninety-eight and 91/100 dollars ($24,998.91).
Patricia F. Johns: Thirty-four thousand five hun-
dred thirty-four and 33/100 dollars ($34,534.33).
Robbie Nugent: Forty-three thousand seven hundred
ninety-four and 57/100 dollars ($438,794.57).
It is further ORDERED, ADJUDGED and DECREED
that Bell, Richardson, Herrington, Sparkman and Shep-
ard, P.A. be and is hereby awarded one hundred thirty-
34a
two thousand dollars ($132,000.00) in fees and thirty-
four thousand nine hundred seventy-nine and 44/100
dollars ($34,979.44) in expenses for their services in
representing the plaintiffs and accordingly that said at-
torneys have and recover of defendant one hundred sixty-
six thousand nine hundred seventy nine and 44/100 dol-
lars ($166,979.44); and that costs of court are taxed
against defendant.
DONE and ORDERED this 4th day of February,
1987.
/s/ Robert S. Vance
United States Circuit Judge
Sitting by Designation
35a
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
Civil Action No. CV83-V-577NE
SHEILA ANN GLENN, PATRICIA F. JOHNS
and ROBBIE NUGENT,
Plaintiffs,
VS.
GENERAL MOTORS CORPORATION,
Defendant.
MEMORANDUM OF DECISION
After entering the Opinion and Order dated July 10,
1986, the court received a verified motion for attorney’s
fees, as well as memoranda from the respective parties
concerning the computation of damages and the award
of attorneys’ fees. On December 2, 1986, the court held
an evidentiary hearing and received further oral argu-
ment. As that time, the parties submitted exhibits, affi-
davits, and oral testimony. Thereafter, post hearing
memoranda were submitted. The court has now fully
considered these matters and enters the following Mem-
orandum of Decision, which incorporates the findings of
fact and conclusions of law required by Fed. R. Civ. P.
52(a). Except as modified herein, the Opinion and Order
of July 10 remains in full effect.
I. DAMAGES ISSUES
1. Statute of Limitations—The first issue confronting
the court is the construction of the word “willful” in the
statute of limitations section of the Portal-to-Portal Act,
36a
29 U.S.C. section 255 (a). A “willful” violation of the
Equal Pay Act, 29 U.S.C. § 206 (d), adds one year to
the statute of limitations, significantly increasing General
Motors’ liability. In Brock v. Georgia Southwestern Col-
lege, 765 F.2d 1026 (11th Cir. 1985), the Eleventh Cir-
cuit reaffirmed its commitment to the “in the picture”
standard, which was pioneered in Coleman v. Jiffy June
Farms, Inc., 458 F.2d 1139, 1142 (5th Cir. 1971), cert.
denied, 409 U.S. 948 (1972). Under this standard, a
violation is “willful” if the employer knows or has reason
to know that the Equal Pay Act governs its conduct.
When the employer knows that the Equal Pay Act is “in
the picture,” its violation is “willful” regardless of the
employer’s good faith. Brock v. Georgia Southwestern
College, 765 F.2d at 1039. General Motors has admitted
that it knew that the Equal Pay Act governed its conduct.
For three years prior to the time the plaintiffs filed this
lawsuit, the plaintiffs continually protested General
Motors’ violation of their rights.
General Motors argues that the “in the picture” stand-
ard is no longer viable. Specifically, General Motors points
to Transworld Airlines, Inc. v. Thurston, 469 U.S. 111
(1985), in which the Supreme Court elaborated a differ-
ent construction of the word “willfulness.”? Both the
‘In fact, Thurston, addresses the construction of the word “will-
fulness” in a completely different context—an age discrimination
action—where section 7(b) of the ADEA permits liquidated dam-
ages “only in cases of willful violations.” 29 U.S.C. § 626(b).
Although Thurston, rejected the Jiffy June “in the picture” analysis
for liquidated damages under the ADEA, the Supreme Court ex-
pressly noted that the Jiffy June standard might be appropriate for
statute of limitations questions. 105 S.Ct. at 625; see also E.E.0.C.
v. McCarthy, 768 F.2d 1, 5 (1st Cir. 1985). Differentiating between
these two settings is consistent with the different purposes served
by the ADEA’s liquidated damages provision and a statute of
limitations. Congress intended the liquidated damages provision of
the ADEA to serve the same punitive purpose as §16(a) of the
FLSA, which imposes a criminal penalty for “willful” violations.
It is not surprising that the Supreme Court relied upon cases inter-
ii a ll
37a
Third and Seventh Circuits have held that “willful” means
the same thing throughout the Age Discrimination in
Employment Act (ADEA) and Fair Labor Standards Act
(FLSA). See, e.g., Brock v. Richland Shoe Co., 799 F.2d
80, 82-83 (8rd Cir. 1986); Walton v. United Consumers
Club, Inc., 786 F.2d 303, 308-312 (7th Cir. 1986).2 Un-
der this view, Thurston supplies a uniform definition of
“willful” for both statutes: “a violation is willful if the
employer either knew or showed reckless disregard for
the matter of whether its conduct was prohibited by the
ADEA.” 105 S. Ct. at 625.
The Thurston reckless disregard standard requires an
employer to make a “reasonable effort to determine
whether the plan he is following would constitute a vio-
lation of the law.” 105 S. Ct. at 624 (quoting Nabob Oil
Co. v. United States, 190 F.2d 478, 479 (10th Cir. 1950),
cert. denied, 342 U.S. 876 (1951)).* In Thurston, TWA
preting the FLSA criminal penalty provision in order to fashion a
similar standard for applying section 7(b), its ADEA counterpart.
See Thurston, 105 S.Ct. at 624. In contrast, a statute of limitations
is not punitive but restitutionary: it extends the period for the
recovery of back wages wrongfully withheld. See Secretary of
Labor v. Daylight Dairy Products, Inc., 779 F.2d 784, 789 (1st Cir.
1985); Donovan v. Bel-loc Diner, Inc., 780 F.2d 1113, 1117 (4th
Cir. 1985). This court does not believe that the Supreme Court’s
interpretation of one statute can be authority for the interpretation
of another so strikingly different in purpose. In the absence of
such authority, this court is bound by Eleventh Circuit precedent.
2 Apparently a majority of other jurisdictions continue to apply
the “in the picture” standard. See, e.g., Nolting v. Yellow Freight
System, Inc., 799 F.2d 1192 (8th Cir. 1986); Crenshaw v. Quarles
Drilling Corp., 798 F.2d 1345, 1349-50 (10th Cir. 1986); Secretary
of Labor v. Daylight Products, Inc., 779 F.2d 784 (1st Cir. 1985);
Donovan v. Bel-loc Diner, Inc., 780 F.2d 1113 (4th Cir. 1985);
Soler v. G. & U, Inc., 628 F. Supp. 720, 723-24 & n.3 (S.D.N.Y.
1986) ; Brock v. El Paso Natural Gas Co., 644 F. Supp. 1202, 1208-
09 (W.D. Tex. 1986).
SIf an employer could escape the “reckless disregard” standard
solely by obtaining a green light from its lawyers, it would be far
ee ne TE eT TN ee a aE TO
38a
complied with this duty by seeking legal advice and con-
sulting with the Union in an effort to conform its retire-
ment policy to the ADEA. 105 8.Ct. at 625. In contrast,
General Motors chose to ignore clear signs that its prac-
tices were illegal.* A violation rises to the level of reck-
too easy for a defendant to circumvent the requirements of the
Act. Cf. Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1141-42
(5th Cir. 1972). It seems that the better law would require, at a
minimum, good faith reliance on a colorable legal position. See,
e.g., Whitfield v. City of Knoxville, 756 F.2d 455, 463-64 (6th Cir.
1985) (violation not willful where case law unsettled and defendants
rely upon a minority district court opinion); E.E.0.C. v. Westing-
house Electric Corp., 646 F. Supp. 555, 563 (D.N.J. 1986) (viola-
tion not willful when the United States government maintains
policies similar to those of the defendants) ; cf. Thurston, 105 S.Ct.
at 620 (summary judgment by district court in favor of defend-
ants). Unfortunately, the case law interpreting “willfulness” under
the Thurston definition defies any overarching legal analysis. Com-
pare Dreyer v. ARCO Chemical Co., 801 F.2d 651, 657-58 (3rd Cir.
1986) (willful conduct involves element of outrage); Berndt v.
Kaiser Aluminum & Chemical Sales, Inc., 604 F. Supp. 962, 967
(E.D. Pa. 1985) (no “willfulness” where management reviews dis-
charges implicating the ADEA) to Guthrie v. J.C. Penney Co., Inc.,
803 F.2d 202, 209 (5th Cir. 1986) (evidence of undue pressure on
plaintiff and early retirement policy supports a finding of willful-
ness); Galvan v. Bexar County, 785 F.2d 1298, 1307 (5th Cir.
1986) reh’g denied 790 F.2d 890 (1986) (age discrimination willful
where age was the explicit reason for not rehiring employee);
E.E.0.C. v. Great Atlantic and Pacific Tea Co., 618 F. Supp. 115,
118 (D.C. Ohio 1985) (ADEA violation willful when denial of
severance pay was “deliberate, voluntary, and intentional.”);
Slenkamp v. Borough of Brentwood, 603 F. Supp. 1298, 1302 (W.D.
Pa. 1985) (material issue as to recklessness where employer posted
no signs informing employees of their rights under the ADEA);
Elbe v. Wausau Hospital Center, 606 F. Supp. 1491, 1499 (W.D.
Wisc. 1985) (conduct willful when there is a conscious decision to
terminate plaintiff ).
*General Motors asserts that its officials acted pursuant to a
“transfer pay policy.” Compare Thurston, 105 S. Ct. 613 (1985)
(good faith implementation of a facially neutral employment pol-
icy). This court has found, however, that the company never
adopted such a policy. What General Motors characterizes as a
39a
less disregard when an employer has the resources to
conform its conduct to the law, but declines to make the
effort.’ See, e.g., E.E.0.C. v. Westinghouse Electric Corp.,
632 F. Supp. 343, 372 (E.D.Pa. 1986) ; Slider v. National
Rollings Mills, Inc., No. 83-5929, slip op. (E.D.Pa. June 9,
1986); Gorman v. Continental Can Co., No. 76-C-908,
slip op. (N.D. Ill. March 25, 1986); Jennings v. Lenox
Hill Hospital, No. 84-1081, slip op. (S.D.N.Y. January 22,
1986). This court finds that General Motors’ conduct
falls within both the Thurston and Jiffy June definitions
of willfulness.
2. Computation of Damages—Both parties have sub-
mitted computations of the sums required to compensate
the plaintiffs in accordance with the findings and con-
clusions expressed in the July 10 Opinion and Order.
These figures are close and the parties have stipulated
that they would “split the difference.” The court there-
fore finds that the plaintiffs were undercompensated dur-
ing the period beginning three years prior to the filing
of suit and ending on the date of trial in the following
amounts:
Sheila Ann Glenn $12,499.46
Patricia F. Johns $17,267.17
Robbie Nugent $21,897.29
3. Prejudgment Interest—Whether or not liquidated
damages are awarded, binding precedent in this circuit
precludes the award of prejudgment interest. See Bar-
corporate policy was not a policy at all, but the practice of individual
decisionmakers.
5 As an explanation for its conduct during settlement negotiations,
General Motors has brought to this court’s attention its policy of
obtaining the resignation of employees who file discrimination
claims as a condition precedent to settlement. This court feels
obliged to point out that a policy of retaliatory discharge may be
per se “willful” under Thurston. See Powell v. Rockwell Inter-
national Corp., 788 F.2d 279, 286 & n.6 (5th Cir. 1986).
40a
cellona v. Tiffany English Pub, 597 F.2d 454, 469 (5th
Cir. 1979) ; Foremost Dairies, Inc. v. Ivey, 204 F.2d 186
(5th Cir. 1953). Liquidated damages, if allowed, act as
compensation for delay in the payment of sums due under
the Act. Jd. at 190.
4. Liquidated Damages—The court finds that individ-
ual company officials held a good faith belief that General
Motors had adopted a “transfer pay policy.” In the July
10, 1986 Opinion and Order, the court concluded that such
a finding was sufficient to establish a good faith defense,
making an award of liquidated damages discretionary un-
der 29 U.S.C. § 260. A further review of the case law in
this circuit, however, has convinced the court that it ap-
plied the incorrect legal] standard in reaching this result.
The purpose of a liquidated damages award is to en-
courage employers to make a good faith effort to ascer-
tain and comply with the law. Archambault v. United
Computing Systems, Inc., 786 F.2d 1507, 1514 (11th Cir.
1986). Accordingly, “good faith requires some duty to
investigate potential liability under the FLSA.”* Wash-
ington v. Miller, 721 F.2d 797, 804 (11th Cir. 1983) ;
Barcellona v. Tiffany English Pub, Inc., 597 F.2d 464,
468-69 (11th Cir. 1979). The Eleventh Circuit has taken
a strict view: the good faith defense applies only when
: an employer innocently and to his detriment follows the
law “as it was laid down to him by government agencies,
without notice that such interpretations were claimed to
be erroneous or invalid.” Olson v. Superior Pontiac-GMC,
Inc., 765 F.2d 1570, 1579 (11th Cir.) modified on other
grounds, 776 F.2d 265 (1985). Accord E.E.0.C. v. Home
Insurance Co., 672 F.2d 252, 263 (2d Cir. 1982); Clifton
D. Mayhew, Inc. v. Wirtz, 413 F.2d 658, 661 (4th Cir.
1969).
*In Thurston, the Supreme Court fashioned its definition of
“willfulness” to reflect these same concerns. 105 S. Ct. at 625 n.22.
4la
General Motors argues that an employer sustains its
burden of proof under section 260 by demonstrating a
reasonable, albeit mistaken, belief that it was not violat-
ing the act. See, e.g., Walton v. United Consumers Club,
Inc., 786 F.2d 303; 312 (7th Cir. 1986); Claymore v.
Far-Mar-Co., 709 F.2d 499, 505 (8th Cir. 1983); Mar-
tinez v. Food City, Inc., 658 F.2d 369, 376 (5th Cir. Unit
A 1981). Even under this less exacting standard, ignor-
ance cannot form the basis for a reasonable belief.” See,
e.g., Doty v. Elias, 733 F.2d 720, 726 (10th Cir. 1984) ;
Marshall v. Brunner, 668 F.2d 748, 753 (3rd Cir. 1982) ;
Brock v. El Paso Natural Gas Co., 644 F. Supp. 1202,
1209 (W.D.Tex. 1986). There is no credible evidence that
General Motors made any attempt to investigate its re-
sponsibilities. See Sinclair v. Automobile Club of Okla-
homa, Inc., 733 F.2d 726, 730 (10th Cir. 1984);
Melanson v. Rantoul, 5386 F. Supp. 271, 293 (D.R.I.
1982). General Motors has adduced neither case law nor
administrative rulings to demonstrate that there were rea-
sonable grounds to support a belief that its acts were in
conformity with the law.* “A good heart but an empty
head does not produce a defense.” Walton v. United Con-
sumers Club, Inc., 786 F.2d at 312. The court concludes
that it has no choice but to award liquidated damages.
Il. ATTORNEY FEES AGAINST GENERAL
MOTORS
The court has given detailed consideration to the twelve
factors set forth in Johnson v. Georgia Highway Express,
488 F.2d 714, 717-719 (5th Cir. 1974). A more useful
starting point for determining a reasonable attorney fee
7A reasonable belief also cannot be based on a simple misunder-
standing of the requirements of the Act. Crenshaw v. Quarles
Drilling Corp., 798 F.2d at 1351.
8 General Motors has cited decisions which advance the hardly
earthshaking proposition that a corporate policy can be lawful if
based on a factor other than sex. In fact, General Motors could not
have relied upon these cases because there was no transfer policy.
ee ee
42a
under more recent law, however, seems to be the number
of hours reasonably expended on the litigation multiplied
by a reasonable hourly rate. Pennsylvania v. Delaware
County Citizens’ Council For Clear Air, 106 S. Ct. 3088,
3097 (1986); Hensley v. Eckerhardt, 461 U.S. 424, 433
(1983). The Supreme Court appears to recognize a
strong presumption that the lodestar figure—the product
of reasonable hours times a reasonable rate—represents
a reasonable fee. Delaware County Citizens’ Council For
Clean Air, 106 S. Ct. at 3097; Blum v. Stenson, 465 U.S.
886, 897 (1984). This calculation may subsume many of
the twelve factors set out in Johnson v. Georgia Highway
Express, 488 F.2d 714, 717-19 (5th Cir. 1974). See Dela-
ware County Citizens’ Council For Clean Air, 106 S. Ct.
at 3098; Blum, 465 U.S. at 896-900; Hensley, 461 U.S.
at 434 n.9; Jones v. Central Soya Co., 748 F.2d 586, 589
(11th Cir. 1984); United States v. Cert. Real Prop. Loc.
at 4880 S.E. Dixie Highway, 628 F. Supp. 1467, 1472
(S.D. Fla. 1986).
1. Reasonable Hours
The court must exclude from its initial fee calcula-
tion hours that are not “reasonably expended.” Hensley,
103 S. Ct. at 1939 (citing S. Rep. No. 94-1011, p.6
(1976)). Plaintiffs’ attorneys seek compensation for a
total of 1889.1 attorney hours and 411 paralegal and
law clerk hours. The reasonableness of this time and
labor has been assessed in light of two other Johnson
factors—the novelty and difficulty of the case and the
result. See Erkins v. Bryan, 785 F.2d 1538, 1545 (11th
Cir. 1986), cert. denied, 107 S. Ct. 455 (1986); Car-
michael v. Birmingham Saw Works, 738 F.2d 1126, 1137
(11th Cir. 1984) York v. Alabama State Board of Edu-
cation, 631 F. Supp. 78, 83 (M.D. Ala. 1986).
This case was a routine disparate treatment case, al-
though it may not have been the type of case plaintiffs’
counsel ordinarily encounters. Such novel issues as there
43a
were did not present significant legal and factual hurdles.
On the other hand, the court notes that plaintiffs’ coun-
sel obtained substantial benefits for their clients. When
only the interests of the named plaintiffs are at stake,
plaintiffs’ attorneys should have in mind the actual
amount in controversy, and this court would normally
balk at awarding fees substantially in excess of that
amount. See Jones v. Central Soya Co., Inc., 748 F.2d
586, 591 (11th Cir. 1984). In the present case, however,
the plaintiffs’ recovery may benefit other female employ-
ees who have been adversely affected by General Motors’
discriminatory practices. See City of Riverside v. Rivera,
106 S. Ct. 2686, 2694, 2700 (1986) (Brennan plurality)
(Powell concurrence) (rejecting argument that “fee
awards under section 1988 should necessarily be propor-
tionate to the amount of damages a civil rights plaintiff
actually recovers”) .°
Notwithstanding possible benefit to other female em-
ployees, the number of hours for which plaintiffs claim
compensation is clearly unreasonable. The court has no
doubt that plaintiffs’ attorneys worked more hours than
they actually claim. The actual figure exceeds 2300
hours. Even defendant’s counsel has billed for substan-
tially over a thousand hours. In contrast, defendant’s
expert witness, James P. Alexander, testified that the
maximum amount of time that is reasonable for litigat-
ing this type of case would be approximately 625 hours.
* The plaintiffs were successful in all significant issues except
their harassment claim. This claim was relatively insignificant and
involved discrete issues of fact and law. Compare City of Riverside,
106 S. Ct. at 2692; Hensley, 461 U.S. at 435. “A fee applicant
should maintain billing time records in a manner that will enable
a reviewing court to identify distinct claims.” City of Riverside,
106 S. Ct. at 2692; Hensley, 103 S. Ct. at 1941. Plaintiffs’ records
do not lend themselves to a determination of the time devoted to
this losing issue. Nevertheless, the court credits Mr. Richardson's
testimony that his firm spent no more than 40 hours pursuing this
harassment claim.
44a
Under ordinary circumstances, the court would consider
625 hours as an absolute maximum, even if the case were
hard-fought and vigorously contested.
Several factors contributed to this staggering waste
of legal resources. First, plaintiffs’ counsel simply over-
prepared, using three lawyers where one would suffice
and expending twice the time on memoranda and briefs
as was reasonably necessary. See Jones v. Central Soya
Company, Inc., 748 F.2d 586, 594 (11th Cir. 1984).
Counsel for the prevailing party must make a good-faith
effort to exclude such excessive and redundant hours from
a fee request just as a lawyer in private practice is
ethically obligated to exclude such hours from his fee
submission. See Hensley, 103 S. Ct. at 1939-40; Erkins
v. Bryan, 785 F.2d 1538, 1545 (11th Cir. 1986). More
significantly, the relations between opposing attorneys
in this case often degenerated into an acrimonious
bickering context which proved to be enormously time-
consuming.
General Motors’ defense techniques also occasioned a
great deal of extra work. General Motors has been stub-
bornly litigious and has adopted an obstructionist policy
in responding to discovery. If General Motors had made
a straightforward presentation of its claimed defense
and willingly disgorged the information sought by the
plaintiffs, this case shoul have consumed no more than
the 625 hours to which reference has been made. At
every step of the way, however, General Motors has fully
participated in the quibbing that has become the hall-
mark of this case. Two additional actions by General
Motors are relevant.
First, General Motors now states that its standard
practice is not to settle any discrimination case unless
the complaining emy..oyee resigns. This position, the ap-
parently nonnegotiab\e character of which was only re-
cently revealed to the court, made settlement all but
45a
impossible. Nevertheless, General Motors continued to
assure the court of its interest in negotiations and the
court continued to pressure both sides to reach a settle-
ment. Plaintiffs’ counsel, who had been told that plain-
tiffs’ resignation was essential to settlement, responded
by embarking upon an expensive, time-consuming evalua-
tion of the economic loss that plaintiffs would suffer as a
consequence of resigning. The court finds that, under
the circumstances, these undertakings were reasonable
and necessary.
General Motors also injected needless work and expense
into this case by adopting an “afterthought” defense.
Specifically, General Motors contended that the plaintiffs
were not entitled to as much compensation as certain
male employees because these male employees utilized an
additional skill, namely, working with blue prints. This
clearly had no causal relationship with General Motors’
discrimination against the plaintiffs. Although this con-
tention was lacking in factual merit, it demanded a re-
sponse. Plaintiffs’ rebuttal required substantial discovery
and expensive expert assistance. A defendant has the
right to put on its case as it sees fit. This court does
not criticize General Motors for exercising this right
and its disposition is in no respect punitive.” General
Motors, however, cannot complain of the waste of time
1% At the conclusion of the evidence the court solicited post-
hearing memoranda. At that time, it stated its tentative, non-
binding, impressions. Defendant takes strenuous exception to cer-
tain of the court’s remarks. These comments were deliberately
couched in provocative terms in a successful effort to elicit pointed
memoranda. Counsel has made an unfortunate misconstruction of
those remarks, however, if they were perceived as reflecting any
punitive disposition by the court. The misunderstood point is sim-
ply that defendants’ own actions, in the two particulars discussed
above, justified and indeed necessitated the expenditure of a great
deal more time and money by plaintiffs’ counsel than would other-
wise have been reasonable. This substantial expense must be borne
by defendant.
eee
46a
and resources precipitated by its own strategy. See
Hudson v. Deyton, 770 F.2d 1558, 1575 (11th Cir.
1985) , reh’g denied, 777 F.2d 704 (1985).
After considering all these facts and circumstances,
the court concludes that 1200 hours was a reasonable
expenditure of time by plaintiffs’ counsel through the
time of trial and to the present date. In disallowing a
substantial portion of the hours expended, the court is
aware of the desirability of making specific determina-
tions with respect to each disallowed time segment. Un-
fortunately that is not possible in this case. The only
specific item that can be so treated is the 40 hours spent
on preparing the unsuccessful harassment claim. The
remainder of the disallowance falls into a general cate-
gory of counsel’s simply exceeding the maximum number
of hours that could ever be reasonable in this situation.
The evidence supporting the fee application does not pro-
vide information necessary to a specific breakdown of
such items as unnecessary preparation, uses of excessive
personnel, and time spent in needless bickering. Never-
theless, the court is reasonably satisfied that, of the total
hours expended, 1200, but no more than 1200, were rea-
sonable under the attendant circumstances.
Plaintiffs’ fee application also seeks payment for 411
hours worked by paralegals and law clerks. Some of
these hours were actually attorney hours that counsel
voluntarily downgraded in the application. The court
finds that this number is also excessive and will limit
this expense to compensation for 200 hours. This will
reduce plaintiffs’ reimburseable expenses by $7385.00
2. Prevailing Market Rate
In determining the prevailing market rate, the court
has considered the following Johnson factors: customary
fee awards in similar cases; skill required to perform
the legal services properly; the experience, reputation
and ability of the attorneys; the contingent nature of
ee
47a
the fee; undesirability of the case; time limitations;
preclusion of other employment; and the nature and
length of professional relationship with the clients. See
York v. Alabama State Board of Education, 631 F. Supp.
78, 84 (M.D. Ala. 1986).
In this district, awards in employment discrimination
cases taken on a contingency fee basis range from $90
to $150 per hour. This approximates the customary fee
for similar work in this community, which ranges from
$90 to $125 per hour. This case required the skill of a
competent trial attorney experienced in federal litiga-
tion. The firm of Bell, Richardson, Herrington, Spark-
man, and Shepard is one of the oldest and best known
firms in North Alabama. Insurance companies, railroads
and large corporations form the bulk of the firm’s
clients." As a result, most of the members of the firm
lack experience litigating discrimination cases for a
plaintiff. Nevertheless, plaintiffs’ counsel displayed ex-
traordinary skill and fully anticipated every development
at trial.12 This case would be considered an undesirable
one for the Richardson firm: corporate clients do not
applaud lawyers who represent employees in discrimina-
11 This court is satisfied that the number of hours plaintiffs’ coun-
sel reasonably devoted to this case is at least equal to the time ex-
pended by the defense counsel. The defendants have not argued that
their representation was more involved than the representation of
plaintiffs. See Hudson v. Deyton, 770 F.2d 1558, 1574 (11th Cir.
1985), reh’g denied, 777 F.2d 704 (1985); Naismith v. Professional
Golfers Association, 85 F.R.D. 552, 563 (1979).
12 The senior partner, Patrick W. Richardson, one of the attor-
neys in this case, is a past president of the state bar association
and a distinguished leader among the bar of this court. Johr A.
Wilmer, who also worked on this case, practices almost exclusi ely
in the labor field and has had several years experience represent-
ing management. James H. Richardson, who acted as lead counsel,
routinely handles important matters for his firm. Mr. Richardson
displays an ability which belies the fact that he has practiced law
for only six years. Gabrielle Wehl has also practiced law for six
years; however, she has experience in this type of litigation.
48a
tion actions. In fact, plaintiffs’ counsel found it neces-
sary to mollify several of their clients while handling
this case.
On the other hand, there is no reason why this case
should have taken priority over other cases. Similarly,
there is no indication that this case caused plaintiffs’
counsel to turn down other work except for the fact that
it was so time consuming. The court understands that
this is a one-time undertaking by the plaintiffs’ counsel
and that there is no ongoing professional relationship
between the plaintiffs and the Richardson firm.
The court finds that an average hourly fee of $110.00
is reasonable under all of the circumstances presented
and that such rate reasonably reflects the prevailing
market rate for work performed by similarly situated
attorneys in similar employment discrimination cases.
3. Lodestar Calculation
The product of the attorneys’ compensable time and
this average market fee is one hundred thirty-two thou-
sand and no/100 dollars ($132,000.00).[*! The court
also awards thirty-four thousand nine hund*ed seventy-
nine and 44/100 dollars ($34,979.44) in expenses, which
the courts finds to have been reasonably expended under
the circumstances for paralegals, law clerks, fee counsel,
general office litigation expenses and expert witnesses.
13 Their performance is all the more impressive because defense
counsel are among the most highly skilled of Alabama attorneys
practicing in this field. Notwithstanding the court’s lack of en-
thusiasm for much that has taken place, defense counsel displayed
outstanding ability and a tenacious dedication to their client’s
cause.
14 The court would very much prefer to calculate a lodestar figure
for each attorney separately. Unfortunately, it is simply impossible
to allocate the unsuccessful, unnecessary and redundant hours
among the attorneys. For this reason, the court has resorted to an
average figure which it finds to be reasonable when the work of all
of plaintiffs counsel is considered.
a
49a
Ill. Summary
Plaintiff Sheila Ann Glenn is entitled to judgment in
the amount of twenty-four thousand nine hundred ninety-
eight and 91/100 dollars ($24,998.91).
Plaintiff Patricia F. Johns is entitled to judgment in
the amount of thirty-four thousand five hundred thirty-
four and 33/100 dollars ($34,534.33).
Plaintiff Robbie Nugent is entitled to judgment in the
amount of forty-three thousand seven hundred ninety-
four and 57/100 dollars ($43,794.57)
Bell, Richardson, Herrington, Sparkman and Shepard,
P.A. is entitled to an award of one hundred thirty two
thousand dollars ($132,000.00) in fees and thirty four
thousand nine hundred seventy nine and 44/100 dollars
($34,979.44) in expenses for their services in represent-
ing the plaintiffs.
An appropriate Order will be entered.
DONE this 4th day of February, 1987.
s/ Robert S. Vance
United States Circuit Judge
Sitting by Designation
50a
APPENDIX D
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 87-7171
D.C. Docket No. 83-5777
SHEILA ANN GLENN, PATRICIA F. JOHNS
and ROBBIE NUGENT,
Plaintiffs-A ppellees,
versus
GENERAL MOTORS CORPORATION,
Defendant-A ppellant,
SAGINAW STEERING GEAR DIVISION,
Defendant.
Appeal from the United States District Court for the
Northern District of Alabama
Before JOHNSON and CLARK, Circuit Judges, and
DUMBAULD,”* Senior District Judge. ~
JUDGMENT
This cause came on to be heard on the transcript of
the record from the United States District Court for the
Northern District of Alabama, and was argued by coun-
sel;
* Honorable Edward Dumbauld, Senior U.S. District Judge for
the Western District of Pennsylvania, sitting by designation.
5la
ON CONSIDERATION WHEREOF, it is now here
ordered and adjudged by this Court that the judgment
of the said District Court in this cause be and the same
is hereby, AFFIRMED in part and REVERSED in
part; and that this cause be and the same is hereby,
REMANDED to said District Court for further proceed-
ings in accordance with the opinion of this Court;
It is further ordered that defendant-appellant pay to
plaintiffs-appellees 75% of the costs on appeal and that
plaintiffs-appellees pay to defendant-appellant 25% of
the costs on appeal; said costs to be taxed by the Clerk
of this Court.
Entered: April 15, 1988
For the Court: MIGUEL J. CORTEZ
Clerk
By: /s/ Warren A. Godfrey
Issued as Mandate: May 12, 1988
52a
APPENDIX E
SUPREME COURT OF THE UNITED STATES
No. A-3
GENERAL Motors CORPORATION,
Applicant
Ve
SHEILA ANN GLENN, et al.
ORDER EXTENDING TIME TO FILE PETITION
FOR WRIT OF CERTIORARI
UPON CONSIDERATION of the application of counsel for
petitioner,
IT IS ORDERED that the time for filing a petition for
writ of certiorari in the above-entitled cause be, and the
same is hereby, extended to and including August 13,
1988.
/s/ Anthony M. Kennedy
Associate Justice of the Supreme
Court of the United States
Dated this 1st day of July, 1988.
53a
APPENDIX F
1. The Equal Pay Act, 29 U.S.C. § 206(d), provides:
(1) No employer having employees subject to any
provisions of this section shall discriminate, within
any establishment in which such employees are em-
ployed, between employees on the basis of sex by
paying wages to employees in such establishment at
a rate less than the rate at which he pays wages to
employees of the opposite sex in such establishment
for equal work on jobs the performance of which
requires equal skill, effort, and responsibility, and
which are performed under similar working condi-
tions, except where such payment is made pursuant
to (i) a seniority system; (ii) a merit system; (iii)
a system which measures earnings by quantity or
quality of production; or (iv) a differential based
on any other factor other than sex: Provided, That
an employer who is paying a wage rate differential
in violation of this subsection shall not, in order to
comply with the provisions of this subsection, re-
duce the wage rate of any employee.
(2) No labor organization, or its agents, repre-
senting employees of an employer having employees
subject to any provisions of this section shall cause
or attempt to cause such an employer to discriminate
against an employee in violation of paragraph (1)
of this subsection.
(8) For purposes of administration and enforce-
ment, any amounts owing to any employee which
have been withheld in violation of this subsection
shall be deemed to be unpaid minimum wages or
unpaid overtime compensation under this chapter.
(4) As used in this subsection, the term “labor
organization” means any organization of any kind,
or any agency or employee representation eommittee
or plan, in which employees participate and which
SEIS A
54a
exists for the purpose, in whole or in part, of deal-
ing with employers concerning grievances, labor dis-
putes, wages, rates of pay, hours of employment, or
conditions of work.
2. Section 16(b) of the Fair Labor Standards Act, 29
U.S.C. § 216(b), provides:
Any employer who violates the provisions of sec-
tion 206 or section 207 of this title shall be liable
to the employee or employees affected in the amount
of their unpaid minimum wages, or their unpaid
overtime compensation, as the case may be, and in
an additional equal amount as liquidated damages.
Any employer who violates the provisions of, section
215(a) (3) of this title shall be liable for such legal
or equitable relief as may be appropriate to effectuate
the purposes of section 215(a) (3) of this title, in-
cluding without limitation employment, reinstate-
ment, promotion, and the payment of wages lost and
an additional equal amount as liquidated damages.
An action to recover the liability prescribed in either
of the preceding sentences may be maintained
against any employer (including a public agency) in
any Federal or State court of competent jurisdiction
by any one or more employees for and in behalf of
himself or themselves and other employees similarly
situated. No employee shall be a party plaintiff to
any such action unless he gives his consent in writ-
ing to become such a party and such consent is filed
in the court in which such action is brought. The
court in such action shall, in addition to any judg-
ment awarded to the plaintiff or plaintiffs, allow a
reasonable attorney’s fee to be paid by the defend-
ant, and costs of the action. The right provided by
this subsection to bring an action by or on behalf of
any employee, and the right of any employee to be-
come a party plaintiff to any such action, shall
terminate upon the filing of a complaint by the Sec-
55a
retary of Labor in an action under section 217 of
this title in which (1) restraint is sought of any
further delay in the payment of unpaid minimum
wages, or the amount of unpaid overtime compensa-
tion, as the case may be, owing to such employee
under section 206 or section 207 of this title by an
employer liable therefor under the provisions of this
subsection or (2) legal or equitable relief is sought
as a result of alleged violations of section 215(a) (3)
of this title.
3. Section 6(a) of the Portal-to-Portal Act of 1947,
29 U.S.C. § 255(a), provides:
Any action commenced on or after May 14, 1947,
to enforce any cause of action for unpaid minimum
wages, unpaid overtime compensation, or liquidated
damages, under the Fair Labor Standards Act of
1938, as amended, the Walsh-Healey Act, or the
Bacon-Davis Act—
(a) if the cause of action accrues on or after
May 14, 1947—-may be commenced within two years
after the cause of action accrued, and every such
action shall be forever barred unless commenced
within two years after the cause of action accrued,
except that a cause of action arising out of a willful
violation may be commenced within three years after
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