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Hodgson v. Robert Hall Clothes Inc.

decided: February 5, 1973.

JAMES D. HODGSON, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, APPELLANT AND CROSS-APPELLEE
v.
ROBERT HALL CLOTHES, INC., A CORPORATION, AND ROBERT HALL CLOTHES GREENBANK ROAD CORP., A CORPORATION, APPELLEES AND CROSS-APPELLANTS



(D.C. Civil Action No. 3289). APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE.

Van Dusen, Gibbons and Hunter, Circuit Judges. Van Dusen, Circuit Judge, dissenting.

Author: Hunter

Opinion OF THE COURT

HUNTER, Circuit Judge.

This case involves the application of the Equal Pay Act of 1963, 29 U.S.C. § 206(d)(1) (1964). In view of the district court's well-written opinion reported at 326 F. Supp. 1264 (D. Del. 1971), we will not elaborate on the facts.

The Robert Hall store in question is located in Wilmington, Delaware. It sells clothing, and contains a department for men's and boys' clothing and another department for women's and girls' clothing. The store is a one -floor building, and the departments are in separate portions of it.

The merchandise in the men's department was, on the average, of higher price and better quality than the merchandise in the women's department; and Robert Hall's profit margin on the men's clothing was higher than its margin on the women's clothing. Consequently, the men's department at all times showed a larger dollar volume in gross sales, and a greater gross profit.*fn1 Breaking this down, the salespeople in the men's department, on the average, sold more merchandise in terms of dollars and produced more gross profit than did the people in the women's department per hour of work.*fn2

The departments are staffed by full and part-time sales personnel. At all times, only men were permitted to work in the men's department and only women were permitted to work in the women's department. The complaint is not addressed to the propriety of such segregated employment.

The salespeople receive a base salary and can earn additional incentive payments. Various factors relating to the garment sold determine the amount of incentive payments.*fn3 At all times, the salesmen received higher salaries than the saleswomen. Both starting salaries and periodic increases were higher for the males. The amount of incentive compensation was very slightly greater for the men.*fn4

PROCEDURAL HISTORY

The Secretary of Labor brought this action against Robert Hall in 1966, pursuant to 29 U.S.C. § 217, claiming that since June 13, 1964 Robert Hall had been discriminating against the saleswomen on the basis of sex because it compensated them less than it compensated salesmen even though the saleswomen and the salesmen were performing equal work. If proven, this was a violation of 29 U.S.C. § 206(d)(1).*fn5

After a trial in late 1970, the district court filed its opinion on April 16, 1971. The court found that Robert Hall had a valid business reason for segregating its sales personnel, i.e., "the frequent necessity for physical contact between the sales persons and the customers which would embarrass both and would inhibit sales unless they were of the same sex." Hodgson v. Robert Hall, supra at 1269. However, it also found that this does not affect the application of the Equal Pay Act. It proceeded to hold that the sales personnel of each department performed equal work within the meaning of § 206(d)(1).

The question then facing it was whether Robert Hall could prove that the wage "differential was based on any other factor other than sex." 29 U.S.C. § 206(d)(iv). Robert Hall contended that its wage differentials were based on economic factors, i.e., the higher profitability of the men's department allowed it to pay the men more, and the lower profitability of the women's department forced Robert Hall to pay the workers in that department less. In support of this contention, Robert Hall introduced evidence of sales and profit margins from which the district court was able to make the findings in the tables previously quoted.

The district court accepted Robert Hall's contention that economic benefit to the employer could be a factor other than sex on which a wage differential could be based. But it decided that the figures for the average performance of each department were not sufficient to meet Robert Hall's burden of proof. The court held that the relevant figures were those relating to the economic benefit produced by each individual sales person. Although Robert Hall in the ordinary course of business retained no records from which such performance could be calculated, fortuitously there were records available for two ten week periods out of the six years involved in this suit. Based on this evidence, the court compared the performances of the full-time male to the performances of the full-time female and compared the performances of the part-time male to those of the part-time females.*fn6 It found that the full-time male was responsible for more dollar sales per hour of work than was the full-time female. In regard to the part-time personnel, the court found:

"Two of Greenbank's part-time female employees, Alice Baker and C. Jarrell, were responsible for a higher per hour dollar volume of sales than three of the part-time male employees, McGonegal, Law and Layton, during the period from August 10, 1969 to October 18, 1969. A division of Jarrell's gross earnings (less incentive) by hours worked and a similar computation for the part-time salesmen discloses that Jarrell received a lower hourly rate than all three of these part-time salesmen, even though her gross sales per hour were more than that made by three of the five part-time salesmen."*fn7 Hodgson v. Robert Hall, supra at 1278.

On the basis of these findings, the district court held that the wage differential in favor of the part-time salesmen was not "supported by any economic benefits which defendants received from the job performances of the salesmen." Id. at 1278. Accordingly, it found in favor of the secretary as to the part-time personnel (and awarded them back wages) and in favor of Robert Hall as to the full-time personnel. It also found that the incentive compensation system was based on the kind of item sold and that this was a "factor other than sex." Therefore, it held against the Secretary on this point. In addition, it denied interest on its award in favor of the part-time personnel.

This disposition left no one completely satisfied. The Secretary appeals from the decision adverse to the full-time female personnel and against the award of interest, and Robert Hall appeals from the decision in favor of the part-time female personnel. The Secretary decided not to appeal from ...


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