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WETZEL v. LIBERTY MUT. INS. CO.

April 17, 1978

SANDRA WETZEL and MARI ROSS on behalf of themselves and all others similarly situated, Plaintiffs
v.
LIBERTY MUTUAL INSURANCE COMPANY, a corporation, Defendant


Weber, C.J.


The opinion of the court was delivered by: WEBER

In prior proceedings we have determined that the defendant discriminated against women technical employees in its claims department in hiring and promotional opportunities. *fn1" We now consider whether the pay differential between the positions of Claims Adjuster (CA) and Claims Representative (CR) amounts to sex discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

 Title VII became effective on July 2, 1965. In that same year the defendant insurance company created the position of Claims Representative in its claims department. From that date until sometime in 1969, these positions were filled exclusively by females. *fn2" Prior to 1965 the functions which were performed by claims representatives in this new job classification had been performed by Claims Adjusters who were exclusively male. After 1965, the job title of Claims Adjuster continued to exist and was filled exclusively by males until early 1971, after the filing of administrative charges by the named plaintiffs herein, when the first female Adjusters were hired by Defendant.

 There is no dispute that the male CAs were paid substantially more than were the female CRs through the 1965-1971 period. At a typical point in the period material to this question, the difference in the average annual pay was $2,700; the female CRs were being paid $5,200/year while the male CAs were receiving $7,900. *fn3" The male adjusters also had the use of a company automobile and had the opportunity to earn extra pay for occasional weekend duty.

 I. The Issues as Framed by the Parties

 The complaint alleges that the Defendant is guilty of discrimination against women with respect to compensation in violation of Title VII of the Civil Rights Act of 1964. It makes no reference to the Equal Pay Act of 1963, 29 U.S.C. § 206(d)(1), but the allegation that the female CRs performed work equal to that done by the male CAs for less pay does state a cause of action thereunder. Both parties have referred to this question throughout the preparatory and trial phases of this case as the Equal Pay issue and have thoroughly briefed the question of whether Plaintiffs have established that these two job classifications actually involved "substantially equal" work. Plaintiffs, of course, contend that they have clearly established the following facts:

 
"26. Claims representatives exercise the same degree of skill, effort and responsibility as do claims adjusters.
 
27. Claims representatives perform their duties under similar or less favorable working conditions than do claims adjusters." *fn4"

 Furthermore, Plaintiffs contend that

 
"Where an employer segregates jobs by sex in violation of Title VII and assigns female employees to the lower paying jobs, a prima facie showing of discrimination in compensation is shown without regard to the relative differences or similarities between the higher and lower paying jobs," *fn5"

 and that, without regard to whether these two jobs were "equal" Liberty Mutual violated Title VII by considering the sex of its female employees in establishing the compensation of the Claims Representatives at a lower rate than that of the Claims Adjusters.

 Liberty Mutual counters by arguing that the position of CA and CR involved substantially dissimilar work and that the difference in compensation for these groups of employees was based on factors other than sex. According to Liberty Mutual, Title VII affords Plaintiffs no relief with respect to discrimination in compensation other than that afforded by the Equal Pay Act. Therefore, if the jobs of CA and CR were not equal within the meaning of the Equal Pay Act, Plaintiffs may not recover even though they have established that one of Defendant's reasons for paying the CRs less than the CAs was the sex of the former group's members. In addition, Defendant argues that each of its branch offices constitutes a separate "establishment" within the meaning of the Equal Pay Act and that Plaintiffs have failed to show that these jobs were equal at each, or indeed at any single, branch office.

 II. The Relationship Between Title VII and Equal Pay Act.

 Since the hearing on this case, several courts have ruled on the relationship between Title VII's prohibition of discrimination "against any individual with respect to his compensation . . .", 42 U.S.C. § 2000e-2(a)(1), and the Equal Pay Act. The problem revolves around the interpretation of the following statutory provision:

 
"Notwithstanding any other provision of this title, it shall not be an unlawful employment practice for an employer to apply different standards of compensation . . . provided that such differences are not the result of an intention to discriminate because of . . . sex . . . It shall not be an unlawful employment practice under this title for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of Section 6(d) of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. § 206(d))," 42 U.S.C. § 2000e-2h. (emphasis added)

 The emphasized portion of the section quoted above is commonly referred to as the Bennett Amendment; it is now the task of this Court to determine the effect of this sentence on Plaintiffs' Title VII claim. Those courts which have ruled on the effect of the Bennett amendment have uniformly rejected Plaintiffs' argument on this point, see Section I, ante. An employer who violates Title VII by segregating job classifications by sex is not liable for the entire difference between the wages for the higher paid male jobs and the lower paid female jobs to each female who was thus denied a job opportunity unless the two jobs being compared were substantially equal in skill, effort and responsibility. These courts have held that only those women who can show that they have been denied their "rightful place" in a higher-paying position or a promotion will be entitled to this amount of damages. *fn6" As the Court in Orr v. Frank R. MacNeill & Son, Inc., 511 F.2d 166, 171 (5th Cir. 1975) held:

 
"[To] establish a case under Title VII, it must be proved that a wage differential was based on sex and that there was the performance of equal work for unequal compensation."

 See also, e.g., Christensen v. State of Iowa, 563 F.2d 353, 15 Empl. Prac. Dec. (CCH) 7835 (8th Cir. 1977) and cases cited therein; DiSalvo v. Chamber of Commerce of Greater Kansas City, 416 F. Supp. 844 (W.D. Mo. 1976); Molthan v. Temple University, 442 F. Supp. 448 (E.D. Pa. 1977).

 III. The Equal Pay Case.

 A. Substantial Equality of Jobs.

 29 U.S.C. § 206(d)(1) provides as follows:

 
"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 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 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 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."

 As the Third Circuit Court of Appeals noted in Shultz v. Wheaton Glass Company, 421 F.2d 259, 264 (3d Cir.), cert. denied 398 U.S. 905, 26 ...


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