APU Legal Studies Original

Gender-Based Pay Discrimination in Higher Education: Part I

Note: This article is part 1 of a two-part series that discusses three recent cases involving gender-based pay discrimination law for faculty in higher education.

The employment and compensation issues in higher education are varied and diverse. There is a wide spectrum of approaches to faculty employment and compensation policy across the market of colleges and universities. However, it is still an area that is replete with challenges, especially with regard to gender-based pay discrimination.

One such issue is the topic of gender-based pay discrimination claims that arise from faculty members who are not paid the same or similar wages for the same jobs. But as with every issue in the law, details matter and no two cases are perfectly alike. Three of the most noteworthy cases involving gender-based pay discrimination are Freyd v. University of Oregon, Spencer v. Virginia State University and Davidson-Schmich v. University of Miami.

Before we begin, it will be helpful to briefly review the basic principles of discrimination protections under the law.

As I have noted previously, discrimination claims are limited by the prescriptions of statutory and common law. It’s important to remember that the list of protected classes is finite.

Currently, federal statutory law recognizes gender, race, color, national origin, religion, age (if someone is over 40) and disability as protected classes. Common law – specifically the Bostock decision from the U.S. Supreme Court – adds sexual orientation and gender identity to the list.

Also, discrimination claims can lean on one or both of two different types of discrimination recognized under the law. The first type is disparate treatment, also known as discriminatory intent. This type of discrimination claim requires proof that the purpose or aim of employment actions taken for or against an employee was to discriminate based on a protected class. In other words, the discrimination must have been intentional.

The other type of discrimination is called disparate impact, and it occurs when a facially neutral employment policy has the effect of discriminating based upon a protected class. One example of disparate impact would be if an employer requires all new applicants to take a test and pass in order to be eligible for employment. Later, it turns out that, for whatever reason, male applicants are able to pass the test at a much higher rate than female applicants. So long as the test does not reflect skills or attributes that are a business necessity, this type of employer might be found liable for employment discrimination, even if the employer did not intend for the test to have a discriminatory effect.

Now that we understand what discrimination is and how it works under the law, we can look at our three gender-based pay discrimination cases.

Freyd v. University of Oregon

Freyd v. University of Oregon involved a 2020 claim of gender-based pay discrimination, according to Justia. Dr. Jennifer Freyd was a full professor of psychology with the University of Oregon.

Freyd v. University of Oregon involved another gender-based pay discrimination case.

In 2014, she became unintentionally privy to payrate information about other faculty in the department in which she worked. The pay data indicated that Freyd was being paid between $14,000 and $42,000 less per year than several of her male colleagues.

Consequently, she sued the university for gender-based pay discrimination. According to law firm Liebert Cassidy Whitmore, her claim was based on the Equal Pay Act (EPA) of 1963, Title VII of the Civil Rights Act (CRA) of 1964, Title IX of the Education Amendments Act (EAA) of 1972, and Oregon state anti-discrimination laws. It was tried in federal court.

In her initial lawsuit, Freyd alleged both disparate treatment and disparate impact discrimination. The disparate treatment claims fell flat as there wasn’t really any substantial evidence to support the notion that the university actually intended to discriminate against her.

So this lack of evidence left only her disparate impact claims at issue. There is a duty in court to show that evidence of discrimination is not just coincidental. In other words, Freyd had a duty to demonstrate that the wage discrimination was truly reflective of a gender bias across the faculty of her department and not just a unique case with her.

After all, what if Freyd was just an under-performing employee who was disgruntled by poor performance evaluations and commensurate minimal pay raises? If she was the only one who fell outside of normal pay distribution within her group and other female faculty were paid at levels on par with the male faculty, it would be hard for her to prove systematic discrimination based on gender.

But there’s a problem with entering such a battle against academic faculty who hold doctoral degrees: many of them have expert-level training and knowledge in advanced statistical methods. Following her initial discovery about the pay discrimination in 2014, Freyd ran a regression analysis – a type of statistical test that is used to show strong correlation between different phenomena. Freyd’s regression analysis, which incorporated pay data for all of the faculty from her department, showed with statistical significance that women in general were being paid significantly less than men.

Freyd then asked two other faculty member colleagues to run the test again in order to confirm her results and counter any potential bias that may have infiltrated her methods. They had the same finding.

Adding to the body of evidence, the department ran its own internal audit in 2016 and found that female professors were making an average of $25,000 less than their male counterparts. In litigation, Freyd also hired an economist expert witness who reported that there was a roughly $15,000 pay disparity between male and female faculty within the group in question. So there was fairly overwhelming evidence of a statistically significant difference in pay across gender without a valid, non-discriminatory explanation for such a difference.

As far as the reasons for the disparity, there were obviously competing interpretations. But one key challenge brought forward by Freyd pertained to a raise policy maintained by the university. The school had a policy of offering “retention raises” to retain faculty members who were offered employment for a higher wage at a competing institution.

It turned out that several of the male faculty members in Dr. Freyd’s department, who were making more money than she was, had received one or more of these retention raises during their careers at University of Oregon. Freyd and most of the other female professors, on the other hand, had never received any retention raises.

Nonetheless, at the district (trial-level) court, Freyd lost. The court ruled in favor of the university on several grounds.

First, the court opined that Freyd had not sufficiently established that the male faculty, the salaries of whom she was comparing to her own, were in “substantially equal” jobs and doing substantially comparable work, as the EPA requires. Likewise, Title VII of the CRA requires that the jobs be “similar” in nature – and the court did not find that Freyd had met that standard either.

These “similar” or “equal” job rules are predicated on the notion that it would obviously be unfair to compare salaries across dissimilar jobs or positions. For example, it would not make sense for employees to claim unfair treatment because the CEO of the company they work for makes more money than they do; the positions being compared need to be the same or very similar.

In addition to this point, the court also noted in its opinion that Freyd had not produced sufficient evidence to support a finding of discrimination. Furthermore, the court concluded that, even if she had, the university adequately defended that their practices were job-related and in furtherance of business necessity, vis-à-vis the retention raises.

So Freyd appealed to the Ninth Circuit, and the appellate level court granted certiorari (an order requiring a higher court to review a decision made by a lower court). The panel of judges in the appellate court disagreed with several findings from the trial level.

First, they opined that there was sufficient evidence to support a finding that Freyd and her male colleagues were in substantially equal positions, as they were all professors with very similar teaching, research, and service obligations at the school. So the appellate court did not find the comparisons inappropriate.

Second, the court determined that there was more than enough evidence to support a disparate impact claim, given the degree of statistical analysis that had been done multiple times by multiple experts to support the findings. Freyd’s disparate treatment claims were still found to be unmeritorious as she lacked evidence of intent.

Finally, the court was persuaded by Freyd’s arguments that the university’s “retention raise” practices were not the only means of servicing business necessity. Freyd argued that women might not be sought after by competing universities in the same way that men are. According to Phys.org, they might also be less inclined to gamble on a job move for fear of income security. These factors could hypothetically explain the reasons for the disparate impact observed in the pay data analyses.

However, Freyd proposed that the university could have – and should have – abated these discriminatory effects by offering equal raises to all faculty of a similar rank and tenure of service whenever a decision was made to offer a retention raise based upon one faculty member’s situation. In other words, there was an alternative, non-discriminatory – if still more costly – way for the school to resolve the problem.

The Ninth Circuit remanded the case back to the District Court. According to the American Association of University Women (AAUW), the university settled with Dr. Freyd for a $350,000 compensatory payment and a $100,000 contribution to the Center for Institutional Courage, a nonprofit data-driven advocacy group which Freyd founded.

But the lesson to be learned from this case is that institutions of higher learning should be very careful about the fairness, equity, and equality characteristics of decisions they make around faculty compensation. Professors with terminal degrees often have the knowledge and skills to prove their grievances whenever and wherever actual wrongdoing exists.

A Second Pay Discrimination Case: Spencer v. Virginia State University

However, just because certain professors understand statistics doesn’t mean they are guaranteed to win legal cases. Even a mastery of statistical analysis won’t help if the facts don’t support a valid claim. A second pay discrimination case would be the contrasting outcome of Spencer v. Virginia State University.

The Spencer case is similar to Freyd v. University of Oregon in many ways. Dr. Zoe Spencer was a sociology professor at Virginia State University, and a few years ago, she discovered she was paid less than some other male professors at the university. Spencer filed suit under both EPA and CRA Title VII discrimination challenges, just as Freyd did, according to Fisher-Phillips.

However, Spencer’s methods for establishing her gender-based pay discrimination argument were not as persuasive as Freyd’s. In Spencer’s case, she was actually making roughly the same amount of money per year as the median salary of her department (which included male faculty members).

But Spencer did not rely on this point of comparison in court. Instead, she argued that her salary was roughly 30% less than the two highest-paid faculty members in the entire university, who both happened to be male. She contended, as Freyd did, that because professor responsibilities are essentially the same across the board, that was sufficient evidence of pay discrimination.

But the District Court was not convinced, and neither was the Fourth Circuit Court on appeal. Ultimately, both courts agreed Spencer failed to establish that the jobs of different professors, working in different departments, were sufficiently “equal” (for the EPA) or “similar” (for Title VII of the CRA) to grant relief.

Why the Courts Arrived at Their Decision That There Was No Pay Discrimination in Spencer’s Case

In their opinions, the courts pointed out that different departments may demand different average salary levels based on the prevailing market rates for hiring professors in different disciplines, according to AAUW. That is a reflection of the varying monetary value for different skills sets and different levels of expertise.

Furthermore, the courts noted that the two professors whose salaries Spencer cited for comparison with her own were both former administrators of the university (i.e., department chairs or deans). As a result, there were higher salaries for these individuals. Virginia State University had an established policy whereby administrators who stepped back into faculty roles after their time in leadership (not uncommon in academia) were paid “9/12ths” of their administrator salary. The term “9/12ths” is stated verbatim in the university’s policy, despite the fact that – of course – the number can be rounded up to three quarters.

To extrapolate, this “9/12ths” math was predicated on the fact that faculty contracts were generally nine-month terms (excluding summers), so the reduction made quantitative sense. But the rate of pay for those nine months remained the same. The university recognized that these faculty members possessed an elevated level of skills and knowledge after serving in the administration, so they would theoretically be able to make greater contributions in their professorships.

The university contended that the basis for the higher levels of pay was job-related and non-discriminatory. Spencer had never served in the administration and so had never benefited from this compensation policy, so she challenged the practice as unfair. But the courts decreed it to be legitimate.

So Spencer lost her pay discrimination case – and the key difference from Freyd seemed to be the way in which Spencer appeared to “cherry pick” from a very small number of faculty at the very top of the university salary spectrum, both of whom were from different departments than hers and had very different backgrounds than hers. This “apples and oranges” comparison left the court unsympathetic to the idea that she was a victim of gender-based pay discrimination.

In the second part of this article series, we’ll look at the final case in our review: Davidson-Schmich v. University of Miami.

Gary Deel

Dr. Gary Deel is a Faculty Member with the Wallace E. Boston School of Business. He holds an A.S. and a B.S. in Space Studies, a B.S. in Psychology, a J.D. in Law, and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for the University, the University of Central Florida, Colorado State University and others.

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