Friday, July 10, 2015

Special Focus: Employment Law A Female Police Officer’s Fight for Equal Pay at the City of Aberdeen by Benjamin P. Compton

Kristi Lougheed, now a 20-year veteran police officer, was hired by the Aberdeen Police Department in 2010. She is the only female police officer in Aberdeen. Despite her experience, the Police Chief started her at the lowest pay step for a lateral hire, lower than male officers with similar and even less experience. She later learned of the pay disparity and requested equal pay, but was forced to go through two years of litigation. At the end of March 2015, she secured a substantial monetary settlement along with major concessions and changes to the City’s personnel policies and practices. The settlement followed the trial court’s entry of partial summary judgment on liability, declaring the City discriminated against Officer Lougheed as a matter of law. Although her economic loss was less than $15,000, the City agreed to pay $375,000 in damages and to make the following changes: Establish a personnel policy that starts lateral officers at Step 3, with exceptions granted only if supported by written justification based on exceptional qualifications, experience or abilities, and approved by the Mayor, Personnel Committee and by the City Counsel. This oversight will help to ensure equal pay for all officers hired. Establish and fund a two-year Task Force to gather information, serve as a resource, and make recommendations to improve diversity within the police department, including educational programs and training. The Task Force is to utilize members of under-represented populations and must include a female patrol officer. Revise the procedure for promotions within the police department, to include use of an outside testing and evaluation center to objectively determine those who are qualified and eligible, and to rank them on an eligibility register. Officer Lougheed was represented by Victoria Vreeland and Benjamin Compton of Vreeland Law, with local counsel Erik Kupka. In 1943, the Washington State Legislature enacted Washington’s Equal Pay Act, RCW 49.12.175, “to sweep away outmoded inequities and assure women equal pay for equal work.”1 The act prohibits employers from discriminating “in any way in the payment of wages as between sexes” or from paying “any female a less wage . . . than is being paid to males similarly employed.”2 To achieve its purpose, the act provides a cause of action “[i]f any female employee shall receive less compensation because of being discriminated against on account of her sex, and in violation of this section.”3 Twenty years later, Congress passed the Equal Pay Act of 1963, establishing the “principle of equal pay for equal work regardless of sex.” 4 Like Washington’s analogue, the federal Equal Pay Act was enacted to remedy the “ancient but outmoded belief” that a man should be paid more than a woman for performing the same duties.5 Yet, women today are still paid less than men. According to the United States Census Bureau’s latest report, Income and Poverty in the United States: 2013, women working full time in the United States were paid just 78 percent of what men were paid, a gap of 22 percent. Women working in Washington fare a little better, but are nonetheless paid only 80 percent of what men are paid.6 Equal pay is not a women’s issue only; it is a family issue. A 2015 study, The Simple Truth About The Gender Pay Gap, by the American Association of University Women (AAUW) reports that between 1967 and 2012, the percentage of mothers who brought home at least a quarter of their family’s earnings rose from less than a third (28 percent) to nearly twothirds (63 percent). In 2012, the latest year for which data are available, 40.9 percent of mothers were the sole or primary breadwinners, bringing home at least half of their family’s earnings. Another 22.4 percent were co-breadwinners, bringing in between 25 percent and 49 percent of earnings.7 Families, in other words, increasingly rely on women’s wages to make ends meet. The same is true of Officer Kristi Lougheed, and her family. Her claims to end wage discrimination at the City and to achieve equal pay were brought under Washington’s Equal Pay Act, RCW 49.12.175, and chapter 49.60 RCW, the Washington Law Against Discrimination (“WLAD”). Aberdeen’s Police Chief Robert Torgerson hired seven lateral patrol officers from 2005 to 2011. All were male, except Officer Lougheed, who was then, and is now, the only female officer at the City. The lateral officers were required to, and did in fact, perform jobs requiring substantially equal skill, effort, and responsibility. Yet, they did not receive equal pay. Chief Torgerson—the sole decision-maker on starting salary for lateral hires—started the males at a higher “step” on the five-step salary scale. He started the males on average at Step 3. He started Lougheed at Step 2, even though she had more experience than all but one of the other lateral hires, and had fifteen years of law enforcement experience at that time. She had been a Deputy Sheriff with Grays Harbor County from 1994 to 2008, and a police officer with the Cosmopolis Police Department from 2009 to 2010. In deciding the starting pay for a lateral hire, Chief Torgerson testified that he “look[s] at what the Officer was making at their last place of law enforcement employment and tr[ies] to place them at a level that will give them a raise when they start at Aberdeen Police Department.” He did not consider any factor except prior salary, and repeatedly stated: “the consideration that I give and the only consideration is what [the lateral hires] were making at their last job prior to me – or the last agency they were working at prior to coming to Aberdeen.” The Chief’s so-called “method” violated the City’s long-standing written policy for how starting salary must be set. The City’s Personnel Policy 7.20 required that all “new employees,” including lateral hires, “be appointed at the minimum step of the range for their position classifications” (Step 1) unless the Mayor grants an exception in writing “based upon exceptional qualifications, experience, or ability of the employee.” Chief Torgerson and former Human Resources Director, Linda Hein, admitted under oath that they did not follow this policy at all for the full seven years Chief Torgerson was hiring lateral officers. Chief Torgerson also did not apply his claimed method consistently. He started one male officer at a salary that was less than the salary he was making at his last agency. And, the amount over prior salary that the Chief gave lateral officers also varied, and was inconsistent. For example, he started one officer at a Step 4 salary, when a Step 2 or Step 3 would have been a raise over the amount he was earning at his last agency. He started another officer at a Step 4 salary when a Step 3 would have been a raise. But, he started other officers at the lowest pay step constituting a raise. And, in fact, the City admitted its use of prior salary to set starting salary step at Aberdeen was not consistently applied, as the Deputy Chief and current Human Resources Director so testified. Moreover, Chief Torgerson testified he did not even find out what Lougheed’s prior salary was before setting her starting salary, and he admitted he looked at prior salary only “[w]hen possible.” The Chief did not have City Council, Personnel Committee, mayoral, nor HR approval to avoid and violate the City’s written policy in setting any of the starting pay steps. But after Lougheed questioned the pay disparity internally, and he realized he had violated the City’s personnel policy, the Chief initiated a revision to the policy to permit exactly what he had been doing: subjective decision-making on starting pay step by department heads without oversight. In advancing his proposal to the City Personnel Committee and the City Council, he deliberately failed to disclose his real reasons for the request (to cover his past violations) and relied upon false and phony reasons and justification for the change. With the acquiescence and similar omissions by the HR director, the Chief persuaded the Personnel Committee to recommend to the City Council revisions to the written City policy. To revise the policy, the Chief misrepresented to both the Personnel Committee and the Council that the requested change was necessary “to expedite the hiring process of good quality candidates and reduce the risk of losing those candidates to other agencies.” However, the Chief admitted in testimony that such a situation had never come up with any of the hires he made. He had never faced a situation where a candidate refused his initial offer due to starting pay step. He had never faced a situation where the Aberdeen Police Department was at any risk of losing a candidate because he needed to obtain proper approval, or because the approval process was too slow. In fact, the Chief did not even negotiate starting salary step with any candidate. He simply told candidates at what pay step he would start them and if a candidate wanted a higher step, the Chief “wouldn’t give it to them.” Although the legislature enacted Washington’s Equal Pay Act in 1943, there are only two Washington appellate decisions substantively addressing the act. Thus, Lougheed drew upon both Washington and federal case law in establishing her equal pay claims against the City, along with the case law and language of the WLAD. After completion of necessary discovery, Lougheed moved for partial summary judgment on liability, arguing that for a number of reasons the City did not have and could not present a legitimate defense and that a violation of Washington’s Equal Pay Act automatically establishes a violation of the WLAD. The City filed a cross-motion for partial summary judgment, arguing that Lougheed could neither establish a prima facie case nor show that the City’s reason for her starting salary is pretext for intentional discrimination. A plaintiff states a prima facie case of wage discrimination under RCW 49.12.175 by proving men and women received different pay for substantially similar work. The City conceded that Lougheed and the male comparators (the other lateral hires) performed substantially similar work. The critical issue, therefore, was whether Lougheed could establish pay disparity when the City started her at a pay step that was lower than the average pay step given to the males, but when Lougheed’s actual dollar salary was greater than what the males were given at the time they were hired. In this case, the lateral officers were hired over a period of seven years. Pursuant to collective bargaining, the actual dollar amount assigned to each step in the five-step salary scale increased ever year during this period, and Lougheed was the only officer who started in 2010. Lougheed argued that comparing actual dollar amount would produce absurd, unintended and unfair results under equal pay law when, as in this case, the female plaintiff and the male comparators did not begin employment the same year. She also argued that RCW 49.12.175 and the WLAD must be broadly construed to fulfill the underlying purpose of the legislature and that, because Washington’s Equal Pay Act is “virtually identical” to its federal counterpart,8 principles garnered from federal cases should be applied. Under federal law, “the proper test for establishing a prima facie case . . . is whether the plaintiff is receiving lower wages than the average of wages paid to all employees of the opposite sex performing substantially equal work and similarly situated with respect to any other factors, such as seniority, that affect the wage scale.”9 In this case, the biggest factor affecting the wage scale is that it increases every year. Eliminating this factor by focusing on salary step instead of dollar amount, Lougheed argued, allows courts to determine relative equality of treatment, and eliminates the possibility cases will be decided based on a wage differential caused by a factor that cannot possibly be attributed to discriminatory treatment, i.e., a compensation system where pay at each step increases yearly. Because Washington courts had not yet addressed whether pay disparity may be established by unequal starting salary steps in a case involving a compensation system where pay at each step increases yearly, Lougheed pointed to federal decisions that focused on salary steps, rather than actual dollar amount, when the defendant hired employees over a period of time. The City, on the other hand, did not point to any cases supporting its contention it is proper to consider only dollar amount. “Once the prima facie case is established, the burden shifts to the employer to prove the wage differential is justified under a statutory exception. In Washington, the sole defense is that the wage disparity is ‘based in good faith on a factor or factors other than sex.’”10 This defense is nearly identical to the catch-all defense available under the federal act – that the wage differential is “based on any other factor other than sex.”11 The City claimed its “method for setting starting salaries for laterally transferring police officers was based on a gender neutral policy of paying lateral transfers a higher salary than they received in their prior law enforcement job in order to entice experienced officers to transfer to Aberdeen.” This argument, Lougheed asserted, is insufficient to establish a “factor other than sex” defense, for several reasons. First, the City had no such “policy.” The Chief acted entirely on his own, and in violation of the City’s written policy, which did not allow the use of prior salary in setting starting salary at the City. Second, attempting to label the Chief’s so-called “method” as “gender neutral” is no defense. As Washington courts rightly recognize, “a discriminatory factor may be facially neutral.”12 Third, and more importantly, courts look with scrutiny and skepticism and require further proof of any proffered business reason for setting a starting salary based on prior salary. This is a so-called “market forces” theory – i.e., any policy based on offering salaries said to be necessary to induce the candidate to accept the employment. This theory has been singled out by many federal courts as requiring additional scrutiny because of the tendency of these policies to simply perpetuate the historical trend of paying women less for the same work. Under federal authority, relying merely on the prior salary of an employee, without analyzing the market value of the employee’s skills, is insufficient to establish an equal pay defense.13 Similarly, in Hudon v. West Valley Sch. Dist. No. 208, the Washington Court of Appeals rejected the employer’s market forces defense that it increased the salary of a comparator who threatened to leave in order to entice him to stay. The employer did not present any evidence of any bona fide outside employment offer, did not present any evidence of the applicable job market, did not perform any research and did not undertake any negotiations before meeting the alleged outside offer. Under Washington law, “underpaying women simply because the market will bear it . . . is not allowed.” 14 The City never claimed the officers it started at higher pay steps possessed unique skills justifying a higher pay step. The evidence indisputably established that Chief Torgerson did not consider skills, experience or any other factor apart from prior salary in determining at which salary step to start each officer. The City did not present any evidence that it performed any research as to market forces or that it negotiated in any way with any lateral officer. Fourth, the City did not articulate any adequate business reason for using prior salary as a factor in fixing starting pay step. Washington law requires the employer to “not only articulate a business purpose served by the factor but also show that it reasonably relied on the factor to achieve this purpose.” 15 The City did not present any evidence supporting its putative “business reason” of attracting experienced officers. And, in actuality, “enticing experienced officers” is not a business reason at all, but the very type of market forces argument routinely rejected by federal courts, and by the court in Hudon. The plain and undisputed truth, Lougheed argued, is the City had no legitimate business reason for using prior salary to set the starting salary step because (1) such method was not the City’s actual policy, (2) it was in direct violation of the City’s policy, (3) it was the subjective method the police chief claimed he did, and (4) was not even consistently applied by the police chief. Fifth, even if “attempting to hire experienced officers” is a “legitimate business reason” (it is not; it is a market forces rationale), which is served by a legitimate factor (which prior salary, standing alone, is not), the City “must also show that it reasonably relied on the factor to achieve this purpose.”16 In this case, the City did not make any showing that it reasonably relied on the factor to achieve its purpose. In fact, the City acknowledged and admitted the use of prior salary to establish starting step and salary was not consistently applied. This evidence was undisputed. It was also undisputed that Washington courts have declared that “[a] factor selectively applied . . . would be discriminatory.”17 The trial court granted Lougheed’s motion for partial summary judgment and denied the City’s cross-motion. The trial court ruled that Lougheed established a prima facie case because (1) the City agreed that Lougheed and the male comparators performed substantially equal work; and (2) the correct measure of wage disparity in this case is the difference between Lougheed’s starting step and the average step of the male comparators. The trial court also ruled that the City did not establish a legitimate defense because the City (1) failed to present evidence of a business purpose served by using prior salary in setting starting pay; (2) failed to support its “market forces defense” with evidence that it conducted any market research; (3) failed to present evidence that it reasonably relied on the factor of prior salary to achieve its “post hoc business purpose;” and (4) failed to present any evidence contradicting Lougheed’s evidence that the use of prior salary to establish starting step was selectively and inconsistently applied. In short, the trial court determined the City failed to create a genuine issue of fact related to the statutory affirmative defense and was liable under RCW 49.12.175 and, by extension, the WLAD as a matter of law. The City moved the Court of Appeals for discretionary review, which was denied by a commissioner in a 19-page written decision, who agreed with Lougheed on all points of law, concluding there was no probable error in the trial court’s rulings. The City then moved for reconsideration of the commissioner’s ruling, which was later denied by a panel of judges. The City agreed to mediation after the Court of Appeals ruled in Lougheed’s favor, and a settlement was reached. The settlement is significant for its broad changes for equal opportunity and compensation to be included in written policies of the City. Officer Lougheed remains on the City’s police force, and the settlement required the Chief of Police to sign a letter of apology to her for the humiliation and unfairness, stating she is a valued officer, and commending her for bringing this matter to the public’s attention to advance the public policy of non-discriminatory treatment of employees. Lougheed, the Police Guild President from 2013 to 2015, sued the City for back wages, but more importantly, she sued to bring change -- for future female police officers and officers of color. In her complaint, she requested the Court intervene to make orders to ensure that pay is based on legitimate, non-discriminatory policies consistently applied. Her settlement terms do just that – change the City policies and practices. As she has repeatedly stated: It is very important to me that women and minorities feel welcome in law enforcement and that they know that if they choose to pursue it as a career, that their rights will be protected by their public entity employer. Police officers, more than anyone, should step in when there is unfairness or a violation of law, and fix it. That’s what cops should do. And, that’s what Officer Lougheed has done. Benjamin P. Compton, WSAJ EAGLE member, is an associate at Vreeland Law in Bellevue, Washington, practicing in the areas of employment, discrimination, personal injury, sexual misconduct and appeals. 1 Hudon v. West Valley Sch. Dist. No. 208, 123 Wn. App. 116, 124, 97 P.3d 39 (2004). 2 RCW 49.12.175. 3 Id. 4 Corning Glass Works v. Brennan, 417 U.S. 188, 190, 94 S. Ct. 2223, 41 L. Ed. 2d 1 (1974). 5 Id. at 195 (internal quotation marks omitted); see also Goodrich v. Int’l Bhd. of Elec. Workers, 712 F.2d 1488, 1489-90, 229 U.S. App. D.C. 456 (D.C. Cir. 1983) (recognizing the Equal Pay Act as “firmly establish[ing] as federal law the ‘principle of equal pay for equal work regardless of sex’” (quoting Brennan, 417 U.S. at 190)). 6 U.S. Census Bureau, 2012 American Community Survey. 7 Glynn, Sarah J. (2014). Breadwinning Mothers, Then and Now. Washington, DC: Center for American Progress. 8 See Adams v. Univ. of Wash., 106 Wn.2d 312, 317, 722 P.2d 74 (1986). 9 Hein v. Oregon College of Edu., 718 F.2d 910, 916 (9th Cir. 1983). 10 Hudon, 123 Wn. App. at 124 (quoting RCW 49.12.175). 11 29 U.S.C. § 206(d)(1). 12 Hudon, 123 Wn. App. at 127. 13 See, e.g., Lewis v. Smith, 255 F. Supp. 2d 1054, 1062-63 (D. Ariz. 2003). 14 Hudon, 123 Wn. App. at 128-29. 15 Id. at 127. 16 Id. 17 Id.