How the EEOC is Cracking Down on Equal Pay Act Violations in the Food Service Industry

November 15, 2017 | By
With the prevalence of gender discrimination lawsuits in the media and the increasing number of equal pay laws nationwide, employers in the food services industry would be wise to review their hiring and payroll practices as soon as possible to ensure that they are not unlawfully contributing to the gender pay gap, or otherwise retaliating against any employee who reports issues regarding pay disparity.

This issue most recently came to light last week, when a federal district court in Kansas entered judgment in favor of the Equal Employment Opportunity Commission (EEOC) after it sued a pizza restaurant under the Equal Pay Act (EPA), claiming that the restaurant offered a male applicant 25 cents more per hour than his female counterpart and then terminated both employees for complaining about unequal pay.  The EPA prohibits employers from discriminating against employees on the basis of sex in the payment of wages (i.e. paying men more than women for the same job).

In the matter of Equal Employment Opportunity Commission v. PS Holding LLC, the EEOC brought a lawsuit against the company that operated a Pizza Studio in Kansas City, where complainants Jensen Walcott and Jake Reed applied to work as “pizza artists” in 2016.  Complainants allege that they were interviewed and hired contemporaneously, but later discovered that Reed, a male, was offered 25 cents more than Walcott, a female.  Walcott claimed that when she complained about the unequal pay, the restaurant immediately withdrew her offer of employment, along with Reed’s. On November 9, 2017, the EEOC secured a favorable judgment on behalf of Walcott and Reed based on these EPA claims.

Employers who violate the EPA can be ordered to pay lost wages, compensatory, liquidated and punitive damages to successful complainants. According to the EEOC, the court ordered the pizzeria to pay these kinds of monetary damages to Walcott and Reed and further required that it “implement significant policy changes, conduct training, collect and analyze pay and other data, and report data and complaints to the EEOC,” to prevent future discrimination.  This case demonstrates that when it comes to unequal compensation, even the seemingly smallest transgression can be deemed unlawful and lead to substantial penalties.

Moreover, equal pay and gender discrimination claims have recently gained significant media attention due to the growing number of state and local governments that seek to enact or modify their own EPA laws as a means to eliminate pay disparities between men and women.  This kind of legislation, such as laws that prohibit employers from learning a candidate’s salary history, coupled with the court’s intolerance of even the slightest EPA infraction (as demonstrated by the case above), indicate that employers should pay close attention to how they determine wages for new hires, promotions, or any other monetary change in the terms and conditions of an individual’s employment status. Employers should consult experienced employment law counsel if they have questions regarding their rights and responsibilities under federal, state or local EPA laws.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.