First Circuit: Clarification of Maine’s Equal Pay Act
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APPLIES TO All Employers with Employees in ME |
EFFECTIVE February 1, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
In Mundell v. Acadia Hospital Corp., the First Circuit Court of Appeals stated that the Maine Equal Pay Act does not require a showing of intent to prove pay discrimination. Instead, an employer will face liability under the Maine Equal Pay Act when employees of one sex are being paid less than employees of the opposite sex for comparable work in comparable jobs, regardless of intent, unless the employer can demonstrate that the disparity stems from seniority, merit, or shift differentials.
In this case, Mundell worked as a licensed clinical psychologist where she earned an hourly rate of $50 per hour. In her lawsuit, Mundell alleged that the hospital violated the state’s equal pay law by paying Mundell’s male counterparts in the department between $90 to $95 per hour. On appeal, the hospital argued that the lower court’s decision in favor of Mundell was incorrect because the hospital’s intent to discriminate was not established. Instead, the hospital claimed a reasonable-factor-other-than-sex defense and cited “market factors” to explain the difference in pay.
The court found it significant that the Maine equal pay law had previously been amended to remove the broad catch-all defense for any “other reasonable differential except difference in sex,” and therefore provides greater protections than those provided under the federal Equal Pay Act, which contains a similar catch-all defense for pay differentials. Looking at the plain language of the law, the court found that the only allowable reasons for paying someone of the opposite sex a higher wage for the same kind of work are seniority, merit pay, and/or shift differentials.
Because of this, the court declined to accept the hospital’s “reasonable factor other than sex” defense and found instead that the hospital had violated the state’s equal pay law by failing to compensate Mundell in line with her male colleagues. The court also noted that the Maine legislature recently broadened the state’s Equal Pay Act to include pay discrimination based on race.
Action Items
- Conduct an equal pay audit.
- Review pay differentials for similar positions with legal counsel.
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