The 6th U.S. Circuit Court of Appeals has ruled that a difference between a male and a female's pay that is based on education or experience is acceptable under the Equal Pay Act (EPA), even if both employees hold similar jobs.
In 1999, Shannon Balmer accepted a position as a claims supervisor for Health Care Indemnity (HCI). At the time, she had two and a half years experience with another insurance company. HCI hired her at a starting rate of $39,500, an increase from her salary in her previous position. Another claims supervisor, Frank Halliburton, was hired on the same day. Halliburton had 11 years of extensive experience and he negotiated a starting salary of $50,800, which was a decrease from his previous salary.
After Balmer started work at HCI, she often complained about her salary. At her annual review, she received a salary increase higher than those given to other supervisors. She also received a performance award and gift certificates worth over $2,000.
Balmer ultimately resigned her position and filed a gender discrimination suit under the EPA. The Court found that Balmer had established a case, but eventually it ruled in favor of HCI. The Court advised that four affirmative defenses can be used to justify a difference in pay for two people in the same position. These include: a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a factor other than sex. HCI argued the last measure and successfully demonstrated that the pay differential for the two employees was based on experience and prior salary history.