Federal Court Holds EEOC May Subpoena Records For "Overall" Conditions In the Workplace

The federal court of appeals that sits in Chicago issued a decision today that lets the EEOC subpoena records relating to hiring practices from an employer (Konica Minolta) accused of wrongful termination in the employee's EEOC charge.  The decision serves as a lesson to employers about the broad subpoena power of the EEOC.  The only relevant facts are that Konica Minolta fired a minority employee ("Thompson") for poor sales performance after he had worked for 8 months.  He filed a charge alleging his firing was disparate treatment because of his race.  The EEOC then asked and later subpoenaed records of Konica Minolta's hiring practices.  

As a side note, the facts that led the EEOC to seek the hiring practices records were that it:

discovered that there were only six blacks employed at Konica, out of 120 total employees in the identified facilities, and all six were employed in Tinley Park. Of the approximately 100 employees at the other locations, only one was a person of color. The EEOC also learned that there were two sales teams at the Tinley Park facility, and those teams were segregated largely along racial lines. Thompson’s team was made up of five black employees and two white employees.

These facts were not, strictly speaking, necessary to the court's decision but they do show the EEOC's concern was not completely irrational, either.  The employer took the position that information on hiring practices in a termination claim was not relevant. The court disagreed, saying:

When the EEOC investigates a charge of race discrimination for purposes of Title VII, it is authorized to consider whether the overall conditions in a workplace support the complaining employee’s allegations. Racial discrimination is “by definition class discrimination,” and information concerning whether an employer discriminated against other members of the same class for the purposes of hiring or job classification may cast light on whether an individual person suffered discrimination. For that reason, the EEOC is authorized to subpoena “evidence concerning employment practices other than those specifically charged by complainants” in the course of its investigation.

* * * 

The Commission is entitled generally to investigate employers within its jurisdiction to see if there is a prohibited pattern or practice of discrimination. Here, Thompson alleged both a specific instance and such a pattern of race discrimination. He asserted that he was treated differently from white co-workers in the “terms and conditions” of his employment, and that he was unequally disciplined for not meeting a sales quota. It is true that Thompson was not saying that Konica had refused to hire him, but that does not make hiring data irrelevant. The question under Shell Oil and its progeny is not whether Thompson specifically alleged discrimination in hiring, but instead is whether information regarding Konica’s hiring practices will “cast light” on Thompson’s race discrimination complaint.

(I've omitted citations to other court decisions from these quotes.) 

Pending Tennessee Legislation would Overturn Summary Judgment Rulings of the Supreme Court

A bill pending in the General Assembly would effectively reverse several decisions of the Tennessee Supreme Court that have all but made it impossible for an employer to get an employment lawsuit dismissed without a jury trial.

The bill would add a new provision to the Tennessee code which would say:

In all motions for summary judgment in any civil action in Tennessee, the moving party shall prevail on its motion for summary judgment if it:
(1) Submits affirmative evidence that negates an essential element of the nonmoving party's claim; or
(2) Demonstrates to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim.

One sponsor of the bill explained (in the House Judiciary Subcommittee - see video of the session from April 27, 2011, set out below) the purpose of the bill was to addresses the Supreme Court's 2008 decision in Hannan v Alltel Pub where the Tennessee Supreme Court changed how they applied rule 56 and made a wrong or incorrect decision which makes it almost impossible for a court to grant summary judgment by requiring a party to essentially prove a negative.

A prior post of mine criticized the Supreme Court's "deeply flawed" application of the Hannan decision after it issued the decision in Gossett v. Tractor Supply, which held that the method of analyzing discrimination claims adopted in the U.S. Supreme Court's decisions in McDonnell Douglas / Burdine (an explanation of what these decisions held was included in my prior post) did not apply to summary judgment motions under state law because they were inconsistent with the Hannan decision.

Not surprisingly, the Tennessee Employment Lawyers Association (a group of lawyers that represent employees) opposes the bill, saying it would let employment lawsuits be dismissed without given employees the opportunity to respond.  Their arguments (to the House Judiciary Subcommittee) were poorly founded and were sharply challenged by the bill's sponsor.  The fact that TELA spoke against this bill should tell Tennessee Employers all they need about whether to get behind this bill. Here is a video of the most recent subcommittee discussion about the proposed legislation:

Interestingly, a separate bill (House Bill 1641, by the same sponsor) would directly overturn the Supreme Court's decision in Gossett by adding a provision to the code which specifies that McDonnell Douglas / Burdine principles would apply to claims under the Tennessee Human Rights Act and claims for retaliatory discharge.  I am quite sure that TELA opposes this bill, as well.

Sixth Circuit Rejects DOL Guidelines on Determining Employee Status in a Training or Educational Setting

The Secretary of Labor sued Laurelbrook Sanitarium and School, Inc. (“Laurelbrook”) for potential child labor violations.  Laurelbrook is a nonprofit corporation located in Dayton, Tennessee which observes the Seventh-Day Adventists philosophy and teachings which include the view that children are to receive an education with a practical training component.  The DOL sued contending that the students are really employees and being worked in violation of the child labor requirements.

The principal issue the court addressed (which makes the decision more relevant than it otherwise would be) was the test to apply in this type of situation.  The DOL wanted the court to apply guidelines it established in the DOL Field Operations Handbook and in a publication available on its website: Employment Relationship Under the Fair Labor Standards Act, WH Pub. 1297 (Rev. May 1980).  The publication set out minimum requirements (all of which must be met) for determining whether a student or trainee was not an employe:

1. the training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. the training is for the benefit of the trainees or students;
3. the trainees or students do not displace regular employees, but work under their close observation;
4. the employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion his operations my actually be impeded;
5. the trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. the employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

The Sixth Circuit, however, rejected application of this test saying it was "a poor method for determining employee status in a training or educational setting.  For starters, it is overly rigid and inconsistent with a totality-of-the-circumstances approach, where no one factor (or the absence of one factor) controls." Furthermore, the court said, the DOL test is inconsistent with the Supreme Court's decision in Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947), which "suggests that the ultimate inquiry in a learning or training situation is whether the employee is the primary beneficiary of the work performed. While the Secretary’s six factors may be helpful in guiding that inquiry, the Secretary’s test on the whole is not."

The proper inquiry (the one the district court used) is to focus on "which party receives the primary benefit of the work performed by Laurelbrook students."   The court went into considerable detail (by discussing the facts in a separate court decision) about the considerations for this test. I won't repeat them here.  The following explanation will suffice for present purposes:

If a purported employer receives the primary benefit from a working relationship with a child, it is likely that the child is in competition with adults, whom the employer cannot employ without complying with the FLSA’s costly and burdensome requirements. If, however, a child receives the primary benefit of the work performed for a purported employer, and the child’s presence does more harm to the purported employer’s operations than good (or no good at all), it is unlikely that the child is competing with adults for the opportunity to hinder the employer’s operations.

To conclude, we hold that the proper approach for determining whether an employment relationship exists in the context of a training or learning situation is to ascertain which party derives the primary benefit from the relationship. Factors such as whether the relationship displaces paid employees and whether there is educational value derived from the relationship are relevant considerations that can guide the inquiry. Additional factors that bear on the inquiry should also be considered insofar as they shed light on which party primarily benefits from the relationship.

Harassment Decision Demonstrates Importance of Clear Policies and Training

The federal court of appeals in Richmond issued a decision today which demonstrates the importance of having clear harassment policies and training first level supervisors about reporting harssment complaints. 

The lawsuit, brought by the EEOC (EEOC v. Xerxes Corporation) alleged a racially hostile work environment on behalf of two employees.  The employees say they complained to their supervisor months before the company did anything.  (The supervisor disputed having received any complaints.)  It was clear, that once more senior management learned of the conduct, they took prompt action that was reasonably calculated to end the harassing conduct.

The court of appeals upheld the dismissal of the EEOC's harssament claims for conduct that occurred after management learned of the conduct.  Ironically, this conduct was among the worst of the lot (assuming there are degrees of offensive racial conduct) consisting of anonymous hate-speech (e.g., KKK messages and the "N" word included in a written message) left in the locker of one African-American employees.  The employer promptly and effectively responded to these incidences, the court held, even though it never caught the perpetrator.  The employer called a meeting, threatened to fire the person if caught, and called in the police to investigate. 

The employer's problem was that the employees claimed to have reported to their supervisor a number of racial slurs that were directed at them but it was months before the company took action.  This allegation, the court held, created an issue of fact for the jury over whether the employer had effectively responded to their complaints. 

I don't often get to give advice on how to avoid issues of fact.  An issue of fact isn't discrimination.  There can be all sorts of factual disputes but if a jury believes the employer's testimony, the employer will win.  Factual disputes are only an issue because it is vastly cheaper for the employer to have the discrimination/retaliation claims dismissed prior to a full blown trial.


Here, the employer's policies played into the EEOC's goal of creating a factual dispute.  The court noted, for example, that "Plant employees were instructed to report any violations [i.e., harassing conduct] to their 'supervisor, Plant Manager, . . . or a member of Xerxes’ Compliance Committee.'"  The employer changed the policy (after the employees say the complained to their supervisor) to say that violations must be immediately reported to the supervisor and plant manager.

It would be interesting to see a policy that said harassing conduct must be reported to HR not the supervisor.  I tend to think a court might not look favorably on that policy because supervisors are considered to be agents of the employer.  A policy that says report violations to both is more likely to be enforced if the employee only reports to the supervisor.  Regardless, the safest course, even if not required, is to make sure supervisors are clearly and regularly trained to report up the command chain all reported misconduct. 

Whether or not this avoids an issue of fact, if a case goes to trial, evidence of this kind of training can be used to help convince a jury that no complaints were made to the supervisor.

Court Holds an Employer's Prior Leniency Doesn't Create Inference of Pretext

The federal court of appeals that sits in Denver issued a rather interesting race and retaliation decision today in the case of Wythe Crowe v. ADT.  Numerous complaints of harassment and improper conduct had been made against the employee (he, in turn, had complained about racial bias in promotions).  The employee was a minority, however, and the implication in the decision was that ADT, the employer, had been too lenient towards him because he was a minority.  After one more complaint of harassment, an HR manager wrote a report, which relied upon complaints against Crowe that occurred well before and after Crowe complained about promotion bias.  (The report's conclusion is worth setting out as it reflects a frustration many HR Managers feel): 

 [W]hy have we allowed Wythe to treat management and specifically, women in positions of power, with such disrespect? Why did ADT continue to try to appease this person and not support or protect our management team from this type of harassing and disrespectful abuse?  This behavior is against the law at any company in this country.  Why do we allow it here at ADT?  If Heather England took this case to the EEOC or to court, ADT could lose because we were not there to protect all employees from a hostile work environment that is free from harassment.

. . . .

The ramifications of not terminating Wythe Crowe could be huge! Think about this: What if a white male exhibits the same harassing, insubordinate, discriminatory, and disrespectful behavior as Wythe has done over the years.  If we decide to fire this person, we have now set ourselves up for a reverse discrimination lawsuit.  For that matter, since we have allowed Wythe to exhibit this type of behavior for many years, it does not matter whether the next person  is white, yellow, or pink, we are setting ourselves up for a potential lawsuit due to the precedent we have set by allowing Wythe Crowe to continue his employment at ADT.

(The court rejected Crowe's argument that this report was itself evidence of bias.)  What was most interesting was, when it came to the retaliation claim, the court rejected the employee's argument that the employer's history of being lenient towards him itself raises an inference of pretext:

Accepting Mr. Crowe’s argument would have the peculiar result of penalizing employers which, like ADT did in this case, attempt to rectify alleged inappropriate behavior instead of immediately terminating an employee upon the first transgression. Indeed, Mr. Crowe’s argument effectively inverts an employer’s incentives—if two employees engage in the same protected behavior, terminating the employee with a longer, more extensive history of serious complaints would invite litigation, while terminating the employee with a shorter, less extensive history of minor complaints would not entail that risk. In sum, ADT’s prior leniency with Mr. Crowe, without more, does not constitute evidence from which a reasonable jury could conclude that firing Mr. Crowe based on his long history of alleged in appropriate behavior was pretextual.

The idea isn't unprecedented.  Years ago, the federal court of appeals in Chicago stated essentially the same thing when it said, "we cannot vilify every employer that exercises caution in the handling of delicate employment situations." Vore v. Indiana Bell, 32 F.3d 1161 (7th Cir. 1994).

No doubt, it is always better to be as even handed as possible in imposing disciplinary action but in today's costly litigation climate, the decision preserves some flexibilty for cautious employers.

Federal Court Upholds DOL Regulations on Tip Credit Limits

Applebees had its bar tenders and servers perform a variety of duties which the employees contended were outside the scope of duties for which tips were traditionally paid.  In a decision issued today, the federal court of appeals in St. Louis, sided with the Department of Labor in upholding the DOL's interpretation of its tip credit rules.

Tip credits, for those that don't know, permit employers to pay tipped employees a lower fixed hourly rate ($2.13) and having tips make up the difference to minimum wage.  Today's decision explained the rules governing tip credits:

The FLSA requires employers to pay a minimum hourly wage, which is currently $7.25 per hour. See 29 U.S.C. § 206(a)(1). The "wage" paid to a "tipped employee" is defined as the sum of (1) the cash wage paid to the employee, which must be at least the minimum cash wage that was required to be paid to tipped employees on August 20, 1996 ($2.13 per hour), and (2) an additional amount based on the tips received by the employee that is equal to the difference between the amount stated in paragraph (1) and the current rate required by § 206(a)(1). See 29 U.S.C. § 203(m) (defining "wage").

I mentioned tip credits in a recent post on the recently issued Wage and Hour Division regulations.  As to tipped employees doing other non-tipped duties, the court explained:

The DOL regulations recognize that an employee may hold more than one job for the same employer, one which generates tips and one which does not, and that the employee is entitled to the full minimum wage rate while performing the job that does not generate tips. See 29 C.F.R. § 531.56(e). The DOL's 1988 Handbook provides that if a tipped employee spends a substantial amount of time (defined as more than 20 percent) performing related but nontipped work, such as general preparation work or cleaning and maintenance, then the employer may not take the tip credit for the amount of time the employee spends performing those duties.

The bar tenders and servers contended they did a lot more than their tipped work:

The plaintiff bartenders claim that they were required to perform such duties as wiping down bottles, cleaning blenders, cutting fruit for garnishes, taking inventory, preparing drink mixers, and cleaning up after closing hours. The servers claim that they performed such duties as cleaning bathrooms, sweeping, cleaning and stocking serving areas, rolling silverware, preparing the restaurant to open, and general cleaning before and after the restaurant was open. 

 Applebee's argued these were incidental duties.   The crux of the case concerned the Wage and Hour Division's regulation on performing non-tipped tasks.  The regulation recognizes, the court explained, that an employee may perform "related duties in . . . a tipped occupation" that are not themselves tip producing "part of [the] time" and "occasionally," and that the time spent performing these related duties is subject to the tip credit, but it does not address the impact of an employee performing related duties more than "part of [the] time" or more than "occasionally."  The DOL further explained these limits not in a regulation but in a handbook the DOL prepared for its investigators to use:

where the facts indicate that specific employees are routinely assigned to maintenance, or that tipped employees spend a substantial amount of time (in excess of 20 percent) performing general preparation work or maintenance, no tip credit may be taken for the time spent in such duties.

The court of appeals upheld the 20 percent limitation set forth in the DOL Handbook.  The decision is an unfortunate reminder for any employer with tipped employees that the DOL rules on tips are a frequent source of litigation, are often complex and difficult to follow. 

Bring Your Gun to Work Legislation Passes Tennessee House Judiciary Committee

Looking to create a problem where no problem exists, a bill (HB 2021) pending in the Tennessee General Assembly would prohibit Tennessee employers from barring employees from bring firearms onto the employer's property.  The operative language is:

no private or public employer, including the state and its political subdivisions, shall prohibit an employee who possesses a valid handgun carry permit authorized by § 39-17-1351, from entering the employer’s parking lot and parking in such lot during the employee’s regular work hours when the employee's privately-owned motor vehicle contains a firearm that is stored within the trunk, glove box, or other enclosed compartment or area where the firearm is not visible from outside the vehicle and such motor vehicle is locked.

Forcing employers to permit firearms on their property is an utterly bad idea.  A sad graphic from the Department of Homeland Security listed the "active shooter" incidences in this country, including one at a church in the home town of the state senator sponsoring the "bring your gun to work" legislation:

Prepared by Department of Homeland Security

Bureau of Labor Statistics show an average of 70 people a year are killed at work by co-workers.  Legislation is about balancing competing concerns and any increase in the risk of workplace violence should be weighed against the need for the action.  No doubt, not everyone who would bring a gun to work is going to use it at work.  The point is, however, that it is impossible to fathom the need for legislation that gratuitously increases the risk for all Tennessee employees.

But what is even stranger about the legislation is a separate provision which seems to say that employers may not prohibit firearms but if an employer fires an employee for bringing a firearm onto the employer's property, the employee has no right to sue for wrongful discharge.

Legislation that solves no existing problem but increases risks for employers and is incomprehensible.  It has not been a good week in Nashville.

Vendors who Prey on Employers

I read an article in the Asheville, North Carolina, Citizen-Times that bears repeating for Tennessee employers.  The article, headlined NC Labor Department Warns Businesses of Poster Scams reminds employers that they need to be wary of "private poster companies [who try] to make a buck off businesses by threatening them with huge fines" including, recently by email and phone solicitations.

North Carolina provides posters to employers free of charge.

Tennessee does as well.  The Tennessee Department of Labor and Workforce Development provides downloadable posters on its website: http://www.state.tn.us/labor-wfd/poster.htm

The U.S. Department of Labor provides downloadable posters for the employment laws it administers at http://www.dol.gov/oasam/programs/osdbu/sbrefa/poster/matrix.htm.

The EEOC will provide posters free of charge at http://www1.eeoc.gov/employers/poster.cfm but it also permits fee downloads of printable posters.  The current one (November 2009) poster is available at: http://www1.eeoc.gov/employers/upload/eeoc_self_print_poster.pdf

You may prefer the commercially available posters (which seem to run about $30 dollars) but there are free alternatives.  The main point, however, is not to taken in with threats of fines.

Biased Statements Will Hurt You - Even in "Reverse" Discrimination Case

Today's decision from the Seventh Circuit (Radentz v. Marion County) serves as a reminder that statements reflecting a desire to hire employees of a specific race are likely to hurt in litigation.   The decision reverses summary judgment for the Marion County, Indiana, coroner in a "reverse" discrimination suit brought by two white individuals who provided contract autopsy services to the County.  The County terminated the contract ostensibly as a money saving measure (but there was evidence that the replacement agreement did not actually save money).  (For present purposes it doesn't matter that these were employees of a contractor, the rules governing Title VII would be the same had they been employees.)

The county did a lot wrong but its shoddy (to be charitable) management practices would perhaps not have mattered (under the business judgment rule) except for the presence of several statements by the newly elected coroner (who was African-American) that he wanted to hire more African-Americans and to replace white workers.

Wage Hour Division Finalizes Update to FLSA Regulations

Today, April 5, 2011, the Wage and Hour Division ("WHD") of the Department of Labor issued a final rule (regulation) which has the effect of clarifying the WHD's position on a number of thorny issues that arise under the Fair Labor Standards Act.  While the WHD pitches the regulations as being issued to conform to "recent" statutory changes (understand that the DOL's idea of recent is within the last 20 to 40 years), much of the preamble to the regulation addresses whether or not the WHD agrees with certain court of appeals decisions. 

A large part of the preamble addresses rules relating to the "tip credit" an employee working in a hotel or restaurant.  The WHD expresses its strong disagreement which Cumbie v. Woody Woo, 596 F.3d 577 (9th Cir. 2010), which the WHD said held that "an employer’s use of an employee’s tips apply only when the tip credit is taken, and that when a tip credit is not taken, tips are only the property of the employee absent an agreement to the contrary."  The holding was wrong, the WHD states, because:

Congress would not have had to legislatively permit employers to use their employees’ tips to the extent authorized in section 3(m) unless tips were the property of the employee in the first instance. In other words, if tips were not the property of the employee, Congress would not have needed to specify that an  employer is only permitted to use its employees’ tips as a partial credit against its minimum wage obligations in certain prescribed circumstances because an employer would have been able to use all of its employees’ tips for any reason it saw fit.

To reflect this, the WHD is amending 29 C.F.R. § 531.52 "to make clear that tips are the property of the employee, and that section 3(m) sets forth the only permitted uses of an employee’s tips—either through a tip credit or a valid tip pool—whether or not the employer has elected the tip credit."

The WHD also disagrees with an important Sixth Circuit decision regarding the level of notice that is required before an employer may claim the tip credit.   Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294 (6th Cir. 1998), which held "an employer must provide notice to the employees, but need not necessarily 'explain' the tip credit." While not exactly disagreeing with the Sixth Circuit's decision, the WHD explained that the new rule will require the following notice:

an employer must inform a tipped employee before it utilizes the tip credit, of the following: (1) The direct cash wage the employer is paying a tipped employee, which can be more than, but cannot be less than, $2.13 per hour; (2) the additional amount the employer is using as a credit against tips received, which cannot exceed the difference between the minimum wage specified in section 6(a)(1) of the FLSA and the actual cash wage paid by the employer to the employee; (3) that the additional amount claimed by the employer on account of tips as the tip credit may not exceed the value of the tips actually received by the employee; (4) that the tip credit shall not apply with respect to any tipped employee unless the employee has been informed of the tip credit provisions of section 3(m) of the Act; and (5) that all tips received by the tipped employee must be retained by the employee except for the pooling of tips among employees who customarily and regularly receive tips. 

The WHD revised the rule on tip pooling to permit mandatory tips pools without a cap on the maximum contribution percentage but only among "those employees who customarily and regularly receive tips" and where an notifies "employees of any required tip pool contribution amount, may only take a tip credit for the amount of  tips each employee ultimately receives, and may not retain any of the employees’ tips for any other purpose."

Other subjects addressed (fodder for a later post) included meal credits, compensatory time for public employees (agreeing with the Sixth Circuit's decision in Beck v. City of Cleveland, 390 F.3d 912, 925 (6th Cir. 2005), and the Fluctuating Workweek Method of Computing Overtime.

A Reminder about Treating Employees Consistently

For some jobs, even private sector jobs, not getting (or maintaining) a government issued security clearance is a fundamental job requirement.  There are numerous court decisions upholding terminations from employment because the government revoked the clearance of the employee.  There is even a special provision in Title VII which states that it is not illegal to fire (or refuse to hire) an employee who cannot possess a clearance if the position requires the holding of a clearance.  42 U.S.C. 2000e-2(g).

A decision issued today (Zeinali v. Raytheon Co.) by the Ninth Circuit (which governs federal laws in the west coast states), serves as a reminder that even "sure things" have a catch, that being treating employees consistently. The court held that it could not review the government's clearance decision (in this case the government refused to grant a clearance).  It refused to go so far as to refuse to review the employer's decision to fire the employee because the employee failed to obtain a clearance.  There was no doubt, the decision stated, the employee was told the position required a clearance.

What went wrong was that there were two other employees (in jobs similar to that held by the plaintiff) who  had security clearances revoked but the employer had not terminated either employee.  So, for all the bluster and worry about whether or not courts may review decisions based upon the loss of a security clearance, the decision came down to whether or not the employer had treated the employee worse that it treated other, similarly situated, employees.

Proving Compensation Discrimination

One of the difficulties in developing a sound compensation system is to measure both the value to the company and the value to the market.  Every compensation system I have defended has tried to do both, though, as a recent Seventh Circuit decision (Randall v. Rolls-Royce, March 30, 2011), shows, the two goals don't always co-exist all that comfortably.  

The exempt employee compensation system for Rolls-Royce's manufacturing plant in Indianapolis balanced both goals, as the court described:

Rolls-Royce determines the compensation of its employees (all its employees, but this case concerns just those exempt from the minimum-wage and maximum-hours provisions of the Fair Labor Standards Act) in two steps. The first is to establish a broad pay range for each class of employees whom it deems of equal value to the  company. We’ll call these broad ranges “compensation categories.” The class is spread over five of these  categories. The second step, which is based on Rolls-Royce’s recognition that it must meet competition from other employers for the employees it wants to hire or retain, is to create within each broad range a narrower range based on prevailing market wages for each of the jobs in question—“prevailing market wages” meaning wages offered by competing employers. Because of these ranges within ranges, the class that the plaintiffs want certified sprawls over twenty different compensation grades, including supervisory and nonsupervisory positions and encompassing starting salaries ranging from $40,050 to $190,750.

Rolls-Royce’s expert showed that any seeming sex-based disparity in base pay (that existed before this system was adopted) disappeared once "differences in the jobs performed by male and female employees in each compensation category are corrected for." Plaintiff's expert, however, failed to adjust for differences in the jobs occupied by male and female employees. 

It's OK, in other words, to have broad "compensation categories" and still make market-based distinctions for the specific jobs that fall within those categories.