The Ledbetter Fair Pay Act has put pay discrimination claims into the spotlight. Does it mean employers can’t offer higher salaries to woo desirable applicants away from current employers?
No, according to this recent court case — as long as companies document their reasons for pay differences.
An African-American employee learned that she was making less than other, white employees in the same position. She sued, claiming she was given a lower salary because of her race.
The company’s explanation: Higher salaries are often offered to employees who come from other employers to convince them to leave their current jobs. In this case, the two white employees in question were hired from outside and negotiated for higher pay during the offer process. Also, both had received other offers while employed with the company and negotiated for raises at that time.
On the other hand, the African-American employee was promoted to the position, did not negotiate her salary and never told the company about other job offers.
The court ruled in favor of the employer. Since HR had documented the salary negotiation process, the judge agreed there was no discrimination — just the natural effects of a free market.
Cite: Sims v. Burlington Coat Factory Warehouse of Alabama, Inc.