Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 1 of 8 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS LUFKIN DIVISION

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1 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 1 of 8 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS LUFKIN DIVISION E.E.O.C., Plaintiff, v. LOWE S HOME CENTERS, INC. Defendant. Civil Action No. 9:06-CV-56 JUDGE RON CLARK ORDER DENYING PLAINTIFF S MOTION FOR PARTIAL SUMMARY JUDGMENT Before the court is the Plaintiff s Motion for Partial Summary Judgment [Doc. #15]. Plaintiff Equal Employment Opportunity Commission ( EEOC ) brought this lawsuit alleging that Defendant Lowe s Home Centers, Inc. ( Lowe s ) violated the Equal Pay Act ( EPA ) and Title VII of the Civil Rights Act of 1964 ( Title VII ) by unlawfully underpaying women who have worked at Lowe s Livingston, Texas store. In addition to its Title VII and EPA claims, EEOC has claimed that Lowe s failed to comply with applicable federal recordkeeping laws and regulations. EEOC now moves for summary judgment on its EPA claims. I. Background In April 2004, Lowe s opened a store in Livingston, Texas. The EEOC claims that Lowe s has violated the EPA by unlawfully underpaying women who have worked in the following positions: Customer Service Associate (CSA), Team Leader and Department Manager. i. Customer Service Associate and Team Leader The EEOC alleges that Carol Baudat was underpaid while she was working as a CSA and Team Leader. On March 13, 2004, Baudat began working as a CSA I at $8.10/hour. Around May 1, 2004, she received a promotion to Team Leader. While Baudat was a CSA and a Team

2 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 2 of 8 Leader, Lowe s paid a male associate, Paul Stein, more than it paid Baudat for their respective work. ii. Department Managers The EEOC alleges that Baudat, Carol Bailey, Sabrina Lemons and Jenevieve Vicario, are victims of pay discrimination in their positions as Department Managers. i. Carol Baudat, Carol Bailey and Sabrina Lemons On July 17, 2004, Baudat was promoted to Department Manager from her previous position as a Team Leader, and received an increase in her pay from $8.61 to $ From July 17, 2007 to November 5, 2004, she was the lowest paid Department Manager at the store. Bailey was working as a CSA I at Lowe s Lufkin Store in She received a promotion to work as a Department Manager at the Livingston store starting on February 28, 2004, for $10.72 per hour. From March 1, 2004 to July 16, 2004, Bailey had a lower hourly rate of pay than any other Department Manager at the store. In late September of 2004, both Baudat and Bailey notified Lowe s of their concern that their compensation was lower than other Department Managers in Livingston. In October 2004, Lowe s increased their pay to $12.02/hour, or $25,000 annually, effective on November 6, By March 12, 2005, Bailey s pay increased from to $ Lemons was promoted to Department Manager from her previous position as a CSA III in January As a Department Manager, she received the salary of $12.52/hour. Three male employees received a higher salary than she did. iv. Jenevieve Vicario On March 8, 2004, Vicario was hired as Department Manager with a salary of $11.539/hour, or approximately $24,021/year. Her compensation was lower than two male employees, who were hired directly into Department Manager positions.

3 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 3 of 8 III. Summary Judgment Standard The party moving for summary judgment under Fed. R. Civ. P. 56 has the initial burden of demonstrating that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. 2505, 2514 (1986). Movant may show that the undisputed material facts affirmatively establish a right to judgment. Alternatively, movant may establish that the other party has the burden of proof at trial, and has failed to make a showing sufficient to establish the existence of an element essential to [its] case. Celotex Corp. v. Catrett, 477 U.S. 317, , 106 S. Ct. 2548, 2522 (1986). In order to avoid summary judgment, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, , 106 S. Ct. 1348, 1335 (1986); Anderson, 477 U.S. at 257, 106 S. Ct. at The nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts. Matsushita, 475 U.S. at 586, 106 S. Ct. at Fed. R. Civ. P. 56 requires that the nonmoving party set forth specific facts showing that there is a genuine issue for trial. Anderson, 477 U.S. at 256, 106 S. Ct. at Only a genuine dispute over a material fact (a fact which might affect the outcome of the suit under the governing substantive law) will preclude summary judgment. Anderson, 477 U.S. at 248, 106 S. Ct. at The dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party on the issue. Id. If the factual context renders a claim implausible (for example if the claim simply makes no economic sense) nonmovants must come forward with more persuasive evidence to support their claim than would otherwise be necessary. Matsushita, 475 U.S. at 587, 106 S. Ct. at Fed. R. Civ. P. 56(c) requires the court to look at the full record, including the pleadings,

4 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 4 of 8 depositions, answers to interrogatories, admissions, and affidavits. But, the court is not going to sift through the record in search of evidence to support a party s opposition to summary judgment. Doddy v. Oxy USA, Inc., 101 F.3d 448, 463 (5th Cir. 1996)(citations omitted); see also Local Rule CV-56(c) and Appendix 1, 3 of the Order Governing Proceedings in this case. All reasonable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion, and any doubt must be resolved in its favor. Matsushita, 475 U.S. at 587, 106 S. Ct. at However, only reasonable inferences in favor of the nonmoving party can be drawn from the evidence. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 468, 112 S. Ct. 2072, 2083 (1992). III. Equal Pay Act Under the EPA, an employee is prohibited from discriminating between employees on the basis of sex... for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions. 28 U.S.C. 206(d)(1)(1978). To establish a prima facie case under the EPA, a plaintiff must demonstrate that 1) her employer is subject to the EPA, 2) she performed work in a position requiring equal skill, effort and responsibility under similar working conditions; and 3) she was paid less than members of the opposite sex providing the basis for comparison. Jones v. Flagship Int l, F.2d 714, (5th Cir. 1986). Defendant does not appear contest that the EEOC has established a prima facie case. Lowe s Response to Motion [Doc. #18, p. 2]. When a plaintiff succeeds in establishing her prima facie case, the burdens of production and persuasion shift to the employer to demonstrate one of the four affirmative defenses specified 1 Unlike a claim arising under Title VII, a plaintiff in an EPA case need not demonstrate discriminatory intent. Id.

5 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 5 of 8 2 under the EPA. Plemer v. Parsons-Gilbane, 713 F.2d 1127, 1136 (5th Cir. 1983). The EPA provides exceptions, or affirmative defenses,for disparate wage payments made pursuant to: 1) a seniority system; 2) a merit system; 3) a system that measures earnings by quantity or quality; 4) a differential based upon any factor other than sex. Peters, 818 F.2d at 1153; 29 U.S.C. 206(d)(1). At the outset, it must be remembered that [a]n exemption from the coverage of the Act must be narrowly construed. Hodgson v. Behrens Drug Co., 475 F.2d 1041, 1047 (5th Cir. 1973). Nevertheless, courts recognize valid exemptions. Specifically, with regard to factors other than sex, several determinants must pass judicial muster, including different job levels, different skill levels, previous training, and experience. Pouncy v. Prudential Ins. Co., 668 F.2d 795, (5th Cir. 1982). i. Customer Service Associate and Team Leader The EEOC alleges that Lowe s discriminated against Baudat because of her gender by paying her less than a male, Paul Steil, while she was a Customer Service Associate and Team Leader. In contrast to Baudat s pay of $8.10/hour, Steil was hired as a CSA III at $9.57/hour. As evidence of its legitimate nondiscriminatory reasons for the pay discrepancy, Lowe s offers the declaration of Terry Gillespie, Lowe s Regional Human Resources Director. Gillespie testified that Steil received a higher salary than Baudat based on Steil s work experience and previous salary of $18.00/hour as a Foreman and Project Manager. Gillespie also states that Steil indicated a willingness to work any hours from 5:00a.m. to 2:00a.m., seven days a week. For summary judgment purposes, credibility can not be assessed so Lowe s has provided sufficient evidence to avoid summary judgment. 2 Unlike a Title VII claim, a plaintiff does not retain the ultimate burden of persuasion in an EPA case. In an EPA case, the employer, not the employee, must prove the actual wage disparity is not sex linked. Plemer, 713 F.2d at 1136.

6 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 6 of 8 ii. Department Managers The EEOC alleges that Lowe s discriminated against Baudat, Bailey, Lemons and Vicario because of their gender by paying them less than other Department Managers. In support of its arguments, the EEOC compares the pay received by Baudat, Bailey and Lemons to four male employees, Tim Bergman, Ron Bromley, David Phillips and Michael Hood, who were promoted to Department Managers. The EEOC also offers data showing that Vicario earned less than two male employees, Daniel Pope and Gaylon Dickens, who were hired directly into the Department Manager position. Lowe s proffers two determinants for the differences in pay: 1) Lowe s use of a uniform Store Jobs and Pay Guide ( Pay Guide ); 2) the males prior work experience and salary history. Lowe s has provided evidence that suggests all pay differentials are attributable to the nondiscriminatory application of Lowe s pay policies embodied in its Pay Guide. Under the Pay Guide, when Lowe s hires or promotes an employee, it takes into account prior work experience and market demands when determining the rate of pay. The Pay Guide states the following about setting rates of pay for newly hired hourly employees: When to place a new hire in the hourly grade / position structure should be determined based on several factors. These include: - the applicable minimum wage rate for your state, - the open positions available, - prior Lowe s experience, - prior retail experience, and - education level. New hires should be placed in a job commensurate with their experience and/or education. They should not be placed in the grade or position which matches the pay level they would like to earn.... New hires with prior work experience can be placed in higher graded positions. In most cases, their pay should not exceed STEP 6 of the range. The Pay Guide provides that when an hourly employee is promoted to a Salary plus

7 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 7 of 8 Overtime position, the new base pay amount would be the greater of 10% over current base pay or new range minimum. Gillespie testified that the order of progression for positions on the sales floor in a Lowe s store is CSA I, CSA II, CSA III, CSA IV, Team Leader, Sales Specialist, Department Manager, Zone Manager, Sales Manager, Operations Manager, Store Manager. a. Baudat, Bailey, Lemons Baudat and Lemons were both promoted from their positions as CSAs to Department Manager. The pay range for CSAs was $8.25 to $ Bailey was promoted from her position as a Team Leader, and the pay range for a Team Leader is $9.07 to $ In contrast, Bergman, Bromley and Phillips were promoted to Department Managers from their positions as Sales Specialists. The pay range for a Sales Specialist was from $9.60/hour to $14.39/hour. Hood was promoted from his prior position as a Delivery Driver, at which he earned $12.09/hour. Lowe s evidence suggests that because the salaries of CSAs and Team Leaders are lower, promotions from those positions generate a lower resulting rate of pay. This justification suffices as a legitimate, nondiscriminatory reason for the discrepancy between the salaries of Baudat, Bailey and Lemons and the comparative males. As the Supreme Court has stated, Under the [EPA], the courts and administrative agencies are not permitted to substitute their judgment for the judgment of the employer... who [has] established and applied a bona fide job rating system, so long as it does not discriminate against sex. County of Washington v. Gunther, 452 U.S. 161, 101 S.Ct (1981). Again, Lowe s has provided sufficient evidence to avoid summary judgment. b. Vicario Vicario was directly hired as a Department Manager at a rate of $11.59/hour. Two of Vicario s male comparators, Daniel Pope and Gaylon Dickens, were also employees who were

8 Case 9:06-cv RHC Document 21 Filed 12/20/2006 Page 8 of 8 directly hired as Department Managers. Both Pope and Dickens earned $12.02/hour. Gillespie testified that Pope s salary was higher than Vicario s salary because Pope was a certified heavy equipment operator, and had retail sales experience working at two car dealerships where he previously earned as much as $52,000 per year. Gillespie also testified that Dickens s salary was higher than Vicario s salary because Dickens has a B.B.A. in Management from the University of Houston, and prior management and sales experience. As mentioned above, Lowe s reliance on work experience, education and prior salary history to set the salaries of its managers qualify as legitimate, nondiscriminatory reasons for a pay differential. Given the applicable stringent standards, EEOC is not entitled to summary judgment on this claim. IT IS THEREFORE ORDERED that Plaintiff s Motion for Partial Summary Judgment is DENIED.