McManama v. Gannett Co., Inc.

Filing 41

MEMORANDUM OPINION AND ORDER it is Considered and Ordered that Defendant's Motion for Summary Judgment doc. 25 be and the same is hereby denied. Signed by Honorable Ira De Ment on 11/18/08. (Attachments: # 1 appeals checklist)(vma, )

IN THE UNITED STATES DISTRICT COURT FOR T H E MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION T IN A McMANAMA, P l a in tif f , v. G A N N E T T CO., INC., D e f e n d a n t. ) ) ) ) ) ) ) ) )

C A S E NO. 2:07-cv-479-ID (W O )

M E M O R A N D U M OPINION AND ORDER T ina McManama brings this action against Gannett Company, Inc. ("Gannett"), a lle g i n g that Gannett discriminated against her on the basis of her gender by paying her less t h a n it paid men to do the same job, in violation of the Equal Pay Act, 29 U.S.C. § 206(d) (" E P A " ). This cause is before the Court on Gannett's Motion for Summary Judgment (Doc. # 25), filed September 8, 2008. The Court has carefully considered all submissions in s u p p o rt of and in opposition to the motions and the relevant case law. For the reasons set f o rth below, the Court finds that Gannett's Motion for Summary Judgment is due to be D E N IE D . I . JURISDICTION AND VENUE T h e Court exercises subject matter jurisdiction over Plaintiff's claims pursuant to 28 U .S .C . §§ 1331 (federal question) and 1343(4) (civil rights). The parties contest neither p e rs o n a l jurisdiction nor venue, and the Court finds an adequate factual basis for each.

I I . SUMMARY JUDGMENT STANDARD U n d e r Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is a p p ro p ria te "if the pleadings, depositions, answers to interrogatories, and admissions on file, to g e th e r with the affidavits, if any, show that there is no genuine issue as to any material fact an d that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). " A n issue of fact is `genuine' if the record as a whole could lead a reasonable trier of fact to f in d for the nonmoving party. An issue is `material' if it might affect the outcome of the c a se under the governing law." Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1 4 8 9 , 1496 (11th Cir. 1996) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1 9 8 6 )). "A genuine issue of material fact does not exist unless there is sufficient evidence f a v o rin g the nonmoving party for a reasonable jury to return a verdict in its favor." Chapman v . AI Transp., 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v. City of M ia m i, 52 F.3d 918, 921 (11th Cir. 1995) (internal quotation marks and citations omitted)). T h e party seeking summary judgment "always bears the initial responsibility of in f o rm in g the district court of the basis for its motion, and identifying those portions of `the p le a d in g s , depositions, answers to interrogatories, and admissions on file, together with the a f f id a v its , if any,' which it believes demonstrate the absence of a genuine issue of material f a ct." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant can meet this burden b y presenting evidence showing there is no dispute of material fact, or by showing the n o n m o v in g party has failed to present evidence in support of some element of its case on

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w h ic h it bears the ultimate burden of proof. Id. at 322-23. O n c e the moving party has met its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the `depositions, answers to in t e rr o g a to r ie s , and admissions on file,' designate `specific facts showing that there is a g e n u in e issue for trial.'" Id. at 324. To avoid summary judgment, the nonmoving party " m u s t do more than simply show that there is some metaphysical doubt as to the material f a cts ." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). On the o th e r hand, a court ruling on a motion for summary judgment must believe the evidence of th e nonmovant and must draw all justifiable inferences from the evidence in the nonmoving p a rty's favor. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); M c C o r m ic k v. City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003) (the evidence a n d all reasonable inferences from the evidence must be viewed in the light most favorable to the nonmovant). After the nonmoving party has responded to the motion for summary ju d g m e n t, the court must grant summary judgment if there is no genuine issue of material f a c t and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 5 6 (c). I I I . FACTS T h e Court has carefully considered all deposition excerpts and documents submitted in support of and in opposition to the motion. The submissions of the parties, viewed in the lig h t most favorable to the non-moving party, establish the following relevant facts:

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G a n n e tt is an international news and information company that, among other things, p u b lish e s newspapers throughout the United States. One of the newspapers that Gannett p u b lis h e s is the Montgomery Advertiser in Montgomery, Alabama. M cM an am a worked for Gannett from 1987 to 2006 for several different newspapers th a t they publish. McManama has an Associate of Arts degree in Commercial Art and D e sig n from Vincennes University. McManama does not have a bachelor's degree. M c M a n a m a was first hired by Gannett to work for the Palm Springs Desert Sun in O c to b e r 1987 as Marketing Art Director. McManama worked at the Desert Sun until 1997, w h e n she was promoted to Market Development Director at the Hattiesburg American, a n o th e r Gannett newspaper. When McManama left the Desert Sun, her salary was

a p p ro x im a te ly $35,000 per year. Her salary increased to $46,000 per year when she relocated to Hattiesburg; an increase of 31% in her salary. In November 2001, McManama applied for and was selected as the Market D e v e lo p m e n t Director at the Montgomery Advertiser. When McManama left Hattiesburg, h e r salary was $54,500 per year. Her salary increased to $65,000 per year when she relocated to Montgomery; an increase of 19% in her salary. G a n n e tt has established a salary grade schedule that determines the range of salary it w ill pay its employees at each position. The salary for the Market Development Director of th e Montgomery Advertiser was chosen at all times relevant to this case by the Vice P reside n t of Compensation, Robert Oliver, and the Publisher of the Montgomery Advertiser,

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S c o t t Brown. Gannett's written compensation policy states: Y o u r compensation is consistent with the job responsibilities of your p o s itio n . Consideration in determining salary levels may also depend on p r e v io u s experience, education, performance, and other qualifications. Y o u r compensation is generally reviewed annually, usually on the a n n iv e rs a ry of your current position or last salary change. Your performance is the key to determining whether a change is appropriate. If your performance w a rra n ts a change, the amount is determined by compensation guidelines that re f le c t level of performance, the economic climate in the country and region, a n d the company's business success. G an n ett's written policies further describe guidelines for selecting salaries within the salary ra n g e s established for each position: A s a general rule, the range from minimum to maximum of the job grade is 405 0 % . The minimum assumes competent performance by an employee who m e e ts the minimum qualifications for the job. The maximum of the range s h o u l d be set to encompass the highest sustained performance for that job c la ss if ic a tio n . The mid-point of the salary range represents the competitive ra te that would be paid for commendable performance by a fully-qualified p e rs o n after several years on the job. M cM an am a's position in Hattiesburg was a Grade 23, which had a minimum salary o f $54,000 and a maximum of $90,000. When McManama moved to Montgomery, her new p o s itio n was a Grade 25, which had a minimum salary of $68,000 and a maximum of $ 1 1 6 ,0 0 0 . Therefore, when McManama began as Market Development Director for the M o n tg o m e ry Advertiser earning $65,000, she was earning $3,000 per year below the stated m in im u m salary for the position. M c M a n a m a 's salary was increased in 2003 to $68,000, the minimum salary for her p o s itio n . When McManama left the Montgomery Advertiser in 2006, she was earning 5

$ 7 5 ,5 0 0 , which was $5,500 above the then-minimum salary for the position and $18,500 b e lo w the midpoint of the salary range. McManama received positive performance

ev alua tio n s while she worked for the Montgomery Advertiser. Throughout McManama's c a re e r working for Gannett, she was consistently paid at or near the minimum salary for her p o s itio n , and sometimes was paid below the minimum. According to McManama, after she g a v e Gannett notice that she was leaving the company, Brown told her "women don't know h o w to negotiate, hence they get paid less" and that she "needed to hold out for $90,000 b e c a u s e she was worth that." D o n Halleck held the position of Market Development Director at the Montgomery A d v e rtis e r immediately prior to McManama. Halleck has a bachelor's degree in Economics a n d a master's degree in Business Administration with a concentration in Marketing. When H a lle c k was being considered for the Market Development Director position, he was w o rk in g with an advertising agency. Halleck had never worked for a newspaper prior to his w o rk for the Montgomery Advertiser. Halleck's starting salary at the Montgomery

A d v e rtise r was $87,000, which was $22,000 more than McManama's starting salary. Scott B ro w n was the Gannett employee responsible for hiring both Halleck and McManama. H a lle c k did not perform well and was asked to resign after less than one year on the job. M c M a n a m a did not discover that Halleck had been paid substantially more than she u n til March 2007, after she had left Gannett. McManama filed this action on May 30, 2007.

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I V . DISCUSSION A. L ia b ility Under The Equal Pay Act A n employee demonstrates a prima facie case of an Equal Pay Act violation by s h o w i n g that the employer paid employees of opposite genders different wages for equal w o rk for jobs which require equal skill, effort, and responsibility, and which are performed u n d e r similar working conditions. Steger v. Gen. Elec. Co., 318 F.3d 1066, 1077-78 (11th C ir. 2003). Gannett concedes that McManama has established a prima facie case under the E P A through the use of Halleck as a comparator. Indeed, given the fact that Halleck p e r f o rm e d the exact same job as McManama for more money, this Court finds that M c M a n a m a has established a prima facie case. O n c e the employee presents a prima facie case, the burden shifts to the employer to a v o id liability by proving by a preponderance of the evidence that the difference in pay is b a se d on (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings b y quantity or quality of production; or (iv) any other factor other than sex. See 29 U.S.C. § 206(d)(1). The burden to prove these affirmative defenses is heavy because the employer m u s t demonstrate that "the factor of sex provided no basis for the wage differential." Steger, 3 1 8 F.3d at 1078 (emphasis added). Furthermore, the EPA prescribes a form of strict lia b ility. Once the disparity in pay between substantially similar jobs is demonstrated, the b u rd e n shifts to the defendant to prove that a factor other than sex is responsible for the d if f ere n tia l. If the defendant fails, the plaintiff wins. The plaintiff is not required to prove

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d is c rim in a to ry intent on the part of the defendant. Miranda v. B & B Cash Grocery Store, 9 7 5 F.2d 1518, 1533 (11th Cir. 1992). G an n ett argues that it is not liable under the EPA because the difference in salary b e t w e e n McManama and Halleck can be explained by the differences between the two in p rio r salary, experience, and education. While an employer may not rely on prior salary a lo n e to justify a difference in pay, an employer may avoid liability under the EPA by p ro v in g that the difference in pay was based on prior salary and some other factor, such as e x p e rie n c e . See Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995). Moreover, "business re a so n s " , such as experience, are legitimate "factors other than sex" so long as they can be re b u tte d . Id. at 956. A plaintiff may rebut a defense like experience by showing he or she h a d equal or more experience of the same type. Id. Time spent in a position is a measurable q u a n tity one can sufficiently rebut. Id. G a n n e tt argues that it treats internal and external hires differently, which explains the d if f e re n c e in pay on a gender neutral basis. For external hires, Gannett claims its policy is to offer whatever salary Gannett feels is necessary to attract the candidate to the relevant m a rk e t. For internal promotions, however, Gannett claims that it has a general rule that such p ro m o ti o n s should result in a range of 10-15% salary increase over what the employee is c u rre n tly earning. P rio r to the promotion to Market Development Director of the Montgomery A d v e rtis e r, McManama was earning $54,500 per year. Her salary increased to $65,000 per

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ye a r when she began to work at the Montgomery Advertiser. Therefore, Gannett argues, M c M a n a m a 's salary increased 19% after the promotion, which exceeded the limit on internal p ro m o tio n s normally observed at Gannett. The problem with this argument is that this "101 5 % " rule does not appear in any of Gannett's written policies. Moreover, when McManama w as promoted to the Hattiesburg American in 1997, also as an internal promotion, her salary in c re a se d by more than 30%. Accordingly, this Court finds no evidence that such a rule a c tu a lly existed, or that, even if such a rule or guideline did exist, it was a meaningful enough ru le that this Court could be confident that the rule was responsible for the difference in pay, ra th e r than unlawful discrimination. Furth erm o re, Gannett argues that Halleck had twenty years of experience in marketing a n d advertising management positions, and he had a masters degree in Business A d m in is tra tio n with a concentration in Marketing. McManama had only four years of e x p e rie n c e in a marketing management position, and she did not have a bachelor's degree. M c M a n a m a argues that she was actually the more experienced candidate because she had w o rk e d in the newspaper industry for Gannett for fourteen years, and had been doing the e x a ct same job--Market Development Director--for four years. On the other hand, Halleck h a d no newspaper experience and was working for an advertising agency when he was hired. W ith these facts alone, this Court might be inclined to accept Gannett's argument that th e difference in pay was based on a business judgment regarding the respective value of M c M a n a m a and Halleck's relative education and experience. However, this Court finds that

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s e v e ra l factors, taken in the light most favorable to the plaintiff, create a genuine issue of m a te ria l fact for trial as to whether the difference in pay was the result of "factors other than s e x ." F irs t, despite positive evaluations, Gannett consistently paid McManama at or near th e minimum salary for her work throughout her entire fourteen-year career at Gannett. S e c o n d , the difference between what McManama and Halleck earned was substantial, $ 2 2 ,0 0 0 , and McManama was not even paid the minimum salary set for the position by G a n n e tt policy when she was hired. Third, and most significantly, after five years on the job a n d consistently earning positive evaluations, McManama was still being paid $12,000 less th a n what Halleck was first offered five years earlier, and $18,500 below the midpoint of the th e n -c u rre n t salary range for the Grade 25 position, which had increased over time. A c c o rd in g to Gannett's salary guidelines, "[t]he mid-point of the salary range represents the c o m p e ti ti v e rate that would be paid for commendable performance by a fully-qualified p e r s o n after several years on the job." Therefore, under these guidelines, because

M c M a n a m a had several years on the job and consistently earned "commendable" p erf o rm an ce evaluations, she should have been earning close to the midpoint of the salary ra n g e , which would have been $94,000. However, after five years, Gannett was only paying M c M a n a m a $75,500, still barely above the minimum salary. In other words, Gannett consistently violated its own policies in order to pay M c M a n a m a at or below the minimum salary established for her job. Under these

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c irc u m s ta n c e s , this Court finds that a reasonable jury could find in favor of McManama. T h e re f o re , Gannett is not entitled to summary judgment. B. D a m a g e s and the Statute of Limitations C la im s brought under the EPA are subject to a two-year statute of limitations for o rd in a ry violations, and a three-year statute of limitations for willful violations. See 29 U .S .C . § 255; Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1164 (1 1 th Cir. 2008). Gannett argues that the two-year limitations period applies to this case. M c M a n a m a claims there is sufficient evidence to find Gannett acted willfully, which would m e a n the three-year statute of limitations was applicable. McManama incorrectly argues that the Jiffy June standard of willfulness applies to d e te rm in in g whether the two or three-year statute of limitations applies. In Coleman v. Jiffy J u n e Farms, Inc., 458 F.2d 1139, 1142 (5th Cir. 1971), the Fifth Circuit held that an e m p lo ye r acted wilfully within the definition of the FLSA when "the employer knew or s u s p e c t e d that his actions might violate the FLSA. Stated most simply, we think the test s h o u ld be: Did the employer know the FLSA was in the picture?" 1 However, the Supreme C o u rt has rejected the Jiffy June "in the picture" standard explicitly. McLaughlin v. Richland S h o e Co., 486 U.S. 128, 133 (1988). Therefore, in order to act "willfully" as defined by 29 U .S .C . § 255, an employer must act knowingly, or with reckless disregard for whether its

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), th e Eleventh Circuit adopted as binding precedent all Fifth Circuit cases submitted or decided p rio r to October 1, 1981. 11

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c o n d u c t was prohibited by the applicable statute. Id.; Alvarez Perez, 515 F.3d at 1165. The e m p lo ye e has the burden to prove willfulness. Alvarez Perez, 515 F.3d at 1162-63. H o w e v e r, Gannett does not argue that McManama's claims are time-barred. The twoye a r limitations period would extend back to May 30, 2005--approximately eighteen months b e f o re McManama left Gannett. Moreover, the Eleventh Circuit has held in the context of a disparate pay case brought under Title VII that in cases in which the employer has a system for periodically reviewing and ree sta b lis h in g employee pay, an employee seeking to establish that his or her pay le v e l was unlawfully depressed may look no further into the past than the last a f f irm a tiv e decision directly affecting the employee's pay immediately p re c ed in g the start of the limitations period. Other, earlier decisions may be re le v a n t , but only to the extent they shed light on the motivations of the p e rs o n s who last reviewed the employee's pay, at the time the review was c o n d u c te d L e d b e tte r v. Goodyear Tire and Rubber Co., Inc., 421 F.3d 1169, 1183 (11th Cir. 2005), a ff'd , 127 S.Ct. 2162 (2007). "Moreover, the employee is limited to recovering for Id. at 1183 n.18. Consequently,

p a yc h e ck s received within the limitations period."

M c M a n a m a can only recover based upon the salary she received after May 30, 2005 for an o rd in a ry violation, or May 30, 2004 for a willful violation. T h is Court finds that taking the evidence in the light most favorable to the plaintiff, a reasonable jury could find that Gannett acted willfuly. This is due to (1) the consistency w ith which Gannett violated its own written policies in order to pay McManama at or below th e minimim salary established for her job; and (2) the substantial difference in salary the c o m p a r a to r earned for the exact same job. 12

V . CONCLUSION A s stated above, this Court finds a genuine issue of material fact exists as to whether th e difference in pay between McManama and her comparator is due to a "factor other than se x ." This Court also finds that a genuine issue of material fact exists as to whether Gannett a c te d willfully when it established McManama's salary. F o r the reasons set forth above, it is CONSIDERED and ORDERED that Defendant's M o tio n for Summary Judgment (Doc # 25) be and the same is hereby DENIED. D O N E this 18th day of November, 2008. /s/ Ira DeMent SENIOR UNITED STATES DISTRICT JUDGE

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