Tracy Sempowich v. Tactile Systems Technology ( 2021 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 20-2245
TRACY SEMPOWICH,
Plaintiff – Appellant,
v.
TACTILE SYSTEMS TECHNOLOGY, INC., d/b/a Tactile Medical,
Defendant – Appellee,
------------------------------
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Amicus Supporting Appellant.
Appeal from the United States District Court for the Eastern District of North Carolina, at
Raleigh. James C. Dever III, District Judge. (5:18-cv-00488-D)
Argued: October 27, 2021 Decided: December 3, 2021
Before WILKINSON, NIEMEYER, and MOTZ, Circuit Judges.
Vacated and remanded by published opinion. Judge Motz wrote the opinion, in which
Judge Wilkinson and Judge Niemeyer joined.
ARGUED: Kathryn F. Abernethy, NOBLE LAW FIRM, PLLC, Chapel Hill, North
Carolina, for Appellant. Julie Loraine Gantz, EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, Washington, D.C., for Amicus Curiae. Kristin Berger Parker, STINSON
LLP, Minneapolis, Minnesota, for Appellee. ON BRIEF: Carroll Theresa Wright,
STINSON LLP, Minneapolis, Minnesota; Theresa Sprain, Jonathon D. Townsend,
WOMBLE BOND DICKINSON (US) LLP, Raleigh, North Carolina, for Appellee.
Sharon Fast Gustafson, General Counsel, Jennifer S. Goldstein, Associate General
Counsel, Elizabeth E. Theran, Assistant General Counsel, Office of General Counsel,
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Washington, D.C., for
Amicus Curiae.
2
DIANA GRIBBON MOTZ, Circuit Judge:
This appeal arises from the district court’s grant of summary judgment to Tactile
Systems Technology, Inc. on former employee Tracy Sempowich’s discrimination,
retaliation, and Equal Pay Act claims. Because the court applied an incorrect legal standard
to the Equal Pay Act claim and erred in holding that there are no genuine issues of material
fact precluding summary judgment on the other claims, we must vacate its judgment and
remand for further proceedings consistent with this opinion. 1
I.
A.
Tactile, a medical device company, sells compression devices to treat chronic
swelling and wounds. In 2007, Tactile hired Tracy Sempowich — a woman — as a field
sales employee, a position known at the company as a “product specialist.” Sempowich
briefly left full-time employment in 2009 but continued to work with Tactile as an
independent contractor during that time. In 2010, Tactile rehired her as a full-time product
specialist and subsequently promoted her to a senior product specialist.
Four years later, Tactile again promoted Sempowich — then forty-nine years old —
to be the regional sales manager for the Mid-Atlantic region. In this role, Sempowich
1
In granting Tactile’s motion for summary judgment, the district court also granted
Tactile’s motion to strike Sempowich’s proffered expert testimony and dismissed as moot
Sempowich’s own motion for partial summary judgment and motion to strike Tactile’s
responsive statement of material facts. As discussed below, we vacate the grant of Tactile’s
motion to strike Sempowich’s proffered expert testimony and remand for further
proceedings consistent with this opinion. On remand, the district court should also
reconsider and decide Sempowich’s motions that it dismissed as moot and any motions
that may otherwise be revived.
3
supervised a sales team of up to fifteen people for a region then consisting of Maryland,
North Carolina, part of South Carolina, and Virginia. Later that year, Tactile hired Greg
Seeling — a forty-six-year-old man — to be the regional sales manager for the Southern
region, consisting of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, part of
South Carolina, Tennessee, and West Virginia.
B.
The above facts are undisputed, but the record is rife with other facts that are in
serious dispute. The disputed facts relate primarily to Sempowich’s performance as a
regional sales manager, about which Tactile and Sempowich have offered starkly different
testimony and documentary evidence.
On one hand, Tactile maintains that Sempowich failed to meet the company’s
performance goals. Tactile’s Senior Vice President of Sales, Bryan Rishe, testified that
Sempowich oversaw lagging year-over-year growth, high employee turnover, and slow
hiring in her region, and that there was a “lack of professional development of [her
region’s] personnel.” He further testified that these issues “had challenged the region since
2015” and that he had discussed them with Sempowich “on a number of occasions” and
“tried to assist her with recruitment,” to no avail. Tactile also points out that Sempowich
stated on a call with Rishe that she “couldn’t grow the way” that he was “measuring [her]
on from last year with the fact that there was a lot of things that were out of [her] control
from a business perspective.” And in a business action plan, Sempowich acknowledged
that her region’s “biggest hur[d]le has been headcount and the ability for expansion,”
noting that hers was “the only tenured region that has not maximized expansion
4
opportunities or had increase of territory.” Rishe testified that he and the company’s CEO
“concluded [that] a change of management was needed to turn around performance of the
Mid-Atlantic Region.”
On the other hand, Sempowich testified and offered documentary evidence showing
that Tactile consistently viewed her as a top performer. She testified that Vice President
Rishe never “explicitly” told her she had “performance deficiencies” that she needed to
work on to keep her position. In fact, she offered documentary evidence that in two of
Tactile’s recent annual evaluations of her performance, Rishe listed her as having
“[e]xceptional [s]trengths” in people development, team building, leadership, and
planning, organization, and execution skills. Sempowich also testified and offered
documentary evidence that Tactile repeatedly gave her awards, including a Regional
Manager Sales Leadership Award three years in a row for exceeding the revenue plan in
her region and, at the national sales meeting on January 21–24, 2018, an award for
Sustained Excellence (an honor that, according to Sempowich, no other current regional
sales manager received at that time). In addition, she testified that in January 2018, Tactile
informed her that it would give her a discretionary equity grant of $40,000 and a $10,000
salary raise effective February 1, 2018.
Moreover, Sempowich offered evidence that Tactile viewed her not only as a top
performer but also as a better performer than Seeling. In their 2015 evaluations, Tactile
rated Sempowich as a Key Contributor (the third-highest possible rating) and Seeling only
as a Contributor (the fourth-highest); and in their 2016 evaluations, Tactile rated
5
Sempowich as a Major Contributor (the second-highest) and Seeling only as a Key
Contributor (the third-highest).
Nevertheless, on February 12, 2018, Rishe informed Sempowich that she would no
longer be a regional sales manager, that Tactile would reassign her region to Seeling, and
that Seeling would be promoted to area director (a step above regional sales manager).
Tactile offered Sempowich a newly created position as a market development manager for
its “head and neck” business, in which she would retain the same base salary. But
Sempowich viewed this offer as a demotion — she saw the new position “more like a sales
job” with only a nominal title as manager, especially because she would no longer have
any employees reporting directly to her. And the formal offer letter that Tactile later
provided did not mention a plan that would allow her to earn incentive compensation after
the expiration of a six-month guarantee.
Ten days later — on February 22, 2018 — Sempowich submitted a complaint to
Tactile’s Human Resources department, alleging that Tactile had discriminated against her
on the basis of sex and age. On March 23, Tactile’s counsel informed Sempowich’s
counsel that if she failed to accept the offer to become a market development manager, her
employment with Tactile would cease effective March 30. Sempowich did not accept, and
on March 30 her employment ended.
Sempowich then sued Tactile in state court, alleging: (1) Title VII disparate
treatment on the basis of sex and sex-plus-age; (2) wrongful termination under North
Carolina state law; (3) Title VII retaliation; and (4) a violation of the Equal Pay Act. Tactile
removed the case to federal court. Once in federal court, Tactile moved for summary
6
judgment on each of Sempowich’s claims. The district court granted the motion.
Sempowich then noted a timely appeal to this court.
We review a district court’s grant of summary judgment de novo, “applying the
same legal standards as the district court and viewing all facts and reasonable inferences in
the light most favorable to the nonmoving party.” Ballengee v. CBS Broad., Inc., 968 F.3d
344, 349 (4th Cir. 2020). Of course, summary judgment is appropriate only if “the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a).
II.
To survive a motion for summary judgment on a Title VII disparate treatment claim,
a plaintiff must either proceed under the mixed-motive framework or the McDonnell
Douglas burden-shifting framework. See Perkins v. Int’l Paper Co., 936 F.3d 196, 206 n.4
(4th Cir. 2019); see also McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Here,
the district court held that Sempowich failed to present the direct evidence required to
proceed under the mixed-motive framework, a contention that Sempowich has not
challenged on appeal. Accordingly, the court analyzed her claims under the McDonnell
Douglas burden-shifting framework.
Under the burden-shifting framework, a plaintiff must first offer a prima facie case.
Lettieri v. Equant, 478 F.3d 640, 646 (4th Cir. 2007). To do so, a plaintiff must show that
(1) she is a member of a protected class; (2) her employer took an adverse action against
her; (3) she had been fulfilling her employer’s legitimate expectations at the time of the
adverse action; and (4) the adverse action occurred under circumstances that raise a
7
reasonable inference of unlawful discrimination, including because the employer left open
the position or replaced the plaintiff with someone outside the protected class. Id.; Bing v.
Brivo Sys., LLC, 959 F.3d 605, 616 n.8 (4th Cir. 2020). Once a plaintiff makes out a prima
facie case, the burden shifts to the employer to put forth a nondiscriminatory explanation
for its actions. Lettieri, 478 F.3d at 646. If the employer does so, the burden then shifts
back to the plaintiff to show that the employer’s explanation was “actually a pretext for
discrimination.” Id. (quoting Hill v. Lockheed Martin Logistics Mgmt., Inc., 354 F.3d 277,
285 (4th Cir. 2004) (en banc)).
The district court held that Sempowich failed to make out a prima facie case because
she was not fulfilling Tactile’s legitimate expectations at the time the company reassigned
her. It then held that, even if she had made out a prima facie case, Tactile had put forth a
nondiscriminatory explanation for reassigning her, and no rational jury could find that
Tactile’s explanation was a pretext for discrimination.
A.
On Sempowich’s prima facie case, the only factor at issue before this court is
whether Sempowich was fulfilling Tactile’s legitimate expectations at the time it took an
adverse action against her. To satisfy this factor, a plaintiff need not “show that [s]he was
a perfect or model employee. Rather, a plaintiff must show only that [s]he was qualified
for the job and that [s]he was meeting [her] employer’s legitimate expectations.” Haynes
v. Waste Connections, Inc., 922 F.3d 219, 225 (4th Cir. 2019).
Tactile asserts that we may solely consider the “perception of the [employer]” on
this factor, “not the self-assessment of the plaintiff,” and that “an employer is free to set its
8
own performance standards.” Br. of Appellee at 21–22 (first quoting Hawkins v. PepsiCo,
Inc., 203 F.3d 274, 280 (4th Cir. 2000); then quoting Beall v. Abbott Lab’ys, 130 F.3d 614,
619 (4th Cir. 1997)). It is not clear that Tactile is correct — although we have held that
we must focus on the employer’s perception in the context of the pretext stage, we have
not so held with respect to a plaintiff’s prima facie case. See, e.g., Hawkins, 203 F.3d at
279–80; Beall, 130 F.3d at 619–20; DeJarnette v. Corning Inc., 133 F.3d 293, 299 (4th
Cir. 1998). But even assuming that we must focus on just the employer’s perception at the
prima facie stage, a plaintiff may still introduce “evidence that demonstrates (or at least
creates a question of fact) that the proffered ‘expectation’ is not, in fact, legitimate at all.”
Warch v. Ohio Cas. Ins. Co., 435 F.3d 510, 517 (4th Cir. 2006).
Viewing the evidence in the light most favorable to Sempowich, there is an issue of
material fact as to whether Tactile’s asserted expectations were legitimate or genuine.
Sempowich presented substantial evidence that they were not. If an employer genuinely
believed that one of its employees was performing poorly on metrics the employer
perceives as critical (as Tactile claims here), it seems likely that it would at the very least
not rate the employee’s performance highly or give her awards, a salary raise, or an equity
grant. And yet there is evidence that Tactile (1) consistently rated Sempowich’s overall
performance highly (and notably, higher than the employee who it reassigned to her
position); (2) repeatedly gave her awards, including one for Sustained Excellence three
weeks before it told her that it would reassign her position; (3) told her that it would give
her a salary raise three weeks before it told her that it would reassign her position; and
9
(4) gave her a discretionary equity grant twelve days before it told her that it would reassign
her position.
We have previously held that similar evidence was sufficient to survive summary
judgment. In Haynes v. Waste Connections, we held that a plaintiff had “raise[d] the
reasonable inference . . . that he was performing at a satisfactory level” because there was
evidence that the employer had given the plaintiff bonuses for the period in question and
told him “mere weeks before his termination” that “everything looks good” and that he had
“nothing to worry about.” 922 F.3d at 225. As in Haynes, there is evidence that Tactile
signaled to Sempowich that it viewed her overall performance positively.
Tactile argues that here we cannot consider the performance evaluations, awards,
salary raise, or equity grant because they relate to Sempowich’s performance prior to the
time it reassigned her. But some of Sempowich’s evidence relates to events that occurred
three weeks or even twelve days before Tactile informed her of the reassignment. And the
two annual evaluations that Sempowich points to are Tactile’s most recent annual
evaluations of her; not only is there no more-recent negative annual evaluation for us to
consider, but there is no more-recent annual evaluation at all. Somewhat inexplicably,
Vice President Rishe nevertheless testified that he believed Sempowich’s supposed
weaknesses had been apparent “since 2015.” Given the awards, salary raise, and equity
grant that Tactile has given Sempowich since 2015, a reasonable factfinder could find this
testimony not credible. And if Tactile asserts that it reassigned Sempowich’s position due
to weaknesses she supposedly demonstrated throughout most of her tenure, it cannot
10
simultaneously argue that the court should ignore evidence about her performance during
that same period.
This does not mean that Sempowich is entitled to summary judgment or even that a
factfinder will ultimately find in her favor on the disparate treatment claims. Our holding
is simple — a court cannot grant a party summary judgment when there are genuine issues
of material fact, and here the record reveals factual disputes as to one of the key elements
of Sempowich’s prima facie case.
B.
The record is similarly replete with genuine issues of material fact that go to the
heart of the pretext issue. The district court erred in analyzing pretext not only by failing
to account for those disputes but also by incorrectly applying the same-actor inference. 2
First, the district court erred in holding that there is no genuine issue of material fact
as to pretext. “[T]o show pretext, a plaintiff may show that an employer’s proffered
nondiscriminatory reasons for the termination are inconsistent over time, false, or based on
2
Sempowich also argues that the district court incorrectly applied the pretext-plus
standard that the Supreme Court abrogated in Reeves v. Sanderson Plumbing Products,
Inc., 530 U.S. 133 (2000). In Reeves, the Supreme Court held that “[i]n appropriate
circumstances, the trier of fact can reasonably infer” pretext “from the falsity of the
[employer’s] explanation,” but that there may be instances in which such evidence is
insufficient, for example, “if the record conclusively revealed some other,
nondiscriminatory reason for the employer’s decision.” Id. at 147–48. The record is
unclear as to whether the district court failed to follow Reeves. But regardless, the district
court erred in holding that Sempowich could not rely solely on the falsity of Tactile’s
articulated explanation to show pretext. This is so because this is not a case in which “the
record conclusively revealed some other, nondiscriminatory reason for the employer’s
decision.” Id. at 148. As a result, we need not address other evidence that Sempowich
proffers to attempt to show a discriminatory motive.
11
mistakes of fact.” Haynes, 922 F.3d at 225. “Once the plaintiff offers such circumstantial
evidence, the case must be decided by a trier of fact and cannot be resolved on summary
judgment.” Id. Here, Sempowich has introduced a good deal of evidence suggesting that
Tactile’s explanations for its decisions were false or inconsistent over time. Much of this
evidence has already been discussed above in considering Sempowich’s prima facie case.
But she has also introduced other evidence that supports her assertion of pretext. For
example, the fact that Tactile replaced her with Seeling is certainly evidence of pretext.
This is so because a jury might well conclude it unlikely that an employer who reassigned
an employee solely because it believed that she performed poorly would replace her with
an employee whose performance it consistently rated as worse.
Sempowich has also introduced evidence that challenges the accuracy of the
statistics Tactile used to measure its chosen performance standards. Sempowich testified
that Tactile removed Maryland and part of Virginia from her region in January 2017, even
though she had previously told Vice President Rishe that “most of the Region’s significant
sales growth over the next two years would likely come from [those] territories.” And yet
Tactile’s year-over-year growth statistics may have failed to account for this external
factor. See Miles v. Dell, Inc., 429 F.3d 480, 491 (4th Cir. 2005) (observing, in a different
statutory context, that a rational jury could find that by reducing an employee’s sales
territory and increasing her quotas, the employer’s actions “set her up for the failures that
he later used to make the case for her termination”). The same logic applies here — an
employer may be free to choose its own performance standards, but it cannot measure those
12
standards with distorted data that fails to account for factors over which the plaintiff had
no control. 3
Tactile argues that none of this evidence shows that its stated reasons were false or
inconsistent, but rather merely reflects that Sempowich disagrees with the usefulness of its
chosen performance standards. Tactile points out that in Hawkins v. PepsiCo, Inc., we held
that a plaintiff must offer evidence that an employer’s assessment is “dishonest or not the
real reason for her termination,” rather than merely “dispute[] the merits of [the
employer’s] evaluations.” 203 F.3d at 280. It is true that courts must defer to the
company’s business judgment with regard to legitimate criteria it chooses to measure
successful employee performance. Id. We are not free to substitute criteria of our own.
But Sempowich has done more than challenge the criteria or merits of Tactile’s
evaluations. Sempowich has done what the plaintiff in Hawkins failed to do — “supply
evidence that [her employer] actually believed her performance was good.” Id. at 279(emphasis added). This evidence is the employer’s own words and actions — the
3
Sempowich also offered an expert report, and later a supplemental declaration, by
a certified public accountant who “investigate[d] what is actually being measured by”
Tactile’s year-over-year growth statistics. The district court excluded both the report and
declaration, holding that the report was not relevant and that Sempowich had not previously
disclosed the opinions laid out in the declaration. The court abused its discretion in doing
so. The report is clearly relevant because it could help a factfinder understand the accuracy
of Tactile’s statistics — in the report, the expert stated that Tactile’s statistics “did not
isolate and track any particular action over which a Regional Sales Manager could
reasonably be expected to exert control.” And Sempowich did previously disclose the
opinions in the declaration by outlining them in the earlier report, in which the expert
“opine[d] on whether Tactile’s year-over-year growth statistics are reproducible and
statistically valid” by stating that, “[d]espite working with several different types of reports
generated by Tactile, [she] was unable to reproduce the statistics shown in Exhibit 38.”
13
performance ratings, awards, salary raise, and equity grant. Each of these pieces of
evidence indicates that Tactile not only thought that Sempowich was performing
satisfactorily, but that her performance was of such a high quality that it deserved repeated
praise.
The district court also erred in applying the same-actor inference to dispose of
Sempowich’s claim. Under the same-actor inference, if the plaintiff’s “hirer and the firer
are the same individual and the termination of employment occurs within a relatively short
time span following the hiring, a strong inference exists that discrimination was not a
determining factor.” Proud v. Stone, 945 F.2d 796, 797 (4th Cir. 1991) (emphasis added).
But Rishe did not reassign Sempowich “within a relatively short time span” after he rehired
her — far from it. In Proud, the time span was less than six months. Id. at 798. Here,
Rishe reassigned Sempowich approximately eight years after he rehired her and four years
after he promoted her. Moreover, there is a genuine issue of material fact as to whether
Rishe rehired and promoted Sempowich under protest: although Rishe ultimately approved
rehiring Sempowich, she testified that he told her that he was “not in favor” of doing so.
And when Rishe learned that Sempowich wanted to be promoted to regional sales manager,
he told her that he “didn’t think [she] wanted to get into management.” Under these
circumstances, the same-actor inference cannot support a grant of summary judgment to
the defendant.
14
Because the record is replete with genuine issues of material fact as to both the prima
facie case and pretext, we vacate the grant of summary judgment on the disparate treatment
claims and remand for further proceedings consistent with this opinion. 4
III.
Sempowich also claimed that Tactile violated Title VII by retaliating against her for
submitting her discrimination complaint. To establish a prima facie case of retaliation
under the burden-shifting framework, a plaintiff must show: “(i) ‘that [she] engaged in
protected activity,’ (ii) ‘that [her employer] took adverse action against [her],’ and
(iii) ‘that a causal relationship existed between the protected activity and the adverse
employment activity.’” Foster v. Univ. of Md.-E. Shore, 787 F.3d 243, 250 (4th Cir. 2015)
(alterations in original) (quoting Price v. Thompson, 380 F.3d 209, 212 (4th Cir. 2004)).
The burden then shifts to the employer to demonstrate that “its purportedly retaliatory
action was in fact the result of a legitimate non-retaliatory reason.” Id. If the employer
does so, the burden shifts back to the plaintiff to show that “the employer’s purported
nonretaliatory reasons ‘were not its true reasons, but were a pretext for discrimination.’”
Id. (quoting Hill, 354 F.3d at 285).
4
The district court also granted Tactile’s motion for summary judgment on
Sempowich’s state law wrongful termination claim “for the same reason” as her Title VII
disparate treatment claims. Because we vacate the grant of summary judgment on the Title
VII disparate treatment claims, we also vacate the district court’s holding as to the state
law wrongful termination claim and remand for further proceedings consistent with this
opinion. We need not reach aspects of the state law claim that the district court did not
address. See Hulsey v. Cisa, 947 F.3d 246, 252 (4th Cir. 2020) (“It is the general rule, of
course, that a federal appellate court does not consider an issue not passed upon below,”
especially if doing so “would require extensive analysis of issues never addressed by the
district court.” (quoting Singleton v. Wulff, 428 U.S. 106, 120 (1976))).
15
As to the prima facie case, the district court assumed without deciding that
Sempowich engaged in protected activity and that Tactile took an adverse action against
her. But it then held that no rational jury could find that a causal relationship existed,
reasoning that (1) temporal proximity alone cannot establish a causal relationship; and (2)
no temporal proximity existed in Sempowich’s case. The court erred on both counts.
First, the court erred by holding that temporal proximity alone cannot establish a
causal relationship. We have made abundantly clear that temporal proximity suffices to
show a causal relationship. We explained this in Strothers v. City of Laurel, 895 F.3d 317(4th Cir. 2018). A plaintiff may establish a causal relationship “simply by showing that
(1) the employer either understood or should have understood the employee to be engaged
in protected activity and (2) the employer took adverse action against the employee soon
after becoming aware of such activity.” Id. at 336 (emphasis added).
Second, the district court erred by holding that there was not temporal proximity in
Sempowich’s case. The court reasoned that, because Vice President Rishe told Sempowich
on February 12 that Tactile would reassign her region, and Sempowich did not submit her
internal discrimination complaint until February 22, Tactile’s adverse actions could not
have been caused by Sempowich’s internal complaint. But there is a genuine issue of
material fact as to whether Rishe made clear on February 12 that her employment with
Tactile would end if she did not accept the reassignment. It was not until March 23 —
about a month after Sempowich submitted her internal complaint — that Tactile stated that,
if she did not accept the offer of reassignment, her “employment with Tactile [would] end
effective March 30.”
16
Tactile relies largely on Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299 (4th
Cir. 2006), to assert that there is no temporal proximity. In that case, we held that, “[w]here
timing is the only basis for a claim of retaliation, and gradual adverse job actions began
well before the plaintiff had ever engaged in any protected activity, an inference of
retaliation does not arise.” Id. at 309 (quoting Slattery v. Swiss Reins. Am. Corp., 248 F.3d
87, 95 (2d Cir. 2001)). But in Sempowich’s case, the adverse actions were far from
“gradual”; nor did they begin “well before” she engaged in protected activity. A reasonable
factfinder could find that after Sempowich submitted an internal complaint, Tactile decided
to take the more drastic approach of telling her that her employment would end if she failed
to accept the reassignment offer.
IV.
Unlike her Title VII claims, Sempowich’s final claim — an asserted violation of the
Equal Pay Act — does not turn on whether there was a genuine issue of material fact. On
the Equal Pay Act claim, there are few, if any, material facts in dispute. Rather, the claim
turns on the appropriate legal standard for determining whether an employer has violated
the Act.
To establish a prima facie case of an Equal Pay Act violation, a plaintiff must
demonstrate that “(1) the defendant-employer paid different wages to an employee of the
opposite sex (2) for equal work on jobs requiring equal skill, effort, and responsibility,
which jobs (3) all are performed under similar working conditions.” EEOC v. Md. Ins.
Admin., 879 F.3d 114, 120 (4th Cir. 2018).
17
In Sempowich’s case, the district court assumed without deciding that Sempowich
had demonstrated the second and third factors of her prima facie case. But it then held that
Sempowich had failed to demonstrate the first factor, even though neither party disputes
that, in 2015, 2016, and 2017, Tactile paid Seeling a higher annual base salary than
Sempowich. The court reasoned that, in 2016 and 2017, Sempowich earned more in sales
commissions than Seeling, such that when combining their salaries and commissions,
Sempowich earned more in total wages than Seeling in each of those two years.
This dispute thus centers on the proper metric for determining wage discrimination
under the Equal Pay Act. Sempowich argues that the proper metric is the rate at which an
employer pays the plaintiff. Amicus the Equal Employment Opportunity Commission
(EEOC) agrees. In contrast, Tactile argues that the proper metric is the employee’s total
wages.
The text of the Equal Pay Act unambiguously states that an employer may not
“discriminate . . . between employees on the basis of sex by paying wages to employees . . .
at a rate less than the rate at which he pays wages to employees of the opposite sex.”
29 U.S.C. § 206(d)(1) (emphasis added). This critical portion of the statute says nothing
about total wages; it places all the emphasis on wage rates. As a result, we need not even
18
decide whether we should defer to the EEOC’s interpretation of the statute — the statute
itself makes clear that wage rate is the proper metric. 5
The district court incorrectly stated that total wages is the proper metric under the
regulations. This error apparently arose from a misreading of the EEOC’s definition of the
term “wages.” The regulations define “wages” as including “all forms of compensation
. . . whether called wages, salary, profit sharing, expense account, monthly minimum,
bonus . . . or some other name.” 29 C.F.R. § 1620.10. As a result, the district court
reasoned that “wages” must include commissions, and thus that the proper metric is to
compare total wages. But this definition is beside the point. The term “wages” includes
commissions because, just as with salary, an employer could not pay commissions to a
female employee at a lower rate than a similarly situated male employee. This does not
mean that all types of remuneration should be combined into one lump sum when
comparing the earnings of a male and female employee.
Rather, the statute and the EEOC’s regulations make clear that an employer violates
the Equal Pay Act if it pays female employees at a rate less than that of similarly situated
male employees. A hypothetical illustrates the point: “As a matter of common sense, total
remuneration cannot be the proper point of comparison. If it were, an employer who pays
5
We note, however, that the EEOC’s regulations reach the same conclusion. Under
those regulations, “an employer would be prohibited from paying higher hourly rates to all
employees of one sex and then attempting to equalize the differential by periodically
paying employees of the opposite sex a bonus.” 29 C.F.R. § 1620.19. Although this
regulation refers to bonuses rather than commissions, the logic is the same: an employer
may not pay a female employee a lower salary than a similarly situated male employee and
then hope to avoid liability if the female employee works hard enough to earn extra money
through commissions or bonuses.
19
a woman $10 per hour and a man $20 per hour would not violate the [Equal Pay Act] . . .
as long as the woman negated the obvious disparity by working twice as many hours.”
Ebbert v. Nassau County, No. 5 Civ. 5445, 2009 WL 935812, at *3 (E.D.N.Y. Mar. 31,
2009).
V.
For the foregoing reasons, we vacate the judgment of the district court and remand
for further proceedings consistent with this opinion.
VACATED AND REMANDED
20