Trevor Schleicher v. Preferred Solutions ( 2016 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 16a0183p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
TREVOR J. SCHLEICHER, ┐
Plaintiff-Appellant, │
│
│
v. > No. 15-1716
│
│
PREFERRED SOLUTIONS, INC., │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:14-cv-10729—Paul D. Borman, District Judge.
Argued: March 9, 2016
Decided and Filed: August 2, 2016
Before: DAUGHTREY, MOORE, and STRANCH, Circuit Judges.
_________________
COUNSEL
ARGUED: Elisabeth A. Gusfa, STERLING ATTORNEYS AT LAW, P.C., Bloomfield Hills,
Michigan, for Appellant. David M. Cessante, CLARK HILL PLC, Detroit, Michigan, for
Appellee. ON BRIEF: Elisabeth A. Gusfa, Raymond J. Sterling, James C. Baker, STERLING
ATTORNEYS AT LAW, P.C., Bloomfield Hills, Michigan, for Appellant. David M. Cessante,
Ellen E. Hoeppner, CLARK HILL PLC, Detroit, Michigan, for Appellee.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. Between 2009 and 2013, Trevor Schleicher
worked for Preferred Solutions, Inc. (“Preferred”), a Michigan-based company that provides
staffing for corporate clients. With his co-worker Susan Piotrowski, Schleicher led Preferred’s
1
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 2
healthcare information technology staffing group. Schleicher and Piotrowski performed the
same job, had the same responsibilities, and each earned a share of the profits they collectively
generated. However, they asked Preferred’s CEO, Marie Seipenko, to be paid pursuant to
different compensation models: Schleicher received 20% of the group’s profit pool, while
Piotrowski received a $100,000 base salary plus a 10% draw from the profit pool. This worked
out well for Schleicher: between 2009 and 2013, he outearned Piotrowski by $694,159.38.
However, he also had a number of disagreements with Seipenko and other Preferred employees.
In 2013, Seipenko modified Schleicher’s compensation model so that it matched Piotrowski’s.
From that point onward, he received a $100,000 salary and 10% of the profit pool. At the end of
that year, Seipenko terminated Schleicher.
Schleicher sued Preferred under the Equal Pay Act (“EPA”), alleging that Preferred
violated the statute by paying him more than Piotrowski for three years, then lowering his
compensation so that it matched Piotrowski’s. The district court granted summary judgment to
Preferred, finding that it had conclusively established that sex played no part in the pay
differential between Schleicher and Piotrowski. For the reasons set forth below, we AFFIRM the
district court’s entry of summary judgment in favor of Preferred.
I. FACTS AND PROCEDURE
A. Facts
1. Seipenko hires Piotrowski and her former co-worker Schleicher.
Preferred is a Michigan-based company that provides staffing services for corporate
clients. R. 39-5 (Company Highlights/History at 1) (Page ID #537). John Butkovich founded
Preferred in 1993. R. 39-2 (Seipenko Dep. at 6:24–7:10) (Page ID #385). He now sits on the
company’s board of directors; his daughter, Seipenko, has been Preferred’s President and CEO
since 2002. Id. at 8:1–9:15 (Page ID #386).
In December 2006, Seipenko hired Piotrowski, who came onboard as a vice president. R.
39-3 (Piotrowski Dep. at 20:7–11) (Page ID #456). Around January 2007, Piotrowski introduced
Seipenko to Schleicher, her former co-worker. R. 39-2 (Seipenko Dep. at 23:6–10) (Page ID
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 3
#389); R. 39-3 (Piotrowski Dep. at 19:4–6) (Page ID #456). Piotrowski told Seipenko that
Schleicher had done well “selling healthcare IT staffing services.” R. 39-3 (Piotrowski Dep. at
19:23–20:1) (Page ID #456). Seipenko and Schleicher had a lunch meeting in January 2007,
where they discussed Schleicher’s work in general terms. R. 39-2 (Seipenko Dep. at 22:7–23:8)
(Page ID #389).
Until 2008, Preferred was “a general IT staffing company.” R. 39-2 (Seipenko Dep. at
11:13–22) (Page ID #386). Seipenko had tried (unsuccessfully) to move Preferred into several
niche markets. Id. at 11:20–12:7) (Page ID #386). Around April 2008, Seipenko decided to
move Preferred into a new niche: healthcare information technology, and “specifically training
in go-live business for electronic medical records.” Id. at 18:3–7 (Page ID #388). The parties
dispute what role Schleicher played in Preferred’s decision to pursue this line of business. R. 51
(5/18/15 Op. and Order at 3–4) (Page ID #1298–99).
In 2009, Seipenko hired Schleicher and one of his co-workers, Katrina Purdy. R. 51
(5/18/15 Op. and Order at 4) (Page ID #1299). Schleicher worked directly with Piotrowski:
Seipenko wanted them to “co-sell[] and co-lead[] activities and growth targeted at the health
information technology space.” R. 39-3 (Piotrowski Dep. at 49:5–10) (Page ID #464).
Schleicher and Piotrowski were Preferred’s only salespeople specializing in this health IT
market. R. 39-7 (Schleicher Dep. at 73:18–21) (Page ID #579). Both “perform[ed] the same
job” at Preferred. R. 39-3 (Seipenko Dep. at 70:3–9) (Page ID #401).
2. Schleicher and Piotrowski select different compensation models.
When she first joined Preferred, Piotrowski received a $120,000 annual salary, plus a
10% commission rate. R. 39-3 (Piotrowski Dep. at 46:3–10) (Page ID #463). Piotrowski’s
commissions were measured as the “gross profit that [she] produced in [her] business unit.” Id.
at 46:8–10 (Page ID #463). Sometime thereafter—but before Schleicher joined Preferred—
Piotrowski elected to switch to a different compensation model: a $100,000 salary plus 20%
commissions. R. 39-2 (Seipenko Dep. at 77:9–78:1) (Page ID #403); R. 39-3 (Piotrowski Dep.
at 46:12–15) (Page ID #463).
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When Schleicher joined Preferred, he negotiated with Seipenko to create a new
compensation model that differed from Piotrowski’s in two respects. R. 39-2 (Seipenko Dep. at
69:7–12) (Page ID #401). First, Schleicher wanted to be paid directly from a profit pool, instead
of earning income on a commissions basis. Id.; R. 39-7 (Schleicher Dep. at 75:2–77:17) (Page
ID #579–80). The pool would consist of the “collective gross profit produced by [Schleicher]
and [Piotrowski], less direct costs for conducting the business.” R. 39-3 (Piotrowski Dep. at
47:8–11) (Page ID #463). Pursuant to the profit-pool model, Schleicher would receive a set
draw of the profits that he and Piotrowski collectively generated in their healthcare IT sales unit,
“regardless of what an individual did in any particular quarter.” R. 39-7 (Schleicher Dep. at
80:1–81:13) (Page ID #580–81); R. 51 (5/18/15 Op. and Order at 6–7) (Page ID #1301–02).
Second, Schleicher wanted to be paid exclusively from the profit pool, with no salary. Id. at
76:14–77:4 (Page ID #579–80). Schleicher and Seipenko settled on the following model:
Schleicher would receive 20% of the profit pool “with no guaranteed base salary.” R. 51
(5/18/15 Op. and Order at 7) (Page ID #1302).
Because Seipenko agreed to Schleicher’s profit-pool proposal—and because the profit
pool would consist of profits generated exclusively by Schleicher and Piotrowski—Seipenko
modified Piotrowski’s compensation model. R. 39-3 (Piotrowski Dep. at 46:24–47:5 (Page ID
#463). Seipenko offered Piotrowski the same compensation model that Schleicher had
negotiated. R. 39-2 (Seipenko Dep. at 237:22–25) (Page ID #443). Piotrowski declined, opting
instead for a $100,000 base salary plus a 10% draw from the profit pool. Id. at 78:2–5, 238:1–2)
(Page ID #403, 443); R. 39-3 (Piotrowski Dep. at 47:1–7, 140:23–141:6) (Page ID #463, 486–
87). Schleicher “talked openly with” Piotrowski about his profit-pool-only compensation model;
by his account, Piotrowski “wouldn’t touch it with a 10-foot pole” because it was risky. R. 39-7
(Schleicher Dep. at 81:11–17) (Page ID #581).
At the time Schleicher and Piotrowski negotiated these different deals, Seipenko did not
“have any idea” which of them would end up making more money. R. 39-2 (Seipenko Dep. at
238:3–17) (Page ID #443). Neither party disputes that Schleicher made considerably more than
Piotrowski: between 2009 and 2013, Schleicher outearned her by $694,159.38. R. 43-10
(Earnings Chart) (Page ID #895). However, at no point during Schleicher’s tenure at Preferred
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 5
did Piotrowski complain to Seipenko or ask to change her compensation model. R. 39-3
(Seipenko Dep. at 120:18–121:16) (Page ID #481–82).
3. Seipenko modifies Schleicher’s compensation model after he has several
problems at Preferred.
Preferred’s healthcare IT staffing group did well after Schleicher joined the company.
The group generated $892,940.22 in revenue in the fourth quarter of 2009; in the following
years, the group brought in $13.1 million (2011), $16.6 million (2012), and $11.4 million (2013).
R. 51 (5/18/15 Op. and Order at 8) (Page ID #1303).
Schleicher, however, had problems with a number of different people at Preferred.
Although the parties dispute many of the details, R. 51 (5/18/15 Op. and Order at 9–10) (Page ID
#1304–05), Schleicher sent Seipenko two emails in which he acknowledged these issues. In the
first, sent on October 8, 2012, Schleicher wrote:
First, I want to tell you again that I feel terrible that I’m at the root of any
problems for you or anyone else in the company. It sickens me to be tied to
anything negative relative to my efforts here at Preferred. I’m 100% committed
to getting back on the same page again with you, am wide open to constructive
criticism, will be accountable for my actions, and will work very hard to be a
better employee, person, and colleague!
R. 39-10 (10/8/12 Email from Schleicher to Seipenko) (Page ID #657). Shortly thereafter,
Schleicher and Seipenko got into a major dispute over a project scheduled to take place at one of
Preferred’s New Jersey-based clients right around the time of Hurricane Sandy. R. 39-2
(Seipenko Dep. at 204:13–209:25) (Page ID #435–36); R. 51 (5/18/15 Op. and Order at 10–11)
(Page ID #1306). Although the parties dispute the sequence of events, Schleicher evidently
disobeyed several direct orders from Seipenko. R. 51 (5/18/15 Op. and Order at 10–11) (Page
ID #1305–06). That incident prompted another email from Schleicher:
I could have never predicted or imagined when I decided to come work for you
how much resistance I would get from you every step of the way.
....
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 6
. . . I have given you everything I have with nothing but the best intentions
at heart. I do not believe there is a justifiable reason to let me go and I hope that
is not what you want to do.
R. 39-12 (10/30/12 Email from Schleicher to Seipenko at 1–2) (Page ID #661–62).
The parties also dispute Schleicher’s sales performance. R. 51 (5/18/15 Op. and Order at
8–9) (Page ID #1304). Seipenko recalls that Schleicher’s co-workers complained that Schleicher
“was not pulling his weight in sales,” and that Schleicher told Seipenko that Piotrowski should
shoulder more sales responsibility. R. 39-2 (Seipenko Dep. at 107:16–18, 137:20–138:5) (Page
ID #410, 418). Schleicher counters that his performance was not deficient; further, he claims
that Seipenko made several derogatory, gender-based remarks to him during his time at Preferred
(e.g., “[Y]ou might be better suited in an office with more men”). R. 39-7 (Schleicher Dep. at
253:22–255:21) (Page ID #624).
On May 3, 2013, Seipenko told Schleicher that she was changing his compensation plan:
from that point forward, his compensation would be calculated similar to that of Piotrowski
($100,000 salary plus 10% of the profit pool). R. 39-2 (Seipenko Dep. at 92:19–23) (Page ID
#406). By Seipenko’s account, she changed Schleicher’s pay structure “to motivate him to sell.”
Id. at 94:19–22 (Page ID #407). Schleicher recalls that, during this May 3 meeting, Seipenko
“told [him] that she was not happy that [he] made more money than” Piotrowski and that she
wanted to “equalize” their compensation. R. 39-7 (Schleicher Dep. at 226:20–227:3) (Page ID
#617).
4. Seipenko terminates Schleicher.
The discord between Schleicher and Seipenko grew in 2013. R. 51 (5/18/15 Op. and
Order at 13) (Page ID #1308). On December 2, 2013—after Schleicher evidently disobeyed a
direct order from Seipenko regarding his supervision of a Preferred employee—Seipenko
terminated Schleicher. Id. at 14 (Page ID #1309).
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 7
B. Procedural History
On February 17, 2014, Schleicher filed a four-count complaint against Preferred, alleging
that:
1. Preferred had violated the EPA;
2. Preferred had violated Michigan’s Elliott-Larsen Civil Rights Act;
3. Preferred had breached its employment contract with Schleicher; and
4. Preferred was unjustly enriched as a result of Schleicher’s work at Preferred.
R. 1 (Compl. at 6–10) (Page ID #6–10). Preferred moved for summary judgment on all four of
Schleicher’s claims on January 23, 2015. R. 39 (Def.’s Mot. for Summ. J.) (Page ID #343).
Schleicher responded on February 13, 2015. R. 43 (Pltf.’s Br. in Opp. to Def.’s Mot. for Summ.
J.) (Page ID #762).
On May 18, 2015, the district court issued an order (1) granting Preferred’s motion for
summary judgment on Schleicher’s EPA claim and (2) declining to exercise supplemental
jurisdiction over Schleicher’s state-law claims. R. 51 (5/18/15 Op. and Order at 1) (Page ID
#1296). Because the district court reasoned that Preferred had “acquiesce[d] that Plaintiff ha[d]
established a prima facie case under the EPA,” it focused on whether Preferred had rebutted that
case with an affirmative defense. R. 51 (5/18/15 Op. and Order at 19) (Page ID #1314). It
concluded that “Piotrowski’s compensation differential was based on a factor other than sex—
namely personal choice regarding the risk associated with the compensation structure.” Id. at 21
(Page ID #1316). Finding no genuine dispute of material fact “that sex provided no reason for”
this differential, the district court dismissed Schleicher’s EPA claim with prejudice. Id. at 23–24
(Page ID #1318–19).
Schleicher timely appealed the district court’s grant of summary judgment in favor of
Preferred on his EPA claim, but not its dismissal of his state-law claims. R. 59 (Notice of
Appeal at 1–2) (Page ID #1346–47).
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II. ANALYSIS
A. Standard of Review
We review a district court’s grant of summary judgment de novo. Michael v. City of Troy
Police Dep’t, 808 F.3d 304, 307 (6th Cir. 2015). “Summary judgment is appropriate if, viewing
the facts and reasonable inferences in the light most favorable to the nonmoving party, there are
no genuine issues of material fact for trial.” Shadrick v. Hopkins Cty., 805 F.3d 724, 736 (6th
Cir. 2015).
B. Schleicher’s EPA Claim
“The EPA prohibits employers from paying an employee at a rate less than that paid to an
employee of the opposite sex for performing equal work.” Beck-Wilson v. Principi, 441 F.3d
353, 359 (6th Cir. 2006). Schleicher makes a two-part EPA argument. First, he claims that
Preferred violated the EPA by “maintaining the pay disparity” between Schleicher and
Piotrowski for more than three years. Appellant Br. at 21. Second, he argues that Preferred
violated the EPA again when it tried to cure this pay disparity by lowering Schleicher’s
compensation to match Piotrowski’s. Id. at 31. The second part of Schleicher’s argument
depends on the first: the EPA forbids an employer from lowering an employee’s wages only if it
does so to remedy an underlying EPA violation. See 29 U.S.C. § 206(d)(1). If the first part of
Schleicher’s argument fails, the second fails as well.
We have read the EPA to establish a three-step burden-shifting scheme:
First, “[i]n order to establish a prima facie case of wage discrimination under the EPA,
plaintiffs must show that an employer pays different wages to employees of opposite sexes ‘for
equal work on jobs the performance of which requires equal skill, effort, and responsibility, and
which are performed under similar working conditions.’” Beck-Wilson, 441 F.3d at 359 (quoting
Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974)). “Unlike the showing required
under Title VII’s disparate treatment theory, proof of discriminatory intent is not required to
establish a prima facie case under the Equal Pay Act.” Id. at 360 (quoting Peters v. City of
Shreveport, 818 F.2d 1148, 1153 (5th Cir. 1987), abrogated on other grounds by Price
Waterhouse v. Hopkins, 490 U.S. 228 (1989)).
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 9
Second, “[o]nce the plaintiff establishes a prima facie case, the defendant must ‘prove’
that the wage differential is justified under one of the four affirmative defenses set forth under
§ 206(d)(1) of the Equal Pay Act: (1) a seniority system; (2) a merit system; (3) a system which
measures earnings by quantity or quality of production; or (4) any other factor other than sex.”
Buntin v. Breathitt Cty. Bd. of Educ., 134 F.3d 796, 799 (6th Cir. 1998).1 Importantly, “a
defendant bears both the burden of persuasion and production on its affirmative defenses.”
Beck-Wilson, 441 F.3d at 364–65.
Finally, if an EPA defendant proves an affirmative defense, an EPA plaintiff “must come
forward with evidence demonstrating the existence of a triable issue of fact” regarding pretext.
Timmer v. Michigan Dep’t of Commerce, 104 F.3d 833, 844 (6th Cir. 1997); accord Balmer v.
HCA, Inc., 423 F.3d 606, 613 (6th Cir. 2005), abrogated on other grounds by Fox v. Vice,
563 U.S. 826 (2011). Put another way: an “EPA plaintiff bears the burden of producing
evidence of pretext solely where a reasonable jury viewing the defendant’s evidence could find
only for the defendant.” Buntin, 134 F.3d at 800 n.7. Accordingly, “[i]n order ‘to survive [a]
defendant’s motion for [summary judgment], the EPA plaintiff need not set forth evidence from
which a jury could infer that the employer’s proffered reason for the wage differential is
pretextual.’” Beck-Wilson, 441 F.3d at 365 (quoting Buntin, 134 F.3d at 799). “Rather, as the
party who bears the burden of persuasion, the defendant who makes a motion [for summary
judgment] must demonstrate that there is no genuine issue as to whether the difference in pay is
due to a factor other than sex.” Id.
Applying these principles, we may uphold the district court’s grant of summary judgment
“only if the record shows that [Preferred] established the [“factor other than sex”] defense so
clearly that no rational jury could have found to the contrary.” Id. (quoting Buntin, 523 F.3d at
1
Schleicher contends that “[t]he EPA is a strict liability statute” because a plaintiff need not show
intentional discrimination to establish a prima facie case. Appellant Br. at 20–21. He is mistaken. Although intent
is not an element of the first step of proving an EPA violation, the EPA makes plain that “not all differences in pay
for equal work constitute violations of the Act.” Timmer v. Michigan Dep’t of Commerce, 104 F.3d 833, 843 (6th
Cir. 1997). Thus, an employer’s intent is relevant under the EPA’s second step, because an employer-defendant can
defeat a claim of discrimination by proving any of the EPA’s four statutorily enumerated affirmative defenses.
29 U.S.C. § 206(d)(1). An employer’s intent is also relevant under the EPA’s third step, which addresses pretext.
See Timmer, 104 F.3d at 844. Accordingly, under the EPA, an employer’s intent does matter—not at the first step,
but certainly at the second and third.
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 10
800). Such is the case here. The district court held—and Preferred does not appear to dispute—
that Schleicher established a prima facie EPA case. We agree: Schleicher has satisfied the
EPA’s first step because he has shown that Preferred paid him $694,159.38 more than Piotrowski
for performing the same work. Beck-Wilson, 441 F.3d at 359. However, Preferred has proven
that this pay disparity was due to a “factor other than sex”—namely, when given both pay
options, Piotrowski chose to be compensated pursuant to the $100,000 salary plus 10% draw
model. Further, Schleicher’s claims of pretext are unconvincing.
Accordingly, both parts of Schleicher’s EPA argument fail. First, Preferred did not
violate the EPA when it paid Schleicher more than Piotrowski. Nor did it violate the EPA when
it equalized Schleicher’s and Piotrowski’s compensation models, because there was no
underlying EPA violation to “cure.” The district court properly entered summary judgment in
favor of Preferred.
1. Preferred did not violate the EPA when it paid Schleicher more than
Piotrowski between 2009 and 2013.
The first part of Schleicher’s argument—that Preferred violated the EPA when it paid
him more than Piotrowski—is somewhat ambiguous. He argues that even if Preferred did not
violate the EPA in 2009 when it hired Schleicher and agreed to his 20% profit-pool-only
compensation model, the resulting disparity between Schleicher’s income and Piotrowski’s
“became violative of the EPA by 2013” (or perhaps sometime between 2009 and 2013).
Appellant Br. at 21; see id. at 4 (“A facially neutral pay model may become violative of the EPA
when the employer maintains the pay differential over an extended time.”). Schleicher contends
that Seipenko knew that she was paying Schleicher substantially more than Piotrowski. Id. at 22.
By maintaining that disparity quarter after quarter, Schleicher argues, Preferred violated the
EPA. Id. at 22–24.
We disagree. Schleicher has established a prima facie case under the EPA: Preferred
paid Schleicher $694,159.38 more than Piotrowski between 2009 and 2013, which is enough to
satisfy the EPA’s first step. See Beck-Wilson, 441 F.3d at 359. However, whether Preferred
violated the EPA turns on two additional questions. First, can Preferred prove that this pay
disparity was due to any of the four grounds that the EPA lists as affirmative defenses? Second,
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 11
assuming that Preferred can make this showing, is there a fact dispute as to whether its
justifications are pretextual? We conclude that the answer to the first question is “yes,” and the
answer to the second is “no.”
a. Preferred paid Schleicher more than Piotrowski because of a
“factor other than sex.”
First, the record in this case is clear that Preferred paid Schleicher more than Piotrowski
because of a “factor other than sex,” 29 U.S.C. § 206(d)(1): Piotrowski chose to be compensated
pursuant to her $100,000 salary plus 10% profit-pool draw model rather than the model that
Schleicher chose.
The EPA’s fourth, “factor other than sex” defense was intended to be “a broad principle.”
Bence v. Detroit Health Corp., 712 F.2d 1024, 1030 (6th Cir. 1983) (quoting 109 Cong. Rec.
9203 (1963) (statement of Rep. Griffin)). It is not, however, a “blanket” protection: it “does not
include literally any other factor, but a factor that, at a minimum, was adopted for a legitimate
business reason.” EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1988). We strictly
interpret this defense: “[U]nless the factor of sex provides no part of the basis for the wage
differential, the requirements [for the defense] are not met.” Beck-Wilson, 441 F.3d at 365
(quoting Brennan v. Owensboro-Daviess Cty. Hosp., 523 F.2d 1013, 1031 (6th Cir. 1975)); see
also Timmer, 104 F.3d at 843 (“[T]he burden of proving that a factor other than sex is the basis
for a wage differential is a heavy one. . . . If proven, though, the defendant is absolved of liability
as a matter of law.”).
Even viewing the evidence in the light most favorable to Schleicher, we conclude that sex
played no role in Preferred’s decision to pay Schleicher more than Piotrowski. To begin,
Preferred adopted a profit-pool model because Schleicher negotiated with Seipenko to create that
compensation plan. Schleicher points to Piotrowski’s statement during her deposition that she
“didn’t have the choice” to switch back to a commissions-based model after Preferred
implemented the profit pool. Appellant Br. at 8 (quoting R. 39-3 (Piotrowski Dep. at 47:1–5)
(Page ID #463)). That concession, Schleicher claims, “directly conflicts with” Preferred’s theory
that Piotrowski earned less than Schleicher because of her “personal choice.” Id. at 9. Not so.
The relevant “personal choice” in this case is different: Seipenko offered Piotrowski the exact
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 12
same compensation model (a 20% profit-pool draw) that Schleicher received, and Piotrowski
declined that offer. Indeed, Piotrowski testified that at no point during Schleicher’s tenure with
Preferred did she ever want to alter her compensation model to match Schleicher’s model.
Moreover, Schleicher knew that Piotrowski did not want to be paid on a profit-pool-only basis
because she thought it was risky.
Schleicher tries to analogize his case to our decision in Bence v. Detroit Health
Corporation, but that case is inapposite. Defendant Detroit Health Corporation ran health spas,
“each of which was divided into a men’s division and a women’s division which operated on
alternate days.” Bence, 712 F.2d at 1025. Male managers ran the men’s division, and female
managers ran the women’s division. Id. at 1025–26. Because Detroit Health Corporation’s
“gross volume of membership sales to women was 50% higher than the gross volume of
membership sales to men,” id. at 1026, it compensated its managers differently based on their
sex: “Male managers were paid 7.5% of the individual spa’s gross sales of memberships to men.
Female managers were paid 5% of gross sales of memberships to women. Male assistant
managers received 4.5% of gross sales to men. Female assistant managers received 3% of gross
sales to women.” Id.
Detroit Health Corporation attempted to defend its compensation scheme under the
EPA’s fourth affirmative defense, arguing that “a legitimate business policy of providing male
and female employees equal total remuneration” was a “factor other than sex.” Id. at 1029–31.
We rejected that defense, reasoning that “segregating male and female employees into men’s and
women’s departments . . . plus application of a lower commission rate only to those who sold
memberships to women effectively locked [Detroit Health Corporation’s] female employees, and
only female employees, into an inferior position regardless of their effort or productivity.” Id. at
1031.
Schleicher ignores two important differences between his case and Bence. First, Bence
involved a transparent example of sex-based pay discrimination. Detroit Health Corporation
paid its male managers (who worked in a male-only division) at a rate 50% higher than its
female managers (who worked in a separate, female-only division). It did so purportedly to
equalize compensation between its male and female managers. In Schleicher’s case, there is no
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evidence that sex played any role in Preferred’s decision to compensate Schleicher (a man) and
Piotrowski (a woman) pursuant to different compensation models. Second, the Bence plaintiffs
were never in a position to choose how they would be compensated: women received one
(lower) rate, while men received a different (higher) rate. R. 51 (5/18/15 Op. and Order at 22–
23) (Page ID #1317–18). In contrast, Preferred gave Schleicher and Piotrowski the option to
select the compensation model that suited them best. Piotrowski hedged her risk by selecting a
model that guaranteed her a $100,000 salary in exchange for a smaller (compared to Schleicher)
draw from the profit pool—her personal choice was clearly a “factor other than sex,” and it
explains why Schleicher outearned Piotrowski between 2009 and 2013. At bottom, Bence does
not help Schleicher.
We thus conclude that Preferred has carried its heavy burden of proving that the disparity
between Piotrowski’s and Schleicher’s pay was due to a “factor other than sex.” Neither party
disputes that Schleicher outearned Piotrowski during his time at Preferred. However, this
disparity arose because Schleicher convinced Seipenko to add a new profit-pool model, and the
disparity continued only because Piotrowski declined that model because she did not want to be
paid exclusively from the profit pool. Because Preferred has demonstrated that “the factor of sex
provide[d] no part of the basis for the wage differential” between Schleicher and Piotrowski, it
has established an affirmative defense to Schleicher’s prima facie EPA case. Beck-Wilson,
441 F.3d at 365 (quoting Owensboro-Daviess Cty., 523 F.2d at 1031).
b. Schleicher has not shown that Preferred’s proffered reasons for
maintaining the pay disparity are pretextual.
Because Preferred established an affirmative defense under 29 U.S.C. § 206(d)(1)(iv),
Schleicher must raise a genuine issue of fact that Preferred’s justification for paying him more
than Piotrowski is pretextual. See Buntin, 134 F.3d at 800 n.7. He has not done so.2 Because
this is a burden of production, not persuasion, Schleicher “need not set forth evidence from
2
Schleicher arguably waived many of his arguments about pretext in this case. He addressed pretext in
cursory fashion in his opposition to Preferred’s motion for summary judgment. R. 43 (Pltf.’s Br. in Opp. to Def.’s
Mot. for Summ. J. at 18) (Page ID #787). Indeed, the district court thought that Schleicher had introduced no
evidence of pretext. R. 51 (5/18/15 Op. and Order at 23) (Page ID #1318). However, in his briefing before the
district court, Schleicher alleged pretext and, in support of this argument, highlighted his success at Preferred and
listed several discriminatory comments that Seipenko allegedly made. R. 43 (Pltf.’s Br. in Opp. to Def.’s Mot. for
Summ. J. at 16–20) (Page ID #785–89). Moreover, Preferred has not raised a waiver argument.
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 14
which a jury could infer that [Preferred’s] proffered reason for the wage differential is
pretextual.” Beck-Wilson, 441 F.3d at 365 (quoting Buntin, 134 F.3d at 799). Even with this low
bar in Schleicher’s favor, he has not produced evidence of pretext sufficient to withstand
summary judgment.
In his brief on appeal, Schleicher lists several comments Seipenko allegedly made and
incidents that occurred at Preferred that Schleicher claims evidence pretext. Appellant Br. at 30–
31. Most relate to Seipenko’s decision to cut Schleicher’s pay in 2013, not her continued
maintenance of the pay disparity between Schleicher and Piotrowski from 2009 to 2013. Id.
Although Schleicher does provide three examples that seem to relate directly to the disparity
(and not the 2013 pay cut), all three are unavailing.
First, Schleicher claims that “Seipenko directed exclusionary comments toward” him
because he was a man. Id. at 30. He does not, however, explain why Seipenko’s alleged gender
animus caused her to pay him more than his female co-worker, Piotrowski. Second, Schleicher
argues in conclusory fashion that “[t]he nearly $700,000 disparity itself is evidence of pretext.”
Id. That is enough to establish a prima facie case under the EPA; it is non-responsive to
Preferred’s affirmative defense under § 206(d)(1)(iv). Finally, Schleicher repeats his claim that
Piotrowski had “no choice” when Preferred switched to the profit-pool compensation model. Id.
at 31. Again, this is irrelevant: the “choice” justifying Preferred’s affirmative defense is
Piotrowski’s decision to be paid a $100,000 salary plus 10% of the profit pool. At bottom,
Schleicher does not present any evidence suggesting that Preferred’s proffered reason for paying
him more than Piotrowski—that Piotrowski did not want to be paid under the same model as
Schleicher—is pretextual. Because Schleicher has produced no evidence raising a fact dispute
about Preferred’s “factor other than sex” defense, his claim that Preferred violated the EPA when
it paid him more than Piotrowski fails.
2. Preferred did not violate the EPA in 2013 when it modified Schleicher’s
compensation plan.
Schleicher also argues that Preferred violated the EPA when it changed his compensation
plan to match Piotrowski’s. This second part of his argument necessarily depends on the first
part. The EPA provides “[t]hat an employer who is paying a wage rate differential in violation
No. 15-1716 Schleicher v. Preferred Solutions, Inc. Page 15
of [§206(d)(1)] shall not, in order to comply with the provisions of this subsection, reduce the
wage rate of any employee.” 29 U.S.C. § 206(d)(1). “Under the express terms of the EPA, when
a prohibited sex-based wage differential has been proved, an employer can come into compliance
only by raising the wage rate of the lower paid sex.” 29 C.F.R. § 1620.25 (2016); see Corning
Glass Works, 417 U.S. at 207 (“[T]o remedy violations of the Act, ‘[t]he lower wage rate must
be increased to the level of the higher.’” (quoting H.R. Rep. No. 309, at 3 (1963))). Thus, an
employer violates the EPA by lowering an employee’s wages only if it does so to remedy an
underlying EPA violation.
That is not the case here. Because Preferred has proven its affirmative defense under
§ 206(d)(1), the fact that it changed Schleicher’s compensation plan to match Piotrowski’s is
irrelevant: there was no EPA violation to cure. Schleicher argues that “[b]y reducing
Schleicher’s commissions from 20% to 10%, the employer violated the plain terms of the EPA.”
Appellant Br. at 32. The plain terms of the EPA suggest otherwise: Preferred’s decision to cut
Schleicher’s “commissions” was not actionable discrimination because the underlying pay
disparity between Schleicher and Piotrowski did not violate the EPA. Thus, the second part of
Schleicher’s EPA argument also fails.
III. CONCLUSION
For the reasons set forth above, we AFFIRM the district court’s judgment in favor of
Preferred.