In a Unique Twist, Massachusetts Attorney General Takes Advantage of Pay Equity Affirmative Defense and Wins

Seyfarth Synopsis: In the Woodward case, Justice Sisitsky of the Massachusetts Superior Court issued an outright win for employers in the first decision to apply the affirmative defense of the Massachusetts Equal Pay Act (“MEPA”) since it took effect in 2018. The defendant in the case was an agency of the state and thus represented by the Attorney General’s Office (“AGO”) – the very entity responsible for guidance on MEPA.

Overview

Plaintiff brought MEPA and sex discrimination claims against the Massachusetts Department of Public Health, Board of Registration in Nursing (“DPH”), alleging she was improperly hired into the wrong “step” in the hiring pay scale and thus was underpaid relative to two male colleagues. On July 18, 2024, the Court granted summary judgment to DPH on both of Plaintiff’s claims, holding that DPH demonstrated it was entitled to the MEPA affirmative defense because it conducted a good faith self-evaluation of its pay practices within three years of commencement of the lawsuit and made reasonable progress toward eliminating pay disparities. Because the Court relied on the affirmative defense, it did not address whether the pay disparity was permissible based on differences in education, training or experience between Plaintiff and her male colleagues. Plaintiff appealed the decision.

MEPA Affirmative Defense

The MEPA 2018 amendments created an affirmative defense to wage discrimination claims for an employer that (1) completed a self-evaluation of its pay practices that is “reasonable in detail and scope in light of the size of the employer” within the three years prior to commencement of the action; and (2) made “reasonable progress” toward eliminating pay differentials uncovered by the evaluation. This is a complete defense to liability.

AGO’s MEPA Guidance

The amendments to MEPA instructed the AGO to issue “regulations interpreting and applying” the statute. Instead of promulgating regulations, the AGO elected to issue an informal statement of its views regarding the statute. The Guidance is not binding on courts, and judges may disregard the AGO’s stated views, to the extent that they are unconvinced by the AGO’s reasoning.

One fascinating aspect of the Woodward decision is that the Court did not mention the Guidance  and the AGO did not rely on or refer to it in its brief. Plaintiff attempted to rely on it, unconvincingly.

Court’s Assessment of 3-Year Requirement

Plaintiff argued DPH’s analysis was not completed within three years before Plaintiff filed suit, relying on vague deposition testimony about when the analysis concluded. The Court concluded that lack of clarity benefitted DPH, noting that Plaintiff failed to point to any dispute of fact on timing. 

Court’s Assessment of Good Faith

In support of its good faith, DPH relied on 10-page guidelines it circulated before beginning its analysis.  Plaintiff attempted to rely on evidence concerning her background, her initial pay determination, the evaluation, and its results to challenge good faith, but the Court noted that “none of the evidenced cited suggests that [DPH] feigned the self-evaluation, manufactured its discoveries, or obscured its results, any of which may have indicated an absence of good faith,” Given the lack of any precedent analyzing the affirmative defense, the Court relied on a 1937 Massachusetts Supreme Judicial Court opinion holding that bad faith requires an intention to mislead.  
The Court did not review or discuss the factors set forth in the AGO Guidance, including whether the evaluation included a reasonable number of jobs and employees or was reasonably sophisticated.

Court’s Assessment of Reasonable Progress

As to reasonable progress toward eliminating disparities, the Court noted that DPH’s analysis identified seven individuals for pay increases and proposed the necessary adjustments.  The record was not clear as to whether the increases were actually implemented, although DPH alleged they were.  The Court did not rely on that but instead concluded DPH’s mere proposal of increases alone “constituted reasonable progress” within the meaning of MEPA and that Plaintiff failed her burden to demonstrate any genuine dispute as to whether reasonable progress was made. While not expressly relying on the fact that DPH was subject to funding approval requirements, the Court seemed to be influenced by that unique aspect of the case.  The Court did not discuss the AGO Guidance stating that reasonable progress depends in part on the size and resources of the employer, or that employers must eliminate wage disparities in a reasonable amount of time.

Recommendations for Employers

• Conduct pay audits under the protection of the attorney-client privilege -- this is not implicated by the Woodward decision but always a best practice
• Document the completion of any pay equity audit
• Despite the Court’s holding, implement increases to address identified pay disparities shortly after completing an analysis -- preferably within six months, if feasible, depending on the circumstances
• Continue to track MEPA developments. This is a busy month for pay equity – see our earlier discussion about the pay transparency and reporting law that was signed by the Governor on July 31, 2024.  The pay transparency requirements will take effect July 31, 2025