DOL Audit Results No Defense in Pay Discrimination Trial

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By Jay-Anne B. Casuga

An Iowa furniture maker can’t rely on the results of a Labor Department compliance audit to defend its pay practices during a sex discrimination trial, the Eighth Circuit affirmed April 3 ( Dindinger v. Allsteel, Inc. , 2017 BL 107720, 8th Cir., No. 16-1305, 4/3/17 ).

The issue of whether audit results from the DOL’s Office of Federal Contract Compliance Programs can be admitted as trial evidence in private employment discrimination litigation doesn’t appear often.

“We didn’t find any evidentiary rulings on point where the issue of admissibility for OFCCP audits had been addressed,” attorney Ann Brown of Ann Brown Legal in Cedar Rapids, Iowa, told Bloomberg BNA April 3. Brown is one of the lawyers representing three female managers who sued Allsteel Inc. for pay discrimination under the federal Equal Pay Act, Title VII of the 1964 Civil Rights Act and the Iowa Civil Rights Act.

But administrative findings by other government agencies have been found to be inadmissible in a number of cases, Brown said. The trial judge’s decision to exclude the OFCCP’s audit results in the Allsteel case because the results might unfairly prejudice a jury—which was upheld by the U.S. Court of Appeals for the Eighth Circuit—was in line with those findings, she said.

The Eighth Circuit largely affirmed a $204,000 jury award in favor of the employees and about $270,000 in attorneys’ fees. It sent back to the trial court an issue about whether the award of costs under Iowa law can include computer-aided research.

Representatives of Allsteel and the Equal Employment Opportunity Commission, which filed an amicus brief in the case, didn’t immediately respond to Bloomberg BNA’s April 3 requests for comment.

Audit Results Would Be ‘Unfairly Prejudicial.’

During scheduled compliance reviews, the OFCCP generally analyzes government contractors’ employment data, including compensation information, to uncover statistical indicators of discrimination.

Here, the OFCCP conducted a 2012 audit of Allsteel and ultimately issued a notice of compliance in that audit. The trial judge properly excluded the OFCCP’s findings under federal rules of evidence because they would have been “unfairly prejudicial” at trial, the Eighth Circuit said.

Allowing the results would have created a risk that a jury would rely on the OFCCP’s results instead of its own judgment as to whether the three female managers were paid less than men, the court said.

Additionally, the court said the OFCCP’s findings had limited value to prove or disprove the pay discrimination claims because the trial judge allowed Allsteel to offer evidence about the audit process in general, the type of data collected and analyzed, and conclusions made by company officials based on that data.

Economic Conditions Also Not a Defense

Furthermore, the Eighth Circuit rejected Allsteel’s argument that it should get a new trial. The company contended that the trial judge incorrectly instructed the jury that economic conditions can’t be used to explain pay differences between men and women.

The appeals court disagreed, explaining that the U.S. Supreme Court has previously held that employers can’t rely on market forces as a defense under the Equal Pay Act.

Even if economic conditions could justify a pay difference, the court said, Allsteel failed to offer evidence that the recession of the late 2000s, which resulted in company layoffs and a freeze on pay raises, caused female employees to be paid less than their male comparators.

The court also rejected Allsteel’s other arguments for a new trial, including one concerning the admission of testimony of other female employees who weren’t parties to the case but who also claimed they were paid less than men.

Judge Jane L. Kelly wrote the opinion, joined by Judges James B. Loken and Diana E. Murphy.

Brad J. Brady and Ann C. Gronlund of Brady & Preston in Cedar Rapids also represented the employees. Frances M. Haas and Frank B. Harty of Nyemaster Goode in Cedar Rapids represented Allsteel.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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