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In Lauderdale v. Illinois Department of Human Services, a female, state of Illinois employee, filed suit under Title VII, Section 1983 and the Equal Pay Act claiming her pay disparity with a male co-worker was based upon her gender. Plaintiff established that she was performing work equal to, or even greater than, her male co-worker. The State countered, stating that plaintiff’s pay disparity was based upon factors other than sex.

The State asserted that the pay disparity was based upon budget concerns, plaintiff’s prior pay base and a salary/bonus/raise pay grade system established by the State. The Illinois Administrative Code established a detailed pay plan for state employees. Each position was assigned a salary range and each subsequent bonus/raise was based upon the established salary range.

The 7th Circuit rejected the plaintiff’s claims and upheld the State’s defense of factors other than sex. The court reiterated that pay disparities based upon prior pay is a legitimate factor other than sex. The court also noted that the budget concerns raised by the State were legitimate and not pretext for discrimination. Finally, the court noted that the bonuses and raises were based upon a system established by the State, and thus the raises and bonuses issued to plaintiff were based upon a pay system, rather than based upon sex.

This opinion continues to support prior pay as a legitimate factor other than sex for pay disparities while also supporting legitimate budget concerns and established pay guidelines as factors other than sex. Employers must continue to press ahead with the utilization of pay grades and legitimate pay guidelines to support pay decisions. Budget utilization should be included in this process.

Read the ruling.