Compensation Policies Under Scrutiny: Federal Court Conditionally Certifies Class of Female Faculty Physicians in EPA Case

On September 28, 2017, the U.S. District Court for the Central District of Illinois granted conditional collective action certification in Ahad v. Board of Trustees of Southern Illinois University, a case under the Equal Pay Act (EPA) brought on behalf of female faculty physician employees of the Southern Illinois University School of Medicine and SIU Physicians & Surgeons, Inc.

The court found that the plaintiff, Dr. Sajida Ahad, met the modest factual showing required for conditional certification under the EPA (which is part of the Fair Labor Standards Act (FLSA)). The court was likely swayed by data presented by the plaintiff which showed that for a six-year period, the average total compensation of female associate professors and assistant professors was over $62,000 less each year than that of their male counterparts, and the average total compensation of female professors was approximately $45,000 less than that of male professors. Although the defendants argued that the pay discrepancies could be accounted for by nondiscriminatory explanations, the court found those issues were more appropriately addressed at the second step of FLSA certification at the close of discovery. The court also accepted the plaintiff’s positon that the compensation plan (which was gender neutral) and an unofficial policy of the university (effectuated by the dean and compensation committee) were part of a common policy causing unfair compensation to women.

Although this case is far from over, and the defendants will have an opportunity to decertify the conditional class after discovery, this decision is significant for several reasons. First, it may encourage more collective actions under the EPA, because the court set a low standard for conditional certification. Second, it shows that academic medicine may be ripe for lawsuits such as this from the plaintiffs’ bar. This is particularly true because there can be significant pay disparities based on experience, education and seniority, clinical productivity, procedure type, and clinical practice arrangement. Third, it shows that it is not enough to have gender-neutral compensation plans. Both formal plans and “unofficial policies” should be reviewed for potential pay disparities.