Law & Courts

Federal Appeals Court Revives Teacher’s Pay-Discrimination Case Over Starting Salary

By Mark Walsh — January 05, 2021 3 min read

A federal appeals court on Tuesday revived the employment-discrimination lawsuit of an Indiana high school science teacher who allegedly was told when she was hired that her starting pay was sufficient because her husband worked and together they “would have a fine salary.”

A unanimous three-judge panel of the U.S. Court of Appeals for the 7th Circuit, in Chicago, reinstated the suit filed by Cheryl Kellogg, who was hired as a life sciences teacher at the Indiana Academy for Science, Mathematics, and the Humanities. The residential school for high school juniors and seniors is on the campus of and is operated by Ball State University in Muncie, Ind.

Kellogg was hired in 2006 as a life sciences teacher at a starting salary of $32,000, court papers say. When she sought to negotiate higher starting pay, an academy administrator allegedly told her he wouldn’t pay her more than his teachers with Ph.D’s. And, her suit alleges, the administrator told her that because he knew Kellogg’s husband worked at Ball State, she “didn’t need any more money” because the couple would have “a fine salary.”

Years later, in 2017, Kellogg complained to the dean of Ball State’s Teachers College, which oversees the academy, that she was being paid less than several similarly situated male colleagues. The dean said the issue was one of higher starting pay for the others and that Kellogg’s salary had increased by more than 36 percent during her years there while her male colleagues’ pay had increased less.

Kellogg sued for sex discrimination under Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963. A federal district court granted summary judgment to the academy, accepting its gender-neutral explanations for the disparities, such as differences in starting pay and in qualifications among the employees. The district court also ruled that the administrator’s alleged 2006 statement about Kellogg’s husband could not support liability for her claims because the statement fell outside the time limitations of the two anti-discrimination statutes.

In its Jan. 5 decision in Kellogg v. Ball State University, the 7th Circuit panel reversed the district court.

The court said the academy’s explanations for the differences in pay are in dispute because “the Academy blatantly discriminated against Kellogg by telling her that, because her husband worked, she did not need any more starting pay. Such clear discrimination calls the sincerity of the academy’s rationales into question.”

The appeals court rejected the academy’s arguments that the administrator’s 2006 comment (which it accepted as true for present purposes) was a “stray remark” that had no real link to Kellogg’s pay over the years.

The administrator’s remark “was not water-cooler talk,” the court said. “It was a straightforward explanation by the academy’s director, who had control over setting salaries, during salary negotiations that Kellogg did not need any more money ‘because’ her husband worked at the university. Few statements could more directly reveal the academy’s motivations.”

Next, the appeals court rejected the academy’s argument that the administrator’s remark could not establish liability because it fell outside the statute of limitations. The court noted that the Lilly Ledbetter Fair Pay Act of 2009 had codified the “paycheck accrual rule,” which means a new cause of action for pay discrimination arises under Title VII each time a worker receives a paycheck that is rooted in an earlier discriminatory practice.

The Ledbetter law was Congress’s response to the U.S. Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., which had rejected the paycheck accrual rule.

“All of Kellogg’s pay from the academy resulted, at least in part, from [the administrator’s 2006 starting salary] decision because the academy admittedly based Kellogg’s later pay on raises from her starting salary,” the 7th Circuit court said. “Thus, each of Kellogg’s paychecks gave rise to a new cause of action for pay discrimination.”

The court ruled that the paycheck accrual rule also applied to Kellogg’s Equal Pay Act claims. And it said that on remand, Kellogg will be able to pursue evidence that her pay lagged that of several different “comparators”—male colleagues who were paid more.

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