The opinion of the court was delivered by: GREENE
This case involves a significant issue of first impression: what is the meaning of the term "establishment" under the Equal Pay Act for purposes of employment in the federal government?
Plaintiff Margaret Mary Grumbine was a Regional Counsel of the Customs Service assigned to Baltimore, Maryland. At all times pertinent to this lawsuit, the Customs Service was divided into nine regions
and so was the Chief Counsel's Office of that Service.
Although each of the other eight individuals serving as Regional Counsel in the Customs Service, all of them male, had a GS-15 rating, and although plaintiff's immediate predecessor, also a male, had that same GS-15 rating, plaintiff herself was classified and paid only as a GS-14. The government defends this action basically
on the ground that each Regional Counsel's Office is a separate "establishment" for purposes of the Equal Pay Act, and that, accordingly, it was not required to pay plaintiff at the same rate as the individuals serving as Regional Counsel in other "establishments," that is, elsewhere in the United States. Plaintiff and the Women's Legal Defense Fund, which was permitted to participate as amicus curiae, argue on various bases that, at least in the context of the federal Civil Service, the term "establishment" has a far broader meaning.
The Equal Pay Act, 29 U.S.C. § 206(d), enacted as an amendment to the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., was "intended as a broad charter of women's rights in the economic field." Shultz v. Wheaton Glass Company, 421 F.2d 259, 9 FEP Cases 502 (3rd Cir. 1970). To that end, it was designed to eliminate all wage discriminations based on sex which the Congress had found in 1963 to continue to exist on a substantial scale.
The issues in this case must be considered with these basic purposes in mind.
The government does not deny that Margaret Mary Grumbine was classified in a lower grade and was paid less than her male counterparts in the other Customs Service regional offices. In defense of that disparity, the government relies on section 206(d)(1) of the Act which provides in pertinent part that
No employer . . . shall discriminate, within any establishment. . . between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work (emphasis added).
In the government's view, the "establishment" to which the Court must look to determine whether plaintiff was underpaid is the Office of Regional Counsel in Baltimore -- not the Civil Service, the Department of the Treasury,
or the Treasury's Office of Chief Counsel (with its nine subordinate Regional Counsels).
If that interpretation of the law is correct, plaintiff's classification and pay could not have violated the Equal Pay Act since there was no one in the Baltimore "establishment" who had a position like plaintiff's -- she was the one and only, the Regional Counsel in that city.
In defense of its interpretation, the government points out, correctly, that in a number of cases under the Fair Labor Standards Act the courts have held that an "establishment" is a "distinct physical place of business,"
and that employees working in separate locations or offices should not be compared for Equal Pay Act purposes.
These lines of cases certainly do exist, and they hold what the government claims for them. However, in a number of other instances, and particularly in recent years, courts have not taken a strictly geographical view of the term "establishment" but have considered a multi-location employer to be a single establishment.
The seminal decision in that regard is that of Judge Rives, writing for the Fifth Circuit, in Brennan v. Goose Creek Consolidated Independent School District, 519 F.2d 53, 11 FEP Cases 313 (5th Cir. 1975). That case involved alleged differentials in pay between men and women working as janitors for a school district composed of thirteen geographically separated elementary schools. There, as here, the argument was made that each separate geographic entity, i.e., each school, was a separate "establishment" for purposes of the Act. Relying on such facts as that the central administration of the school district did the hiring, determined the wages, and assigned the employees, and further that the duties of the various janitors did not differ from school to school, the court held that all the janitors were employed by a single "establishment" for purposes of the statute. To the same effect, see Marshall v. Dallas Independent School District, 605 F.2d 191, 21 FEP Cases 143 (5th Cir. 1979); Alexander v. University of Michigan-Flint, 509 F. Supp. 627, 26 FEP Cases 448 (E.D. Mich. 1980); EEOC v. Maricopa County Community College District, 29 Fair Empl. Prac. Cas. (BNA) 383 (D. Ariz. 1982).
The question before the Court, then, is how these various decisions may be reconciled with each other and, more important, how they may be squared with the congressional purpose. It appears to the Court that, at a minimum, a distinction should be drawn for Equal Pay Act purposes between private and public employment.
The term "establishment" as a geographical concept had its root in the congressional effort to exempt certain local business establishments from the minimum wage and maximum hours provisions of the Fair Labor Standards Act.
Since coverage depended upon the volume of sales in any particular State,
it made sense to give to the term "establishment" a geographic meaning, and the older cases did just that. But this reasoning has little relevance to the Equal Pay Act provisions of the Fair Labor Standards Act, and even less so in the area of governmental employment, where typically central supervision exists and pay standards apply for an entire system irrespective of where the employee happens to be located. It would hardly make sense to permit an employer to rely on a geographic "establishment" concept in defense of an unequal pay practices when that employer has itself adopted a uniform, non-geographic pay policy and system.
It was on this basis that the courts in the more recent decisions referred to supra have departed from geography in applying the Equal Pay Act and have considered a public employer with a number of locations to be a single establishment.
Even the Department of Labor, upon whose regulations
the government strongly relies,
has taken this view. It has not followed a "distinct physical place of business" rule in enforcing the Equal Pay Act against public employers. In fact, in such cases as Brennan v. Goose Greek, supra, and Marshall v. Dallas School District, supra, it was that Department which brought the suits against the ...