ME Equal Pay Law: Employers Should be Aware of this Significant Decision from United States District Court for District of ME

What Happened

On February 8, 2022, United States District Judge Lance E. Walker of the United States District Court for District of ME issued a decision in Mundell v. Acadia Hospital Corp. and Eastern ME Health Systems, concerning the ME Equal Pay Law (“MEPL”), 26 M.R.S.A. § 628, which could have significant implications for employers and businesses moving forward. Specifically, Judge Walker concluded that the MEPL is violated as long as there is an unjustified pay disparity between two members of the opposite sex performing comparable work regardless of whether the pay disparity is because of the individuals’ sex.

Brief Background

Mundell concerns a claim by Mundell, a Clinical Psychologist and former employee of Acadia Hospital and Eastern ME Health Systems. Mundell asserted, among other things, that her former employers violated the MEPL by paying male pool psychologists more than its female psychologists. Mundell asserted that this alleged pay disparity violated the MEPL and filed a dispositive motion asserting that she was entitled to judgment on her MEPL claim as a matter of law.

Court’s Ruling

Following briefing by the parties, the primary issue before the Court was whether the MEPL requires a plaintiff to establish that the employer engaged in intentional sex discrimination or whether the MEPL is violated by any unjustified pay disparity for comparable work between two employees of the opposite sex without necessarily showing discriminatory animus.

The Court noted that the MEPL provides that,

“[a]n employer may not discriminate between employees . . . on the basis of sex by paying wages to any employee in any occupation . . . at a rate less than the rate at which the employer pays any employee of the opposite sex for comparable work on jobs that have comparable requirements relating to skill, effort and responsibility.”

The Court also noted that the MEPL further provides that employees may have such pay differentials only where such differences are predicated upon established seniority systems or merit increase systems or difference in the shift or time of the day worked.

In his ruling, Judge Walker stated that the “evil redressed by MEPL is decidedly the impact of unequal pay for comparable work, regardless of the employer’s motivation” and thus, rejected the employers’ argument that the MEPL requires some showing of “intentional discrimination[.]” Judge Walker concluded that there is “no indication in the text of MEPL that it is at all concerned with proof of discriminatory intent.” Accordingly, the Court determined that the “MEPL is similar to Massachusetts’ Equal Pay Law, which [the Massachusetts] Supreme Judicial Court has read to create a form of strict liability.”

Judge Walker acknowledged that his “interpretation of MEPL will require employers to track compensation differentials among their employees and to articulate one of the authorized reasons provided by the statute for such pay disparity[,]” but found that such a conclusion was not unreasonable given that the MEPL is a pay equality statute.

Next Steps for Employers

Acadia Hospital and Eastern ME Health Systems have both indicated they plan to appeal Judge Walker’s determination to the United States Court of Appeals for the First Circuit. Nevertheless, given the District Court’s decision as it currently stands, employers should be aware of this interpretation of the MEPL and evaluate their current pay structures and policies to ensures there is no pay disparity between opposite sex employees performing comparable work.