A Federal Court of Appeals recently reinstated a teacher’s Title VII and Equal Pay Act suit based on an administrator’s off-hand comment. In Kellogg v. Ball State University d/b/a Indiana Academy for Science, Mathematics and Humanities, (No. 20-1406, 7th Cir. 2021), the Seventh Circuit found that an “offhand remark”, made 10 years earlier, was evidence of the school’s discriminatory intent. In 2006, Cheryl Kellogg was hired as a science teacher by the Indiana Academy (“the Academy), a residential public high school for gifted high school upperclassmen. During salary negotiations with Dr. Williams, the Academy’s director, Williams told Kellogg that “she didn’t need any more [money], because he knew her husband worked at Ball State University, “so they would have a fine salary.” Her starting salary was then set at $32,000.
After eleven years with the Academy, Kellogg complained to the dean about her salary, asserting that she was paid less than her similarly situated male colleagues. The dean responded that “the issue was salary compression,” because those who were hired after her began at higher salaries. According to the dean, Kellogg’s salary had increased 36.45% during her time at the Academy, while her colleagues’ salaries had increased by a smaller percentage. Kellogg responded by filing a federal lawsuit, asserting violation of Title VII and the Equal Pay Act.
The District Court granted the Academy’s Motion for Summary Judgment, because it found that the Academy provided gender-neutral explanations for Kellogg’s pay. When Kellogg appealed, the Seventh Circuit Court of Appeals reversed. In its opinion, the Seventh Circuit held that “…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.”
On appeal, the Academy argued that Dr. Williams’ statement was a “stray remark” with “no real link” to Kellogg’s pay. Furthermore, the Academy contended that the statement occurred outside the statute of limitations period, and thus, could not establish liability. The Appellate Court rejected the Academy’s statute of limitations argument, finding that under the “paycheck accrual rule,” “a new cause of action for pay discrimination arises every time a plaintiff receives a paycheck resulting from an earlier discriminatory compensation practice.” Applying this rule, the Court found that “each of Kellogg’s paychecks gave rise to a new cause of action for pay discrimination.” Moreover, the Court found that “Williams’ alleged discriminatory statement casts doubt on the Academy’s non-discriminatory explanations for Kellogg’s salary, and Kellogg can rely on the statement even though Williams uttered it outside the limitations window.”
Please download Court’s Opinion here: