Grover v. Smarte Carte, Inc. (836 F. Supp. 2d 860, 2011)

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, District Judge.

This matter is before the Court on Defendant’s Motion for Summary Judgment [Doc. No. 15]. For the reasons stated below, this Court denies Defendant’s Motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Jean Grover alleges that she was discriminated against because of her gender while she was an employee of Defendant Smarte Carte, Inc. Specifically, Grover alleges that she was paid less than similarly situated male employees and that she was overlooked for career- and compensation-enhancing opportunities that were ultimately awarded to male employees. Grover also alleges that she was fired in retaliation for complaining about her unequal treatment.

Smarte Carte is a Minnesota-based international retailer of rentable luggage carts, lockers, and strollers. Smarte Carte’s products are available in airports, theme parks, ski resorts, and retail establishments. Smarte Carte’s principal revenue stream comes from its airport luggage-cart business. Smarte Carte has had a tumultuous corporate history; Smarte Carte has changed hands multiple times in the last twenty-five years and filed for bankruptcy in February 2005. (Rudis Decl. ¶ 3.)

Grover worked for Smarte Carte from 1994 to 2007. Grover started out as a sales representative and, through a series of promotions over the years, eventually rose to the level of vice president. Grover earned salary increases along with her various promotions. From 1999 until her termination in 2007, Grover was Vice President of Business Development and Operations of Smarte Carte’s domestic locker and retail business. (Erickson Decl. Ex. 2.) Grover also testified that, in addition to the domestic market, she was responsible for business development in Canada, parts of Europe, and other international locations. (Grover Dep. at 105, 181-82; Grover Aff. ¶¶ 15, 20.) Grover’s focus was the development and growth of the company’s stroller and locker product lines in the retail (or non-airport) market. (Grover Dep. at 66-67, 98.)

Before September 1999, Grover was supervised by then-CEO Brad Stanius. Most, if not all, of Grover’s promotions occurred during Stanius’s tenure. In 2000, Edward Rudis succeeded Stanius as CEO.

The record shows that Grover was quite successful during her tenure with Smarte Carte. Under her leadership, sales attributable to the locker and retail division accounted for between 15.2% and 18.6% of Smarte Carte’s total sales. (Rudis Dep., Ex. 1 at 8.) Grover was routinely praised for her negotiation skills and her ability to land large contracts for the company. Grover’s reviews appear to have been largely positive, although Rudis noted on several occasions that Grover had difficulty relating to her coworkers. (See Grover Dep. at 153-56.) Specifically, in Grover’s review for 2003 (which she received in early 2004), Rudis stated that he was “concerned about [Grover’s] ability to resolve issues with her peers.” (Id. at 156.)

On May 28, 2004, Grover responded to the 2003 review in a memorandum to Ru-dis. (Rudis Dep., Ex. 13.) Grover complained that the negative comments in her review stemmed from a “biased power base” among management from which she was excluded. Grover asserted that she was increasingly unable to work with her peers and superiors because their bias against her undercut her ability to communicate effectively. (Id. at 1.) Grover, specifically noted that “senior management perceive [her] comments, directives and recommendations differently than those voiced by [her] peers.” (Id.) Grover also complained that she was underpaid vis-avis her male peers: “I have expressed my concern about compensation vs. demonstrated performance and responsibility compared to my peers a few times to you over the last year. These concerns remain un-addressed.” (Id.) Grover then compared her compensation and responsibilities to those of one of her alleged comparators, Arthur Spring, and requested a response. (Id. at 1-2.) At the time, Arthur Spring was Vice President of Carts and Lockers — International. (Erickson Deck, Ex. 2 at 4.) It is not clear from the record whether Rudis ever responded formally to Grover’s memorandum.

On June 9, 2004, Grover sent Rudis a follow-up memorandum again outlining her perceived unequal treatment. (Rudis Dep., Ex. 13 at 3-4.) She attached various graphs showing her performance from 1996 to 2003 and her perceived unfavorable compensation as compared with that of Arthur Spring. (Id. at 5-8.) Again, the record is unclear as to whether or how Rudis responded to Grover’s memorandum.

In March 2005, Grover met with Rudis to discuss a new bonus plan that she felt treated her unfairly by providing for similar bonuses to the airport line of business for reaching a lower sales threshold. (Grover Aff., Ex 2 at 5.) Rudis told her that he would discuss the matter with the company’s Chief Financial Officer. (Id.)

On April 15, 2005, Grover again met with Rudis to discuss her concern that she was being compensated unfairly. (Id. at 214-16.) On April 23, 2005, Rudis responded to Grover’s complaints of unequal pay in writing. (Rudis Dep., Ex. 14.) Rudis first dismissed Grover’s assertion that she was unfairly paid less than her male peers: “I continue to believe that your current compensation including base salary and bonus plan is in line with your level of responsibility within the organization.” (Id.) Rudis stated, however, that Grover would be offered additional incentives in the form of deferred salary and stock options, which were “intended to recognize [Grover’s] contribution to the growth of new business for Smarte Carte.” (Id.) Rudis then rejected Grover’s request for a promotion to senior vice president without explanation: “I do want to keep your title as an officer in the company as that of Vice President.” (Id.) Rudis ended the letter by stating that he “did not wish to discuss the matter any further” and that if Grover was still unsatisfied, she should “look outside at other opportunities that might better serve [her] financial and career needs.” (Id.)

On January 12, 2006, Grover’s review for 2005 indicated that her job was in jeopardy due to- her “struggle with managing interpersonal relationships with peers.” (Rudis Dep., Ex. 15.)

Throughout 2006 and 2007, Grover continued to formally complain to Rudis about her unequal pay and her belief that she was treated less respectfully than her male peers and that her decisions were actively undermined by senior management. (See Grover Aff. ¶¶ 22-26.) On May 8, 2007, Grover again met with Rudis to discuss these issues and again provided documentation supporting her belief that she was paid less than her male peers and that she was treated with less respect and given less autonomy than her male peers. (Grover Aff. ¶¶ 25-26; id., Ex. 1; Grover Dep. at 251-52.)

On May 31, 2007, Smarte Carte terminated Grover without cause. (Grover Dep., Ex. 18.) Rudis told Grover that she was being discharged due to a reduction in force, but it is not clear from the record whether other employees were fired along with Grover. It does appear, however, that Grover’s position was not filled and that her responsibilities were rolled into an existing position. (See Sarnoski Decl., Ex. H at 2.)

On February 22, 2008, Grover filed a complaint with the Equal Employment Opportunity Commission (“EEOC”), charging Smarte Carte with violating the Equal Pay Act of 1963 (“EPA”), 29 U.S.C. § 206(d), et seq., and Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq. (Erickson Decl., Ex. 1.) Grover’s EEOC complaint states that the discrimination took place between February 14, 2004 and May 30, 2007.(M) After receiving evidence from both parties, the EEOC issued Grover a right-to-sue letter.

On November 19, 2009, Grover filed the present case, again claiming violations under the EPA and Title VII and for retaliation. [Doc. No. 1.] Grover also brought claims under the Minnesota Human Rights Act, MinmStat. §§ 363A.01, 363A.15. In October 2010, the parties stipulated to the dismissal of Grover’s state-law claims.

Smarte Carte now moves for summary judgment, arguing that there are no genuine issues of material fact as to whether Smarte Carte discriminated or retaliated against Grover.

II. DISCUSSION

A. Standard of Review

Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the burden of showing that the material facts in the case are undisputed. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Whisenhunt v. SW Bell Tel., 573 F.3d 565, 568 (8th Cir.2009). The Court must view the evidence, and the inferences that may be reasonably drawn from it, in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Weitz Co., LLC v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir.2009); Carraher v. Target Corp., 503 F.3d 714, 716 (8th Cir.2007). The nonmoving party may not rest on mere allegations or denials, but must show through the presentation of admissible evidence that specific facts exist creating a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Davenport v. Univ. of Ark. Bd. of Trustees, 553 F.3d 1110, 1113 (8th Cir.2009) (citing Anderson, 477 U.S. at 247-49, 106 S.Ct. 2505).

B. Equal Pay Act Claim

To establish a prima facie case under the EPA, Grover must show that Smarte Carte paid her less than similarly situated male employees for equal work in jobs that required equal skill, effort, and responsibility and that were performed under similar working conditions. 29 U.S.C. § 206(d)(1); Taylor v. White, 321 F.3d 710, 715 (8th Cir.2003). If Grover meets this burden, Smarte Carte must show that the pay differential was based on a factor other than gender. Id. at 716; 29 U.S.C. § 206(d)(1). Smarte Carte argues that Grover’s EPA claim fails because Grover’s male peers were not paid more than she was and were not similarly situated to her.

1. Unequal Pay

The threshold issue is whether Grover was paid less that her alleged comparators, Johnny Chiu and Arthur Spring. The records support Grover’s contention that she was paid less in guaranteed pay than either comparator from 2002 through her termination in 2007. (Pl.’s Opp’n Mem. at 6; Grover Dep., Ex. 2; Sarnoski Deck, Exs. A-C.) Although the parties’ numbers do not square exactly, the exhibits show that for each year from 2002 forward, Grover received less in guaranteed pay (base salary and commission, and retention bonus) than at least one of her comparators. {See Carr Deck, Ex. C; Sarnoski Deck, Exs. A-C.) Moreover, Grover’s base pay was substantially less than either Chiu’s or Spring’s for each of those years. For example, in 2005, Grover’s base pay was $163,523, while Chiu’s base pay was $211,150 and Spring’s was $300,515. {See id.)

Smarte Carte argues, however, that the Court must look at Grover’s “aggregate” compensation between 2002 and 2007 to determine whether she was paid less than her male peers. Under this approach, Grover’s overall compensation appears greater than that of her comparators. The difference, however, is due solely to Grover’s receipt of nearly $1.4 million for her stock options in 2006 and 2007. (Defs. Supp. Mem. at 8-9; Rudis Dep., Ex. 1.)

Smarte Carte’s aggregate approach finds no support in the law. Smarte Carte has pointed to no case standing for the proposition that courts must consider multiple years of compensation in the aggregate when considering the merits of an EPA claim. Smarte Carte relies on Mitchell v. Diversified Reality Corp., No. 4:09-CV-224, 2010 WL 3855547, *5 (E.D.Tex. Sept. 8, 2010), for that proposition, but Mitchell centered on compensation earned in a single year and thus does not support Smarte Carte’s aggregate approach. Indeed, if the Court were to adopt the approach urged by Smarte Carte, employers would be free to underpay certain employees for years, but then escape liability by issuing equalizing compensation. Similarly, an employer could escape liability by underpaying a female employee, who nevertheless is paid the same in the aggregate because she makes up the difference in commissions through her own hard work. This is not, and should not be, the law.

In sum, Grover has established a prima facie case that she was paid less than her alleged male counterparts, Chiu and Spring.

2. Propriety of Comparators

The next issue is whether Chiu and Spring are proper comparators. As explained above, to establish a prima facie case, Grover must identify male employees who were paid more for equal work in jobs that required equal skill, effort, and responsibility and that were performed under similar working conditions. Taylor, 321 F.3d at 715. Grover has identified Johnny Chiu and Arthur Spring as her comparators. The positions of Grover’s comparators need not be identical to be considered equal under the EPA. Krenik v. County of Le Sueur, 47 F.3d 953, 961 (8th Cir.1995). Furthermore, job titles and classifications are not dispositive; it is the actual requirements of the jobs that control. Tenkku v. Normandy Bank, 348 F.3d 737, 741 (8th Cir.2003). Whether the compared jobs are “substantially equal requires a practical judgment on the basis of all the facts and circumstances of a particular case, including factors such as level of experience, training, education, ability, effort, and responsibility.” Renstrom v. Nash Finch Co., 787 F.Supp.2d 961, 967 (D.Minn.2011) (Schutz, J.) (quoting Lawrence v. CNF Transp., Inc., 340 F.3d 486, 492 (8th Cir.2003)). “Insubstantial or minor differences in the degree or amount of skill, or effort, or responsibility required for the performance of jobs will not render the equal pay standard inapplicable.” Id. (citing 29 C.F.R. § 1620.14(a)).

Grover and Smarte Carte have submitted conflicting evidence regarding whether Grover and Chiu and/or Spring were similarly situated.

a. Johnny Chiu

Chiu joined Smarte Carte in August 2000 as Vice President of Business Development and Domestic Airport Operations. In this role, Chiu was responsible for business development relating to Smarte Carte’s domestic' airport cart and locker businesses. (Rudis Decl. ¶ 8.) Beginning in 2003, Chiu was also responsible for Smarte Carte’s locker operations in China. (7