Sex Discrimination

Can "Retention Raises" for Faculty Constitute Employment Discrimination?

A Ninth Circuit decision that may be of particular interest to academics.

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On Monday, in Freyd v. University of Oregon, a panel of the U.S. Court of Appeals for the Ninth Circuit split over whether a university's practice of giving "retention raises"–salary increases to prevent faculty from accepting lateral offers at other schools–could constitute employment discrimination if, as alleged in this case, the practice produces pay disparities between men and women.

Judge Jay Bybee wrote the majority opinion, joined by District Court Judge Kathleen Cardone (sitting by designation). Here is how he sets the stage:

Jennifer Freyd is a Professor of Psychology at the University of Oregon ("the University"). Although she is a well-recognized academic and pioneer in trauma studies, the University pays Freyd several thousand dollars less per year than it does four of Freyd's male colleagues, despite their being of equal rank and seniority. Freyd alleges that this gender disparity in pay is department wide and is caused by the University's practice of granting "retention raises" to faculty as an incentive to remain at the University when they are being courted by other academic institutions. She further claims that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors, and when they do, they are less likely to successfully obtain a raise.

Freyd sued the University alleging violations of, inter alia, the Equal Pay Act, Title VII, Title IX, and Oregon law.

The district court granted summary judgment for the University on all counts. The court's majority, however, reversed the district court on several counts, finding that a reasonable jury could have concluded that the University of Oregon's policies, including its practice of offering "retention raises," violated federal or state employment discrimination laws because they produced pay disparities between male and female faculty who perform equivalent work.

Judge VanDyke wrote separately, concurring in part and dissenting in part. His opinion begins:

Jennifer Freyd is far from the typical employee arguing that she is being treated differently based on her sex. She is not merely a professor of Psychology, or even just a tenured professor of Psychology. She is a full professor of Psychology at the University of Oregon—the top echelon, crème-de-la-crème of her academic field. She is, one might say, in the big leagues of her profession. According to Dr. Freyd herself, her job at her elite level of academic achievement is marked by "considerable discretion and autonomy in developing and executing a unique research agenda and professional profile," and "[n]o two people will exercise their discretion and autonomy in the same way."

Just as we see with top professional athletes or the very best attorneys in their field, competition is fierce for leading academic talent. Universities understandably attempt to poach top dons from other schools by offering better pay and other benefits and opportunities, and the professors' home institutions are often required to make comparable offers (called "retention raises") to keep their own outstanding people—especially those who are willing to seriously entertain an offer to change institutions. This case effectively challenges that market-driven practice as violative of a host of federal and Oregon laws prohibiting sex-based discrimination.[FN1]

FN1. The majority criticizes what it characterizes as my "strong preference for a 'market-driven practice.'" My preferences are unrelated to my pointing out the obvious here. The fact that an employment practice is "market-driven" may not necessarily exempt it from Title VII, but it is unquestionably relevant to whether it is prohibited. While it is perhaps true that a "'business necessity' defense is not the same as a guarantee of a free market," it is certainly true that every business necessity is, ultimately, market-driven. Even the majority cannot avoid market-driven concepts when discussing the University's business necessity defense ("the need for retention raises" and "job-related" have no meaning apart from a job market).

If Freyd is correct that—even in this elite context, where the defining characteristic of professors at this level is their uniqueness—pay disparities based on retention raises can permit a jury to award damages for sex discrimination, then employers will predictably be incentivized to abandon a tool for retaining top talent and revert to lock-step pay. Worse, unless all of the federal circuits agree with ours (always an unlikely proposition), another predictable result of today's decision is that universities in the Ninth Circuit will be unable to compete economically to retain their best professors, and we could see a corresponding brain drain in universities in the western states.

Of course, if this were required by our laws prohibiting sex discrimination, then so be it. But it isn't. The district court was correct that, for professors at this level, "a university is more akin to the National Baseball League than it is to a traditional employer." Freyd v. Univ. of Or., 384 F. Supp. 3d 1284, 1288 (D. Or. 2019). Only by emphasizing a superficial "common core of tasks" shared by full professors and downplaying all of the obvious differences that have made them stand-outs in their profession can the majority conclude that "a reasonable jury could find that Freyd and her comparators … do substantially equal work" for purposes of the Equal Pay Act. The majority also errs in its consideration of Freyd's Title VII disparate impact claim, relying on irrelevant statistical data to find a genuine issue of material fact and then indulging the academic fiction that the University's retention raise practice may not serve a business necessity. I disagree with these conclusions, and therefore respectfully dissent.

NEXT: No "Private Matter Among Friends" Exception to Public Access to Court Records

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  1. Quite an interesting development in the 9th circuit.
    I’m glad to hear that Harvard and MIT will have better chances in cherry-picking top talent from UC Berkeley Stanford Junior University, and other left coast schools.

  2. Hire a female. Hire a lawsuit.

    A male dissatisfied with his pay, would be send out resumes, not suing his employer. This lady will not be hired to swab the floor in a McDonalds. No one wants to be sued by a feminist.

    1. Maybe you should be send out your resumes?

    2. Gosh what a stupid, bigoted comment.
      Whether the professor has a case is beside the point; she can run circles around you intellectually even in her sleep.

      1. Hi, are you a lawyer? Whom did you vote for President?

      2. “…she can run circles around you intellectually even in her sleep.”

        No she can’t. Didn’t you read the quote from her complaint? She claims that because she is a woman she is incapable of negotiating retention rate increases as well as a man. Those are her own words. And that is one hell of an admission from an alleged intellectual giant, isn’t it?

        1. Number 2,
          Who are you to say. Never mind what he lawyer wrote don’t. Did you bother to check out her performance before your BS hit the page? Obviously not.

      3. Ever heard of ad hominem argument?

        Congratulations! You have demonstrated your own stupidity.

  3. A whole bunch of academic practices aren’t really long for this world if they come into contact with the federal court system. Academics, for whatever reason, seem less likely to listen to in-house attorneys in designing their policies.

    Affirmative action is the classic example of this- 4 1/2 decades of various admissions practices struck down by courts. This is another example of it. I suspect if someone brought the right lawsuit against “spousal hires” (which allow your unqualified or less qualified spouse to get a job they would have never gotten on merit as an inducement to get you to take a job yourself), they would probably fall too. And there are other practices as well.

    1. Why do you think so called “spousal hires” would fail?

      1. Because it unfairly increases family compensation?
        Because it is in effect a bribe to take the job?
        Because someone more qualified and possibly more “diverse” failed to get the job?

        1. 1. Because it unfairly increases family compensation?

          Many items “unfairly” increase family compensation. Notably family health insurance.. In this case, it’s not clear that it actually increases family compensation, as the “primary” spouse could be taking lower money in order to make sure his or her spouse got a job they would be happy with.

          2. Because it is in effect a bribe to take the job?

          You realize, you ARE paying them anyway, right? It’s part of the negotiation for the job. Pay, benefits, etc. As long as it’s above board, it’s not considered a bribe

          3. “Because someone more qualified and possibly more “diverse” failed to get the job?”
          -Potentially. On the other hand, doing this likely ensured that someone extra-qualified and possibly more diverse got the original job.

      2. It’s marital status discrimination. It is a preference a single person not in a relationship cannot receive.

        1. So, can a college not “discriminate” based on marital status? (It’s not really a discrimination, but an incentive one cannot get if one is married). I didn’t think marital status was a protected class.

          If a company offers a health care plan for families (which is far more common), is that effective discrimination against single people as well?

          1. In many states, marital status discrimination is either barred specifically by statute or included by judicial decision within the concept of sex discrimination.

            Offering a health care plan is not the same thing, because (1) it’s not discrimination in hiring, and (2) there isn’t another person out there who would occupy the health insurance policy if it weren’t given to the partner.

            1. So, here’s the issue.

              1) It’s not really “discrimination” for the primary hire. The company doesn’t prefer married candidates over non-married candidates. It’s an added benefit one “may” obtain if one is married. Like health care for a family versus an individual. The company, to be honest, would probably prefer the non-married person because it is cheaper. But they understand that in order to attract qualified people, sometimes they need to offer health insurance for the entire family. And sometimes there’s a negotation that lowers the “primary” candidate’s salary/benefits to account for the “secondary” candidate.

              2) Sometimes the position is actually created for the secondary hire. So it wouldn’t exist without the primary hire. The question is, is it discrimination for the secondary hire in comparison to other candidates? Potentially. It’s hard to prove, to be honest. And looking at the statistics, it may run the other way (IE, the secondary hire may increase the number of women relative to an independent search).

              So, if you hire someone, and deliberately open up a new position JUST for a secondary hire, a position that wouldn’t exist without the primary hire coming onboard, is that discrimination?

              1. It’s discrimination for the secondary hire, because once you create the secondary position (assuming it is even “created” as opposed to being a position they would have eventually filled anyway), the person who is getting the position is being favored over all other potential candidates because of their status of being in a marital relationship.

                Compare: let’s say that a university “creates” a new position they weren’t otherwise going to fill and decides that they are going to give that new position to a white person without regard to qualified Black candidates. That’s OBVIOUSLY employment discrimination, isn’t it? So why is it different to “create” a new position only available to someone married to another job applicant?

                1. Hypo 1: Jane Jett is the world’s foremost widget designer. Acme Widgets, Inc. reeeeaaaallllly wants to poach her away from her current employer. They ask her to name her price, and she says ‘Well, my success isn’t just about me; my staff has contributed to my success – I’ll only come if you hire my staff, too, and let us continue to work as a unit’.

                  Hypo2: Similar, but Jane is the owner of Jett Widgets, and Acme wants to buy her out. She says ‘OK, but you have to hire all my loyal employees as part of the deal’.

                  Your final paragraph seems to say that either of those arrangements would ‘OBVIOUSLY’ be employment discrimination, because Acme isn’t doing open hiring for all those positions. Is that your position?

                  (I’m curious because I have heard of both versions of those deals)

        2. It certainly in NOT marital status discrimination. That has Never been held.

  4. I find it interesting one of the points brought up in the lawsuit was…

    “She further claims that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors”

    Is this really discrimination on the part of the university?

    1. I thought that as well, until I realized that this is a disparate impact case. What she is arguing is: (1) that one’s pay as a professor of psychology is based on one’s negotiating skills, but (2) negotiating skills are not a necessary business requirement for being a professor of psychology, and (3) because women are disproportionately worse negotiators than men, therefore (4) the university is maintaining a salary requirement that has a discriminatory disparate impact against women even in the absence of discriminatory intent.

      It’s one hell of an argument, but the Ninth Circuit bought it.

      1. It’s actually a little worse than that.

        Note, there’s no statement in there about negotiation SKILL. But simple willingness to negotiate at all. I don’t fundamentally think that women are less capable than men of even asking to negotiate. I think they’re about equal.

        But, if I wanted to be particularly twisted here, one could argue that negotiation, and how and when one negotiates, is a key aspect of psychology and interaction between people. And by conceding that women are simply less capable of negotiation, of even asking to negotiate, they are ALSO less capable of teaching psychology that would involve negotiation. And since they are “less capable”, they deserve less pay.

        Of course, I don’t believe at all that women are less capable. But, if you force that concession, then….

        1. I respectfully disagree. The quote from the article says, “She further claims that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors, and when they do, they are less likely to successfully obtain a raise.” The latter clause suggests less skill in successful negotiations. Either way, I agree it’s a questionable assertion.

          1. I agree with you on the second clause (they are less likely to successfully obtain a raise).

            And there is far more there to the argument, including potential bias on the part of the school there in negotiations (Which is a much stronger argument than any lack of skill on the female’s part)

            But I would’ve left off the first part (Females are less likely to negotiate) because it undermines the entire argument

            1. I see your point on the bias of the school’s negotiators, but that would a discriminatory intent case, not a disparate impact case. And she could have simply said that the school pays lower retention rates to women than to men, which would have been a more powerful and straightforward argument.

              And note further: she did not claim that SHE failed to engage in retention rate negotiations, or that SHE was unable to negotiate a retention raise successfully. She does not even allege that another school ever tried to recruit her away. She focuses on women as a class. She seems to be suggesting that the equivalent of a “retention rate” adjustment should be added to her pay regardless if she ever asked for it, or even would have been eligible for consideration for one.

              1. If no one tries to hire you away, you don’t get a retention raise. Pretty simple.
                Has she showed that women faculty get as many offers for lateral moves as male faculty? Has she showed that they don’t get other retention bonuses that are more valuable, for example extra funds for post-docs, extra lab space, overhead kickbacks (TAMU uses that), appointments to privileged committees. And who said that her work was actually the equal of her male colleges. Most of these items are amenable to at least semi-quantitative metrics.
                There is a lot that is not said.

    2. Radiolab helped a woman navel gaze for an hour about why she had sex with a hot dude at a frat once. She didn’t feel threatened. She didn’t feel he was gonna hurt her. She didn’t think he was even pressuring her. She just did it, and did not understand why. The host sympathized with her as she explored her feelings as to how they could define what the dude did as wrong.

      It’s way beyond what people realize.

  5. “She further claims that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors”

    So negotiate! I am so tired of hearing that because women CHOOSE not to negotiate, that’s gender discrimination. Jennifer Lawrence got so much press about gender discrimination when she was paid less than her costars for a movie, but she admitted that she accepted a lesser rate and didn’t negotiate for anything higher. Focus on teaching women to be more assertive on negotiating if that’s the problem, but stop acting like it’s a problem with the industry. You get a higher rate if you negotiate for it. No one’s just going to hand you everything for the joy of you being you.

    1. Kenvee,

      Isn’t it interesting how the same people who’d scream bloody murder if you suggested that women are less skilled at math and science than men, or that women would be less effective in combat than men, are more than ready to claim to be weaker than men when it works to their advantage?

      I wonder what would happen if I told a female attorney applicant that I was not hiring her because I need an attorney who can negotiate effectively and women are less assertive in negotiating? We’d hear quite a different argument then, wouldn’t we?

      1. Isn’t she claiming that women working in upper academia are less likely to negotiate at all? I’m not sure if she’s claiming that the women who do choose to negotiate are less effective. And I am confident that she’s not saying that women writ large are unable to negotiate effectively. I suspect that female attorneys are much more effective at negotiating than the public at large (just as I’m confident that male attorneys are, on average, more effective negotiators than the Average Joe or Average Jill on the street.).

        1. Once again, I am reading the following quote from the opinion: “She further claims that female professors at the University of Oregon are less likely to engage in retention negotiations than male professors, and when they do, they are less likely to successfully obtain a raise.”

          The latter clause can be read as suggesting that women are less able to negotiate raises successfully. I have also heard several women argue that men take advantage of women in salary negotiations because women supposedly “undervalue themselves” and are supposedly “less assertive” in salary negotiations. (Bear in mind that this is what women, not men, are saying).

          And please – do not assume that I agree that women are worse negotiators than men. My long experience with women attorneys, women executives, and women business owners has proven otherwise. I am simply commenting on the willingness of SOME women to plead weakness when it serves their purposes.

  6. Suppose someone has a abiding commitment to a particular University due to long standing family tradition or pride in their home state or the presence of extended family in the area or something similar and is unwilling to consider a position at another institution, should that person be penalized?

    Should that person be required to engage in a sham job search and negotiation to get a retention raise?

    Should someone in that position use their professional network to get a sham offer for the sole purpose of negotiation a retention raise?

    Could a university set up a sham offer to reward a crony of the administration?

    1. Such a person has chosen to hold their family tradition or state pride in higher regard than their monetary compensation. That was their choice to make and its a decision they can change at any time, its not a penalty

      1. Not necessarily, they may simply be unwilling to take unethical steps to increase their compensation, like seeking a job offer they have no intention of accepting.

        While it’s probably not illegal I do consider it unethical to search for a job you are not open to accepting. In fact someone with a known allegiance to a particular University may not even be considered for other positions.

    2. I think that you list a number of items that are predominantly counterfactual. The best faculty get recruited to move. If one does a job search in a manner that does not embarrass oneself-a job offer is not unlikely. In that case the offerer will look to offer what the applicant does not have in her present position.
      The sham offer is the least credible especially at top major research universities.

  7. So it sounds like this could apply to any individuals ability to negotiate their own compensation and create a de facto state of “collective bargaining” even in non-unionized sectors

  8. It seems to me that anyone who doesn’t want to hire a female attorney, business exectuive, etc., or wants to pay them less, can simply cite this case as their defense.

    The 9th Circuit has held that it’s reasonable to believe that women are inherently less willing and able to negotiate than men.

    So for any job that requires negotiation as an essential part of the job — and there are many, including lawyers, business executives, and more – the 9th Circuit has officially endorsed and blessed the idea that women are inherently inferior to men in terms of their negotiation skills and this inherent inferiority creates a rational, legitimate business necessity justification for excluding them or relegating them to lower-level positions.

    It’s a big, big win for people who don’t want women in managerial or professional positions.

    The plaintiff can probably rely on a major university not to raise this argument, so it’s not her own petard that the reprecussions of her argument will be hoisted on. But the implications of this case may well boomerang to the great detriment of managerial and professional women generally.

    1. On further reflection perhaps the university could raise this argument. It might say that if courts officially accepted and endorsed the argument that women are inherently less willing (or able) than men to engage in negotiations and this becomes an accepted basis for a Civil Rights case, this might lead to businesses shutting women out of positions requiring negotiation initiative and skills, and provide a precedent for allowing it.

  9. THE YEAR WAS 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

  10. I infer (but maybe I’m wrong) that no other U was trying to poach Prof. Freyd, even though she’s at the top of her field and female. That’s surprising. Back when I was in a Big Law Firm, we were certainly looking for highly qualified women lawyers as lateral hires. I would think academia would be the same. Certainly after this lawsuit, other U’s would be unlikely to have much interest in hiring Prof. Freyd, which would be called, in legal jargon, “buying a lawsuit”.

    I’m trying to figure out how the majority opinion isn’t “sexist”. Not having much luck.

    1. Just a bit of fact-finding. Professor Freyd had written 140 research papers and has an h-index of 42. That is pretty good. However, she has not written a highly cited (more than 30 cites) in five years.
      The department chair has 160 papers and an h-index of 43. But as chair he would get paid more.
      I did not have time to check af of Oregon’s Psych faculty, but it does seem that Prof. Freyd is a top performer.

      Now let’s look at Stanford. Prof James Gross has 428 publications and an h-index of 106! Hazel Markus has 135 publications and an h-index of 60. James McClelland has 180 publications and an h-index of 68.

      One has to conclude that Prof. Freyd is scarcely at the pinnacle of her field. Could she get an offer from Stanford? Who knows. But the upper researches of academia are fiercely competitive. This may be another case of the 9th Circuit heading for reversal

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