Gallagher v. KLEINWORT BENSON GOV. SECURITIES, INC.

• Decision Date: 24 October 1988
• Docket Number: No. 86 C 1455.,86 C 1455.
• Citation: 698 F. Supp. 1401
• Parties: Lanette Bengel GALLAGHER, Plaintiff, v. KLEINWORT BENSON GOVERNMENT SECURITIES, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

698 F. Supp. 1401

Lanette Bengel GALLAGHER, Plaintiff, v. KLEINWORT BENSON GOVERNMENT SECURITIES, INC., Defendant.

No. 86 C 1455.

United States District Court, N.D. Illinois, E.D.

September 23, 1988.

On Motion to Vacate October 24, 1988.

Abraham N. Goldman, John R. Wylie, Abraham N. Goldman & Assoc., Chicago, Ill., for plaintiff.

Bennett L. Epstein, Lee Ann Russo, Coffield, Ungaretti, Harris & Slavin, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

ANN C. WILLIAMS, District Judge.

The plaintiff Lanette Bengel Gallagher brings this two count amended complaint which alleges that the defendant Kleinwort Benson Government Securities, Inc. discriminated against her on the basis of her sex in violation of the Equal Pay Act of 1963 ("Act"), 29 U.S.C. § 206(d)(1) and Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-1 to 2000e-17. The defendant moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. The court grants the defendant's motion for the following reasons.

I Rule 56 Summary Judgment

Summary judgment pursuant to Federal Rule of Civil Procedure 56(c) is appropriate when the moving party uses the

pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, to show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(c). A material fact is one that "must be outcome determinative under the applicable law." Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir.1984); See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (substantive law determines material facts); Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.) (en banc), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983). A genuine dispute about a material fact arises when "the evidence is such that a reasonable jury could return a verdict for that party." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.

After the movant has made a properly supported summary judgment motion, "the nonmovant does have the burden of setting forth specific facts showing the existence of a genuine issue of fact for trial." Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986); See also Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed. 2d 538 (1986) (the nonmovant "must do more than simply show that there is some metaphysical doubt as to the material facts.") The nonmovant may not rely on the allegations or denials in its pleadings to establish a genuine issue of fact. See Fed. R.Civ.P. 56(e). Furthermore, summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Finally, "the trial judge must accept as true the nonmovant's evidence, must draw all legitimate inferences in the nonmovant's favor, and must not weigh the evidence on the credibility of witnesses." Valentine v. Joliet Township High School District, 802 F.2d 981, 986 (7th Cir.1986) (emphasis added).

II Factual Background

The pertinent undisputed facts are as follows. In August 1977, Gallagher began her employment at Kleinwort as a head cashier. Her starting salary was $10,150 per year. In September 1979, Gallagher and another woman were promoted to the position of assistant repurchase trader. She was paid a salary of $19,540 a year plus a subjective bonus to be determined by management. In January 1981, Gallagher was again promoted to the position of repurchase trader. Her salary increased to $27,000 a year. In addition, she became eligible for an objective bonus based on individual profitability. The objective bonus is calculated by subtracting two times a trader's base salary from his or her profit during the calendar year and multiplying the resulting figure by ten percent. Gallagher received gradual increases in her base salary in the ensuing years. In 1982, her base salary increased to $33,000. In 1983, she earned a $38,500 base salary in addition to a $155,844 bonus. In 1984, her base salary was $46,000 plus a $143,248 bonus. In 1985, her base salary was raised to $53,000 prior to her termination.

During the course of her employment at Kleinwort, Gallagher approached her superiors on several occasions about the low level of her base salary. In 1983, for example, she approached Allen Donald, Kleinwort's former deputy trading manager. Gallagher Deposition, April 18, 1986, at 110. She stated

that she felt that she was on the lower end of the scale and that she had been a top producer and that she wasn't real happy with her raise and she wanted to know why it was still so low.

Id. at 112. Donald stated that she was "really further ahead making what she was given as opposed to making more money" on her salary. Id. Gallagher stated that it was unfair. Donald stated that the amount of her salary raise was going to remain the same. In December 1984, Gallagher also brought her salary concerns to Paul Dziubek, her supervisor. After receiving her yearly raise, Gallagher said that she was not pleased with her raise because she had previously been promised more compensation. Gallagher Deposition, June 10, 1986, at 37. Moreover, she felt that the raise was unfair since she "was one of the top producers consistently for the last five years and one of the lowest paid." Id. Dziubek, who did not deny her statement, said that he would look into it. Id. Gallagher had a follow-up conversation with Dziubek regarding her salary in January 1985. She asked him if anything had come up about her raise. Id. at 39. He said no but that it was being looked into. Id. Beginning in December 1981, Kleinwort management formally reviewed Gallagher's performance as a repurchase trader on at least four occasions. Kleinwort also conducted informal reviews of Gallagher's performance. She received many reprimands and criticisms during these reviews. Kleinwort terminated Gallagher's employment in February 1985.

III Equal Pay Act

Gallagher alleges a violation of the Equal Pay Act, 29 U.S.C. § 206(d)(1), in Count I of her amended complaint. To establish a prima facie case of discriminatory compensation under the Act, Gallagher must prove "that she received less pay than a male for equal work requiring equal skill, effort and responsibility under similar working conditions." Covington v. Southern Illinois University, 816 F.2d 317, 321 (7th Cir.), cert. denied, ___ U.S. ___, 108 S.Ct. 146, 98 L.Ed.2d 101 (1987). Kleinwort moves for summary judgment on the grounds that Gallagher cannot show that she received less pay than the male traders that she compares herself to. Gallagher asserts that the following traders received higher wages than her for performing equal work: Martin Kaiser, Glen Noren, Tom Mangan, Greg Silver, Peter Franz, Robert Schumacher, Marcus Schwartz, Clark Pleiss, Donald Eden, Levor Garnaas, Frank Oddo, Wendell Kapustiak, Mark Lahey, and Joseph Persak. Gallagher's Answers and Supplemental Answers to Interrogatories at 3.

The definition of "wages" for the purposes of the Act is found at 29 C.F.R. § 1620.10.¹ Under the Act the term "wages"

includes all payments made to or on behalf of an employee as remuneration for employment. The term includes all forms of compensation irrespective of the time of payment, whether paid periodically or deferred until a later date, and whether called wages, salary, profit sharing, expense account, monthly minimum, bonus, uniform cleaning allowance, hotel accomodations, use of company car, gasoline allowance, or some other name.

29 C.F.R. § 1620.10 (emphasis added). Thus, under this definition, any bonus received by a trader will be included within his or her wage. Gallagher concedes that her total compensation exceeded that of almost every other trader. Gallagher Deposition, January 14, 1987, at 44. In 1984, her last full year of employment, Gallagher's "wages" were higher than all of the traders named above with the exception of Frank Oddo, the firm's vice president.²See Kleinwort's Rule 12(e) Statement, Appendix B. As a result, Gallagher has failed to present any evidence showing that the male traders with whom she compares herself with received greater wages than her own.³ Consequently, her Equal Pay Act claim fails. Accordingly, Kleinwort is entitled to summary judgment on Count I.

IV Title VII: Wage Discrimination

Gallagher brings Count II of her amended complaint pursuant to Title VII, 42 U.S.C. § 2000e-1 to 2000e-17. She alleges two causes of action within this count. Her first cause of action is for discriminatory compensation. The Seventh Circuit has held that a plaintiff must "meet the equal pay standard of the Equal Pay Act to prove her Title VII sex discrimination in wages claim" unless she can present "`direct evidence that an employer has intentionally depressed a women's salary because she is a woman.'" American Nurses' Association v. State of Illinois, 783 F.2d 716, 721 (7th Cir.1986), quoting County of Washington v. Gunther, 452 U.S. 161, 204, 101 S.Ct. 2242, 2265, 68 L.Ed. 2d 751 (1981) (emphasis in original); Equal Employment Opportunity Commission v. Sears Roebuck & Co., 839 F.2d 302, 343 (7th Cir.1988). The Supreme Court found an example of such intentional sex discrimination in Gunther where the defendant had set "the wage scale for female guards, but not for male guards, at a level lower than its own survey of outside markets and the worth of the jobs warranted." Gunther, 452 U.S. at 166, 101 S.Ct. at 2246 (emphasis added).⁴

In this case, Gallagher attempts to establish that Kleinwort engaged in intentional sex discrimination. She again raises the argument that she was paid less than the...