Kellogg v. Ball State Univ.

• Decision Date: 05 January 2021
• Docket Number: No. 20-1406,20-1406
• Citation: 984 F.3d 525
• Parties: Cheryl KELLOGG, Plaintiff-Appellant, v. BALL STATE UNIVERSITY d/b/a Indiana Academy for Science, Mathematics and Humanities, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

984 F.3d 525

Cheryl KELLOGG, Plaintiff-Appellant,

v.BALL STATE UNIVERSITY d/b/a Indiana Academy for Science, Mathematics and Humanities, Defendant-Appellee.

No. 20-1406

United States Court of Appeals, Seventh Circuit.

Argued November 3, 2020

Decided January 5, 2021

Rehearing Denied January 28, 2021

Jason Cleveland, Eric James Hartz, Attorneys, CLEVELAND LEHNER CASSIDY, Indianapolis, IN, for Plaintiff - Appellant.

Matthew L. Kelsey, Scott E. Shockley, I, Attorneys, DEFUR VORAN LLP, Muncie, IN, for Defendant - Appellee.

Before Kanne, Scudder, and St. Eve, Circuit Judges.

Kanne, Circuit Judge.

Many plaintiffs seeking to redress discriminatory payment decisions cannot marshal evidence of explicit misconduct. But the plaintiff in this case, Cheryl Kellogg, can and has. Kellogg testified that when the Indiana Academy hired her as a teacher in 2006, its director, Dr. David Williams, told her that she "didn't need any more [starting salary], because he knew [her] husband worked." Throughout her twelve-year tenure at the Academy, Kellogg suffered the effects of this outdated and improper approach to her starting pay. And in 2018, she sued the Academy for her unjust compensation.

Despite this evidence of unequivocal discrimination, the district court granted summary judgment to the Academy because it proffered what the court believed were undisputed gender-neutral explanations for Kellogg's pay.

This decision was not correct. Williams's statement contradicts the Academy's explanations for Kellogg's pay and puts them in dispute. And for several reasons, it does not matter that Williams uttered the statement so long ago, even well outside the statute of limitations period. Under the paycheck accrual rule, Williams's statement can establish liability because it affected paychecks that Kellogg received within the limitations window. Plus, as an evidentiary matter, Kellogg can rely on Williams's statement to put the Academy's explanations in dispute. We thus reverse the decision of the district court granting summary judgment to the Academy and remand this case for further proceedings.

I. BACKGROUND

The following facts are stated in the light most favorable to Kellogg as the nonmoving party. The Indiana Academy for Science, Mathematics and Humanities is a residential high school on the campus of Ball State University. The Academy hired Kellogg in 2006 as a life science teacher. Her starting salary was $32,000.

Kellogg negotiated this figure with the Academy's Executive Co-Director, Dr. David Williams. According to Kellogg, Williams told her during those negotiations that "he wouldn't pay [her] any more, because then [she] would be making as much as his Ph.D instructors and ... he offhandedly told [her] that [she] didn't need any more money, because he knew [her] husband worked at Ball State, so [they] would have a fine salary."

Many years later, in 2017, Kellogg complained to the Dean of Ball State's Teacher's College, which oversees the Academy, that she received less pay than her similarly situated male colleagues. The Dean responded to this complaint by writing to Kellogg that "[t]he issue [wa]s salary compression, which means those who [we]re hired after [Kellogg] began at a higher salary." The Dean also noted that Kellogg's salary increased by 36.45% during her time at the Academy while her colleagues’ salaries increased by less.

Unsatisfied with this answer, Kellogg sued the Academy in 2018 for violating Title VII and the Equal Pay Act by engaging in sex-based pay discrimination. The Academy moved for summary judgment on both claims. The district court granted the motion because the Academy provided what the court believed were undisputed gender-neutral explanations—such as salary compression and qualification differences—for any discrepancy between Kellogg's salary and her colleagues’. In reaching this conclusion, the court found that while Williams's statement about Kellogg's husband "is admissible for purposes of providing background information on the factual circumstances, it cannot establish liability, as these allegations fall well outside the statute of limitations." Kellogg now appeals that decision.

II. ANALYSIS

We review the district court's summary judgment order de novo . Flexible Steel Lacing Co. v. Conveyor Accessories, Inc. , 955 F.3d 632, 643 (7th Cir. 2020) (citing Ga.-Pac. Consumer Prods. LP v. Kimberly-Clark Corp. , 647 F.3d 723, 727 (7th Cir. 2011) ). "Summary judgment is appropriate when ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ " Id. (quoting Fed. R. Civ. P. 56(a) ). "We draw ‘all justifiable inferences’ in the favor of the nonmoving party." Id. (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ) (citing AutoZone, Inc. v. Strick , 543 F.3d 923, 929 (7th Cir. 2008) ).

Our review of the district court's decision to grant summary judgment to the Academy comes down to one question—are the Academy's nondiscriminatory explanations for Kellogg's pay in dispute?

We hold that they are because 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.

A. Title VII

"Title VII makes it unlawful for an employer to ‘discriminate against any individual with respect to his compensation ... because of such individual's ... sex.’ " Lauderdale v. Ill. Dep't of Human Servs. , 876 F.3d 904, 909 (7th Cir. 2017) (alterations in original) (quoting 42 U.S.C. § 2000e–2(a)(1) ). Under this statute, the plaintiff bears the burden of establishing a prima facie case of unlawful pay discrimination. Id. at 910 (citing Burks v. Wis. Dep't of Transp. , 464 F.3d 744, 750 (7th Cir. 2006) ). "If that burden is met, the employer must articulate a ‘legitimate, nondiscriminatory reason’ for paying the plaintiff less." Id. (quoting Burks , 464 F.3d at 751 ).

Then, if the employer does so, the burden shifts back to the plaintiff to call the explanation into question as pretextual. Id. (citing St. Mary's Honor Ctr. v. Hicks , 509 U.S. 502, 507–08, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993) ; Burks , 464 F.3d at 751 ). Our task in determining whether a proffered explanation is pretextual is to ask if the employer "honestly believed in the nondiscriminatory reasons it offered." Merillat v. Metal Spinners, Inc. , 470 F.3d 685, 693 (7th Cir. 2006) (quoting Jackson v. E.J. Brach Corp. , 176 F.3d 971, 984 (7th Cir. 1999) ) (citing Balderston v. Fairbanks Morse Engine Div. of Coltec Indus. , 328 F.3d 309, 323 (7th Cir. 2003) ).

Here, the parties agree for purposes of summary judgment that Kellogg established a prima facie Title VII claim. Further, the Academy has articulated potential gender-neutral explanations, such as salary compression, for Kellogg's pay. So, the key summary judgment question is whether Kellogg has brought forth evidence to "create a triable issue of fact with respect to her burden of demonstrating that [the Academy's nondiscriminatory] reasons are pretextual." Id. at 695.

She has. Kellogg testified that Williams told her that she "didn't need any more [starting salary], because he knew [her] husband worked." That statement, which must be taken as true, creates a dispute over whether the Academy "honestly believed in the nondiscriminatory reasons" that it offered. Id. at 693. According to Williams, the Academy didn't honestly believe in them; it paid Kellogg less because of her husband's employment. Indeed, the Academy has not even tried to argue that the statement does not impugn their proffered explanations.

The Academy instead argues that, for two reasons, we should not consider Williams's statement. First, it tries to brush Williams's statement aside by characterizing it as a "stray remark" with no "real link" to Kellogg's pay because Kellogg described it—in an ironically offhanded way—as "offhanded." Id. at 694 ("[I]solated comments that are no more than ‘stray remarks’ in the workplace are insufficient to establish that a particular decision was motivated by discriminatory animus." (citing Cullen v. Olin Corp. , 195 F.3d 317, 323 (7th Cir. 1999) ). But Williams's statement was not watercooler talk. It was a straightforward explanation by the Academy's director, who had control over setting salaries, during salary negotiations that Kellogg did not need any more money "because" her husband worked at the University. Few statements could more directly reveal the Academy's motivations.

Second, the Academy argues that we, like the district court, should skirt Williams's statement because it occurred outside the statute of limitations period and thus "cannot establish liability." We disagree for several reasons.

To start, under the paycheck accrual rule, as codified by the Lilly Ledbetter Fair Pay Act of 2009, Williams's statement can "establish liability." Under the Ledbetter Act, an actionable "unlawful employment practice occurs, with respect to discrimination in compensation ... each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice." 42 U.S.C. § 2000e–5(e)(3)(A). In other words, "a new cause of action for pay discrimination ar[ises] every time a plaintiff receive[s] a paycheck resulting from an earlier discriminatory compensation practice"—even one that "occurr[ed] outside the statute of limitations period." Groesch v. City of Springfield , 635 F.3d 1020, 1027 (7th Cir. 2011) (citing Reese v. Ice Cream Specialties, Inc. , 347 F.3d 1007, 1013–14 (7th Cir. 2003) ; Hildebrandt v. Ill. Dep't of Nat. Res. , 347 F.3d 1014, 1028 (7th Cir. 2003) ).

Our application of this rule in Groesch is especially informative. In that case, "the original adverse discrimination decision," which involved a seniority calculation, took place outside the limitations window. Id. at 1023. The plaintiffs relied...