Managers v. Dollar Tree Stores - A Tale of Two Cases with Four Lessons About Pay Discrimination Claims Under Title VII and The Equal Pay Act

| Zuckerman Spaeder Team

Here’s the tale of  two cases with four lessons about Title VII and the Equal Pay Act when it comes to claims that an employer (in this case, Dollar Tree Stores) pays employees (in this case, Dollar Tree Store Managers) less because of their gender.  As we’ve said previously, claims for pay discrimination can be brought under both laws. 

The first case was filed in 2008 in federal court in Alabama by Cynthia Ann Collins and Beryl Dauzat against Dollar Tree alleging that the company violated the Equal Pay Act by paying them and other female Store Managers less compensation than male Store Managers doing the same work.  In 2009, the court certified an opt-in collective action under Section 216(b) of the Fair Labor Standards Act (or, the “FLSA,” of which the Equal Pay Act is a part), allowing all women who were classified as Store Managers for Dollar Tree between 2006 and 2009 to join the lawsuit.  Under the court’s order, notice of the lawsuit was sent to all Dollar Tree Store Managers employed by the company between 2006 and 2009.  To join the lawsuit, a woman would have to complete and sign a form and send it to the court no later than the deadline expressly consenting to become a party to the lawsuit and authorizing the named plaintiffs and their counsel to act as her agents in prosecuting her Equal Pay Act claims against Dollar Tree.  About 350 women joined the lawsuit.

Later in 2009, Collins and the other plaintiffs sought to amend their complaint to bring claims under Title VII alleging that Dollar Tree discriminated against them by paying them less than their male counterparts, and to certify those claims for a Rule 23 opt-out class action.

Lesson #1:  Equal Pay Act claims cannot be brought as a Rule 23 opt-out class action.  Section 216(b) of the FLSA (again, of which the Equal Pay Act is part) provides:

No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

By contrast, under Rule 23, if a court certifies a class which is defined to include you, then you are and remain a class member unless you affirmatively opt-out of the class.  On the flip side, the standards for certifying an FLSA collective action are easier to satisfy than the standards for certifying a Rule 23 class action.

Back to our tale.  Dollar Tree opposed the plaintiffs’ efforts to amend the complaint with the Title VII claims on the ground that the Alabama court was not the proper venue for them. 

Lesson #2:  Title VII, in contrast to the Equal Pay Act, has strict requirements about venue.  42 U.S.C. § 2000e-5(f)(3) provides that venue lies (1) “in any judicial district in the State in which the unlawful employment practice is alleged to have been committed,” (2) “in the judicial district in which the employment records relevant to such practice are maintained and administered,” or (3) “in the judicial district in which the aggrieved person would have worked but for the alleged unlawful unemployment practice.” 

The Alabama court agreed with Dollar Tree that the court was not the right venue and denied the plaintiffs’ request to amend their complaint with the Title VII class action claims.

The second case was filed the next day in federal court in Virginia, where Dollar Tree is headquartered (to solve the venue issue) by Collins and others alleging their Title VII class action claims against Dollar Tree. Dollar Tree argued that the claims were time-barred because they were not filed within 90 days of the plaintiffs receiving their Right to Sue letters from the EEOC.   Dollar Tree further argued that the statute was not tolled (that is, the 90-day clock did not stop ticking) while the plaintiffs were waiting for a decision from the Alabama court on whether they could amend their complaint with their Title VII claims in that case.  The Virginia court agreed with Dollar Tree, and then, last week, so did the Fourth Circuit. 

Lesson #3:  For a Title VII claim to be valid, the plaintiff first has to file a charge with the EEOC within 180 days of the alleged violation.  The Lilly Ledbetter Act, as we have described, changed the law on what that time limit means in the pay discrimination context.  A second statute of limitations – the one that was at issue in the Dollar Tree case – applies to Title VII claims.  In order to timely file a Title VII claim in court, the plaintiff has to do so within 90 days of receiving a Right to Sue Letter from the EEOC. 

Is this the end of our tale?  Most likely, yes.  From what we can tell, the first (Equal Pay Act) case settled on confidential terms after the Alabama court decertified the collective action.  The second (Title VII) case came to an end with the Fourth Circuit’s decision last week.

Lesson #4:  Collective actions may be easier to come by than class actions, but they are also generally more vulnerable to decertification by the court later, after more facts come to light through discovery in the case. 

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.