Published on August 26, 2014

Royal Tire to pay fine for wage discrimination

MINNEAPOLIS (Aug. 26, 2014) — Royal Tire Inc. will pay a $182,500 fine and be subject to a detailed consent decree to resolve a wage discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced.

The decree, approved on July 31 by Judge John R. Tunheim of U.S. District Court for the District of Minnesota, resolves an EEOC lawsuit charging that between January 2008 and June 2011, Royal Tire discriminated against its female human resources director, Christine Fellman-Wolf, by paying her lower wages than it paid a male employee who held the same position.

The EEOC said its investigation showed that when Ms. Fellman-Wolf became HR director, she was paid $35,000 less per year than her male predecessor, and $19,000 less than the minimum salary for the position under Royal Tire’s own compensation system.

Ms. Fellman-Wolf complained about the disparity and asked to be compensated fairly, but Royal Tire did not make up the difference, according to the EEOC. Ms. Fellman-Wolf was director of HR from March 2006 to July 2011, according to her LinkedIn page.

Royal Tire did not respond to Tire Business requests for comment on the case.

Pay discrimination is illegal under the Equal Pay Act of 1963, which prohibits sex-based wage differentials for work requiring “equal skill, effort and responsibility performed under the same or similar working conditions,” the EEOC said.

It also is illegal under Title VII of the Civil Rights Act of 1964, which generally prohibits employment discrimination—including in compensation—on the basis of sex.

Both statutes are enforced by the EEOC.

The EEOC lawsuit charged that Royal Tire had violated both those acts.

The agency said it filed suit on June 21, 2013, in U.S. District Court for the District of Minnesota after first attempting to reach a pre-litigation settlement through its voluntary conciliation process.

“We are very pleased with this consent decree,” said EEOC General Counsel David Lopez. “This is the latest in a series of cases where the Commission was able to successfully vindicate the rights of women under the Equal Pay Act.”

In addition to monetary relief to Ms. Fellman-Wolf, Royal Tire must comply with the three-year consent decree, which contains an injunction prohibiting the company from any future discriminating based on sex, paying men and women different wages for doing equal work, and retaliating against employees who exercise their rights under federal law.

The consent decree also requires Royal Tire to evaluate its pay structure to ensure compliance with the Equal Pay Act and Title VII, and if it discovers employees who are being paid less than required by law, it must immediately raise the wages for those employees.

The decree requires training for Royal Tire’s managers and employees under the Equal Pay Act and Title VII, and allows the EEOC to monitor the dealership’s compliance with the decree. Royal Tire must report to the EEOC any complaints it receives about pay discrimination and provide information on how it handles those complaints.

Ms. Fellman-Wolf now describes herself as an independent business consultant on her LinkedIn page.

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