A Win for Equal Pay: The Third Circuit Court of Appeals Upholds A Law Designed to Address Wage Gap

JOANNA L. GROSSMAN

SMU Dedman School of Law professor Joanna L. Grossman comments on a recent decision by the U.S. Court of Appeals for the Third Circuit upholding a local law designed to address the wage gap. Grossman describes the landscape of equal pay law and the efforts some states and localities have made to address the inequity.

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Sanchez v. Department of Veterans Affairs

Docket: 18-2171

Opinion Date: February 10, 2020

Judge: Timothy B. Dyk

Areas of Law: Contracts, Labor & Employment Law, Military Law

In 1999, while working at the San Juan VA Medical Center, Dr. Sanchez, a urologist, reported to his superiors what he believed to be improper practices. In 2000, Sánchez received a proficiency report prepared by his supervisor, indicating that his performance “ha[d] shown a significant [negative] change since his last evaluation.” Sánchez was reassigned to the Ambulatory Care Service Line, where he believed that he would not perform surgery, care for patients, or supervise other staff members. He concluded that these actions were retaliation for his whistleblowing activities. Sánchez and the VA entered into a settlement agreement under which Sanchez was to be reassigned to the Ponce Outpatient Clinic with a compressed work schedule of 10 hours per day for four days per week, to include three hours of travel per day. The parties adhered to the Agreement for 16 years. In 2017, Sánchez received a letter, informing him that he was required to be at the Ponce clinic from “7:30 a.m. until 4:00 p.m. from Monday through Friday.” An AJ rejected his petition for enforcement with the Merit Systems Protection Board. The Federal Circuit affirmed. The background of the Agreement supports the conclusion that 16 years was a reasonable duration. As the party claiming a breach, Sánchez had the burden of proof but did not offer evidence that the claimed animosity persisted after that 16-year time period.

Acetris Health, LLC v. United States

Docket: 18-2399

Opinion Date: February 10, 2020

Judge: Timothy B. Dyk

Areas of Law: Drugs & Biotech, Government Contracts, International Trade

Acetris obtains its pharmaceutical products from Aurolife, which makes them in a New Jersey facility, using an active pharmaceutical ingredient made in India. Acetris had contracts to supply the VA with several pharmaceutical products, including Entecavir (used to treat hepatitis B). The VA requested that Acetris recertify its compliance with the Trade Agreements Act of 1979 (TAA), which bars the VA from purchasing “products of” certain foreign countries, such as India. Ultimately, the VA requested that Acetris obtain a country-of-origin determination. Customs concluded that the Acetris products were products of India. Acetris agreed to cancel its Entecavir contract. The VA issued a new solicitation seeking proposals for Entecavir, indicating that it would continue to rely on the Customs determination. Acetris filed suit, challenging the VA’s interpretation of the TAA. The VA awarded the Entecavir contract to Golden, consistent with its policy to award contracts to the lowest-price technically acceptable bid. The government moved to dismiss the suit, arguing that Acetris lacked standing because Acetris would not have won the contract regardless of the interpretation of the TAA and that Acetris’ earlier-filed Court of International Trade suits divested the Claims Court of jurisdiction under 28 U.S.C. 1500. The Claims Court denied the government’s motions and rejected the government’s interpretation of the TAA. The Federal Circuit affirmed in part, holding that the suit is justiciable and agreeing with the Claims Court. The court remanded for the entry of a declaratory judgment and injunction.

CP Kelco US, Inc. v. United States

Docket: 19-1207

Opinion Date: February 10, 2020

Judge: Kimberly Ann Moore

Areas of Law: International Trade

The Department of Commerce initiated an antidumping duty investigation and determined that xanthan gum imported from China was sold in the U.S. at less than fair value. Commerce considers China to be a non-market economy country and must “determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise . . . . based on the best available information regarding the values of such factors in a market economy country,” 19 U.S.C. 1677b(c)(1). Commerce values factors of production by utilizing “prices or costs of factors of production” from a market economy country.” Commerce chose Thailand as the primary surrogate country for the investigation. In determining Fufeng's duty, Commerce did not value X. Campestris as a factor of production or a direct material input because Fufeng’s costs associated with the maintenance and use of X. Campestris bacteria are similar to those of Thai Ajinomoto’s costs associated with maintaining the bacteria used to produce comparable merchandise (MSG and l-lysine). Commerce found that Fufeng acquired an X. Campestris strain for payment-in-full before the period of investigation, including the right to further grow and exploit the resulting bacteria for the production of xanthan gum. The Trade Court and Federal Circuit upheld the treatment of Xanthomonas as an asset rather than a direct material input.