Randall v. ROLLS-ROYCE CORP.

742 F. Supp. 2d 974, 2010 U.S. Dist. LEXIS 101545, 2010 WL 3816700
CourtDistrict Court, S.D. Indiana
DecidedSeptember 22, 2010
Docket1:06-cv-860-SEB-JMS
StatusPublished
Cited by5 cases

This text of 742 F. Supp. 2d 974 (Randall v. ROLLS-ROYCE CORP.) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Randall v. ROLLS-ROYCE CORP., 742 F. Supp. 2d 974, 2010 U.S. Dist. LEXIS 101545, 2010 WL 3816700 (S.D. Ind. 2010).

Opinion

ORDER ON DEFENDANTS’ TWO SUMMARY JUDGMENT MOTIONS

SARAH EVANS BARKER, District Judge.

Plaintiffs, Sally Randall and Roña Pepmeier, each claim to have been the victims of gender discrimination while employed by Defendants, in violation of the Equal Pay Act (EPA) and Title VII of the Civil Rights Act. Defendants are all related entities engaged in the business of manufacturing turbine engines and parts and, unless there is a specific reason to differentiate among them, we will refer to them collectively throughout this entry as “Rolls-Royce.” In addition to their individual disparate treatment and disparate impact claims, Plaintiffs initially pled a “pattern and practice” claim, seeking to represent a class of women employees occupying various high salary management pay grades at the Rolls-Royce facility in Indianapolis, Indiana. We denied their class certification motion in March 2010 and thereafter also denied a motion to reconsider that decision, leaving Ms. Randall and Ms. Pepmeier to pursue only their individual claims. This entry addresses the two summary judgment motions which Rolls-Royce has filed with respect to the individual claims of each of the Plaintiffs, respectively.

Rolls-Royce Employee Compensation Structure

To fully understand the arguments made by the parties to this dispute, an examination of the Rolls-Royce salary structure and salary setting methodology in place since 2002 is necessary. To that end, we have drawn heavily on the Rolls-Royce Compensation Guidebook, a reference tool for Defendants’ Human Resources staff, which guidebook we also referenced liberally in analyzing Plaintiffs’ prior motion for class certification.

Employee compensation for non-hourly positions at Rolls-Royce is based on an annual salary plus a bonus awarded through one of the two bonus programs for which the employee may be deemed eligible. The company attempts in setting compensation levels to ensure that its em *977 ployees receive a market-competitive salary. To accomplish that goal, the company sets salary ranges for each position based on three factors: (1) job level; (2) control point (a/h/a “salary grades”); and (3) geographic differential. 1 There are a total of eight job levels denominated 70 through 77. Non-supervisory or “individual contributor” jobs are assigned levels within 70 to 75. Supervisory positions are set at levels 72 through 77. Various suffixes are used in job titles to help delineate various job levels. The Compensation Guidebook contains the following helpful chart:

Individual LEVEL Contributor Manager 70 Associate 71 Sr. Associate 72 Specialist Supervisor 73 Sr. Specialist Manager 74 Consultant Sr. Manager 75 Principal Director 76 Vice President 77 Executive Vice President

To establish specific salary ranges, Rolls-Royce subdivides each of these eight job levels into four control points designated by a letter, which we refer to as “salary grades” in this litigation. Thus, an employee at any job level may be assigned any one of four letter designations, for example: 71A, 71B, 71C, and 71D.

Rolls-Royce sets the salary ranges for each grade following annual reviews of outside market-based employment surveys, which data inform their decisions for each type of job within each salary grade. Salary ranges within job classification levels as well as within the respective control points can and do vary significantly. Rolls-Royce also determines a median or midpoint market salary for each salary grade and on this basis pegs the minimum salary for each grade at 75% of the median with a maximum set at 125%. Significant overlaps exist between and among the ranges for specific job levels and control points (i.e., an employee working as a 71A, whose salary is set at the higher end of that salary range, could receive more than an employee who works as a 73A). Thus, an employee’s specific salary amount depends on a variety of factors, including the complexity of the employee’s responsibilities, the employee’s experience level and qualifications, and the quality of the employee’s performance.

Rolls-Royce conducts an annual review of every employee’s performance, in part to determine whether the employee’s performance merits a raise in pay. Each year Rolls-Royce adopts a budget for merit increases and apportions the budgeted amount to each manager. Based on this allocation, each manager makes recommendations for increases for their supervisees. Part of the manager’s evaluation process is the computation of a Performance Development Review (“PDR”) score for each employee, which informs the decision as to the amount of any merit increase an employee is entitled to receive. In addition to conducting this annual review process, managers are vested with discretion to determine any appropriate adjustments to an employee’s base salary, such as an “equity adjustment,” in order to make the salary commensurate with market levels and reflective of the nature and scope of the employee’s duties. Managers are also authorized to make critical skills adjustments for those top performing employees whose skills are deemed critical to the success of the business.

*978 In addition to receiving an appropriately calibrated salary, employees are also eligible to participate in one of two bonus programs: the All Employee Bonus Scheme (“AEBS”) or, upon nomination by management, the Annual Performance Related Award (“APRA”). The Rolls-Royce Leadership Team for each particular business nominates employees to participate in the APRA program, which is an executive bonus program paid out to recipients on the basis of two-thirds in cash and one-third in deferred stock. APRA awards focus on the employee’s performance against personal objectives set at the start of the year. Employees nominated to participate in APRA do so at differing percentage levels assigned based on the significance of their roles within the company. Company financial targets must be achieved for any bonus payment to occur under APRA. Eligibility for APRA is typically reserved for Director-level employees and above. However, exceptions are made from time to time for participation by employees below the Director-level.

Employees not selected for participation in the APRA program are eligible for the AEBS. AEBS awards are based on the company’s overall performance relative to certain financial measures.

Sally Randall’s Tenure

Sally Randall holds B.S. and M.S. degrees from Purdue University in Mechanical Engineering and Thermal Science, respectively. She initially worked for the predecessor to Rolls-Royce, Detroit Diesel Allison. After the Indianapolis facility was acquired in 1995, she became a member of the Rolls-Royce engineering department, and in April 1996 she attained the level of Chief Project Engineer.

From January 2000 through April 2002, Randall occupied the position of Chief Project Engineer for the Model 250 Engine product family. After requesting an opportunity to transfer to another business section in April 2002, Rolls-Royce moved her to the AE 1107 Engine product line, where she assumed a comparable position as Chief Project Engineer. In early 2003, she was approached by the hiring manager for the Quality area and, in March of 2003, Randall accepted the position of Director of Quality Assurance for Rolls-Royce Corporation.

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742 F. Supp. 2d 974, 2010 U.S. Dist. LEXIS 101545, 2010 WL 3816700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/randall-v-rolls-royce-corp-insd-2010.