A recent federal appeals court’s decision in Cheryl Lane & Adrienne Hause v. Stericycle, Inc., No. 24‑1570 (7th Cir. Dec. 23, 2025) highlights risks employers face when defending against pay discrimination claims brought under the Equal Pay Act (EPA) and Title VII.
The Seventh Circuit’s decision emphasizes key areas that employers need to be aware of, including the use of salary history when defending compensation claims, the definition and timing of comparators in an equal pay case, and the different burden requirements under both the EPA and Title VII.
Stericycle underwent a reorganization of their sales function in 2021 which resulted in the creation of a new role, the Key Account Director (KAD), in its national and hospital divisions. The plaintiffs Cheryl Lane and Adrienne Hause were female sales employees in the national sales division at the time and were promoted to the new National KAD roles during the reorganization. After the promotions, both employees continued to receive their base salaries prior to the promotion.
During the same reorganization nine male employees became Hospital KADs – two were promoted into the role with salary increases, and seven were transferred into the role with no salary increase. All their salaries post-promotion or transfer were more than the female plaintiffs’ salaries.
After the plaintiffs complained to their employer of inequitable pay, their salaries were increased to equal that of the lowest-paid male Hospital KAD. The company’s Director of Human Resources testified that when adjusting the plaintiffs’ pay, she considered years of experience, skill and performance, the salary range for the KAD position and prior positions, and the salaries of comparators, including Hospital KADs.
The plaintiffs sued under the EPA and Title VII, alleging they were paid less than males in the Hospital KAD roles, even though they were performing substantially similar work. The district court ruled that while the plaintiffs established a prima facie EPA case (males were paid higher wages for equal work), Stericycle’s explanation that the pay differences were based on prior position and salary history were a valid ‘factor other than sex’ under the EPA. The plaintiffs also lost their Title VII claim, as the court found that they had not proved the company’s pay decisions were based in discriminatory practices or were pretextual.
The plaintiffs appealed this decision, and the Seventh Circuit reversed the district court’s ruling of summary judgement and sent the case back to the lower court for reconsideration. The Seventh Circuit’s opinion highlights some important takeaways for employers.
- Identification of comparators: The plaintiffs in this case did not list the Hospital KAD’s as comparators in their initial complaint and instead identified them as comparators later during the litigation process. Stericycle argued they were not valid comparators as they were not included in the initial complaint; the Seventh Circuit disagreed with this conclusion and maintained that they could be considered as comparators.
- EPA “factor other than sex” defense: Under the EPA, an employer can justify pay differences by showing the disparity was based on a “factor other than sex.” Although some courts, like those in the Ninth Circuit, take the position that salary history cannot be a valid defense, the Seventh Circuit does not. For the male KADs who were transferred into the role and kept their prior salaries (which were higher than the plaintiff’s salaries) the court held that Stericycle’s salary history defense was valid because the plaintiffs were unable to prove that the historical pay had been discriminatory. However, for the two male comparators that were promoted into the KAD role, Stericycle failed to prove their neutral explanation because it could not provide documentation that the plaintiffs received raises at the same time as those men, and it could not justify why one male’s raise was much higher than the plaintiffs’. The court allowed this claim to move forward under the EPA because they raised genuine factual disputes that should be decided at trial.
- Temporary pay disparities: In its ruling, the court emphasized that pay differences occurring at specific times, even if corrected later, can support an EPA claim. Specifically in relation to the two male KAD’s promoted into the role, the court stated that there was a genuine dispute whether Stericycle consistently applied its stated practice that promotions into the KAD role were accompanied by raises. The court found that the plaintiffs might have been doing KAD work before the day they received the raise, and the raises were given only after collectively complaining about inequity. The court held that a reasonable jury could infer that there was intentional sex discrimination, and that the case should be reconsidered by the lower court.
Employers would be wise to pay attention to the ruling in this case. Courts will closely scrutinize pay-setting practices, particularly around promotions, timing of raises, and reliance on prior salary. Employers should consider taking the following actions:
- Be thoughtful about pay adjustments for promotions: This case shows that temporary pay disparities can create liability, even if they are corrected later. When multiple employees are promoted at the same time into the same role, employers should set the base pay at the same time, avoiding a “we’ll adjust later” mindset. If increases will be staggered, document why and how the timing differs.
- Be cautious about using prior salary: Courts are split on whether salary history may be considered a legitimate defense against an EPA claim as a “factor other than sex.” Using salary history alone is risky, so employers should also consider other independent, job-related factors such as prior experience or training, and the rationale should be carefully documented. Employers should also be mindful of states or localities where there are bans on using prior salary to set starting pay.
- Apply promotion practices consistently: In this case, some of the plaintiffs’ strongest evidence was that the men received raises immediately upon promotion, while the women did not. Employers should ensure that promotion practices are consistently followed and should regularly audit whether certain groups are receiving automatic raises, discretionary increases, or faster pay adjustments.
- Document, document, document: If employers find themselves in court defending against an EPA or Title VII claim, they must be prepared to prove neutral explanations for salary decisions, not just assert that decisions were made on a neutral basis. For all compensation decisions that are made, employers should document and retain who made the decision, what factors were considered, when the decision took effect, and if there were alternative salary options that were rejected.
- Conduct regular pay audits: This case emphasizes the importance of conducting regular audits of employees’ pay. At least annually, employers should examine pay by role, sex, and promotion status, analyze starting pay vs. post-promotion adjustments, and identify any unexplained gaps. Fixing issues before they become complaints will save the employer time and money in the long run, preventing potentially costly litigation and court-mandated pay raises and backpay.