Labor & Employment Law Daily Wrap Up, DISCRIMINATION—PAY—7th Cir.: Female employees promoted without raises revive pay and sex discrimination claims, (Jan 2, 2026)

By Brandi O. Brown, J.D.

The employees pointed to evidence they only received pay raises after complaining to HR, whereas male employees who were promoted to the same positions received automatic raises.

Two female Stericycle sales employees who were promoted during an employer reorganization, but did not receive immediate pay raises as had male employees promoted to the same positions, were able to revive their pay and sex discrimination claims on appeal to the Seventh Circuit. Although the court below granted summary judgment against them on both their Equal Pay Act and Title VII claims by focusing on the fact that seven of the male comparators had been transferred rather than promoted and had brought their salary history with them, the appeals court noted that this did not account for two male workers who were, like the female employees, promoted and who received immediate pay raises (Lane v. Stericycle, Inc., No. 24-1570 (7th Cir. Dec. 23, 2025)).

Reorganization. In 2021, Stericycle, which sells waste-disposal services to healthcare organizations and commercial businesses, reorganized its sales department, creating a new role in both its national and hospital divisions. The new sales role was Key Account Director (KAD), classified at paygrade eight, and it was staffed from within, with some employees promoted into the positions (including the two plaintiffs) and some transferred. National KADS worked in the national division and Hospital KADs worked in the hospital division.

No immediate pay raise. Prior to their promotion to National KAD positions, the two plaintiffs served as National Account Managers, which is paygrade seven, and they earned base salaries of $92,784 and $95,026 each. While the dates of their promotions were not clear, what appears clear is that they did not receive an immediate pay raise. In fact, they did not receive pay raises until after someone complained to HR a few months later.

Two male employees who were promoted to the Hospital KAD role, who before had held paygrade five positions and earned $71,487 and $100,900 respectively, saw salary increases immediately upon promotion in October, taking them to $98,000 and $110,990 respectively. Seven other male Hospital KADs, who were transferred to their positions, likewise had higher salaries, ranging from $101,711 to $142,000. After the complaints, the female employees’ pay rates were both raised to $98,000.

They filed suit and the district court granted summary judgment for the employer. While the lower court concluded that the plaintiffs had provided sufficient evidence to establish their prima facie case under the Equal Pay Act, it found that the employer had satisfied its affirmative defense—attributing the pay discrepancy between the plaintiffs and Hospital KADs to the employer’s reliance on “prior position and salary [history]” in setting KAD salaries—as a matter of law.

Equal Pay Act comparators. On appeal, the Seventh Circuit agreed with the lower court that the Hospital KADs were proper comparators. However, it rejected the idea that the lowest paid male Hospital KAD, who was paid $98,000, was not a proper comparator. Even though in 2022 he and the two female KADs earned the same base salary, this overlooked evidence that the female KADs did not receive the same salary as the male KAD upon their promotion in 2021. He received his raise immediately upon promotion in October, whereas they did not receive a raise upon promotion and only received it after complaining. Thus, the appeals court explained, he was, in fact, a proper comparator for their Equal Pay Act claim.

Transferred versus promoted. The lower court correctly concluded that the employer proved its affirmative defense in relation to the seven male employees who were transferred to their KAD positions and whose salaries were based on their salary histories, particularly in light of the fact that the plaintiffs did not point to evidence allowing a reasonable trier of fact to find that the employer’s salary histories were historically discriminatory.

Regarding the other two male KADs who were promoted, however, the appeals court concluded that the employer did not sustain its affirmative defense as a matter of law. The employer had argued that KAD salaries were determined by whether the KAD was transferred or promoted. If transferred, the employer had explained, their salary would be retained. If promoted, their salary would be raised. The employer argued that this practice was sex neutral and applied to the plaintiffs and the two male KADs.

Promotion date separate from raise. “To prevail on summary judgment,” the court explained, “a defendant must not merely articulate but also prove its affirmative defense, and must do so beyond reasonable dispute.” Here is where the employer fell short, the court explained, because it failed to identify how, based on the record, the court was required to conclude that female KADs’ salaries were raised at the time of their promotion. In fact, at oral argument, the employer was unable to provide the court with the date of plaintiffs’ promotion, instead conceding that it did not have a promotion or start date in the record.

Because the record would allow a reasonable factfinder to conclude the plaintiffs did not receive raises upon promotion but instead only got them after complaining about gender disparities, the court was unable to find as a matter of law that the employer proved its affirmative defense as it related to the two promoted male Hospital KADs. In fact, there was a material dispute of fact, the court explained, regarding whether the female KADs received a raise at the time of their promotion.

What about the disparity with the other comparator? Moreover, even assuming the record supported the employer’s sex-neutral explanation, that explanation still did not justify the discrepancy between the salary the female KADs eventually received ($98,000) and that received by one of the male KADs who was promoted ($110,990). “In other words,” the court explained, “Stericycle’s affirmative defense does not answer the question of why Plaintiffs and [that male KAD] landed at different salaries upon being promoted. To justify the salaries only on the basis that they were increased falls short of justifying the actual amount these promoted KADs received, and therefore falls short of justifying the salary disparity between the KADs.”

Title VII claim also revived. Below, the district court reasoned that the employer’s sex-neutral salary history justification for the pay disparities among KADs applied with “equal force” to the female KADs’ Title VII claim. Here, again, the appeals court diverged from the reasoning of the lower court with regard to the two promoted Hospital KADs. A reasonable trier of fact could find that the female employees did not in fact receive raises upon their promotions, as did those two male KADs, and it could find that they only received raises after collectively complaining. “In other words,” the court explained, “there is a material dispute of fact as to whether Stericycle’s nondiscriminatory explanation for its pay decisions—which assumed that a raise would accompany a promotion—was inconsistently applied to Plaintiffs and therefore untrue.”

Here, the plaintiffs identified evidence that they had been promoted and started working in their new roles before receiving pay raises and that another promoted female KAD (once a plaintiff in the lawsuit) had expressed concerns about salary disparities amongst KADs as early as August 2021 and had been told she was already doing the KAD job but would not receive a raise. There was evidence that the plaintiffs, that KAD, and a fourth female KAD (who was also previously a plaintiff), were all promoted at the same time. This could lead a jury to reasonably find that they had been promoted without a pay raise, in spite of the employer’s “promotion-versus-transfer” explanation, and conclude that the employer’s nondiscriminatory explanation was “unworthy of credence” and a “mere coverup for intentional discrimination.”

The case is No. 24-1570.

Judge: Pryor, D.

Attorneys: Kristin M. Case (Case & Sedey) for Cheryl Lane and Adrienne Hause. Jennifer Lee Schilling (Littler Mendelson) for Stericycle, Inc.

Companies: Stericycle, Inc.

Cases: Discrimination PayDiscrimination SexDiscrimination IllinoisNews IndianaNews WisconsinNews