The New Mexico Court of Appeals held in Wolinsky v. New Mexico Corrections Department¹ that the state Fair Pay for Women Act’s definition of “employer” extends to the State of New Mexico and its agencies.  In doing so, the Court of Appeals rejected defendant’s arguments that (1) the Legislature did not intend to subject the state to the statute’s requirements; and (2) that the “general grant of immunity” in the New Mexico Tort Claims Act applies, granting sovereign immunity to the state for any Fair Pay for Women Act (FPWA) claims.  The New Mexico Supreme Court denied certiorari. This denial leaves the court of appeals decision as the controlling precedent unless the Supreme Court reconsiders the issue in a future case.

Background on the FPWA

The New Mexico Legislature enacted the FPWA in 2013 to ensure that women would be compensated at a rate no less than the rate paid to men for equal work on jobs that require equal skill, effort and responsibility, under similar working conditions.  The FPWA provides limited exceptions to that requirement for seniority systems, merit systems, or systems that measure earnings by quantity or quality of production.  The FPWA defines an “employer” as “a person employing four or more employees and any person acting for an employer.” 

Factual Background

Plaintiff Melinda Wolinksy sued her employer, the New Mexico Corrections Department (a department of the State of New Mexico), for sex-based pay discrimination in violation of the FPWA.  Plaintiff alleged that her salary was approximately $8,000 less than that of a male employee who was employed in the same job description/level.

The Court’s Rationale

Defendant moved to dismiss plaintiff’s claims, arguing that: (1) because the FPWA did not expressly include the state as an “employer,” the department was immune from suit; and (2) that the “general grant of immunity” in the state Tort Claims Act provided it with immunity.  The state district court granted defendant’s motion to dismiss, and plaintiff appealed.

In evaluating the dispute, the Court of Appeals reviewed the history of state sovereign immunity in New Mexico.  In the 1975 case Hicks v. State, the New Mexico Supreme Court abolished common law sovereign immunity for tort actions.  The Court concluded that sovereign immunity was “causing a great degree of injustice” that rendered the doctrine of sovereign immunity unjustifiable.  In response to Hicks, the Legislature enacted two statutes the following year.  The Tort Claims Act reinstated the state’s sovereign immunity for tort claims, but expressly waived immunity in specifically enumerated circumstances.  The second act, NMSA 1978 § 37-1-23, addressed the state’s liability for contract claims. The purpose of this act, according to the legislative history, was “to reinstate the sovereign immunity which had been abolished by Hicks … subject to certain exceptions,” including “the acceptance of liability for claims based on valid written contracts.”  Considering these enactments in a separate case, the New Mexico Supreme Court described Hicks as having “generally abolished the common law doctrine of sovereign immunity in all its ramifications, whether in tort or contract or otherwise.”  Torrance Cty. Mental Health Program, Inc. v. N.M. Health and Env’t Dep’t, 113 N.M 593, 597 (N.M. 1992) (emphasis added).

Given that background, the appellate court in the present case noted that “the existence and extent of the state’s immunity post-Hicks depends upon the [L]egislature.”  Consequently, after Hicks, sovereign immunity is not a general condition that can be waived by statute, but does not exist unless it is expressly invoked by the Legislature.  Because common law sovereign immunity no longer exists in New Mexico, the court’s decision in Wolinsky turned on its analysis of the express language of the FPWA.

The court’s analysis focused on two questions.  First, the court found that unlike the Tort Claims Act and NMSA 1978 § 37-1-23, the FPWA did not expressly invoke sovereign immunity.  Instead, the court observed, the FPWA “does not refer to sovereign immunity at all.”  Thus, defendant had no sovereign immunity under the express language of the FPWA.

Second, the appellate court addressed whether the Legislature intended to expose the state to liability under the language of the FPWA.  The court noted that the FPWA’s definition of “employer” included any “person” employing four or more employees—but that the FPWA did not define the term “person.”  In the absence of such specific language, the court relied on the New Mexico Uniform Statute and Rule Construction Act (the “Act”) to fill the gap.  The Act defines a “person” as an “individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any legal or commercial entity.”  NMSA 1978, Section 12-2A-3(E).  In turn, a “legal entity” is a “body, other than a natural person, that can function legally, sue or be sued, and make decisions through agents.”  Black’s Law Dictionary 1031 (10th ed. 2014).  Consistent with these definitions, the court held that the state, as an entity capable of suing and being sued, is a “person” subject to suit for allegedly violating the FPWA.

Practical Application for Public Employers

State employers in New Mexico should consider this ruling as fair warning that, if they employ four or more persons, they can be subject to suit under the FPWA.  Given the expansive interpretation of “person” as used in the definition of “employer,” state employers can no longer rely on sovereign immunity to avoid liability under the FPWA.  State employers that pay differently-gendered employees of the same level different rates of pay may incur significant liability unless they can prove that those differences are due to legitimate merit, seniority, or production considerations as permitted under the FPWA.  In the absence of such justifications, state entities should consider taking steps to correct questionable disparities among genders for those engaged in “equal” positions as defined under the FPWA.