Four staff earned less than a new hire - the paperwork on file settled it
A Kentucky appeals court threw out an order forcing a state agency to raise four investigators' pay, rejecting their equal protection claim.
The Kentucky Court of Appeals issued the decision on July 17, 2026, siding with the Public Protection Cabinet and the Kentucky Personnel Board. Both had challenged a lower-court order that required the cabinet to lift the salaries of four investigators in the Department of Alcoholic Beverage Control.
The fight started in November 2021. The four investigators filed grievances after learning that a newly hired colleague had been brought on at a higher salary than theirs. A state regulation lets an existing employee's pay be adjusted up to a new hire's level - but only when several conditions are met. One is being in the "same work county."
That condition went unmet. The new hire's work county was in western Kentucky, while the four investigators covered counties in central and eastern Kentucky. None lined up. So the appointing authority ruled the pay-adjustment provision didn't apply, and the Personnel Board backed that call.
A circuit court disagreed. It found the "work county" requirement had no rational basis, branding it an "artificial disqualifier" and a breach of the state constitution's equal protection clause. It ordered the raises.
The appeals court reversed. What the investigators were really pressing, it said, was a "class-of-one" equal protection claim - the argument that they alone had been treated worse than a comparable employee, with no claim of belonging to a protected group. The court pointed to the US Supreme Court's decision in Engquist v. Oregon Department of Agriculture, which held that such claims have "no application in the public employment context."
Letting them proceed, the court cautioned, would "constitutionalize the employee grievance" and drag everyday pay and assignment decisions into constitutional court. It also leaned on Kentucky's Civil Rights Act, which states that it is "not an unlawful practice" for an employer to set different pay under a merit system, or for staff who work in different locations, as long as the difference isn't the result of an intention to discriminate.
For HR leaders, the takeaway is about discretion. A pay difference between comparable employees - even one that is tough to justify on paper - does not automatically become a legal violation. The question is whether a protected characteristic drove the decision. Without that, an employee who simply earns less than a peer has a grievance, not a constitutional case.
The ruling is published and reverses the circuit court in full.
