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Salary History Can’t Defend Lower Pay, 9th Cir. Rules Again (1)

Feb. 27, 2020, 6:07 PMUpdated: Feb. 27, 2020, 9:03 PM

Employers can’t use a worker’s salary history to justify paying her less than male peers, the full Ninth Circuit ruled in a case that could force the U.S. Supreme Court to reckon with a defense to Equal Pay Act claims that critics say perpetuates gender inequities.

Only criteria that are job-related fall under the federal pay law’s any “factor other than sex” defense, the court said. The defense allows employers to escape discrimination liability by pointing to shift differentials, the time of day when work is performed, and similar legitimate distinctions to defeat a claim that it paid a worker of one sex less than workers of the opposite sex for equal work, the court said.

Prior pay isn’t job-related for purposes of an Equal Pay Act claim because it pertains to compensation the worker received for a different job, Judge Morgan B. Christen wrote for the en banc U.S. Court of Appeals for the Ninth Circuit.

The Second, Fourth, and Tenth circuits all agree that only job-related factors are relevant to the factor-other-than-sex defense, Christen said. The Seventh Circuit is the only federal appeals court that has found the defense “embraces an almost limitless number” of other criteria as long as they don’t involve a worker’s sex, the judge said.

This is the second time that the full Ninth Circuit has tackled the issue. It previously ruled in favor of math consultant Aileen Rizo, and that decision was appealed to the Supreme Court in 2018. But the justices last year sent it back to the Ninth Circuit because it was penned by the late Judge Stephen Reinhardt, who died 11 days before the court issued the opinion in Rizo’s case against Fresno County, Calif. The county argued that it paid Rizo less than her male peers based on a scale that factored in her prior work experience as a math teacher, as well as other criteria such as her graduate education.

The high court told the Ninth Circuit to reconsider the salary history issue without Reinhardt. The case has drawn wide interest from worker advocates, as well as the Equal Employment Opportunity Commission, who argue that the use of salary history to set pay perpetuates a cycle where women and people of color make less than their white, male counterparts.

“This decision makes clear that the fact that women have been paid less in the past is not a lawful justification for paying women less in the future,” Emily Martin, vice president for education and workplace justice at the National Women’s Law Center, said. The center wrote a friend-of-the-court brief in the case. “It makes clear that the Equal Pay Act was designed to ensure pay discrimination does not follow women from job to job through their careers.”

California is among dozens of states and cities that have banned salary history inquiries in recent years to combat gender pay gaps. Fresno County ended its salary history-based pay procedure in 2015.

Some business representatives have argued that not allowing employers to ask about prior salary deprives them of a necessary tool in determining how to pay new hires. It might also cause employers to make other unwanted assumptions, including that a female job candidate will accept a lower pay rate than a male candidate because women historically had been paid less than men, some say.

Concurrences Join Result Only

In Rizo’s case, five judges—Sidney R. Thomas, William A. Fletcher, Richard A. Paez, Marsha S. Berzon, and Paul J. Watford—joined Christen’s opinion.

Judges M. Margaret McKeown, Richard C. Tallman, Consuelo M. Callahan, Carlos T. Bea, and Mary H. Murguia concurred, meaning that Rizo can proceed to trial on her claims. But they agreed on the result only.

The majority went too far in holding prior salary may never be used as a defense in an Equal Pay Act lawsuit, McKeown wrote in a concurring opinion. Agreeing, Callahan said in another concurrence that the majority overlooked Supreme Court precedent on the issue and created “an amorphous and unnecessary standard” that “ignores the realities and dynamic nature of business.”

Siegel Yee Brunner & Mehta represented Rizo. Jones Day and McCormick Barstow Sheppard Wayte & Carruth represented the school district. Attorneys didn’t immediately respond to request for comment.

The case is Rizo v. Yovino, 9th Cir., No. 16-15372, en banc 2/27/20.

(Updated with additional reporting.)

To contact the reporters on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com; Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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