03-10-2020
The Ninth Circuit Court of Appeals affirmed its prior decision holding that an employee’s salary history may not be used to justify a pay differential. This decision was first reached in 2018 but the authoring judge passed away before the decision was published. As a result, the U.S. Supreme Court ordered the court to reconsider the case.To recap, in the case of Rizo v. Yovino, Rizo was hired as a math consultant for the Fresno County Office Education. Three years into her employment, she discovered that she was being paid less than her male peers. She then filed a lawsuit under the Equal Pay Act (EPA) which mandates that men and women be paid the same for work that “requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” Exclusions are permitted when differences are due to a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a differential based on any factor other than sex. The last exclusion has been considered a “catch-all” affirmative defense.
Employers often argue that salary history is relevant to setting a starting salary and thus fall within that last category of exclusions. It was permissible in the Ninth Circuit to consider salary history prior to this decision. The Ninth Circuit’s new en banc opinion asserted that “[a]llowing employers to escape liability by relying on employees’ prior pay would defeat the purpose of the Act and perpetuate the very discrimination the EPA aims to eliminate.” In its decision, the court noted that it was not presuming the employee’s prior wages were a result of sex discrimination but that the collective history of pervasive wage discrimination would prevent an employer from being able to show that sex played no role in the disparity.