Labor & Employment

Employers can't use salary history to justify lower pay for women, full 9th Circuit rules

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The Equal Pay Act does not permit paying lower salaries to women based on their pay histories, according to the en banc 9th U.S. Circuit Court of Appeals at San Francisco.

Salary history is not a “factor other than sex” that can justify unequal pay for comparable jobs, the appeals court said in a Feb. 27 opinion by Judge Morgan Christen. The Recorder, Law360 and Bloomberg Law have coverage.

“The express purpose of the act was to eradicate the practice of paying women less simply because they are women,” Christen wrote for the majority. “Allowing 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.”

The Equal Pay Act allows employers to justify unequal pay based on three defenses or “any other factor other than sex.” The three defenses are a seniority system, a merit system, or a system that measures earnings by quantity or quality of production.

Because the three defenses are based on job-related factors, the “factor other than sex” defense must also be job-related, the appeals court said. Prior pay for a different job is not a job-related factor, the court concluded.

The 9th Circuit ruled in the case of Aileen Rizo, a math consultant in Fresno County, California, who learned during a lunch with colleagues that men hired into the same position were making more money than her.

Under the policy in place at the time, the county calculated beginning salary by taking prior salary, adding 5 percent, and placing the employee on the corresponding step of the salary schedule. Rizo was placed on the lowest rung, although she did get $600 more for her master’s degree.

It’s the second time the full 9th Circuit has ruled for Rizo. The last time, Judge Stephen Reinhardt had written the first opinion, which was issued after his death. The U.S. Supreme Court vacated the ruling because it effectively allowed a deceased judge to exercise judicial power after his death in a case where his vote made a difference in rationale.

Like the prior opinion, the new opinion affirms a district court’s refusal to toss the case.

The Fresno schools superintendent said in a statement that the district changed its salary policy four years ago, and only its former policy was before the court.

“The 9th Circuit concluded it was not permissible, but acknowledged that other federal circuits across the nation have applied different rules and have reached inconsistent conclusions,” said the statement obtained by the Recorder.

“My agency looks forward to final resolution of this controversy, not only for the involved parties, but for uniform guidance to aid public and private employers in setting their compensation policies and practices.”

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