Ninth Circuit Holds Prior Salary Cannot Justify Gender Pay Differential

April 11, 2018

A Federal appeals court ruled earlier this week that salary history cannot be used to justify a wage gap between men and women. The full U.S. Court of Appeals for the Ninth Circuit, which heard the case Rizo v. Fresno County Office of Education, held that an employee’s prior salary — either alone or in a combination of factors — cannot be used to justify paying women less than men in comparable jobs.

“The Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex,” wrote Judge Stephen Reinhardt in the opinion. “The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history, and purpose of the Equal Pay Act, the answer is clear: No.”

Judge Reinhardt died last week at the age of 87. The case was decided before his death.
The appellate courts have split on the issue. The Tenth and Eleventh circuits previously have held that prior pay alone cannot be considered as an exemption to equal pay laws, while the Seventh Circuit has ruled that previous salary could be considered.

In Rizo, the full Ninth Circuit ruled in favor of a Fresno math consultant who sued because she was paid less than men for the same work. The school district admitted that it paid her less but argued it was because of her salary history and not because of gender discrimination. The school district said it plans to ask the U.S. Supreme Court to hear the case.

In addition to the court cases, pay equity laws banning salary history inquiries have been enacted by California, Massachusetts, Delaware, Oregon, New York City, San Francisco and Philadelphia, and are under consideration in 13 states.

“With these developments, ILMA members are facing challenges in developing compliant policies and procedures while making good business decisions about salaries for new hires,” said ILMA CEO Holly Alfano. “It is placing greater burdens on employers to prove that their pay decisions are fair and based on legitimate reasons.”