 Early last month on April 9, 2018, the U.S. Court of Appeals for the Ninth Circuit released an en banc ruling in Rizo v. Yovino, No. 16-15372[1], holding that an employer cannot use “prior salary alone or in combination with other factors” to justify a wage differential between male and female employees. This decision joins a larger trend across the US where a number of states and cities are rejecting the use of salary history in determining applicant pay. There is a split among circuits on this issue, which makes it ripe for the Supreme Court to step-in and resolve, but it is too early to know if it will—stay tuned!
The Equal Pay Act of 1963[2] prohibits paying men and women differently for the same or substantially similar work, “except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” Rizo learned that her employer hired male colleagues at a significantly higher rate of pay for similar work. Rizo’s employer admitted paying the male colleagues more than her, but argued the wage differential was a result of their higher prior salaries at the time they were hired and fell under the forth catchall exception. The court disagreed and provided a narrow reading of “any other factor other than sex” stating that “[it] is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.” |
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