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Salary History And Wage Gaps

4/10/18

By: Rebecca J. Smith

The U.S. Court of Appeals for the 9^th Circuit, which heard the case of Rizo v. Fresno County Office of Education en banc last year, has changed the 9^th Circuit’s position and found 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” Judge Stephen Reinhardt wrote in the opinion.   The opinion clearly establishes that an employer cannot justify a wage differential between male and female employees by relying on prior salary.
In the ruling made on Monday, April 09, 2018, the en banc panel overturned the earlier panel’s decision looking at the history of the act and indicating that Congress simply could not have intended to allow employers to rely on past discriminatory wages to justify continuing wage differentials.  One of the biggest issues, going forward after this decision will be whether negotiated salaries are included within the equal pay statutes.  Judge M. Margaret McKeown indicated in her concurring opinion that she was concerned about chilling voluntary discussions between employees or potential employees and employers when an employee is attempting to use prior salaries as a bargaining chip.
If you have any questions or would like more information, please contact Rebecca Smith at rsmith@fmglaw.com.