By: Eric J. Wu, Esq.

On the eve of Equal Pay Day, the Ninth Circuit Court of Appeals ruled that employers may not justify paying women a lower salary than men by relying on salary history. Equal Pay Day raises awareness for the gender wage gap. It falls on a date that represents how far into the year women must work to earn pay equal to what men earned in the previous year.[1]

In a unanimous ruling in Rizo v. Yovino, No. 16-15372 (9th Cir. Apr. 9, 2018) (en banc) the Ninth Circuit held that pay differences based upon salary history are inherently discriminatory under the Equal Pay Act because the previous salaries were the result of gender bias. Judge Stephen Reinhardt’s posthumous opinion explained that prior salary is not a legitimate measure of work experience, ability, performance, or any other job-related quality. This is a significant reversal from the Ninth Circuit’s ruling just last year, which allowed employers to justify pay disparities by looking at prior salary.

The Equal Pay Act forbids employers from paying women less than men based on gender for equal work performed under similar conditions. There are exceptions where pay differences are based upon “any other factor than sex,” such as merit, seniority, quantity or quality of work. In the Ninth Circuit, however, prior salary can no longer be considered as a “catchall” exception.

Employers in California, Arizona, Alaska, Idaho, Hawaii, Montana, Nevada, Oregon and Washington will now have to look to other legitimate factors, rather than salary history, to prove that pay differentials do not violate the Equal Pay Act.

Leech Tishman’s Employment Practice Group can help clients ensure compliance with complex and technical employment laws and can assist clients with defending against civil or administrative actions.

If you have any questions regarding the Equal Pay Act, or any other employment legal matters, please contact Eric J. Wu. Eric is an Associate in Leech Tishman’s El Segundo, CA office and practices in the firm’s Employment, Corporate and Litigation Practice Groups. He can be reached at 424.738.4400 or ewu@leechtishman.com.

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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, aviation & aerospace, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in El Segundo, CA, Chicago, Los Angeles, New York, Sarasota and Wilmington, DE.

 

[1] https://www.pay-equity.org/day.html

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