U.S. Supreme Court Overturns Decision Prohibiting Employers from Paying Women Less Than Men Based on Their Salary History

A Ninth Circuit Court decision from April 2018 prohibiting employers from paying women less than men based on their salary history has been overturned on a technicality by the U. S. Supreme Court.

On April 9, 2018, the Ninth Circuit Court of Appeals  ruled that a person’s previous compensation may not be used to justify gender pay disparity in Rizo v. Yovino. In its February 25, 2019 decision, the United States Supreme Court vacated the decision because the judge who authored the ruling died before appeals court’s final decision was issued stating “[f]ederal judges are appointed for life, not for eternity.”

The case will now be remanded to the Ninth Circuit to again consider whether an employer can justify paying a female candidate less than a male candidate for the same work based on the female’s lower salary history. Some courts have found last compensation to be an exception under the federal Equal Pay Act, which prohibits business from paying employees of one gender less than the other for equal work.

The appeals court decision mirrored a trend where states including California, Connecticut, Delaware, Massachusetts, Oregon and Vermont have pay equity laws prohibiting employers from asking applicants about salary history.

In 11 states and numerous metropolitan U.S. cities, private employers are also impacted by “ban the box” legislation, which prohibits employers from asking about criminal history on an initial job application. Some states go further, requiring employers to wait until after they have conducted an interview or made a conditional offer of employment to pose any questions about criminal history.

California and Illinois are two of the states that have enacted varying degrees of “ban the box” prohibitions, as have major cities including Los Angeles, San Francisco, New York, and Philadelphia.

To learn more about compliance with hiring laws affecting your business, please contact Leech Tishman’s Employment Practice Group.