Tuesday, April 10, 2018
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Ninth Circuit:
Lower Pay for Woman Is Not Justified Based on Her Salary in Prior Job
Reinhardt, in Posthumously Published Opinion, Says Exception in Equal Pay Act Is Inapplicable
By a MetNews Staff Writer
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AILEEN RIZO math consultant |
The Ninth U.S. Circuit Court of Appeals, sitting en banc, held yesterday that an employer cannot justify paying a woman less than her male counterparts based on her prior salary.
Judge Stephen Reinhardt, who died March 29, wrote for the court. There were three concurring opinions.
Fresno County sought to justify paying math consultant Aileen Rizo a lower salary than it paid to male employees—by as much as $10,000 a year—based on what she made in her prior job. It based salaries on the prior salary and adding five percent.
The county, which employed Rizo in its education department, invoked, as an affirmative defense, an exception under the Equal Pay Act: where a lower salary paid to a woman is based on a “factor other than sex.”
The court affirms a decision of Magistrate Judge Michael J. Seng of the Eastern District of California denying summary judgment to the county. A three-judge panel reversed that decision, and en banc review was granted.
Can’t Be Considered
“Reliance on past wages simply perpetuates the past pervasive discrimination that the Equal Pay Act seeks to eradicate,” Reinhardt wrote. “Therefore, we readily reach the conclusion that past salary may not be used as a factor in initial wage setting, alone or in conjunction with less invidious factors.”
The jurist reasoned:
“To hold otherwise—to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum—would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.”
The three-judge panel relied on the circuit’s 1982 decision in Kouba v. Allstate Insurance Co. There, it was held that reliance on prior salary in setting compensation was a “factor other than sex.”
Prior Decision Overruled
Reinhardt declared:
“Because Kouba, however construed, is inconsistent with the rule that we have announced in this opinion, it must be overruled. First, a factor other than sex must be one that is job related, rather than one that ‘effectuates some business policy.’ Second, it is impermissible to rely on prior salary to set initial wages. Prior salary is not job related and it perpetuates the very gender-based assumptions about the value of work that the Equal Pay Act was designed to end. This is true whether prior salary is the sole factor or one of several factors considered in establishing employees’ wages. Although some federal courts of appeals allow reliance on prior salary along with other factors while barring reliance on prior salary alone…, this is a distinction without reason: we cannot reconcile this distinction with the text or purpose of the Equal Pay Act.”
The case was remanded to the district court for a determination as to whether Rizo is entitled to summary judgment on her equal pay claim.
A footnote points out:
“Prior to his death. Judge Reinhardt fully participated in this case and authored this opinion. The majority opinion and all concurrences were final, and voting was completed by the en banc court prior to his death.”
Concurring Opinion
Judge M. Margaret McKeown, joined by Judge Mary H. Murguia, said:
“To be sure, the majority correctly decides the only issue squarely before the court: whether the Fresno County Office of Education was permitted to base Aileen Rizo’s starting salary solely on her prior salary. The answer is no. But regrettably, the majority goes further and effectively bars any consideration of prior salary in setting a new salary. Not only does Rizo’s case not present this issue, but this approach is unsupported by the statute, is unrealistic, and may work to women’s disadvantage.”
McKeown explained:
“[S]tates have begun passing statutes that prohibit employers from asking employees about their prior salaries. California’s statute just went into effect….Those laws represent creative efforts to narrow the gender wage gap. But they also provide important exemptions for employees w7ho wash to disclose prior salaries as part of a salary negotiation….Although the majority professes that its decision does not relate to negotiated salaries, the principle of the majority’s holding may reach beyond these state statutes by making it a violation of federal antidiscrimination law to consider prior salary, even when an employee chooses to provide it as a bargaining chip for higher wages. I am concerned about chilling such voluntary discussions. Indeed, the result may disadvantage rather than advantage women.”
Judge Consuelo M. Callahan, joined by Judge Richard C. Tallman, protested:
“Prior salary serves, in combination with other factors, to allow employers to set a competitive salary that will entice potential employees to take the job. The majority’s approach ignores these economic incentives and appears to demand a lockstep pay system such as is often used in government service.”
Judge Paul J. Watford expressed the view that “past pay can constitute a ‘factor other than sex,’ but only if an employee’s past pay is not itself a reflection of sex discrimination.” He concurred in the result because the County of Fresno “failed to prove that Aileen Rizo’s past pay is not tainted by sex discrimination.”
The superintendent of Fresno schools announced yesterday that certiorari will be sought in the U.S. Supreme Court.
The case is Rizo v. Fresno County Office of Education, No. 16-15372.
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