Technicality overturns 9th Circuit decision regarding use of prior salary
Wage and Hour
Due to a technicality, the U.S. Supreme Court recently threw out the Ninth Circuit Court of Appeals’ 2018 decision that barred employers from using prior salary history to justify paying employees less than their opposite-sex colleagues. The federal Equal Pay Act allows employers to explain pay differences between men and women performing equal work by pointing to seniority, merit, production, or any “factor other than sex.” As we previously reported, the Ninth Circuit, which covers the western U.S., said any reasons that fit into the catchall category must be “legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.” Ultimately, this decision was appealed to the Supreme Court and overturned because one of the Ninth Circuit’s judges passed away prior to the opinion being officially filed (Yovino v. Rizo, US, Feb. 2019).
Tips: Be sure to watch our Pay Equity Webinar where we explain acceptable justifications for pay differences and other important considerations in this emergent area of risk. Given the Supreme Court’s action, you can technically use prior pay as a defense against an Equal Pay Act claim, but we think it’s only a matter of time before the Ninth Circuit hears a similar case and makes the same decision. The safest approach is to eliminate questions about prior pay. Asking about pay expectations should still be fine. Be sure to also check state and local laws. California Labor Code 432.3 and Oregon Revised Statute 659A.357 forbid employers from asking about wage history, while the Revised Code of Washington 49.58.020 warns that prior salary isn’t a defense to a complaint of pay discrimination. For more information on the Equal Pay Act as well as other federal and state laws on pay equity, see our newly updated Legal Guide, Equal Pay: Avoid the Pitfalls.