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An en banc 9th U.S. Circuit Court of Appeals said in a unanimous ruling Monday that prior salary alone, or in combination with other factors, cannot justify a wage differential between male and female employees under the Equal Pay Act.
The strongly worded ruling in Aileen Rizo v. Jim Yovino, Fresno County Superintendent of Schools, by the 9th Circuit in San Francisco replaces an April 2017 ruling by a three-judge 9th Circuit panel and affirms a ruling by the U.S. District Court ruling in Fresno that denied Fresno County summary judgment in the case.
The majority opinion — there were three concurring opinions — was written by Justice Stephen Reinhardt, who died March 29.
The case was filed by Aileen Rizo, who was hired in 2009 as a math consultant for the Fresno County, California, schools and given a starting salary of $62,733 per year, which ranked as Step 1, Level 1 under the county’s salary schedule, according to court papers in the case.
Ms. Rizo learned in July 2012 that a recently hired male math consultant had started on Step 9 of Level 1 and that the other math consultants, all of whom were male, were paid more than she was, according to the ruling.
In its majority opinion, the en banc ruling states it took the case “to clarify the law, and we now hold that prior salary alone or in combination with other factors cannot justify a wage differential. 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 violate the very purpose for which the Act stands.”
The opinion concludes that “Unfortunately, over fifty years after the passage of the Equal Pay Act, the wage gap between men and women is not some inert historic relic of bygone assumptions…. Of bygone assumption and sex-based oppression.
“Although it may have improved since the passage of the Equal Pay Act, the gap persists today…If money talks, the message to women costs more than ‘just’ billions: women are told they are not worth as much as men. Allowing prior salary to justify a wage differential perpetuates this message, entrenching in salary systems an obvious means of discrimination – the very discrimination that the Act was designed to prohibit and rectify.”
Megan C. Winter, a partner with Fisher Phillips L.L.P. in San Diego, said the ruling “could have far-reaching effects because many employers for years have used past compensation as a factor in setting current compensation, and based on what the 9th Circuit is telling us today, that is not going to be a defense for pay differentiation moving forward under the Equal Pay Act.”
Referring to the concurring opinions by five of the 11 justices who ruled in the case, Ms. Winter said, “Everybody reached the same conclusion, but under the facts of the case where the school district was relying solely on past compensation to set current compensation.”
Ms. Winter said, “What they disagreed on was whether or not it would be a defense to also have other legitimate factors along with the prior salary.”
Tara L. Presnell, a shareholder with Littler Mendelson P.C. in Walnut Creek, California, said the ruling will be influential with other circuits. In addition, while the ruling reflects existing state law in California and Oregon, for other states within the 9th Circuit – Washington, Nevada, Arizona, Idaho and Montana – it means employers “must re-evaluate how they view their compensation and hiring decisions and make sure to remove” salary questions from their applications.
Prior salary can be used to justify paying women less than men under certain circumstances, said a federal appeals court, in vacating a lower court order denying a defendant employer’s motion for summary judgment in an Equal Pay Act case.