Last week the U.S. Supreme Court struck the potentially important equal pay case of Yovino v. Rizo from its docket, sending it back to the 9th Circuit Court of Appeals, leaving a split among the circuits as to whether employers violate the Equal Pay Act when they base pay decisions on salary history of the applicants.
We have reported on this case in the past here. The plaintiff in this lawsuit is female and learned that she was making less money at her job with Fresno County Schools than her male counterparts doing the exact same job, despite her having greater educational background than some of her male counterparts. In fact, she was being paid about $13,000 a year less than even the male employee who was less senior to her.
She sued her employer under the Equal Pay Act, who responded that they set her salary, as well as her male colleague’s based in large part on their salary history, ensuring that their starting pay was about 5% higher than the salary in the job they were leaving. The federal district court found this did not violate the Equal Pay Act because that Act prohibits basing pay on gender. In this case, the court found, the basis was salary history, which is not a factor based on gender.
Rizo appealed and the 9th Circuit Court of Appeals reversed the district court, finding that gender has historically played a role in creating a salary or wage differential between genders. Therefore, basing current salaries on salary history, perpetuates the wage gap between sexes and is itself a gender based factor.
The defendants appealed to the U.S. Supreme Court. Employers were interested not only in the Supreme Court’s view of the arguments, but also to resolve a split among circuits. In fact, the 7th Circuit Court of Appeals previously ruled opposite the 9th Circuit on the issue of salary history being a factor based on sex. A decision by the Supreme Court would resolve these differences and unify the law on a national basis.
The Supreme Court, in a sideways move, struck the case and sent it back to the 9th Circuit. The problem being that the 9th Circuit judge who wrote the opinion in Rizo and voted among the majority finding, passed away shortly after writing the decision but before it was published. The 9th Circuit published the decision anyway. The Supreme Court stated “Because Judge Reinhardt was no longer a judge at the time when the en banc decision in this case was filed, the Ninth Circuit erred in counting him as a member of the majority. That practice effectively allowed a deceased judge to exercise the judicial power of the United States after his death. But federal judges are appointed for life, not for eternity.”
For the time being, employers are left with different decisions in different parts of the country on this issue, possibly complicating hiring practices for national companies. In the meantime, employers should be aware that some states, and many municipalities such as Chicago, New York and Philadelphia to name a few, have enacted ordinances prohibiting inquiry of salary history from job applicants.
