The past month has brought notable pay equity developments to the Mid-Atlantic, including pending legislation in Maryland, and a Third Circuit decision that might have far-reaching effects beyond the Philadelphia salary history ban that it upheld. READ MORE
In yet another development in the closely watched case of Rizo v. Yovino, the en banc Ninth Circuit ruled that employers may not defeat a plaintiff’s prima facie case under the Equal Pay Act (EPA) by arguing prior pay is a “factor other than sex” within the meaning of the statute. By doing so, the Ninth Circuit reaches the same result as the previous opinion penned by the late Judge Stephen Reinhardt before his passing in 2018, including overruling Kouba v. Allstate, a prior Ninth Circuit opinion that held that prior pay could justify pay differentials in combination with other factors, and if relied upon reasonably and to effectuate a business policy. The majority opinion further holds that as a matter of statutory interpretation, a “factor other than sex” within the meaning of the EPA must be “job related,” yet it also makes clear that the EPA does not prohibit employers from considering prior pay in making starting pay offers (and in this regard differentiates the opinion from California’s salary history ban). Two separate concurring opinions agree with the result, but they criticize the majority opinion for giving too narrow a reading of the EPA’s fourth “catch all” defense and for embracing a view of prior pay that puts the Ninth Circuit at odds with other circuits and guidance from the U.S. Equal Employment Opportunity Commission (EEOC). READ MORE
On February 6, 2020 the U.S. Court of Appeals for the Third Circuit upheld a Philadelphia pay equity ordinance banning employers from inquiring into prospective employees’ prior pay or relying on prior pay in making compensation decisions unless candidates knowingly and willingly disclose the information. In upholding the ordinance, the Third Circuit vacated a lower court decision that enjoined enforcement of the inquiry provision on the grounds that it violated employers’ First Amendment free speech rights. While the Third Circuit acknowledged that the ordinance implicated First Amendment rights, the court found that there was “a plethora of evidence” provided by the city to meet its burden of clearing intermediate scrutiny for commercial speech. Consequently, it was reasonable for the city to conclude that the inquiry provision would address gender and race-based wage gaps based on experiments, witness testimony, and historical research concluding as much. READ MORE
The New York State Department of Labor has created a website to provide guidance on the state’s recent Salary History Ban. We previously reported on the state’s Salary History Ban in detail here after it was passed by the New York legislature. New York Governor Andrew Cuomo signed the salary history ban into law on July 10, 2019 and it went into effect on January 6, 2020. The new website summarizes the Salary History Ban by explaining that, “The new law prohibits all employers – both public and private – from asking prospective or current employees about their salary history and compensation. It also prohibits businesses from seeking similar information from other sources.” READ MORE
Oregon employers looking to evaluate their pay equity picture in 2020 should be aware of a handful of updates to the state’s equal pay law that went into effect on January 1.
Oregon overhauled its law in 2017, expanding its coverage beyond sex-based pay differentials and modifying the standard for comparators whose pay must be equal absent a legitimate business justification. SB123 makes a handful of small but potentially significant changes:
- Existing law provided that pay differentials can be justified based on a seniority system, merit system, or system that measures earnings by quantity or quality of production. The amendment adds a statutory definition of “system”: “a consistent and verifiable method in use at the time that a violation is alleged.” Correspondingly, the more onerous definition of “system” that had appeared in OAR 839-008-0015 was repealed.
- Existing law included a limited statutory safe harbor provision (ORS 652.235), which authorizes a motion to disallow compensatory and punitive damages in suits under the state’s equal pay law if an employer has completed a good faith “equal-pay analysis” within three years pre-suit. That provision was revised to require that a qualifying equal-pay analysis include “a review of practices designed to eliminate unlawful wage differentials.” The revision also requires an employer attempting to avail itself of the safe harbor to show that it has “made reasonable and substantial progress toward eliminating unlawful wage differentials for the employer’s employees.” The revision eliminates reference to the specific protected class asserted by a particular plaintiff and instead addresses unlawful wage differentials more generally.
- The new law provides that evidence that an employer increased an employee’s pay as a result of conducting an equal-pay analysis may not be considered as an admission of liability in an equal pay case under state law.
- The law authorizes pay differences where an employee performs modified work due to a compensable injury or medical condition, alleviating concerns employers might have had about pay disparities in such circumstances.
- Finally, the amendment expressly addresses unionized workforces, providing that pay differences can be justified if one or more of the enumerated statutory defenses is contained in a collective bargaining agreement. This amendment may represent an effort to address concerns previously expressed by Oregon employers who employ both non-unionized employees and members of unions that bargain for pay rates along with other conditions of work. But it is unclear what impact it will have given that the amended law continues to require that the pay differences be tied to one of the previously enumerated defenses.
We will continue to monitor developments and amendments in Oregon and report on them here.
The Second Circuit ruled this month in Lenzi v. Systemax, Inc. that “Title VII does not require a showing of unequal pay for equal work.” Drawing a line between the Equal Pay Act (“EPA”) and Title VII, the court held that “all Title VII requires a plaintiff to prove is that her employer ‘discriminate[d] against [her] with respect to [her] compensation . . . because of [her] . . . sex.’”
As you’ll recall from our extensive coverage of the EEO-1 pay data collection saga (which we previously reported on here, here, here, here, here, here, here, here, and here), private employers, including federal contractors, have been busy collecting and submitting EEO-1 pay data to the EEOC. The deadline for submissions was initially set for May 31, 2019, but has since been extended multiple times. Earlier this month, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. READ MORE
Last week, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC may not discontinue its pay data collection efforts on November 11, 2019, but rather, must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. The ruling is the latest in a lengthy saga regarding whether EEO-1 Component 2 pay data (data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex) would be collected—a saga that began with the Office of Management and Budget staying collection efforts, and culminated last Spring when Judge Chutkan ruled the decision to stay the collection lacked the reasoned explanation required by the Administrative Procedure Act (see overview here). After vacating the stay, Judge Chutkan initially set the deadline for data collection for May 31, 2019, but later extended it to September 30, 2019. READ MORE
In recent weeks, the Office of Federal Contract Compliance Programs (“OFCCP”) has entered into four major settlements that are notable both for their size, and for highlighting current trends. Each case involved allegations of race and gender-based compensation discrimination, with settlements in the millions: Dell settled for $7 million to resolve the allegations, Goldman Sachs settled for just shy of $10 million, Intel Corporation settled for $5 million, and Bank of America settled for $4.2 million. These amounts represent some of the largest settlements ever reached by OFCCP. READ MORE
Yesterday, the EEOC announced that it does not intend to renew its request for authorization to collect employers’ pay data on the EEO-1 form in future years. The announcement comes less than three weeks before the September 30th deadline for employers nationwide to submit massive amounts of pay data for 2017 and 2018 (a deadline that is not impacted by the EEOC’s announcement).
The rollercoaster saga of the EEOC’s pay data collection (which we previously reported on including here, here, here, here, here, here, and here) began over three-and-a-half years ago when the EEOC announced in January 2016 its plan to revise the EEO-1 form to collect pay data (Component 2 data). The revised EEO-1 form requires employers to submit data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex. While the EEOC contends that the revised EEO-1 form will allow it to better assess pay discrimination, employers have expressed numerous concerns, including that the form may indicate “false positives,” as the broad EEO-1 job categories are not designed to group employees who perform similar work (as defined by federal and state equal pay and anti-discrimination statutes). READ MORE