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
On April 12th, Maine joins a growing list of jurisdictions, including California, Connecticut, Delaware, Hawaii, Massachusetts, New York City (as well as other cities within New York) Oregon, Puerto Rico, and Vermont, that restrict private employers from obtaining salary history information from job candidates and applicants. Within the Northeast region, only Rhode Island and New Hampshire have yet to enact comparable regulations in the public or private sectors, with a bill, HB 221, presently pending before the New Hampshire legislature. READ MORE
In April 2018, an en banc Ninth Circuit held in Rizo v. Yovino that an employer cannot justify a wage differential between male and female employees under the Equal Pay Act by relying on prior salary. Before the Ninth Circuit published its decision, though, Judge Stephen Reinhardt passed away. On February 25th, the U.S. Supreme Court vacated the Ninth Circuit’s decision, reasoning that the appellate court should not have counted Reinhardt’s vote because he passed away before the decision was issued. Instead, the Ninth Circuit should not have released the opinion. READ MORE
For the last two decades, Congressional Democrats have attempted to pass the Paycheck Fairness Act. Beginning with the 105th Congress in 1997-98, several legislators have introduced versions of the act, including then-Senator Hillary Clinton in 2005. Following their newly won majority in the House of Representatives, Democratic lawmakers recently re-introduced the Paycheck Fairness Act on January 30, 2019. The proposed bill, H.R. 7, was introduced by Representative Rosa DeLauro (D) and appears to have considerable Congressional support. Notably, cosponsors of H.R. 7 include every Democratic member of the House of Representatives and forty-five Senators. READ MORE
On January 1, 2019 at the stroke of midnight, Hawaii joined a growing list of states and municipalities to ban prospective employers from asking applicants about their prior salary history. As we have previously reported, several other jurisdictions have already passed similar laws that place restrictions on salary history during the application process, including California, New York City, Westchester, and Suffolk County, New York. READ MORE
In the wake of the Ninth Circuit’s decision in Rizo v. Yovino, key employer-side groups have expressed support for U.S. Supreme Court review to determine whether employers who rely on prior salary to set starting pay can continue to do so consistent with the federal Equal Pay Act, 29 U.S.C. § 206(d)(1) (“EPA”). READ MORE
Connecticut Governor Dannel Malloy is poised to sign into law the Act Concerning Pay Equity bill, which has been passed by both the Connecticut House and Senate General Assembly. In what Governor Malloy referred to as “commonsense legislation” to address pay equity concerns, the Connecticut bill would prohibit an employer, or a third party acting on the employer’s behalf (like a recruiting firm), from inquiring about a prospective employee’s wage and salary history unless voluntarily disclosed by the applicant. The bill does permit an employer to inquire about other components that contributed to the applicant’s previous total compensation package, but not about the value of those items. Although no examples are provided in the legislation, it would seemingly be permissible to ask whether a prospective employee received stock options at their previous employment, but not the value of those options. READ MORE
As schools across the country prepare for summer break, the Ninth Circuit overturned a lower court decision against the Fresno County public school district which had found that its pay practices were unlawful. Notably, the Ninth Circuit held that an employer may rely on prior salary as an affirmative defense to claims under the federal Equal Pay Act (“EPA”) if “it show[s] that the factor ‘effectuate[s] some business policy’ and that the employer ‘use[s] the factor reasonably in light of the employer’s stated purpose as well as other practices.’” READ MORE
