Prior Pay Cannot Be Used To Justify Paying Women Less In Ninth Circuit

On Behalf of | April 28, 2020 | Employment Discrimination, Gender Discrimination, Harassment

“In 1963, Congress enacted the Equal Pay Act with a mandate as simple as it was profound: equal pay for equal work.” So begins the opinion in Rizo v. Yovino, a recent Ninth Circuit case holding that prior pay may not be used to justify a pay discrepancy between men and women—even if it is one factor among several. (In a strange twist, the Ninth Circuit had already decided this issue and reached the same result, but the original opinion was tossed out by the Supreme Court because the authoring judge, Judge Stephen Reinhardt, passed away before publication of the opinion.)

Congress enacted the Equal Pay Act (EPA) in 1963 to combat pay discrimination based on sex. At the time, the practice of paying women less than men was so ingrained that many employers used two separate pay scales: one for men and one for women. The effect was stark; women earned only about 59% of what their male colleagues earned.

Congress’ goal was to eliminate this problem while preserving employers’ right to pay women less for legitimate, job-related reasons. (It’s worth noting that the concept of justifiable pay differences between men and women made more sense in 1963, when women were still newer to the workforce and lagged behind men in educational opportunities and attainment). The EPA was drafted to effectuate this balance. The statute mandates that employers provide equal pay between employees for equal work, then enumerates four defenses to pay disparity related to merit—for example, systems based on seniority or quality of work product. The fourth defense, which allows an employer to justify a pay discrepancy if it is “based on any factor other than sex,” is often referred to as the catch-all.

The question before the Ninth Circuit was whether prior pay can be considered a “factor other than sex” in justifying a female employee’s lesser pay. Aileen Rizo was a math consultant employed by the Fresno County Office of Education who realized after three years on the job that she was paid less than her male counterparts, including those with less experience. One of the reasons for this discrepancy was her previous salary, which the County expressly took into account in setting her pay. The County defended this decision by arguing that prior salary was only one factor in its pay scale formula, and further, that the pay scale was applied equally to all new employees. The County thus reasoned that Rizo’s pay was not based on sex.

The Ninth Circuit disagreed. It rejected the County’s argument that “factor other than sex” should be read expansively to mean any factor other than sex itself. First, that language had to be read in the context of the other three enumerated defenses, which were plainly and specifically job-related. An employee’s prior salary was necessarily not job-related; and to the extent it served as a proxy for job-related factors, an employer was free to consider those factors directly. Second, allowing prior pay to serve as an affirmative defense would risk endless perpetuation of sex discrimination “baked-in” to women’s salaries, frustrating the EPA’s purpose.

The pay gap has narrowed since the EPA was enacted, but it is far from closed. For every dollar earned by men, women still only make about 80 cents, and this disparity is more severe for women of color. Rizo is a critical tool to challenge the insidious effect of prior pay in wage and salary inequality.

If you are an employee in California or elsewhere in the Ninth Circuit and believe you have experienced pay discrimination in your employment, you should consult with an employment lawyer.