NEW Professional Member Special>>> Save $20 and receive a SHRM tote bag
More companies are recognizing the importance of giving employees the time and space they need to navigate personal loss.
Save $20 on a New Professional Membership and receive a FREE Tote bag when you join SHRM today!
Learn to overcome challenges and meet your 2017 goals through competency-based HR education. Available in-person and virtually.
Expand your influence and learn how to become an effective leader. Join us in Phoenix, AZ | OCTOBER 2 - 4, 2017
Decision contradicts other rulings; Supreme Court may have to resolve split among courts
A 9th U.S. Circuit Court of Appeals decision contradicts other appeals court rulings by holding that salary history alone may be used in setting pay--an appellate split that the Supreme Court may have to resolve.
The plaintiff in this case is Aileen Rizo, a math consultant for Fresno County, Calif., schools. Over lunch with male colleagues Rizo, learned that she was paid less than all of them, though they had the same job. She sued, claiming a violation of the federal Equal Pay Act.
A district court determined that the county's reason for her lower pay—prior salary—was "so inherently fraught with the risk … that it will perpetuate a discriminatory wage disparity between men and women that cannot stand, even if motivated by a legitimate nondiscriminatory business purpose."
But the 9th U.S. Circuit Court of Appeals reversed on April 27 (Rizo v. Yovino, No. 16-15372), concluding that, under the Equal Pay Act, prior salary can be a factor other than sex if it supports a business policy and the employer uses the factor reasonably in light of its stated purposes and practices.
The decision on the applicability of the federal Equal Pay Act does not affect state laws, such as one in Massachusetts that takes effect in 2018, that prohibit employers from asking about salary history in job interviews.
Fresno County Claims Business Reasons for Policy
Fresno County claimed four business reasons for relying exclusively on prior salary:
The appeals court sent the case back to the district court to examine whether Fresno County's reliance on prior salary in setting pay effectuated some business policy and used prior salary reasonably. The 9th Circuit rejected the district court's determination that salary history cannot be the only factor for setting pay. But the 10th and 11th Circuits have reached the opposite conclusion (in Angove v. Williams-Sonoma Inc., 70 F. App'x 500, 508 (10th Cir. 2003), and Irby v. Bittick, 44 F.3d 949, 954 (11th Cir. 1995), respectively).
(9th U.S. Circuit Court of Appeals Opinions)
Plaintiff's Lawyer Notes the Split in Authority
Rizo's attorney hasn't decided his next move but did note that the case may go to the U.S. Supreme Court since there now is a split at the appellate court level. "The logic of the decision is hard to accept. You're OK'ing a system that perpetuates the inequity in compensation for women."
(The Associated Press)
[SHRM members-only platform: SHRM Connect]
State Laws May Have Broader Protections
Already some state laws provide broader coverage than the Equal Pay Act. Massachusetts, for example, has a prohibition on inquiring about salary histories. As of 2018, employers in the Bay State may not ask about salary history before offering a job to an applicant. In addition, employers won't be able to contact an applicant's former company to confirm the wage amount until after an offer is made. Even then, employers will only be able to verify past wage amounts if they have written permission from the applicant.
California's Fair Pay Act
California has the Fair Pay Act, which requires employers to explain differences between male and female employees' pay. It tasks employers with proving that any disparities in pay between men and women doing "substantially similar" work are based on a limited number of acceptable factors, including seniority, education and "quantity or quality of production" of goods. Rizo's claim arose before the enactment of the Fair Pay Act; she therefore did not sue under it. (SHRM Online)
Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 3,200 companies