On February 27, 2020, the Ninth Circuit Court of Appeals ruled that a female employee’s prior pay history is not a defense to an Equal Pay Act (EPA) claim that a female was paid less than a male for the same work. The 9th Circuit now follows the holding of the majority of circuits to limit the affirmative defense of “factors other than sex” (FOTS) in an EPA claim. In Rizo v. Yovino, FOTS are limited to specified “job related factors” which do not include prior pay. A female employee’s prior pay is no longer a job-related factor that can defeat a prima facie EPA claim.
All justices joined, or concurred, in the opinion. Three justices concurred only to the extent prior pay salary standing alone is not a defense, but employers may consider prior salary among other FOTS when setting initial wages. Three justices concurred in the decision, but disagreed with the majority’s holding that prior pay may never be considered as FOTS in an EPA claim.
On April 9, 2018, the Ninth Circuit previously ruled in the instant matter that a person’s previous compensation may not be used to justify gender pay disparity. The United States Supreme Court vacated the decision on a technicality, as the judge who had authored the ruling died before the appeals court’s final decision was issued.
The appeals court decision mirrors a growing trend. Almost 20 states have passed or enacted salary history bans and another 20 cities — like Atlanta, New Orleans, New York City, and Philadelphia — have bans in some form.
Rizo and the EPA highlight the very technical nature of “modern” employment law. The interface between federal, state, and local ordinances add an additional level of complexity for businesses.