The federal Equal Pay Act (EPA) bars differences in pay between men and women performing substantially similar jobs in the same establishment. An employer can avoid liability under the EPA by demonstrating that the pay differential is based on one of four specific affirmative defenses, including the catchall “any other factor other than sex.”
In a recent ruling that should probably not come as any surprise, the notoriously liberal Ninth Circuit Court of Appeals reversed its own longstanding precedent and ruled that an employer’s reliance on prior salary in setting initial pay is not a “factor other than sex” under the EPA.
The unanimous decision by the full appeals court in Rizo v. Yovino, No. 16-15372 (9th Cir. April 9, 2018), concludes that permitting an employer to justify a gender pay differential based on prior salary would allow it to “capitalize on the persistence of the wage gap and perpetuate that gap” indefinitely, contrary to the EPA’s purposes. Perhaps worth noting, the decision was issued the day before Equal Pay Day, the day each year on which pay equity advocates claim women’s salaries are said to have caught up to that of men.
NT Lakis lawyers submitted a friend-of-the-court brief in support of the County, arguing among other things that nothing in the EPA – and no reasonable interpretation of it – imposes an affirmative obligation on employers to “cure” the effects of the wage gap generally, or any particular pay gap within their companies that is not attributable to sex-based discrimination. In other words, we contended that the duty to ensure nondiscrimination in compensation decisions does not extend to ensuring that everyone is paid exactly the same in the absence of discrimination.
Members of the Center for Workplace Compliance (CWC) can read more here.