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Analysis Law and Policy

The Supreme Court Considers a Case That Could Gut the Equal Pay Act (Updated)

Jessica Mason Pieklo

The Roberts Court could bless employers' use of past salary histories in setting wages, even though the practice perpetuates the gendered wage gap.

UPDATE, February 25, 10:30 a.m.: The Supreme Court on Monday issued a per curium order ruling the Ninth Circuit improperly considered the vote of Judge Stephen Reinhardt, who died before the opinion was issued. The Supreme Court vacated the Ninth Circuit decision and sent the case back for further proceedings.

In 1963, President John F. Kennedy signed the Equal Pay Act (EPA) into law, which prohibits gender-based wage discrimination. More specifically, the EPA prohibits employers from paying men and women different wages or offering them different benefits for doing jobs that require the same skills and responsibilities. As one of the first pieces of federal legislation targeting gender-based inequality at the workplace, it was the product of political organizing following World War II, when women entered the workforce in unprecedented numbers. And on Friday, the U.S. Supreme Court will consider taking a case that could gut it.

At issue before the Court is the problem of employers using prior salary history when setting wages, which plaintiffs argue perpetuates the gendered wage gap.

In 2009, Aileen Rizo was offered a position as a math consultant with the Fresno County Office of Education. Rizo’s starting salary was $62,133, based on a set salary formula the district applied to all new hires, regardless of gender. As outlined in court documents, the county “calculated new employees’ wages by taking their most recent salaries, adding five percent, and then placing them on the nearest step in a ten-step salary scheme.” Apart from additional stipends for master’s degrees or PhDs, prior salary history was the only factor the office used to set starting salaries.

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In 2012, Rizo learned men in the district were making as much as $10,000 more working in comparable positions. When Rizo brought this to the attention of human resources, they told her the pay discrepancy was justified because it was based on Rizo’s prior salary history per office policy. Rizo disagreed and sued, arguing that the policy violated the EPA.

While the EPA mandates equal pay for equal work, it provide employers some flexibility in setting wages. Employers can justify wage differentials if those differentials are based on things like seniority, merit, or “any other factor other than sex.” In this case, the county argued the formula used to set salaries was applied consistently among employees regardless of gender. Thus, it said, it was not a “sex-based” wage determination in violation of the EPA.

The federal district court disagreed and sided with Rizo, holding that the county’s exclusive use of prior salaries violated the equal pay for equal work mandate of the statute. The county appealed to the Ninth Circuit Court of Appeals, which reversed the lower court’s decision in April 2017. In April 2018, the en banc panel of the Ninth Circuit Court reversed that decision.

The Ninth Circuit’s 2018 en banc decision is a beast of a legal opinion. Of the 11 judges who heard the case, five joined onto the majority opinion. The remaining five judges split across three concurring opinions. When read together, the judges agreed unanimously that the salary differentials generated by the office’s policy violated the Equal Pay Act. That’s about where the agreement in the decision ends. The court expressly declined to offer any answer for how employees and employers can use prior salary in individualized salary negotiations, instead insisting it was expressing a “general rule.” According to the Ninth Circuit’s majority opinion, “prior salary alone or in combination with other factors cannot justify a wage differential” because prior salary is not a “factor other than sex.” The “factor other than sex,” it continues, must be “job-related.”

“Salaries speak louder than words,” the opinion states. It found that “to accept the county’s argument would perpetuate rather than eliminate the pervasive discrimination” that the EPA was designed to prevent.

“Women are told they are not worth as much as men,” the decision states. “Allowing prior salary to justify a wage differential perpetuates this message, entrenching in salary systems an obvious means of discrimination.”

In other words, the court determined that because of workplace sexism, women are less likely to make as much money than men from the get-go—so jobs that relied on previous salary alone to determine wages would just end up repeating that sexism.

In August 2018 the county filed its writ of certiorari to the Supreme Court, arguing the Court should take the case because the Ninth Circuit’s decision creates a split among the federal courts, specifically with the Seventh Circuit Court of Appeals, as to whether prior salary is a “factor other than sex” for purposes of the EPA.

This case has a twist too. Judge Stephen Reinhardt, who authored the Ninth Circuit’s majority opinion, died just before the court published its decision. The opinion notes that Reinhardt “fully participated and authored the opinion” and that the voting on the case was “final and complete” prior to his death. Nonetheless, the county has asked the Roberts Court to rule that his vote can’t count since Reinhardt died before the opinion was published.

Business interests have, not surprisingly, filed briefs in support of the county. And the case has flown relatively under the radar—despite what is at stake.

A 2018 report by the Institute for Women’s Policy Research (IWPR), a public policy think tank, compared men and women’s earnings across a 15-year period and found the gendered pay gap is nearly twice as large as historically reported. According to IWPR, when averaged out over 15 years women make 49 cents for every dollar men make—with women of color, especially Black women, paid the least of all. The report notes that because women still account for a significant number of workers who take time away from work to care for family members, the pay difference is as much a “care penalty” or tax as it is a “wage gap.”

Meanwhile, several cities and states have banned or are considering banning salary history inquiries by employers, including California, Massachusetts, Oregon, New Orleans, Philadelphia, and New York City. A decision by the Roberts Court to side with salary formulas like the one at issue in Rizo could throw those prohibitions into question while solidifying the gendered wage gap findings reported by groups like IWPR and others. If an arguably more liberal Roberts Court in 2013 found the country was “post-racial” enough to justify gutting the Voting Rights Act, it is not difficult to imagine a more conservative Court—thanks to the presence of Justices Brett Kavanaugh and Neil Gorsuch—finding the workplace sufficiently gender-equal to justify gutting the Equal Pay Act.

The Court first conferenced on the county’s petition in December, but has yet to decide whether or not to take it. It will do so again on Friday.

Topics and Tags:

Equal Pay Act, fair wages, Wage Gap

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