Court: Women cannot be paid less than men based on past salary

Court helps define Equal Pay Act

By JENNIFER HANSLER, CNN
Laura Perez Maestro/CNN

(CNN) - A federal court ruled Monday that employers cannot use salary history to justify paying women less than men for the same work.

The Ninth Circuit Court of Appeals decided in favor of the plaintiff in Rizo v. Fresno County Office of Education, ruling that wage disparity based on "prior salary alone or in combination with other factors" violated the Equal Pay Act.

The case was heard by the entire 11-judge panel, including the late Judge Stephen Reinhardt. He penned the majority opinion prior to his death last month.

"The Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex," Reinhardt wrote. "The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history and purpose of the Equal Pay Act, the answer is clear: No."

Stephanie Bornstein, an associate professor of law at the University of Florida Levin College of Law, told CNN that "this decision stands to make a major difference in the way all women's pay is determined -- and in closing the pay gap."

"Many employers use prior salary alone or as one factor in setting pay. Because a woman's pay may be unfairly low to begin with, it perpetuates pay discrimination into the future, from her first job throughout her entire career," she said. "This ruling means that, even if an employer does not intend to discriminate, it cannot consider prior salary when setting an employee's pay -- it must focus only on job-related factors."

The case centered on Aileen Rizo, a math consultant employed by the Fresno County Office of Education. She said she learned in 2012 that her male counterparts made significantly higher wages than her, despite her greater experience and seniority. Rizo filed suit against county superintendent Jim Yovino that year. In 2017, a three-judge panel from the Ninth Circuit ruled against Rizo, holding with the Ninth Circuit's 1982 decision that using prior wages to determine current salary was permissible under the Equal Pay Act as "a factor other than sex." Monday's decision overturned the 1982 ruling.

"We took this case en banc in order to clarify the law, and we now hold that prior salary alone or in combination with other factors cannot justify a wage differential," Reinhardt wrote. "To hold otherwise -- to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum -- would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands."

In a statement to CNN released through his attorney, Yovino said they "respectfully disagree with the Ninth Circuit En Banc's analysis and will petition for review by the United States Supreme Court."

In the years following Rizo's initial suit, California, Massachusetts and Oregon have passed laws prohibiting employers from asking applicants for their salary histories.

The publication of the decision came on the eve of Equal Pay Day. In 2017, women in the United States earned an average of 82% of what men did, according to Pew -- meaning it would take an extra 47 days of work for women to achieve wage parity with men. The gender pay gap is wider among African-American and Hispanic female workers. Pew found the that gap has "remained relatively stable over the past 15 years or so" -- a fact that Reinhardt decried in his opinion.

"Although the (Equal Pay) Act has prohibited sex-based wage discrimination for more than 50 years, the financial exploitation of working women embodied by the gender pay gap continues to be an embarrassing reality of our economy," he wrote.

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