Equal Pay Win: Federal Court Affirms Prior Salary Ban

February 27. 2020

For Immediate Release
Feb 27, 2020

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Jess Eagle
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In an important win for equal pay, a federal appeals court ruled yesterday that employers cannot use prior salary to justify compensating women and men differently for equal work under the federal Equal Pay Act.

After the U.S. Supreme Court sent the case back on procedural grounds, the Ninth Circuit held in Rizo v. Yovino that “prior salary alone or in combination with other factors, cannot serve as a defense to an Equal Pay Act claim” and that employers must “demonstrate that only job-related factors, not sex, caused any wage disparities that exist between employees of the opposite sex who perform equal work.”

Prior salary is a critical issue in the fight for equal pay. Nationwide, women on average earn just 82 cents to every dollar earned by men, and for women of color this wage gap is much worse. Research shows women earn less than men starting just one year after graduating college, even when taking into account factors like major, occupation, and hours worked. When employers rely on prior salary in setting pay, these disparities are perpetuated, allowing gender discrimination to follow women from job to job throughout their careers. The result not only allows the wage gap to persist, but results in a lifetime of lost wages for women, lower income for families, and higher rates of poverty.

[To allow an employer to rely on prior salary to justify a pay disparity would allow the exception to effectively swallow up the rule and contravene the very purpose of the [Equal Pay] Act. — Jessica Stender, Senior Counsel for Workplace Justice & Public Policy

The plaintiff in this case, Fresno educator Aileen Rizo, discovered that she was being paid significantly less than her male coworker for the same job, despite having more experience and education. She has fought for years to ensure that other women — especially other women of color — do not have to experience the same injustice. In a growing number of states, including California, asking a job applicant about their prior salary is illegal.

Equal Rights Advocates authored two amicus briefs in this case and in 2017, Senior Counsel for Workplace Justice & Public Policy Jessica Stender argued before the en banc panel of 11 judges of the Ninth Circuit on behalf of ERA and 21 other amici organizations committed to combatting pay discrimination.

 “More than 50 years after the enactment of the Equal Pay Act, women continue to earn less than their male counterparts in virtually every industry and occupation in this country,” Jessica Stender said. “In holding that prior salary cannot be used to justify a pay disparity under the Act, the Court has clarified that employers can only rely on legitimate, job related, non sex-based factors to justify paying a woman less than a man for doing the same job. As the Court correctly held, “[a]llowing employers to escape liability by relying on employees’ prior pay would defeat the purpose of the act and perpetuate the very discrimination the [Equal Pay Act] aims to eliminate.”

This decision comes at a particularly significant moment as fair pay advocates around the country rally to bring attention to the persistent wage gap the average American woman experiences.