Court: Employers can’t set different pay for men and women doing same job

FILE - In this Dec. 6, 2010, file photo, Senior Circuit Judge Michael Daly Hawkins, left, Circuit Judge Stephen R. Reinhardt, center, and Circuit Judge N. Randy Smith hear arguments during a hearing in the Ninth Circuit Court of Appeals in San Francisco. Judge Reinhardt, a liberal stalwart on the U.S. 9th Circuit Court of Appeals, has died in Los Angeles. He was 87. Court spokesman David Madden says Reinhardt died Thursday, March 29, 2018, of a heart attack during a visit to a dermatologist. (AP Photo/Eric Risberg, Pool, File) less FILE - In this Dec. 6, 2010, file photo, Senior Circuit Judge Michael Daly Hawkins, left, Circuit Judge Stephen R. Reinhardt, center, and Circuit Judge N. Randy Smith hear arguments during a hearing in the ... more Photo: Eric Risberg / Associated Press Photo: Eric Risberg / Associated Press Image 1 of / 1 Caption Close Court: Employers can’t set different pay for men and women doing same job 1 / 1 Back to Gallery

In a victory for women in the workplace, a federal appeals court ruled Monday that employers can’t set different pay levels for women and men doing the same job by relying, even in part, on their salary at a previous job.

Paying employees different amounts based on what they were paid at their former jobs “perpetuates the very gender-based assumptions about the value of work that the Equal Pay Act was supposed to end,” said the Ninth U.S. Circuit Court of Appeals in San Francisco.

The ruling was written by Judge Stephen Reinhardt before his death March 29. The court said all members of the 11-judge panel had cast their votes before Reinhardt’s death.

The ruling is in line with a California law, effective in January 2017, that prohibits employers from paying different amounts to equally qualified women and men based on their previous salaries, and another law effective this year that prohibits employers from asking applicants about their past salaries.

Attorney Jessica Stender of Equal Rights Advocates, who filed arguments for civil rights groups in the court case, noted that Monday’s ruling was issued a day before what has been labeled Equal Pay Day, which marks how far into the current year a woman must work into the calendar year to catch up to the average male’s salary for the previous year.

Those salary gaps exist “in virtually every occupation in this country,” Stender said.

The ruling goes a step beyond other federal appeals courts, as well as the U.S. Equal Employment Opportunity Commission, which had prohibited employers from basing pay differentials solely on workers’ previous salaries but had allowed them to consider prior pay, along with skills and experience, in setting new pay levels. Four of the 11 judges on Monday’s panel favored such an approach.

An attorney for the employer in the case, the Fresno County Office of Education, said it would seek review in the U.S. Supreme Court.

The office believes its pay policies, which considered prior salaries, were “absolutely gender-neutral, objective and effective in attracting qualified applicants,” said attorney Michael Woods.

The suit was filed by Aileen Rizo, who was hired by the county office as a math consultant in 2009 after 13 years as an Arizona schoolteacher and was paid $62,733, near the bottom of the pay scale. She sued after learning in 2012 that a man in the same job was being paid at least $13,000 more because of his earnings at his previous job.

Rizo left for another job in June 2016. Earlier that year, the county office, in anticipation of the new state law, raised her salary to the level of her male colleague. Rizo, who had testified before the Legislature in support of the new law, continued with her suit.

The federal Equal Pay Act, passed in 1963, requires equal pay for equally qualified male and female employees, but allows employers to set different levels based on seniority, skills or output levels, or some other “factor other than sex.” The Fresno County office contended past pay levels constituted such a factor, but the court disagreed.

Although the law has been in effect for more than a half century, Reinhardt said, “the financial exploitation of working women embodied by the gender pay gap continues to be an embarrassing reality of our economy.”

Because the pay gap is based on gender bias, Reinhardt said, allowing an employer to base new salaries on old ones would “perpetuate rather than eliminate the pervasive discrimination at which the (Equal Pay) Act was aimed.”

In separate opinions, four of the 11 judges agreed that Rizo’s case was clear-cut — since the county admitted that prior pay was the sole reason she made less than her male counterparts — but said the court should not rule out all considerations of previous salaries.

Rather than imposing a “lockstep pay system,” courts should interpret the law to let private employers set “a competitive salary that will entice potential employees” by offering them more than they were making, said Judge Consuelo Callahan, writing for herself and Judge Richard Tallman.

Daniel Siegel, a lawyer for Rizo, disagreed with Callahan.

“If the prior salary is a discriminatory factor, whether it’s the sole factor or 1 percent, it’s still discrimination,” he said.