Ninth Circuit Holds that Salary History May Not Justify Gender Pay Differential Under the Equal Pay Act [Rizo v. Yovino]

In Rizo v. Yovino, No. 16-15372 (9th Cir. Apr. 9, 2018) (en banc), an en banc (i.e., full) panel of the U.S. Court of Appeals for the Ninth Circuit held that prior salary alone or in combination with other factors cannot justify a wage differential between male and female employees under the “catchall” exception of the Equal Pay Act of 1963.

That statute provides, inter alia:

(1) No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex[.]

29 U.S.C. § 206(d)(1) (emphasis added by court).

The decision addresses the meaning of the “catchall” exception of “any other factor other than sex.” It had little trouble concluding that salary history does not qualify for the exception:

The question in this case is the meaning of the catchall exception. This is purely a question of law. We conclude, unhesitatingly, that “any other factor other than sex” is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance. It is inconceivable that Congress, in an Act the primary purpose of which was to eliminate long-existing “endemic” sex based
wage disparities, would create an exception for basing new hires’ salaries on those very disparities—disparities that Congress declared are not only related to sex but caused by sex. To accept the County’s argument would be to perpetuate rather than eliminate the pervasive discrimination at which the Act was aimed. As explained later in this opinion, the language, legislative history, and purpose of the Act make it clear that Congress was not so benighted. Prior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages. Reflecting the very essence of the Act, we hold that by relying on prior salary, the County fails as a matter of law to set forth an affirmative defense.