Ninth Circuit Rules That Employers Cannot Use Employees’ Salary Histories to Justify Paying Women Less Than Men

Earlier this month, the Ninth Circuit Court of Appeals, the highest federal court in California, issued a significant decision that could ultimately have national implications for women fighting to be paid equally with their male peers.  In Rizo v. Yovino, a female math consultant sued the superintendent of a California school district under the Equal Pay Act – a federal law that prohibits paying women less than men based on their gender – after she learned that her male colleagues were paid more than she based on the men reporting higher salaries from their previous jobs to the school district.

In analyzing the case, the Ninth Circuit became the first federal appellate court in the country to rule, as a matter of law, that prior salary history cannot justify a wage differential between men and women.  As the Court aptly noted, “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.”  Put differently, allowing employers to rely on the prior salary histories of men and women, which are quite possibly more reflective of the existing gender pay gap in the U.S. than the relative merit of the given male and female employees, actually furthers the pervasive problem of pay disparity based on gender, rather than correcting it.

Despite the common sense nature of the ruling, the Ninth Circuit’s decision puts it at odds with the Seventh Circuit, which reached the opposite conclusion in 2005, holding that salary history can always be used to justify a gender wage gap.  Other appellate courts to address this issue have rendered decisions falling somewhere in the middle.  Therefore, the Ninth Circuit’s decision creates a deep circuit split that could merit a ruling by the U.S. Supreme Court in the coming years.

While the Rizo v. Yovino decision is binding only upon employers in certain states in the Western contiguous U.S. (as well as Alaska, Hawaii, and certain U.S. territories), it undoubtedly marks an enormous victory for women in the workplace and, hopefully, signals a trend towards more equitable compensation for women nationwide.