You Can’t Rely on Prior Wages or Salary to Pay Women Less

One of the last cases of Judge Reinhardt’s life had to do with the Equal Pay Act of 1963.

He wrote the decision, which was published last week, and it begins with these words:

“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. 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.”

This decision means that employers can’t defend against claims of unequal pay under the EPA by pointing to an employee’s prior wages or salary. They can’t rely on prior pay either by itself or in combination with other factors to justify unequal pay. The decision applies to California and eight other states.

Under the Equal Pay Act, you can only pay men and women differently if it’s based on seniority, merit, productivity, or “any other factor other than sex.” This case had to do with that fourth, catch-all exception.

The Court ruled that prior salary doesn’t count because “any other factor” besides sex refers to legitimate job-related factors like hours, shifts, training, education, experience, ability, or past job performance. To rule otherwise would allow employers to defend a sex-based pay differential on the basis of the very pay differentials the EPA was designed to close.

“Rather than use a second-rate surrogate that likely masks continuing inequities, the employer must instead point directly to the underlying factors for which prior salary is a rough proxy, at best, if it is to prove its wage differential is justified under the catchall exception.”

He’s right, and it’s now the law in the Ninth Circuit. [Update: Not quite. On February 25, 2019, the U.S. Supreme Court vacated the opinion and sent the case back for further proceedings.]