“HOW MUCH YOU MAKING?” — FIGHTING WORDS IN THE 9TH CIRCUIT AND CALIFORNIA
Barry A. Bradley, Esq. and Lindy Bradley, Esq., Bradley & Gmelich
The Rizo Case: The full bank of Appellate Justices, in a recent federal Ninth Circuit Court of Appeals case, Aileen Rizo vs. Yovino (April 9, 2018), unanimously ruled that employers may no longer consider an employee’s prior salary history, either alone or combined with other factors, to justify gender-based pay disparities.
Ms. Rizo, a math teacher, filed a lawsuit against her employer when she discovered that her employer had recently hired another math consultant at a salary which was roughly $13,000 greater than her own, despite the fact that she had more experience and education than the new hire. She alleged that the Fresno County Superintendent of Schools (Yovino), violated the federal Equal Pay Act by improperly setting the salary of employees based on adding 5% to a new hire’s prior salary. When she addressed the disparity in pay with her employer, she was told that her own lesser pay was based on her prior salary, following which she filed a lawsuit.
The ruling, written by (now deceased) Justice Stephen Reinhardt, held that allowing employers to consider prior salaries in setting pay is “wholly inconsistent” with the 1963 federal Equal Pay Act. Justice Reinhardt’s ruling notes that “[T]he financial exploitation of working women embodied by the gender pay gap continues to be an embarrassing reality of our economy.” The federal Equal Pay Act bars wage disparity except in cases of seniority, merit, quantity or quality of production or “any other factor other than sex.”
Effect on California Businesses: The Ninth Circuit’s ruling applies to nine Western states, including California. However, this ruling essentially parallels the recently enacted California Assembly Bill 168 (codified as Labor Code section 432.3) — a part of the California Equal Pay Act. That statute, which became effective January 1, 2018, makes it unlawful for employers to ask about or even consider a job applicant’s prior salary history in determining whether to hire the applicant or how much to pay them.
Employers may consider prior salary information applicants voluntarily disclose, but may not seek that information out whatsoever. This new law also requires employers to provide applicants with a pay scale for the position when requested. The purpose of this ban is to ensure that historic discrimination in pay to an applicant will not be perpetuated.
Employer Takeaway: Employers may not rely on prior salary history as a factor in setting an employee’s wages. If they do so, and this results in a gender-based pay disparity, the affected employee may have a legitimate Equal Pay Act claim. Employers should pay close attention to their pay classifications, particularly as they run along gender lines, and should ensure that any disparities in pay are justified by the employee’s experience, education, ability, and/or performance. Your job applications should no longer ask for current salary or prior salary information! You may only advise what the job pays, or ask what the applicant’s salary expectations are.
Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team. A former Deputy District Attorney for the L.A. County District Attorney’s Office, Hardcore Gang Unit, he now applies his law enforcement and prosecutorial background to represent private security companies. Barry serves as the Legal Advisor to CALSAGA, and provides counsel and seminars to security professionals throughout the United States on business, liability, and licensing issues..
Lindy F. Bradley is a Partner at Bradley & Gmelich LLP. A California native, she litigates a variety of cases involving government tort litigation, general civil litigation, premises and products liability matters for several national retailers and commercial business owners. She is on the Board of the Law Enforcement and Private Security Conference (LEAPS), and is also on the Board of the Association of Southern California Defense Counsel (ASCDC) where she acts as co-chair of the general liability committee.