Last year, the 9th Circuit ruled that it was OK to pay a teacher from Arizona who moved to California less than her co-workers because the formula was based strictly on the previous salary and had nothing to do with sex. If the teachers in question had all been male or all been female, the salary discrepancy would have been the same.

This week, though, in an en banc ruling, they flipped it around to say the previous salary is never a valid reason for a difference in pay.

Many states and cities have made it illegal to ask a candidate for salary history, making basing their current offer on a previous salary difficult (but not impossible). Keep in mind, none of these laws prevent employers from asking what salary someone is looking for. A person who currently earns $50,000 is most likely going to say she is looking for a lower salary than someone who currently earns $80,000. The best way is for companies to state a salary range up front: "This job pays between $75.000 to $85,000. Does that work for you?"

Regardless, using previous salary was a legal way to determine a current salary, but the 9th Circuit said no more. Why? Not because of the plain language that allows difference based on "any other factor other than sex," but because the end result can look like illegal sex discrimination. Judge Stephen Reinhardt wrote in the decision:

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.

While I agree with the outcome of this decision--basing pay on previous salary is absolutely stupid and likely to result in pay discrepancies--I disagree with how they arrived at it. There may have been a case out there where a lower salary was based on previous sexual discrimination, but this case wasn't one of them.

Why? Because the person in question was a teacher who was paid based on a formula and there's no evidence that the reason her Arizona salary was lower than the California salary was due to discrimination against women. It's just evidence that Arizona teachers make less money that California teachers. There was no perpetuation of gender discrimination because there was no evidence of gender discrimination to begin with. 

I agree that Congress intended to do away with pay differences based on sex, even if those differences were historical, but this case has nothing to do with sex and everything to do with geography.

Companies and school districts alike need to pay all their employees fairly and ignore what people earned at previous companies, but this wasn't the situation to make this case. 

Published on: Apr 12, 2018