The “Checkerboard” Balkinzation of Employment Law Continues, and Now Gets Worse. A Chance Missed!
The Equal Pay Act does not protect minorities: only Men and Women. So, how does Title VII intersect the prior pay issue as to Minorities and Whites, or does it?
Neither Ms. Rizo’s claim, nor the Ninth Circuit’s decision or the SCOTUS’ order refusing to hear the Rizo case, arose under or decided anything with respect to Title VII, Executive Order 11246, the ADA, Section 503 of the Rehabilitation Act of 1973, or VEVRAA (38 USC 4212).
The United States Court of Appeals for the Second Circuit (New York) has held that the EPA only allows employers to consider “job-related” factors when relying on the “factor-other-than-sex” defense. This Court would thus allow the prior pay defense but would require the employer to also prove that “a bona fide business-related reason exists” for any wage differential.
The United States Court of Appeals for the Tenth Circuit (Denver), is in the same place. It has interpreted the EPA to allow employers to set pay based on prior pay, but employers there also “must present evidence that the job-related distinctions underlying the salary plan…in fact motivated [the Company] to place the claimants and the comparators on different steps of the pay scale at different starting salaries” [so prior pay can be one part of a multi-part pay algorithm or consideration];
The United States Court of Appeals for the Seventh Circuit (Chicago), launched out in an entirely different direction (which employers favor because of the freedom to set pay this interpretation allows). The Seventh Circuit has held that the EPA’s “factor-other-than-sex” defense may consider prior pay because that defense “embraces an almost limitless number of factors, so long as they do not involve sex.”
Two panels of the United States Courts of Appeals for the Fourth Circuit (Richmond) are at odds with each other. One three-Judge panel held (in 2014), like the Seventh Circuit, that employers may always solely consider prior pay without offending the EPA. But then, another three-Judge panel of the Fourth Circuit (in 2018) went the other way and would find a violation of the EPA if an employer based its pay on any factor which was not job-related (even if sex-neutral), including prior pay but allowed consideration of prior pay in the decision-making.
The other seven United States Courts of Appels which could hear EPA case appeals have either not weighed-in on the prior pay issue or have failed or refused to decide the question or to render guidance pursuant to the EPA as to an employer’s use of prior pay to set current pay. Several of those circuit decisions, for example, merely call for a case-by-case review (whatever that means as applied to these several contentious legal issues: where is the “line in that sand”?)
Also, a few states have jumped into the fray with varying prohibitions (read each state law carefully: like snowflakes: no two are the same) limiting private sector employers, including Alabama, California (prohibits employers from asking an applicant about pay history and prohibits employer reliance on an employee’s prior salary to justify any race, or sex, or ethnicity-based pay difference); Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Oregon, and Vermont.
And then there are a few cities and territories which have also jumped into the fray, including (you guessed it!) San Francisco, District of Columbia, Cincinnati (15 or more employees), Toledo (15 or more employees), Philadelphia (lawsuit pending) to name a few.
And then Michigan goes the other way and bans any local bans on an employer’s use of prior salary questions or use of the information to set current pay.