In a February 28, 2019 decision, the U.S. Supreme Court reversed the Ninth Circuit’s ruling in Rizo v. Yovino, overturning the pay-equity ruling which held that employers cannot justify wage differentials between men and women based upon an individual’s prior salary.
In Rizo, Aileen Rizo filed suit against Jim Yovino, Superintendent for the Fresno County Office of Education—where Rizo was employed as a math consultant. Rizo claimed that that she was paid less than her male co-workers as a result of sex discrimination, which was a violation of the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and California Government Code.
When Rizo was hired by the Fresno County Office of Education, her salary was determined according to the County’s Standard Operating Procedure, which slotted new employees into a salary level based upon their previous salary. As a result of the SOP salary slotting, Rizo was paid less than her male colleagues in similar positions.
The Fresno County Office of Education defended the pay disparity by arguing that the Equal Pay Act contains a catchall phrase that allows for pay discrimination based on “factors other than sex.” The Court ruled that this clause was meant to apply to work-related, performance-dictating factors, and that previous salary is not a valid basis for pay differential.
The Court further explained the ruling by pointing out that an interpretation of the EPA which allowed for discrimination based upon previous salary would inevitably perpetuate the continued pay discrimination against women. A female who currently earns less than males at one job could be continually discriminated against by future employers as a result of the current employer’s discriminatory practice.
Yovino appealed the Ninth Circuit’s ruling to the U.S. Supreme Court, who subsequently reversed the lower court’s holding. However, the ruling was reversed not on the merits of the case, but because of a unique procedural issue that invalidated the ruling.
Judge Stephen Reinhardt (who authored the Ninth Circuit’s opinion) passed away eleven days before the ruling was filed, yet his vote had still been counted for the 6-5 majority. The Supreme Court ruled that Judge Reinhardt’s vote should not have counted, and the Ninth Circuit decision was therefore not the result of a valid majority. The Supreme Court made no decision in regard to the pay discrimination issue, they simply reversed the Ninth Circuit’s ruling and sent the case back to the lower court for further proceedings.
As a result of the Supreme Court ruling, there is currently no clear answer on whether previous salary may be a deciding factor upon which an individual’s salary is determined. Rizo’s case, and the bigger issue of prior salary as a reason for pay differential, have been remanded back to the Ninth Circuit for a future decision. Employers should consider the Rizo case in determining what weight, if any, to give an employee’s previous salary.