Jones Day offices in Washington, D.C. Photo: Diego M. Radzinschi/ALM

Employers can lawfully use prior salary considerations to defend paying male and female workers differently for the same work, lawyers from Jones Day asserted in a new petition at the U.S. Supreme Court testing the scope of the federal Equal Pay Act.

The petition, docketed Friday in the case Fresno County Superintendent of Schools v. Rizo, challenges a ruling by the en banc U.S. Court of Appeals for the Ninth Circuit. The divided appeals court in February said employers cannot rely on prior salary to justify gender disparities for employees performing the same work.

The trip to the Supreme Court marks the second time the case has arrived there, but the justices last year declined to reach the merits of the dispute. The high court concluded then that the vote of a Ninth Circuit judge who died after the first ruling was issued should not have counted. The Ninth Circuit reconsidered the case, and Fresno County still lost.

Fresno County's Jones Day team, led by appellate partner Shay Dvoretzky in Washington, contend the federal appeals courts are sharply divided over whether and when employers can consider an applicant's prior salary in setting compensation. They also argued that an applicant's prior salary is a permissible "factor other than sex"—as described by federal law—that can justify differences in pay between male and female employees performing the same work.

"There should be one, uniform answer to the important question whether the Equal Pay Act permits employers to base wages on prior pay. Because there is not, and because the Equal Pay Act permits employers to consider prior salary, this Court should grant certiorari and reverse the decision below," Dvoretzky told the justices.

Writing for the Ninth Circuit majority, Judge Morgan Christen said the EPA was established to "eradicate the practice of paying women less simply because they are women." Christen continued: "Allowing employers to escape liability by relying on employees' prior pay would defeat the purpose of the act and perpetuate the very discrimination the EPA aims to eliminate."

Allowing employers to use prior salary to defend pay disparities "would frustrate the EPA's purpose as well as its language and structure by perpetuating sex-based wage disparities."

The case at the Supreme Court is expected to attract considerable attention from workers' advocates and business interests. Major U.S. law firms that advise on labor and employment matters issued advisories after the Ninth Circuit's ruling in February. Those client alerts noted that many states already prohibit employers from considering, and in some cases even asking about, an applicant's prior salary.

"Given the maze of federal, state, and local laws that govern the use of wage history, employers should evaluate the laws that apply to their operations to ensure they are not unwittingly running afoul of these potentially conflicting obligations," the management-side firm Seyfarth Shaw said in an advisory.

The Ninth Circuit majority said the EPA "does not prevent employers from considering prior pay for other purposes." The court stated: "For example, it is not unusual for employers and prospective employees to discuss prior pay in the course of negotiating job offers, and the EPA does not prohibit this practice. Certainly, our opinion does not prohibit this practice."

Jones Day's Dvoretzky, a leading Supreme Court lawyer, told the justices in Fresno County's petition that a recent survey of employers showed "two-thirds of employers allow interviewers to ask about prior salary where the law permits it." He disputed the Ninth Circuit's position that employers could discuss prior salary but not rely on it to base pay differences.

Shay Dvoretzky, a partner with Jones Day, speaking at a U.S. Chamber of Commerce event June 21, 2019. Credit: Diego M. Radzinschi / NLJ

Dvoretzky called the Ninth Circuit's position "ridiculous," telling the justices: "Employers do not purposefully acquire—let alone discuss, and certainly not act upon—information that could later subject them to liability under federal employment law."

Daniel Siegel of Oakland's Siegel, Yee, Brunner & Mehta argued for Aileen Rizo, a math consultant, at the Ninth Circuit. Rizo claimed in her suit that Fresno County schools had paid her $10,000 less than male colleagues.

"Allowing an employer to consider prior salary along with other factors in setting an employee's initial salary might mitigate but does not eliminate the discriminatory impact of past employment practices," Siegel told the appeals court. "Even if prior salary is valued at just 10% or less in an employer's assessment of the various factors to be considered in setting a new employee's compensation, it still brings a discriminatory factor into the equation."

Siegel's response to Fresno County's petition is due in late April.

Read more:

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9th Circuit: Employers Can't Rely on Prior Pay to Justify Gender Disparities

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