Employers should not have authority under federal workplace laws to use prior salary history to justify paying male and female workers differently for the same roles, a California lawyer told the U.S. Supreme Court on Wednesday in a closely watched case confronting a common employment practice.

The case Fresno County Superintendent of Schools v. Rizo, which arrived in March from the U.S. Court of Appeals for the Ninth Circuit, is a fresh test of the scope of the federal Equal Pay Act, or EPA. The Ninth Circuit's ruling against the school district said the equal pay law required employers to base any wage disparities on job-related factors other than sex.

"The express purpose of the act was to eradicate the practice of paying women less simply because they are women," Judge Morgan Christen wrote for the Ninth Circuit majority. "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."

The Ninth Circuit's decision attracted wide scrutiny among labor and employment lawyers, and the justices have heard from several business groups, including the U.S. Chamber of Commerce, that contend the appellate court's decision, if left in place, could have broad consequences for employers weighing whether and when they can ask about prior salary history.

The case is unfolding at a time when more state and local governments consider or adopt laws banning the consideration of past compensation as an employment practice.

Fresno County was sued by a math consultant named Aileen Rizo, who said she was making $10,000 less than male counterparts performing the same job function.

Rizo's lawyer, Daniel Siegel of the California firm Siegel, Yee, Brunner & Mehta, told the Supreme Court on Wednesday that the appeals court ruling does not present broader questions about the ability of employers to inquire about a would-be employee's past compensation. Siegel argued the Ninth Circuit's ruling was clear: Employers can still ask about prior salary, but they cannot rely on earlier compensation to avoid liability under the Equal Pay Act.

"An employer's ability to ask about, or to rely upon, an applicant's prior pay is left untouched by the Equal Pay Act unless and until those practices result in employees of one sex being paid less than employees of another for doing the same work," Siegel told the justices. "Thus, as long as employers do not violate the act's requirement of equal pay for equal work, they are entirely free to use prior pay to assess a candidate's level of experience or skill."

Siegel said an employer who asks about past salary history is no more exposed to potential liability than one who does not ask. "Any liability stems entirely from their paying women less, and not from why they chose to do so," Siegel wrote.

At the Supreme Court, a team from Jones Day represents Fresno County with lawyers from McCormick Barstow.

Shay Dvoretzky Shay Dvoretzky, partner with Jones Day, speaking at a Chamber event. Credit: Diego M. Radzinschi / NLJ

"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," Jones Day partner Shay Dvoretzky told the justices.

Norton Rose Fulbright partner Jonathan Franklin, advocating for the U.S. Chamber of Commerce, said consideration of prior pay is a "sex-neutral practice can benefit female and male applicants alike—particularly those who were highly valued by their prior employers—by increasing the pay that they might otherwise receive." He continued: "By placing wage-history data off limits for employers within the nation's largest circuit, the court of appeals' rule exacerbates a clear, acknowledged split regarding the legal viability of that important practice."

The Society for Human Resource Management, represented by Seyfarth Shaw partner Camille Olson, told the justices that the group "supports a rule that would permit employers to consider prior salary when the surrounding circumstances make it reasonable to do so, and where the employer is not simply relying on market forces that have permitted employers to pay women less because they are women."