On February 25, 2019, in a much awaited decision, the Supreme Court of the United States issued a per curiam ruling in Yovino v. Rizo, No. 18-272, 586 U.S. ___ (2019). Rather than address the substantive issue of whether an employer may rely on salary history to establish starting pay under the federal Equal Pay Act (EPA), the Court vacated and remanded the matter on a procedural—yet still important—issue.
In Yovino, a former math consultant with the Fresno County Office of Education sued her employer under the EPA after she discovered that a male colleague earned a higher salary than she did. The employer unsuccessfully moved for summary judgment on the grounds that her starting salary was based in part on her prior salary, which was a “factor other than sex” that employers may consider when setting salaries. A three-judge panel of the Ninth Circuit Court of Appeals vacated that decision based on prior Ninth Circuit precedent permitting an employer’s use of salary history in deciding employees’ salaries. The full Ninth Circuit agreed to review the case, to clarify the law. On April 9, 2018, the Ninth Circuit issued a 6-4 decision, overruling prior Ninth Circuit precedent and holding that it was impermissible for the employer to rely on the plaintiff’s prior salary to establish her pay.
Interestingly, the ruling was authored by the Honorable Stephen Reinhardt, who passed away 11 days prior to its publication. The ruling itself referenced his passing, stating that the “majority opinion and all concurrences were final, and voting was completed by the en banc court prior to his death.”
The employer sought Supreme Court review, in part, on the issue of whether Judge Reinhardt’s vote and ruling survived his passing. The Supreme Court ruled that it did not. As the Court noted, “federal judges are appointed for life, not for eternity.” Thus, the court vacated the Ninth Circuit’s decision and sent the case back to the Ninth Circuit for review.
This ruling may leave many non-lawyers scratching their heads; and employers are no closer to receiving much needed guidance on the permissible use of salary history under the federal pay discrimination laws. Federal courts are presently split on this issue. However, the current sitting justices on the Ninth Circuit have the opportunity the review the case and reissue a decision. Given how important the issue of salary history has become to the pay equity movement, we can expect to see continued litigation.
As we have noted, several states and localities have passed legislation that limits an employer’s inquiries into and use of salary history in making pay decisions. Those laws are not impacted by this decision.