UPDATE: Salaries Speak Louder than Words

Katherine M. Flett

By Katherine M. Flett

Equal Pay Day was celebrated this month on April 2, 2019. This date symbolizes how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not stationary. In fact, the date occurs seventeen days earlier than it did in 2005. While there is a lot to celebrate with that achievement, there is still a long way to go to completely close the gender wage gap.equal pay day

In fact, the Supreme Court recently faced the opportunity to potentially close this wage gap even further when it granted cert to Rizo v. Yovino. See Katherine Flett’s blog post titled “Salaries Speak Louder than Words” for more discussion on the case. In Rizo, the Ninth Circuit sitting en banc found that the use of salary history to establish a starting salary violated the Equal Pay Act, as it perpetuated the discriminatory nature of women historically being underpaid in almost all sectors of employment. Thus, reliance on prior pay could no longer be considered as an affirmative defense under the Act’s fourth catchall exception, “any other factor other than sex.”

The Ninth Circuit’s decision went further than any other circuit when they determined that prior pay could never be considered, even as a factor, to establish starting salary. This contrasted directly with the Seventh and Eighth Circuit, which found that prior pay could be considered to establish starting salary. The decision more closely aligned with the Tenth and Eleventh Circuit, which found that prior pay alone could not be considered when establishing a starting salary.

The U.S. Supreme Court was positioned to address the use of salary history inquires to settle the circuit split once and for all following cert on Rizo v. Yovino. However, the Court did not decide the case on the fundamental dispute at hand. Instead, the Court vacated and remanded the Ninth Circuit decision because the author of the majority opinion, Judge Reinhardt, passed away eleven days before the decision was officially published. See Yovino v. Rizo, 139 S.Ct. 706 (2019). The Ninth Circuit previously acknowledged Judge Reinhardt’s passing in the published decision, noting: “Prior to his death, Judge Reinhardt fully participated in this case and authored this opinion. The majority opinion and all concurrences were final, and voting was completed by the en banc court prior to his death.” Rizo v. Yovino, 854 F.3d 1161 (9th Cir. 2018).

The Supreme Court determined that it was improper to count Justice Reinhardt’s vote because judges may change their votes up until the date the decision is released to the public. According to the Court, permitting Judge Reinhardt’s decision to stand would be a violation of judicial policy because it effectively permitted a deceased judge to still exercise the judicial power of the United States even after his death. The Court concluded federal judges are appointed for life, not for eternity.

Additionally, without Judge Reinhardt’s vote, there was not a majority to support the en banc decision as the remaining decision stands at only five in support of the decision out of the remaining ten judges still living. Further, the Court expressed concern that Reinhardt’s decision was deemed the majority decision, thereby establishing the mandatory precedent in the Ninth Circuit. Because the other five judges wrote only as concurrences for various reasons, the Court found it impossible to determine what the outcome would have been without Judge Reinhardt as the majority opinion. Thus, the Court found the only feasible solution to vacate and remand the Ninth Circuit decision. In doing so, the Court failed to provide any dicta or direction regarding the core issue of prior pay under the Equal Pay Act, which continues to divide the nation’s courts.

What happens next?  It is likely the Ninth Circuit will readdress and author a new decision in Rizo. The decision is expected to uphold at least some level of rejection of reliance on prior pay under the Equal Pay Act. There is no time estimate for how long it will be before the Ninth Circuit once again addresses these issues; however, as it currently stands, employers’ use of salary history inquiries is once again permissible unless there is a state or local legislation to the contrary. Since some of the concurrences expressed concern with how far the majority went with its complete ban on considering prior pay, the new decision may show more restraint in interpreting the Equal Pay Act. Another option is that the outcome may remain the same out of the Ninth Circuit’s respect for Judge Reinhardt’s majority opinion on the matter. It will most likely be some time before the Supreme Court addresses the employers’ use of salary history, so the current circuit split is likely to remain unless there is action from Congress.

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Posted by Attorney Katherine M. Flett. Flett is a member of the litigation team whose primary focus is on assisting clients in insurance defense, business litigation, employment law, and bankruptcy matters. 

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