Dive Brief:

• Salary history alone can not be used to justify pay gaps between men and women, the full 9th U.S. Circuit Court of Appeals ruled April 9 (Rizo v. Yovino, No. 16-15372).
• A three-judge panel reached the opposite conclusion in the case last year but upon rehearing en banc, the court determined that "prior salary alone or in combination with other factors cannot justify a wage differential."
• "To hold otherwise—to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum—would be contrary to the text and history of the Equal Pay Act," the court explained, "and would vitiate the very purpose for which the Act stands."

Dive Insight:

The court took up the question in response to an employer's defense to an Equal Pay Act claim. The employer acknowledged that it paid a female employee less than her male colleagues for the same work, but argued that its decision was based on past pay, not sex.

The law allows for differences in pay if they're based on, among other things, "any other factor other than sex." The employer in Rizo argued that that phrase encompasses past pay, but the court was not persuaded. "We conclude, unhesitatingly, that 'any other factor other than sex' is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance," it said.

The court went to to explain that it believed it "inconceivable" that Congress, in a law designed to eliminate sex-based wage disparities, would create an exception for basing new hires’ salaries on those disparities — "disparities that Congress declared are not only related to sex but caused by sex."

The court's opinion in Rizo means that employers in its jurisdiction — Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington — cannot defend equal pay claims by showing that an employee's pay was based on his or her prior salary.

The ruling comes as states and cities are adopting laws that prohibit employers from asking about salary history in the first place. And some, like California, prohibit employers from using that information to set pay, even if an applicant volunteers it.