UPDATE: Feb. 28, 2020: The 9th U.S. Circuit Court of Appeals held in a Feb. 27 ruling that an employee's prior rate of pay is not a "factor other than sex" that allowed an employer to pay one of its female employees less than male employees who performed the same work. Additionally, the court concluded that only job-related factors may serve as affirmative defenses to claims under the Equal Pay Act. The court affirmed a district court's order denying summary judgment to the defendant on remand from the U.S. Supreme Court.
- The U.S. Supreme Court has vacated and remanded a 9th U.S. Circuit Court of Appeals ruling that salary history alone can't justify pay gaps between men and women (Yovino v. Rizo, No. 18-272 (Feb. 25, 2019)).
- In a per curiam decision issued Monday, the High Court said the 9th Circuit erred when it counted the vote of Judge Stephen Reinhardt, who died 11 days before the court's decision was filed. A footnote in the full court's opinion on Yovino noted that, "[p]rior 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." The status of the opinion as a majority opinion of the en banc court depended on counting Reinhardt's vote, the Supreme Court said; without him, the decision would only have been approved by five out of 10 members of the en banc panel.
- Counting Reinhardt's vote "effectively allowed a deceased judge to exercise the judicial power of the United States after his death," the Supreme Court said. "But federal judges are appointed for life, not for eternity." The court remanded the case to the 9th Circuit "for further proceedings consistent with this opinion."
The Supreme Court's ruling answered one question about Yovino — whether deceased judges are allowed to participate in the determination of cases after their deaths — without directly addressing merits of the case. But the 9th Circuit's decision is nonetheless vacated.
Notably, a three-judge panel of the same circuit held oppositely in 2017 before the en banc decision was published in April 2018. In the April ruling, the court held that "prior salary alone or in combination with other factors cannot justify a wage differential." While federal law does allow for pay differences based on factors other than sex, the employer in the case argued that that list includes past pay. The High Court's decision to vacate the ruling will most directly affect employers who operate in the 9th Circuit, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.
Monday's ruling shouldn't prompt much of a response from HR teams, especially since the 9th Circuit will likely revisit the issue, according to Liz Washko, shareholder at the Nashville, Tenn., office of Ogletree Deakins and co-chair of the firm's Pay Equity Practice Group. "Employers who made changes to their processes in light of the Ninth Circuit decision that was just vacated should maintain the status quo," Washko told HR Dive in an emailed statement. "Similarly, employers need to make sure that their hiring processes are in compliance with various state laws that prohibit asking for or relying on salary history in setting compensation — including states located in the Ninth Circuit like CA."
The decision also comes at a time of increasing controversy surrounding the practice of basing pay on an employee's prior salary history. Multiple states and localities — including a few in the 9th Circuit — have already adopted laws that prohibit employers from including salary history questions in the interview process, to varying degrees. Employers may need to work with legal counsel to identify new local laws and adapt recruiting and compensation practices where necessary.