Philadelphia’s Salary History Ban Is Upheld

The U.S. Court of Appeals for the Third Circuit overturned a federal district court’s partial injunction of Philadelphia’s ordinance intended to help address the gender and racial pay gap by banning employers from asking about or relying upon an applicant’s salary history.

As we had discussed in our May 2018 E-Update, the district court found the ordinance to be illegal to the extent it prohibited an employer from asking about an applicant’s salary history (the “Inquiry Provision”), but that it legally prohibited employers from relying on such history in establishing an employee’s salary (the “Reliance Provision). In Greater Philadelphia Chamber of Commerce v. City of Philadelphia, the Third Circuit affirmed the district court’s ruling as to the legality of the Reliance Provision, but reversed the district court’s ruling that the Inquiry Provision violated the First Amendment’s free speech protections. While acknowledging that the provision restricted speech, the restriction was permissible given that Third Circuit found that there was substantial evidence of the possibility that the restriction could favorably impact the government’s interest in mitigating the racial and gender pay gap.