Past Salary Cannot Justify Wage Differential Under Equal Pay Act


Overturning its decades-old precedent, the U.S. Court of Appeals for the Ninth Circuit has ruled that an employee’s past salary is not a “factor other than sex” that provides a legitimate basis for a wage differential under the Equal Pay Act.

The Equal Pay Act prohibits sex-based discrimination in compensation, and requires equal pay for equal work. The law recognizes legitimate pay differentials based on seniority, merit, the employee’s quantity or quality of work, and “any other factor other than sex.” In 1982, the Ninth Circuit found that prior salary was such a factor, and a panel of that same court came to the same conclusion in Rizo v. Yovino, which was issued in 2017. The full court was asked to revisit that opinion and has now reversed the panel opinion and overturned the 1982 decision, holding that prior salary cannot constitute a legitimate “factor other than sex,” as it could perpetuate existing disparities based on sex.

The Ninth Circuit’s ruling sets up a circuit split with the Seventh Circuit, which has come to the opposite conclusion, and this issue may ultimately need to be resolved by the Supreme Court.