Enacted in 1963, the Equal Pay Act prohibits differential payments between male and female employees doing equal work except when made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a fourth, catch-all exception for “a differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1). These exceptions are affirmative defenses which the employer must plead and prove.

In Rizo v. Yovino, 2018 U.S. App. LEXIS 8882, an en banc panel of the Ninth Circuit considered whether an employee’s prior salary was a permissible “factor other than sex” under the Equal Pay Act. Prior Ninth Circuit precedent held that “the Equal Pay Act does not impose a strict prohibition against the use of prior salary.” Kouba v. Allstate Insurance Co., 691 F.2d 873, 878 (9th Cir. 1982). Under Kouba, employers were prohibited from using a factor which “causes a wage differential between male and female employees absent an acceptable business reason.” Id., at 876.

On April 9, 2018, a bare majority of the 11 judge en banc panel of the Ninth Circuit overruled Kouba and held that “a legitimate ‘factor other than sex’ must be job related and that prior salary cannot justify paying one gender less if equal work is performed.” Rizo v. Yovino, 2018 U.S. App. LEXIS 8882, at *15. Writing for the majority, the late Stephen Reinhardt announced a bright-line rule that “prior salary alone or in combination with other factors cannot justify a wage differential.” Id., at *5-6. Five judges concurred in the result, but disagreed with the majority’s holding that prior salary can never suffice to constitute a “factor other than sex” sufficient to justify a wage differential.
Continue Reading Ninth Circuit Holds Prior Salary Cannot Justify Wage Differences

The 2017 California Legislature adjourned on September 15, 2017, and resulted in more than 700 bills being sent to Governor Jerry Brown’s desk for approval. Although the deadline for the Governor to sign new bills into law does not officially expire until October 15, the Governor has already given his stamp of approval to a handful of new employment laws that will take effect on January 1, 2018, including one from the California Chamber of Commerce’s annual list of “Job Killers.” Below is a summary of the major bills recently signed into law.
Continue Reading 5 New Laws: California Governor Approves Employee-Friendly Laws