9th Circuit Considers Pay Disparity Claim Featured

  01 May 2017

Rizo v. Yovino (Fresno County Superintendent of Schools) involves a pay discrimination lawsuit filed by Aileen Rizo, an employee of the public schools in Fresno County.

After discovering that the County paid her less than her male co-workers for the same work, she filed a pay discrimination lawsuit under the Equal Pay Act, and the California Fair Employment and Housing Act. In its motion for summary judgment, the County conceded that it paid Rizo less than comparable male employees for the same work. However, it argued that this result was lawful because the pay differential was “based on any other factor other than sex,” an affirmative defense to a claim under the Equal Pay Act. This other factor was prior salary, and the district court concluded that when an employer bases a pay structure “exclusively on prior wages,” any resulting pay differential between men and women is not based on any other factor other than sex. The County had offered four business reasons for why its starting salary is based on prior salary: (1) the policy is objective, in the sense that no subjective opinions as to the new employee’s value enters into the starting-salary calculus; (2) the policy encourages candidates to leave their current jobs for jobs at the County, because they will always receive a 5% pay increase over their current salary; (3) the policy prevents favoritism and ensures consistency in application; and (4) the policy is a judicious use of taxpayer dollars.

In denying the County’s motion for summary judgment, the district court observed that its decision potentially conflicted with the 9th Circuit’s decision in Kouba v. Allstate Insurance Co., in which the court held that prior salary can be a factor other than sex, provided that the employer shows that prior salary effectuates some business policy and the employer considers prior salary reasonably in light of it stated purpose. Following the district court’s decision, the County appealed to the 9th Circuit. On appeal, the 9th Circuit held that the case was controlled by Kouba, and therefore vacated the district court’s order and remanded the case for reconsideration.

The 9th Circuit also held that on remand, the district court must evaluate the four business reasons offered by the County for the difference in salary, and determine whether the County used prior salary reasonably, emphasizing that the County has the burden of proof. Read more here.