Aileen Rizo v. Jim Yovino
887 F.3d 453 (2018)
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Rule of Law:
Under the Equal Pay Act, an employee's prior salary, whether considered alone or in combination with other factors, cannot justify a wage differential between male and female employees because it is not a 'factor other than sex.'
Facts:
- Aileen Rizo was a math teacher in Arizona, where she earned an annual salary of approximately $51,830 plus a stipend for her master's degrees.
- In 2009, the Fresno County Office of Education ('the County') hired Rizo as a math consultant.
- The County had a Standard Operating Procedure (SOP 1440) that determined a new hire's starting salary based on a fixed formula.
- The formula took the new hire's prior salary, added 5%, and then placed the employee on the corresponding step of the County's official salary schedule.
- This policy did not consider a new hire's experience when setting their initial salary.
- Under this policy, Rizo was placed at step 1 of the salary schedule, with a salary of $62,133 plus a smaller stipend.
- In 2012, Rizo learned that her male colleagues, hired after her to perform the same job, had been placed at higher salary steps.
- Rizo complained to the County, which confirmed that all salaries, including the higher ones for her male counterparts, were set in accordance with SOP 1440.
Procedural Posture:
- Aileen Rizo sued Jim Yovino, Superintendent of the Fresno County Office of Education, in the U.S. District Court for the Eastern District of California, alleging violations of the Equal Pay Act.
- The County moved for summary judgment, arguing its salary-setting policy based on prior wages was a permissible 'factor other than sex.'
- The district court (a magistrate judge) denied the County's motion for summary judgment.
- The district court certified the legal question for an interlocutory appeal, which allows an immediate appeal on a key legal issue before the case is finally resolved.
- The U.S. Court of Appeals for the Ninth Circuit granted the County's petition to appeal the interlocutory order.
- A three-judge panel of the Ninth Circuit reversed the district court, finding that a prior circuit case, Kouba v. Allstate Ins. Co., permitted using prior salary as a factor.
- The Ninth Circuit then voted to rehear the case en banc, meaning a larger panel of judges would reconsider the three-judge panel's decision.
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Issue:
Does an employer's policy of setting an employee's salary based on their prior salary fall under the Equal Pay Act's affirmative defense for a wage differential 'based on any other factor other than sex'?
Opinions:
Majority - Reinhardt
No. Prior salary, alone or in combination with other factors, cannot justify a wage differential under the Equal Pay Act's 'any other factor other than sex' exception. The court reasoned that the purpose of the Act was to remedy historical sex-based wage discrimination, and allowing employers to rely on prior salaries—which often reflect that very discrimination—would perpetuate the problem rather than solve it. Applying canons of statutory construction, the court held that the catchall exception 'any other factor other than sex' must be limited to legitimate, job-related factors such as experience, education, or ability, similar to the other three specific exceptions (seniority, merit, and productivity systems). Prior salary is not a proxy for job performance or qualifications and is therefore impermissible. This decision explicitly overrules the prior Ninth Circuit precedent set in Kouba v. Allstate Ins. Co.
Concurring - McKeown
No. The opinion agrees that prior salary alone cannot be a defense to unequal pay for equal work. However, the majority goes too far by holding that any consideration of prior pay is impermissible. Prior salary should be allowed as one factor among other valid, job-related factors like experience and education. A complete ban is unrealistic, unsupported by the statute, and may disadvantage women who wish to use their prior salary as a negotiating tool for a higher wage.
Concurring - Callahan
No. The opinion agrees that prior salary by itself is not a valid defense under the Equal Pay Act. However, the majority's absolute prohibition on ever considering prior salary ignores business realities and is contrary to Supreme Court precedent, which requires only that the factor not be attributable to sex discrimination. Prior salary is not inherently a reflection of gender bias and can reflect legitimate factors like regional cost-of-living differences. An employer should be allowed to rebut the presumption of discrimination when prior salary is used as part of a multi-factor, business-related pay system.
Concurring - Watford
No. The opinion agrees with the result but proposes a different analysis. Past pay can constitute a 'factor other than sex,' but only if the employer meets its burden of proving that the employee's past pay is not itself a reflection of sex discrimination. Because gender pay disparities remain pervasive, it would be exceedingly difficult for an employer to ever meet this burden. Therefore, an employer will rarely be able to justify a pay disparity by relying on a female employee's prior salary.
Analysis:
This en banc decision establishes a new, bright-line rule in the Ninth Circuit that fundamentally alters Equal Pay Act litigation by categorically prohibiting the use of prior salary in setting initial pay. By overruling Kouba, the court rejects the more common 'factor-plus' approach used in other circuits, which allows prior salary to be considered alongside other legitimate factors. This creates a significant circuit split and will likely force employers within the Ninth Circuit to eliminate any reliance on salary history in their hiring and compensation practices, focusing exclusively on job-related qualifications. The decision strengthens pay equity protections and makes it easier for plaintiffs to challenge pay disparities linked to historical wage gaps.
