Women can't be paid less because of salary history, court rules

A federal court in California ruled on Monday that employers can't justify paying women less than men based on what they earned at previous jobs.

An eleven-judge panel of the U.S. Court of Appeals for the Ninth Circuit in San Francisco reached that conclusion in the case Rizo v. Fresno County Office of Education. It overturned an earlier decision by a three-judge panel holding that employers could use previous pay as a "factor other than sex" in determining a worker's salary.

This week's decision, written by Judge Stephen Reinhardt before his death last month, says that "prior salary alone or in combination with other factors cannot justify a wage differential." 

Reinhardt wrote, "to hold otherwise — to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum — would be contrary to the text and history of the Equal Pay Act." 

The lawsuit involves a math teaching consultant who says the Fresno County Office of Education paid her less than a male colleague, despite their jobs being the same. The County said the pay discrepancy was justified based on the salary she earned at a previous job in Arizona.

USC law professor Lisa Klerman said with this decision, employers within the ninth circuit just lost one of their go-to defenses for paying women less than men.   

"It will be very difficult for the employer now to be able to say that prior salary history was a justifiable basis for a gender wage gap," Klerman said. 

Since the beginning of this year, California has banned employers from asking job applicants about their pay history.