A Federal Court Ruled That Companies Can Pay Women Less If Their Former Employer Did, Too
Spencer Platt/Getty Images News/Getty Images
Share

A federal appeals court has handed down a ruling that could have major repercussions for women across the country. In a decision released Thursday, the 9th Circuit Court of Appeals ruled employers could legally pay women less than men who perform the same job if said discrepancy in pay is based solely on differences in the employees' salary history.

Although some have criticized the ruling as enabling a continued pattern of gender-based pay discrimination, a panel of three judges from the 9th Circuit Court of Appeals ruled employers could legally pay women less than men for doing the same work if the women's previous salary was less than the man's previous salary. In their decision, the judges cited a 1982 ruling from the same court that said employers to use an employees' salary history to determine their current pay as long as the practice was reasonably and was justified with a business policy, the Associated Press reported.

With this decision, the 9th Circuit Court of Appeals overturned a 2015 ruling from a lower court that said any disparity between male and female employees' pay rate resulting from employers basing salaries on the their previous pay rate was considered to be discrimination under the federal Equal Pay Act. Under the Equal Pay Act, employers are required to pay men and women performing the same work equally with exemptions made for seniority, merit, quantity or quality of work, and "a differential based on any other factor other than sex." In the lower-court ruling, U.S. Magistrate Judge Michael Seng had cautioned that gender bias likely contributed to women having previous salaries lower than men's.

Thursday's decision from the 9th Circuit Court of Appeals is the latest ruling in a lawsuit brought forth by Aileen Rizo, an employee of a California school who discovered her salary, which had been based on a salary she'd earned at a previous job, was lower than that of her male counterparts in 2012.

"The logic of the decision is hard to accept," Rizo's attorney Dan Siegel told the Associated Press about the 9th Circuit ruling. "You're OK'ing a system that perpetuates the inequity in compensation for women." Siegel said he could see the case potentially going all the way to the U.S. Supreme Court but had not yet determined what he and his client's next step would be.

The federal appeals court's controversial ruling comes less than a month after Equal Pay Day, a symbolic day meant to highlight how long women have to work into the next year to earn what men earned in the previous year. According to a recent study of government data conducted by the American Association of University Women (AAUW),  women were paid 80 percent of what men were paid on average in 2015.