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Pay history bans coming, at a federal level, by way of the Circuit Courts?

A growing number of state and local governments prohibit asking applicants about their pay history or using prior employer pay histories as a basis for setting employee pay. Two Circuit Court cases suggest that such a ban may be coming, not by way of state and local legislation, but at a federal level under currently existing federal laws known as Title VII and the Equal Pay Act.

The Circuit Courts are the nation’s federal appellate courts. They are divided (and numbered) by region. They are for practical purposes generally the highest courts in the land, just beneath the Supreme Court of the United States. Very few cases result in Supreme Court review; the Circuit Courts resolve the vast bulk of federal appellate litigation without cases ever rising to the Supreme Court.

Pay history bans are growing across the country because advocates for equal pay, particularly between men and women, contend that one reason women earn less than men in many positions, is simply that women tend to have previously earned less than men in prior positions. In other words, they contend it is a self-perpetuating cycle.

In one case, the Ninth Circuit held last year, in 2017, that, consistent with its precedent, an employer may set pay levels purely on the basis of pay histories. However last summer the Ninth Circuit withdrew that decision and ordered the matter reheard en banc (by the entire bench of its judges). The case is pending reconsideration.

In the other case, the Eleventh Circuit just ruled in a Georgia case that an employer was not entitled to summary judgment, in other words, it would have to explain itself to a jury, where the female plaintiff argued she was underpaid compared to her male predecessor. The Eleventh Circuit case did not go so far as to hold that pay histories cannot be considered. It simply held, on the basis of the record before it, that pay histories were not themselves enough to warrant ruling for that employer. The Eleventh Circuit’s decision may be limited to its facts in that, there, the company’s HR manager had testified to general female-male pay disparities at the company and further that the company’s general manager had made an anti-female remark.

Employers should consider monitoring pay history bans.

Source: Rizo v. Yovino, case no. 15-372 (9th Circuit) (case pending reconsideration en banc); Bowen v. Manheim Remarketing, Inc., case no. 16-17237 (11th Cir. 2/21/18).

Employer’s attorney may be held liable for retaliating against client’s former employee

In a decision that is already drawing harsh criticism, the Ninth Circuit held that an attorney may be liable to his client’s former employee for retaliation where the attorney contacted federal immigration authorities at U.S. Immigration and Customs Enforcement (ICE) to advise, “if there is an interest in apprehending” the plaintiff, he would be attending a deposition on a certain date. ICE conducted its own investigation and determined “based on our records he has no legal status.” The plaintiff learned that ICE was aware of him, alleged that realizing the same had caused him severe, and as a result, he said, settled his wage-hour lawsuit against the former employer. After settling with the company, he sued its attorney, again, not his own attorney but opposing counsel. The Ninth Circuit noted that attorney had allegedly communicated with ICE about five other plaintiffs and held that the plaintiff’s claim should be allowed to proceed.

In doing so, the Ninth Circuit reviewed the statutory language of FLSA’s retaliation provisions. The Fair Labor Standards Act (FLSA) is the nation’s primary wage-hour law. The Ninth Circuit read its anti-retaliation language as being broader than its substantive provisions regarding overtime, minimum wage, etc. The Ninth Circuit said the broad anti-retaliation language was more like Title VII’s (the nation’s leading anti-discrimination law). The Ninth Circuit held that, given the breadth of FLSA’s anti-retaliation language, such a claim is viable.

The decision has been called “flat-out bonkers” and possibly “the year’s worst employment law decision” and is being cited as an example of a decision by a court that “has officially lost its mind.”

Source: Arias v. Raimondo, Court of Appeals, 9th Circuit 2017 – Google Scholar