Federal court to reconsider panel’s ruling on equal pay

A new federal appeals court panel in San Francisco will decide whether employers can pay a woman less than a man for the same work if the man was paid more at his previous job.

A three-judge panel of the Ninth U.S. Circuit Court of Appeals ruled in April that paying a male employee a higher wage based on his previous pay level does not violate federal laws against sex discrimination, even though it may have the effect of maintaining a wage gap between men and women. But a majority of the full court has voted to set that ruling aside and order a new hearing before an 11-judge panel, at a date not yet scheduled.

The ruling will have only a limited impact in California, however, because a state law that took effect in January prohibits paying different wages to men and women with equal qualifications by relying on their previous pay levels.

The Ninth Circuit’s rulings are binding on federal courts in California and eight other Western states.

The case involves Aileen Rizo, who had worked as an Arizona schoolteacher for 13 years before being hired by the Fresno County schools in 2009 as a consultant for math teachers. She was paid $62,733, nearly $10,000 more than her previous salary.

In 2012, Rizo said, a man who had just been hired for the same job told her he was making about $79,000 a year. She learned that other consultants, also male, were being paid more than she was, and was told by county officials that the differences were based on the employees’ salaries at their previous jobs, plus a raise of at least 5 percent.

In denying Rizo’s claim of sex discrimination, the county’s lawyers said the policy was gender-neutral — it had actually benefited some female employees — and was applied consistently, without favoritism and based on objective facts.

The federal Equal Pay Act bars sex discrimination in wages but allows pay differentials based on “a factor other than sex.” The initial appeals court panel ruled 3-0 that the law allows employers to base a newly hired worker’s pay on a previous salary if that is part of the employer’s established, reasonable business practices. The panel said a federal magistrate should decide whether Fresno County’s justifications were reasonable practices.

Instead, the larger panel will take up the issue, considering a similar 1982 Ninth Circuit ruling in an equal-pay case and conflicting decisions by two other federal appeals courts. The U.S. Equal Employment Opportunity Commission, the American Civil Liberties Union and a dozen women’s rights organizations joined Rizo in asking the court to rehear the case.

A lawyer for those organizations, Jessica Stander of Equal Rights Advocates in San Francisco, said Tuesday she hopes the court “recognizes that reliance on prior salary in setting pay is often a proxy for pay discrimination” barred by federal law.

Meanwhile, Michael Woods, a lawyer for Fresno County, said the county has changed its salary practices in response to the new California law and now pays Rizo as much as her male colleagues.