In gender lawsuit, 9th Circuit wrestles with whether prior salary can be used in pay decisions

Plaintiff's lawyers who argued Tuesday that prior salary cannot be a reason for gender pay disparity may have snatched defeat from the jaws of victory, as they did not clarify if prior salary may ever be used.

The 9th U.S. Circuit Court of Appeals held an en banc hearing in San Francisco to decide if Fresno County public schools broke the federal Equal Pay Act when they paid math teacher Aileen Rizzo less than her male co-workers. Rizzo v. Yovino, 16-15372.

Partly inspired by Rizzo's lawsuit, Gov. Jerry Brown signed a bill in November making it California law that employers cannot ask workers about their past salary history.

Rizzo's lawyers, then, seemed to have momentum, but even sympathetic judges voiced frustration at what, exactly, the teacher's counsel was arguing.

Judge Morgan Christen told Barbara L. Sloan, an Equal Employment Opportunity Commission lawyer who provided amicus counsel for Rizzo, that, "I am at a loss," after Sloan gave seemingly contradictory answers about whether prior salary could ever be a factor in determining present pay.

"I'm really struggling with the consistency of your position," Christen added.

Even Judge Stephen Reinhardt, who indicated he was open to junking a defense-friendly 9th Circuit precedent, went back and forth with Sloan, expressing fundamental confusion about what -- if any -- circumstances permitted questions about salary.

Rizzo sued after learning of her male counterpart's salaries. Fresno County moved for summary judgment, arguing that Rizzo, like every other hire, was paid 5 percent more than what she made at her previous job.

The district court denied defendant's summary judgment motion but granted an interlocutory appeal. In April, U.S. Distict Judge Lynn S. Adelman of the Eastern District of Wisconsin, sitting by designation, wrote a 3-0 opinion for a 9th Circuit panel siding with the school district.

Adelman declared that Kouba, a 1982 9th Circuit case, found prior salary could reasonably be used to set business policy.

Tuesday's oral argument appeared to begin well for Rizzo.

When the first lawyer to appear on behalf of the plaintiff, Daniel M. Siegel, of Siegel & Yee, said he needed to "rationalize the case law," Reinhardt replied with a smile, "This is the 9th Circuit. You don't have to rationalize the cases. We are trying to adopt a rule. The correct rule."

The judges seemed to think Fresno County lawyer Shay Dvoretsky of Jones Day was suggesting the wrong rule.

Dvoretsky said that under the Equal Pay Act, his client is not required to eradicate gender pay disparities or even show courts that their pay policy is reasonable. Instead, the defense argued, it merely has to show there is a gender neutral pretext -- be it seniority, merit, or another uniformly applied factor including past pay.

Judge William A. Fletcher suggested that past pay reliance "feeds into the kind of discrimination we're trying to prevent."

Reinhardt said that looking at salary history in an economy for which women earn 83 percent of men's salaries, according to Pew, could "perpetuate discrimination."

Where plaintiffs perhaps stumbled, though, was when the amicus lawyers took their turn.

The first amicus lawyer, Jessica Stender at Equal Rights Advocates, which co-sponsored the California law banning salary questions, said that federal law also banned salary questions because they could not be untethered from past discriminatory practices.

Sloan, to the consternation of judges, said past pay could be one of a few factors in determining salary. Reinhardt, then, spent minutes on what seemed to him a logical contradiction: Why prior salary could not be the sole factor but it could be one of several factors.

She never quite answered the question, returning to her general statement that the defense has a burden to show it did not discriminate based on gender.