United States: Ninth Circuit: Prior Pay Can Be Defense To Equal Pay Act Claim Under Certain Circumstances

Last Updated: May 10 2017
Article by W. John Lee

The court did not address the new California Fair Pay Act, which provides that prior pay is not a defense to pay claims, and its decision is not entirely consistent with other circuit courts of appeals on whether prior pay alone is a defense under the Equal Pay Act.

In an opinion in Rizo v. Yovino dated April 27, 2017, the US Court of Appeals for the Ninth Circuit held that the federal Equal Pay Act (EPA) permits an employer to pay different wages to male and female employees for the same work if the differential is based on an employee's prior salary. In doing so, the Ninth Circuit found that prior salary does not automatically qualify as a "factor other than sex," one of the four statutory defenses to EPA claims. Prior pay can, however, constitute a defense if the employer's use of prior salary effectuates a business policy and is reasonable in light of the employer's stated purpose and its other practices.

The defendant in Rizo sued in his official capacity as the Fresno County superintendent of schools (the "County"). The County conceded that it paid the female plaintiff less than her male counterparts, but contended that this was permissible because the differential was based on the employees' prior salaries. The defendant argued that the County's policy of basing employee pay on prior salary (1) is objective; (2) encourages candidates to leave other jobs because candidates will always receive a 5% pay increase over their prior salary; (3) prevents favoritism; and (4) is a judicious use of taxpayer dollars.

The Ninth Circuit vacated the opinion of the district court, which had held that considering prior salaries alone could not constitute a defense to an EPA claim even if motivated by a nondiscriminatory business purpose, and remanded the case to the district court to determine whether the County's stated reasons for relying upon prior salary effectuated a business policy and were reasonable. The Ninth Circuit explained that it was not breaking new ground with its opinion but rather affirming its holding in an opinion from 1982, Kouba v. Allstate Ins. Co., 691 F.2d 873 (9th Cir. 1982).

The Ninth Circuit did not specifically discuss California law, noting that the parties did not assert any differences between the EPA and California law, even though the plaintiff brought a separate claim under state law (specifically, the California Fair Employment and Housing Act). California is among a growing number of state and local jurisdictions that have passed or proposed legislation prohibiting employers from using prior pay as a justification for paying men and women differently, with many jurisdictions seeking to prevent an employer from even inquiring about prior salary at all. The California Fair Pay Act, which states that "[p]rior salary shall not, by itself, justify any disparity in compensation[,]" became effective in 2016 after the Rizo appeal already had been filed.

Also of note is the fact that the US Equal Employment Opportunity Commission (EEOC) filed an amicus brief in Rizo in which the EEOC argued that the EPA "does not permit employers to base pay decisions solely on applicants' most recent prior salary." While the EEOC brief states that an employer may consider prior pay in addition to other factors such as education and experience, the Commission took the position that prior salary alone cannot justify a compensation differential. While the Rizo court rejected this argument, refusing to draw a distinction between consideration of prior pay "alone" as opposed to prior pay in conjunction with other factors, it is possible that the EEOC will continue to press this position in other circuits.

Variances Among Circuit Courts of Appeals

The Ninth Circuit's holding in Rizo is not consistent with its sister circuit courts of appeals, which have taken varying positions. Several other circuit courts of appeals have concluded that prior pay is not, in and of itself, a valid defense to an EPA claim as a "factor other than sex." The Tenth Circuit and Eleventh Circuit, for example, have specifically held that prior pay alone cannot justify a pay disparity, even though it may be considered along with other nondiscriminatory factors. The Fifth Circuit has rejected the use of prior pay as a defense to an EPA claim where the use of prior salary appeared to be pretextual and was easily rebutted. The Eighth Circuit, similar to the holding in the Ninth Circuit, allows employers to rely on prior pay as an affirmative defense, but only upon a showing that the prior pay itself was not the result of discrimination or sex stereotyping. The Seventh Circuit has specifically rejected the argument that the use of prior pay alone violates the EPA, finding that there is no requirement that an employer provide any further business justification.

State and Local Laws

Several state and local jurisdictions have enacted prior pay laws, which prohibit employers from relying upon prior pay as a defense to a pay discrimination claim and/or from inquiring about prior pay in the first place: California, Massachusetts, New Orleans, New York (applicable only to state agencies), New York City (a bill has been passed but not yet signed by the mayor), Philadelphia, and Puerto Rico. Several other jurisdictions are considering similar legislation, including Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, and Washington, DC.

Next Steps

Although Rizo provides that prior pay can be a defense to an EPA claim, employers in California that rely solely upon prior pay will face risks under that state's Fair Pay Act. Employers that operate in jurisdictions that have enacted these laws should

  • review employment application materials to ensure that any provisions concerning employee wage inquiries or discussions comply with applicable laws,
  • train recruiting personnel about the new legislation, and
  • design handbooks and policies that prohibit sex-based pay discrepancies for comparable work and prohibit retaliation against employees who take actions protected by these laws.

In addition, employers in all jurisdictions should keep track of other factors that determine initial pay—including relevant prior work experience, education, and pay for incumbents in the same or substantially similar positions—and document the specific business reasons that motivated individual pay decisions. Furthermore, employers should conduct privileged pay equity studies and evaluate compensation practices.  

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions