Ninth Circuit Holds Prior Salary Cannot Justify Wage Differences

Enacted in 1963, the Equal Pay Act prohibits differential payments between male and female employees doing equal work except when made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a fourth, catch-all exception for "a differential based on any other factor other than sex." 29 U.S.C. § 206(d)(1). These exceptions are affirmative defenses which the employer must plead and prove.

In Rizo v. Yovino, 2018 U.S. App. LEXIS 8882, an en banc panel of the Ninth Circuit considered whether an employee's prior salary was a permissible "factor other than sex" under the Equal Pay Act. Prior Ninth Circuit precedent held that "the Equal Pay Act does not impose a strict prohibition against the use of prior salary." Kouba v. Allstate Insurance Co., 691 F.2d 873, 878 (9th Cir. 1982). Under Kouba, employers were prohibited from using a factor which "causes a wage differential between male and female employees