Promising Developments for LGBTQ Workers

After four years under a President who did everything in his power to strip LGBTQ people of their rights, things are finally looking up for LGBTQ workers. On his first day in office, President Biden issued an Executive Order instructing his administration to vigorously enforce the federal anti-discrimination laws which prohibit discrimination on the basis of sexual orientation and gender identity. And this week, the House of Representatives voted to pass the Equality Act, which would amend the Civil Rights Act of 1964 to explicitly encompass protections for gay, lesbian, bisexual, transgender, and queer people.

 

Biden’s Executive Order requires federal agencies to follow the landmark Supreme Court decision in Bostock v. Clayton County, which Bryan Schwartz Law has written about before. The Court in Bostock interpreted Title VII’s prohibition on discrimination “because of sex” to encompass discrimination based on sexual orientation and gender identity. It held, “An employer who fires an individual merely for being gay or transgender violates Title VII.” Bostock v. Clayton Cty., Georgia, 140 S. Ct. 1731, 1734 (2020). The Court reasoned that it is impossible for an employer to discriminate against employees based on sexual orientation without discriminating against them on the basis of sex. Id. at 1741. Justice Gorsuch provided the example of a man being fired because he was married to a man, whereas a woman would not have been fired for being married to a man. Id. Therefore, because men and women are treated differently, there exists sex discrimination in this scenario. Id.

 

At the end of his presidency, in January, Trump’s Justice Department issued a last-minute memo seeking to limit the scope of Bostock’s applicability. Thankfully, Biden both revoked the memo and explicitly instructed his administration to interpret Bostock broadly in his Executive Order. In adopting a broad construction of Bostock, the Executive Order says loudly that the Biden administration will consider discrimination on the basis sexual orientation and gender identity to be a form of sex discrimination, prohibited by Title VII. This is an encouraging development, but because it is an Executive Order rather than legislation, it leaves open the possibility that future presidents could take steps backward again, like Trump did.

 

This is where the Equality Act comes in. Instead of including protections for LGBTQ people under the umbrella of “sex discrimination,” the Equality Act would Amend the Civil Rights Act of 1964 to add “sexual orientation and gender identity” as their own bases for protection under the Act. Currently, these bases are race, color, religion, sex, and national origin. The Equality Act would replace the word, “sex,” from the Act with, “sex (including sexual orientation and gender identity).” The Civil Rights Act of 1964 is one of the greatest sources of protection for American workers, with Title VII of the Act prohibiting employment discrimination nationwide. The Equality Act would therefore expand these meaningful protections for American workers to explicitly encompass members of the LGBTQ community. 

 

It is important to pass federal protections for LGBTQ workers because currently, 27 states have no state-level laws prohibiting discrimination based on sexual orientation or gender identity.  Further, passing the Equality Act would ensure federal-level protection from discrimination even in the unfortunate case that we end up with another President who does not support LGBTQ workers. It is crucial that we do not leave this important civil rights issue up to the whims of a bigoted future President.

 

Thanks to decades of hard work by LGBTQ advocacy groups, the House of Representatives voted to pass the Equality Act on February 24, 2021. Hopefully the Senate will look past partisan divides and vote this Act into law swiftly.

 

Bryan Schwartz Law stands with LGBTQ workers. The firm has written about Title VII many times before. If you believe you have been discriminated against based on your sexual orientation or gender identity, please contact Bryan Schwartz Law.

Tackling Sex Discrimination in Big Tech: Pinterest and Beyond

The tech industry has a sex discrimination problem. It’s no secret. Like much of the white-collar workforce, men dominate the tech sector. Women hold less than 20% of the technical jobs at some of the largest tech giants. As of 2019, only about 11% of women in tech held supervisory roles. Tech-employed women are paid less than their male counterparts, the subject of (for example) a certified class action against Oracle.

The dearth of women in tech has negative implications for consumers and society at large. Many tech products are designed with men in mind, such as smartphones too large for the average woman’s hands, voice recognition software that understands men better than women, and fitness trackers that don’t count steps while performing household chores or pushing a stroller. Software and artificial intelligence have repeatedly been shown to exhibit race and sex bias.

The male-dominated tech industry has proven resistant to addressing the field’s bias and its wider implications. For instance, Google terminated (it would say “accepted the resignation of”) Timnit Gebru, an Ethiopian-born engineer, after she declined to retract an academic research paper examining the bias risks of Google’s artificial intelligence concerning languages (implicating, for example, predictive text).

One large tech company that came under fire for sex bias, Pinterest (a platform with a predominantly female user base), settled a sex discrimination lawsuit filed by former chief operating officer Francoise Brougher for $22.5 million. Ms. Brougher’s settlement, achieved by Rudy Exelrod Zieff & Lowe, represents a major victory for marginalized women in the tech world. Ms. Brougher’s lawsuit came on the heels of the June resignations of Pinterest employees Ifeoma Ozoma and Aerica Shimizu Banks and their public airing exposing of the explicitly racist and sexist comments they endured at the company, their lower pay, and the retaliatory treatment they experienced when they spoke out. Brougher’s lawsuit similarly alleged that her pay structure was less favorable than that of her male executive counterparts, she was given feedback riddled with gender bias, and she was left out of executive meetings that were necessary for her to perform her job, until she was fired in April 2020.

The publicity following these courageous women’s actions seems to be having an impact on the company. After more than 200 employees virtually walked out in the female former employees’ support, and shareholders sued Pinterest for damaging the company’s reputation and stock value with its toxic work culture, Pinterest added two Black female members to its board of directors, hired a new head of inclusion and diversity, and made other changes to address its culture of bias. Hopefully, Pinterest will listen to these voices rather than cutting them out as they did with Brougher, or as Google did with Ms. Gebru. The $22.5 million settlement for just one high-profile discrimination victim should give Pinterest and other tech companies ample incentive to work to prevent workplace discrimination against countless women going forward. If these companies fail to do so, the settlement should encourage other marginalized women in tech to come forward.

If you are a woman who has experienced sex discrimination in the tech industry, or if you have experienced other discrimination or harassment in the workplace, contact Bryan Schwartz Law. 

Ashley Judd’s Sexual Harassment Case Against Harvey Weinstein Can Go Forward

Earlier this week, the Ninth Circuit Court of Appeals reversed the district court dismissal of actor Ashley Judd’s sexual harassment claim against former Hollywood producer Harvey Weinstein. The Ninth Circuit opinion allows Judd’s sexual harassment claim to go forward. This decision illustrates how sexual harassment claims are not limited to standard employer/employee or service provider/client relationships.

Judd alleges that she was sexually harassed by Weinstein in 1996 or 1997, when she was starting her acting career and Weinstein was a powerful producer. Judd says Weinstein harassed her during a meeting intended to discuss potential acting opportunities. After she rejected his advances, Judd claims Weinstein prevented her from being cast in movies he produced. Notably, Judd alleges that Weinstein blocked her casting in The Lord of the Rings adaptations in retaliation. In fact, the reason Judd can bring her suit so many years after the usual statute of limitations has passed is because she says did not discover that Weinstein had been retaliating against her until Peter Jackson, who directed, produced, and wrote The Lord of the Rings films, gave an interview in 2017 about Weinstein’s actions against Judd. See Judd v. Weinstein, No. CV 18-5724 PSG (FFMx), 2018 WL 7448914, at *3-5 (C.D. Cal. Sept. 19, 2018). Judd was able to use California’s “discovery rule,” which is an exception to the general rules regarding statutes of limitation. Under the discovery rule, the statute of limitation begins to run not when the injury occurs, but instead when the plaintiff discovers or has reason to discover the cause of action. See No. CV 18-5724 PSG (FFMx), 2018 WL 7448914, at *4.

 

Among other claims, Judd sued Weinstein in April 2018 for sexual harassment in a professional relationship under California Civil Code Section 51.9. While allowing her other claims to go forward, the United States District Court of the Central District of California dismissed Judd’s sexual harassment claim because it believed Judd and Weinstein did not have the requisite type of professional relationship described in section 51.9.

 

Section 51.9 is part of California’s Unruh Civil Rights Act, which prohibits business discrimination on the basis of sex, race, religion, disability, sexual orientation, and other characteristics. Section 51.9 specifically prohibits sexual harassment in a variety of business relationships outside the workplace. Over the years, section 51.9 has been amended to specifically cover producer/actor relationships. However, because the alleged harassment occurred in 1996 or 1997, the court clarifies that it must use the 1996 version of section 51.9.

 

In 1996, as the Ninth Circuit explains, the law required the plaintiff to have a certain type of business, service, or professional relationship with the defendant. The 1996 statute listed examples of the types of professional relationships covered by the law, including those between plaintiffs and physicians, attorneys, social workers, accountants, teachers, real estate agents, landlords, and other specific professions. The statute also covered relationships, “substantially similar to any of the above.” Because the relationship between an actor and a producer was not specifically enumerated in the statute, Judd argued that her professional relationship with Weinstein was substantially similar to those listed. The district court disagreed, holding that the defining characteristic of the enumerated relationships was that they were all between service providers and clients. See No. CV 18-5724 PSG (FFMx), 2018 WL 7448914, at *9. Because Weinstein and Judd did not have a service provider/client relationship, the district court dismissed her claim.

 

Fortunately, the Ninth Circuit agreed with Judd. The Ninth Circuit’s reversal of the district court opinion states that the key element in the enumerated relationships is that, “an inherent power imbalance exists such that, by virtue of his or her ‘business, service, or professional’ position, one party is uniquely situated to exercise coercion or leverage over the other.” Because Judd was an actor at the beginning of her career and Weinstein was an established and powerful Hollywood producer, their relationship may have been defined by an inherent power imbalance. Under the Ninth Circuit’s interpretation of section 51.9, Judd and Weinstein’s professional relationship is potentially covered by the statute and she may pursue her sexual harassment claim. The case has been remanded to the district court.

 

Section 51.9 looks different now than it did in 1996. The statute was amended in 2018 and now explicitly covers sexual harassment by directors, producers, elected officials, and lobbyists, in addition to all of the professions previously specified.

 

In this week’s decision, the Ninth Circuit recognized the importance of protecting people from sexual harassment in a wide variety of contexts. The Unruh Civil Rights Act and section 51.9 are important tools in the fight against injustice.

 

Bryan Schwartz Law has written about sexual harassment, gender discrimination, and retaliation many times before. If you believe you were sexually harassed, discriminated against, or retaliated against, please contact Bryan Schwartz Law.

Court Forces Jones Day to Produce Salary Documents in Gender Discrimination Suit

Last week, U.S. District Judge Randolph Moss ruled from the bench that Jones Day must produce salary information for all its associates nationwide in a discovery dispute. This ruling is a huge win for the plaintiffs—a group of former female associates—in a $200 million gender discrimination lawsuit against Jones Day, a global law firm with more than 2,500 lawyers across five continents.

Judge Moss required Jones Day to provide salary information about every associate nationwide from 2012 to 2018. Jones Day had argued that it should only have to provide salary data for 580 associates who worked in its New York, Atlanta, and California offices from 2016 to 2018. The plaintiffs had requested salary data for every associate nationwide from 2012 to present. Judge Moss found that there would be little burden on Jones Day to produce the salary data until 2018, after which time none of the plaintiffs continued to work at the firm. Judge Moss also highlighted that not giving the plaintiffs all the salary information would just prolong proceedings. To protect the privacy of the associates, the data will be filed under seal, but analysis of the data can still appear in future filings.

The plaintiffs--Nilab Rahyar Tolton, Andrea Mazingo, Meredith Williams, Saira Draper, Jaclyn Stahl and Katrina Henderson—sued Jones Day in 2019 for gender discrimination through its compensation model, leadership structure, and “fraternity culture.” Jones Day is known for having a black box compensation structure, which keeps attorney pay completely under wraps. However, Jones Day allegedly does promise to compensate associates who produce high-quality work at or above the market. Despite this, the plaintiffs were not compensated within the “Cravath” market scale, which is considered top-of-line pay in Big Law. The plaintiffs’ attorneys have highlighted that the wide data set will ensure greater accuracy in any analysis completed for the case and help prove that Jones Day has been systemically discriminating against women.

Bryan Schwartz Law has written about gender discrimination many times before. If you believe you were discriminated against on the basis of sex, please contact Bryan Schwartz Law today.

Victory! U.S. Supreme Court Rules that Employers Cannot Discriminate Against Their Employees for Being LGBT

Today, the Supreme Court ruled that Title VII protections apply to lesbian, gay, bisexual, and transgender workers. Title VII was created in 1964 and prohibits employment discrimination based on race, color, religion, sex, and national origin. After hearing oral arguments for three cases last October, the Court ruled in a 6-3 decision that prohibited discrimination “because of sex” under Title VII also extends to LGBT workers.  This landmark ruling is a huge victory for employees and the LGBT movement. 

Before Monday’s ruling, employees in more than half the states could be fired for being LGBT. The three cases discussed before the Supreme Court involved two gay men and one transgender woman, all of whom were terminated immediately after their employer discovered they were LGBT. Gerald Bostock was an award-winning child welfare advocate in Georgia but was fired after his employer found out he participated in a gay recreational softball league. Donald Zarda, a skydiving instructor in New York, was fired days after mentioning he was gay to a client. Aimee Stephens, a transgender woman working at Harris Funeral Homes in Michigan, was fired after announcing she planned to “live and work full-time as a woman.” 

The Court’s decision was surprising to most, as Justice Gorsuch, appointed by President Trump, wrote for the Court. Justice Gorsuch was joined by Republican-appointee Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. The majority found that Title VII’s “because of sex” was originally enacted with protections for LGBT employees in mind. Further, even if an employer’s ultimate goal is to discriminate against its employees on the basis of sexual orientation, the employer intentionally treats an employee worse based on that individual’s sex along the way. For example, if two identical employees are attracted to men, and the employer fires the male employee for no other reason other than the fact he is attracted to men, the employer discriminates against him for traits it tolerates in its female employee. The Court found that this is simply discrimination based on sex, with Justice Gorsuch stating that this analysis “involve(s) no more than the straight-forward application of legal terms with plain and settled meanings.” 

Justice Gorsuch’s decision was surprising because of who appointed him—but, to the vast majority of Americans identifying with both political parties, it is clear that LGBT people in the workplace should not suffer discrimination because of their sexual orientation, i.e., because of sex. In fact, according to The New York Times, 90% of Democrats and 74% of Republicans believe it should be illegal for employees to be fired based on sexual orientation. Similarly, 86% of Democrats and 69% of Republicans believe it should be illegal for employees to be fired for being transgender.

Justice Samuel Alito and Clarence Thomas joined in a dissent out of touch with what the American public has long believed, arguing that the Court was wrongly stepping into the shoes of legislators. Justice Alito stated that if Congress wanted Title VII to include protections for the LGBT population, it would have amended the statute to explicitly include “sexual orientation” or “gender identity.” Meanwhile, in a separate dissent, Justice Kavanaugh focused primarily on statutory interpretation and argued that the majority failed to analyze appropriately the “ordinary meaning” of Title VII. 

The Court’s decision resolved a split among federal circuit courts, with the Eleventh Circuit previously holding that sexual-orientation-based claims were not actionable under Title VII but the Second, Sixth, and Seventh Circuit reaching the contrary decision. In Bostock’s case, the Eleventh Circuit upheld the district court’s dismissal of Bostock’s complaint due to a previous panel holding that found Title VII did not apply to sexual orientation claims, holding that “under [the] prior panel precedent rule, we cannot overrule a prior panel’s holding, regardless of whether we think it was wrong.” The prior panel had explained, “[d]ischarge for homosexuality is not prohibited by Title VII,” highlighting that no Supreme Court decision had ever “squarely address[ed] whether sexual orientation discrimination is prohibited by Title VII.” Evans v. Georgia Reg'l Hosp., 850 F.3d 1248, 1255-56 (11th Cir. 2017) (citing Blum v. Gulf Oil Corp., 597 F.2d 936, 938 (5th Cir. 1979)). Similarly, the district court in Stephen’s case stated that “neither transgender status nor gender identity are protected classes under Title VII.” E.E.O.C. v. R.G. & G.R. Harris Funeral Homes, 201 F. Supp. 3d 837, 861 (E.D. Mich. 2016). In his dissent in Zarda v. Altitude Express, Inc., the Second Circuit case finding that sexual-orientation-based claims were actionable under Title VII, Judge Gerard E. Lynch stated, “I would be delighted to awake one morning and learn that Congress had just passed legislation adding sexual orientation to the list of grounds of employment discrimination prohibited under Title VII[, but when] I actually woke up[, I] realized that I must have been still asleep and dreaming. Because we all know that Congress did no such thing.” 883 F.3d 100, 137 (2d Cir. 2018). With the Supreme Court’s decision today, we can wake up knowing that we all have the right to be protected against employment discrimination under Title VII.

In his opinion, Justice Gorsuch wrote that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” We agree. To the tireless activists—including Mr. Zarda and Ms. Stephens, both of whom passed away before this decision could be published—and decades of LGBT activism that led to this momentous decision today, we thank you and look forward to ensuring employers adhere to this ruling in the years to come.

Bryan Schwartz Law celebrates today’s important decision. The firm has written about Title VII many times before. If you believe you were discriminated against on the basis of sex, please contact Bryan Schwartz Law today.

Can You Be Fired For Being Gay? The Supreme Court Will Soon Decide.

Next month, the Supreme Court will hear three cases about workplace discrimination. Under Title VII of the 1964 federal Civil Rights Act, it's illegal for an employer to discriminate against an employee on the basis of sex. What "sex" encompasses is what's at issue in these cases. Up until now, federal law has treated "sex" to include gender only, meaning an employer can't discriminate against you just because you're a man or a woman. The question at issue in these cases is whether the word "sex" also encompasses sexual orientation and gender identity. If you identify as LGBTQ+, are you protected from discrimination in the workplace? That's what SCOTUS will soon decide.

In one case, a transgender woman was fired from her job after revealing that she was transgender and would be dressing in accordance with the female dress code for the office. In the other two cases, gay men were fired because of their sexual orientation. 28 states currently have no protections for LGBTQ+ employees in the workplace (although a few of those states protect public sector workers). The Obama Administration had interpreted federal non-discrimination statutes to include discrimination on the basis of sexual orientation and gender identity, but the Trump Administration reversed course, and is essentially saying an employer may fire someone for being gay or transgender, without consequences under Title VII. That shouldn't be surprising coming from an Administration that implemented a transgender military ban (which Bryan Schwartz Law has written about before); denies citizenship for the foreign-born, adopted children of gay couples; and nominates judges to the federal bench who are openly hostile to LGBTQ+ people. The Democrat-controlled House passed the Equality Act earlier this year, which would enshrine LGBTQ+ workplace protections into federal law, but the Republican-controlled Senate has not advanced the Act, making the Supreme Court's upcoming hearing especially important.

In this climate, and given the current composition of the Supreme Court, LGBTQ+ advocates and allies are understandably worried. Some are hopeful that since these cases don't involve interpreting the Constitution (as was required in the same-sex marriage case of Obergefell), but rather a statutory interpretation of Title VII, some of the conservative justices who voted no in Obergefell might vote yes in these cases. Advocates also hope that Chief Justice Roberts will remember what he famously said in 2015 when the Court heard arguments about same-sex marriage: “I’m not sure it’s necessary to get into sexual orientation to resolve this case. I mean, if Sue loves Joe and Tom loves Joe, Sue can marry him and Tom can’t. And the difference is based upon their different sex. Why isn’t that a straightforward question of sexual discrimination?” Excellent question, Chief Justice. We look forward to your answer - which could come anytime between next month and next summer.

If you've been discriminated against in the workplace because of your sexual orientation or gender identity, contact Bryan Schwartz Law today.

The Late, Great Judge Reinhardt’s Legacy: Employers can no Longer Consider Prior Salary History in Setting Workers’ Wages

Stephen Reinhardt, known as the “liberal lion” of the Ninth Circuit Court of Appeals since his appointment by President Jimmy Carter in 1980, died last month, after authoring one last decision for the ages.

Yesterday, the Ninth Circuit published posthumously Judge Reinhardt’s final opinion, to combat the gender wage gap, by holding “that prior salary alone or in combination with other factors cannot justify a wage differential.” Rizo v. Yovino, No. 16-15372, Slip Op. at 5 (9th Cir. Apr. 9, 2018), available here. Bryan Schwartz Law previously blogged about the Ninth Circuit’s earlier decision in Rizo here.

            Despite decades of education, litigation, and mobilization to make the promise of equal work for equal pay a reality, the gender wage gap continues to disadvantage millions of women in our country, who earn only 79% of what men earn.[1] Women lose $33 billion per year due to the wage gap.[2] Judge Reinhardt’s words in Rizo will  now be the fulcrum of the national discussion over this stubborn, glaring problem.

In Rizo, the facts are undisputed: a county school district paid a female math consultant less than comparable male workers for the same work. Slip Op. at 6. All things being equal, the county’s decision would be a textbook violation of the federal Equal Pay Act. But, the county attempted to justify its decision by reference to a statutory catch-all exception to the federal Equal Pay Act, which allows for wage differences between male and female employees based on a “factor other than sex.” In particular, the county argued that the female employee’s prior salary history was a factor not rooted in sex, and thus could justify paying the female employee less than comparable male employees for the same work. Id. at 7. The initial three-judge Ninth Circuit panel agreed, citing its past decision in Kouba v. Allstate Ins. Co., 691 F.3d 873, 878 (9th Cir. 1982), in which the court declined to create a strict prohibition against the use of prior salary.

Undeterred, the advocates for pay equality petitioned for the Ninth Circuit to re-hear the case en banc,[3] which the court granted. After a second hearing, the en banc Ninth Circuit court rejected the county’s argument because an employer’s decision to rely on an applicant’s prior salary history to set that applicant’s present salary inevitably imports and thereby perpetuates unlawful disparities in pay from the applicant’s prior position. Id. at 28 (“Prior salary is not job related and it perpetuates the very gender-based assumptions about the value of work that the Equal Pay Act was designed to end. This is true whether prior salary is the sole factor or one of several factors considered in establishing employees’ wages.”).[4] This runs counter to the purpose of the Equal Pay Act, which was enacted to “to put an end to the ‘serious and endemic problem of employment discrimination in private industry’ and to carry out a broad mandate of equal pay for equal work regardless of sex.” Id. at 10 (quoting Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974)).[5]

Notably, in holding that employers “may not use sex directly or indirectly as a basis for establishing employees’ wages,” including using employees’ salary histories to set wages, the Ninth Circuit overruled its prior decision in Kouba. Id. at 23. This outcome not only paves the way for more effective enforcement of the Equal Pay Act’s mandate – equal pay for equal work, not equal salary histories – but also serves as a reminder that equity can sometimes only be achieved through fearless, persistent advocacy, and jurists like Stephen Reinhardt, who demonstrate the courage to pursue justice.

Bryan Schwartz Law congratulates Jennifer Reisch and Jessica Stender at Equal Rights Advocates, our co-counsel in a prior sex discrimination case, and Mariko Yoshihara of the California Employment Lawyers Association, along with the many other advocates for wage equality who brought about this momentous victory!

---

[1] See https://www.equalrights.org/fairpay/

[2] Id.

[3] Most cases reviewed by a federal appellate circuit court are heard by fewer than the full number of judges sitting on a particular circuit court, usually a three-judge panel. However, parties may request that all judges sitting on a given federal circuit court, like the Ninth Circuit, re-hear their case because one or more parties believes the three-judge panel ruled incorrectly.

[4] The en banc court emphasized that the “factor other than sex” exception must be “limited to job-related factors,” not business reasons such as whether an employer could get away with paying a female worker less than male workers because the female worker was paid less at her previous job. Id. at 25 (“[U]sing the word “business” risks conflating a legitimate factor other than sex with any cost-saving mechanism. The Supreme Court and Congress have repeatedly rejected such an interpretation of the fourth exception.”).

[5] The en banc court also supported its decision with the plain text of the statute, and the legislative history of the Equal Pay Act, including specific debates relating to the catch-all exception at issue in Rizo.

California Mandates Employers Display Transgender Rights Poster in Workplace

On October 15, 2017, Governor Brown approved SB 396, a law that requires California employers with 5 employees or more to display a poster about transgender employment rights in a prominent and accessible location in the workplace with other mandatory workplace notices.

California's Department of Fair Employment and Housing recently issued the new mandatory poster, which addresses key topics such as the right of employees to use restrooms, locker rooms, and other similar facilities corresponding to their gender identity and to dress in accord with their gender identity and expression.

California's Fair Employment and Housing Act (FEHA) prohibits employers from discriminating against any employee on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.

The poster follows regulations developed by the Fair Employment and Housing Council that went into effect in July 2017. SB 396 also requires mandatory sexual harassment prevention to include a component regarding gender identity, gender expression, and sexual orientation for California employers with at least 50 employees.

If you feel you have been subjected to unlawful discrimination or sexual harassment in the workplace, please contact Bryan Schwartz Law today.

Equal Pay for Equal Work Gets Another Chance at the Ninth Circuit in Rizo v. Yovino

UPDATE (5/21/18): On rehearing, the Ninth Circuit reversed itself, holding "prior salary alone or in combination with other factors cannot justify a wage differential." Read more about this historic decision here. Readers interested in learning more about this topic may wish to review this research paper, explaining the important positive effects of prohibiting employers from relying on past salary history to set workers' wages. 

Can employers rely solely on employees’ prior salaries to justify unequal pay for equal work?

This is the essentially the question the Ninth Circuit addressed earlier this year in Rizo v. Yovino. In the Rizo case, a female math consultant hired by the Fresno County Schools, Aileen Rizo, was underpaid thousands of dollars compared to her male peers solely because Ms. Rizo’s prior salary was comparatively lower than that of her male peers despite her male peers having less experience. To the dismay of advocates for pay equity nationwide, the Ninth Circuit held that the federal Equal Pay Act of 1963 (29 U.S.C. § 206(d)) does not prohibit an employer from relying solely on employees’ past salary histories to set compensation.[1] 854 F.3d 1161, 1167 (9th Cir. 2017).

The primary flaw in the Ninth Circuit’s opinion stemmed from an overbroad interpretation of its precedent, Kouba v. Allstate Insurance Company. 691 F.2d 873, 876 (9th Cir. 1982). In Kouba, the employer paid its employees a minimum guaranteed salary plus commissions based on employees’ sales. Id. at 874. In setting new employees’ minimum salaries, the employer considered “ability, education, experience, and prior salary.” Id. In this context, where the employer did not rely exclusively on prior salary history in setting employee compensation, the Court previously held that “the Equal Pay Act does not impose a strict prohibition against the use of prior salary.” Id. 878. The Court emphasized that an employer who uses prior salary to set compensation “must” provide “business reasons” that “reasonably explain its use of that factor,” and provided the trial court with a non-exhaustive list of fact-specific questions to consider in evaluating the “reasonableness of this practice.” Id. (emph. added).

Unlike in Kouba, the County in Yovino set new employees’ compensation by increasing their most recent prior salaries by 5% without taking into account employees’ experience or skill. Yovino, 854 F.3d at 1164. Applicants with a master’s degree were given a flat $1,200 bump. Id. Because of the well-established fact that women in nearly every occupation are paid less than men even when controlling for a host of possibly explanatory variables[2], the County’s exclusive use of employees’ prior salary perpetuated the gender wage gap in contravention of the purpose of the Equal Pay Act. The Tenth and Eleventh Circuits have come to this same conclusion. See, e.g., Riser v. QEP Energy, 776 F.3d 1191, 1199 (10th Cir. 2015) (“the EPA precludes an employer from relying solely upon a prior salary to justify pay disparity”); Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995) (“prior salary alone cannot justify pay disparity”).

The Ninth Circuit, diverging from two of its sister circuits, failed to give sufficient weight to the context in which Kouba was decided, particularly with respect to the fact that the Kouba employer used sex-neutral factors in addition to prior salary history. Instead, the Court read Kouba as permitting a “salary differential based solely on prior earnings” without “attribut[ing] any significance to [the Kouba employer’s] use of these other factors [i.e., ability, education, and experience].” Yovino, 854 F.3d at 1166.

Fortunately, this is not the end of the story. Last week, the Ninth Circuit granted Ms. Rizo’s request for a rehearing en banc, meaning that all eligible judges serving on the Ninth Circuit will rehear the case.

Fifty four years have passed since the Equal Pay Act was signed into law to end the “serious and endemic problem of employment discrimination in private industry—the fact that the wage structure of ‘many segments of American industry has been based on an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman even though his duties are the same.’” Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974). Now, the Ninth Circuit has an opportunity to reconsider its erroneous interpretation of the Equal Pay Act and, in the process, move our country closer to achieving the goal of equal pay for equal work.

[1] California’s state law analog, the Fair Pay Act, expressly prohibits the exclusive use of “[p]rior salary” to “justify any disparity in compensation” with respect to sex, ethnicity, and race. Cal. Lab. Code §§ 1197.5(a)(3), (b)(3).

[2] See Brief for Equal Rights Advocates et al. as Amici Curiae in Support of Plaintiff-Appellee’s Petition for Rehearing and Rehearing En Banc, pp. 12-15, Rizo v. Yovino (9th Cir. 2017) (No. 16-15372), available at https://nwlc.org/wp-content/uploads/2017/05/5.22.17_Final_Rizo-v.-Yovino_Motion-and-Amicus-Brief-ISO-Petition-for-Reharing-and-Rehearing-En-Banc.pdf