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Court rules employer violated Equal Pay Act.

Byline: Thomas Franz

A recent Ninth Circuit Court of Appeals decision in Rizo v. Yovino could have ramifications for the wage gap discussion.<br />In the federal case, plaintiff Aileen Rizo was receiving a salary below that of her male colleagues primarily due to the salary she was hired in at, which was based off of her salary at her previous employer.<br />Although she received the same incremental step increases as the male employees, the court ruled that considering prior salary alone or in combination with other factors could not justify a wage differential between male and female employees. Therefore, the employer was in violation of the Equal Pay Act.<br />"The court went even further to say that past salary can't be used as part of an overall determination as to what to pay women. They can't use past salary at all," said Deborah Brouwer, an employment law attorney for Nemeth Law PC in Detroit.<br />There are several exceptions for paying different wages for similar work performed by members of the opposite sex. Those exceptions are a seniority system, merit system, a system that measures earnings by quantity or quality of production, or a differential based on any other factor besides sex, Brouwer said.<br />"Courts have said it's legitimate to pay people differently because they have greater experience and greater educational qualifications, those are easy things to put into that exception," Brouwer said.<br />There have been differing opinions throughout the country on the question of being able to ask about salary history, as Brouwer said the Ninth Circuit decision seems to be an extreme pro-employee position.<br />"There were some more moderate opinions as part of this decision, but the majority rules in this case saying you can't look at salary at all. That's premised on the assumption that past salary, if it's lower than a man's past salary, then that must have been a result of gender discrimination," Brouwer said.<br />By contrast, in Michigan, Gov. Rick Snyder signed in March a bill that prohibits municipalities from enacting an ordinance that would say a business can't ask about previous salary. Brouwer said this expanded a 2015 bill that stated local municipalities can't enact an ordinance that would prohibit employers from asking about criminal history.<br />"The argument is that tying the hands of employers hurts small businesses more, we need to encourage hiring," Brouwer said.<br />Split of authority<br />Despite Snyder's bill, employment law attorney Sarah Prescott of Salvatore Prescott & Porter PLLC in Northville said the legislation could be overruled by decisions from other courts.<br />"The Sixth Circuit or Supreme Court can come in and affirm the Ninth Circuit. I think the concept behind the governor's bill was to keep less regulation so that employers don't have to do it different ways in each city, but the problem is that people will think it's protected," Prescott said. "I think that's wrong. I think the governor is saying it can't be forbidden at the local level, but that doesn't mean it's not already forbidden effectively at the federal level."<br />To prepare for a time when that may happen, Prescott and Brouwer said employers should be cautious and be aware of rulings that affect Michigan on a federal level.<br />"I would be telling clients that it really makes sense to think about individual qualifications for individual jobs, and to really examine the meaning behind the Ninth Circuit's opinion, which is that gender disparities are entrenched," Prescott said. "They've been with us for a very long time, so if you're going to go on what women made in their last job, you'll be walking yourself into adopting some other employer's poor practices."<br />Brouwer said employers need to be able to justify any wage gaps, and if they can't, they must close those gaps.<br />"Employers should do that not just to avoid litigation, but for issues with employee morale and essential fairness," Brouwer said. "Employers regularly need to do salary audits. If they have a number of people doing the same work, periodically they should look at the salaries that those folks are making."<br />If you would like to comment on this story, email Thomas Franz at tfranz@mi.lawyersweekly.com.

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Title Annotation:Rizo v. Yovino, 9th Circuit Court of Appeals
Author:Franz, Thomas
Publication:Michigan Lawyers Weekly
Date:May 7, 2018
Words:718
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