42 | Developments in Equal Pay Litigation ©2023 Seyfarth Shaw LLP comparators’ private practice salaries.338 The court held that prior salary can reflect legitimate, nondiscriminatory differences in the value that one employee contributes compared to another. But the court noted the recent changes to New York’s equal pay law, which now prohibits the use of prior salary as a means of setting starting salary: “If prior salary always justified unequal pay, the EPA would entrench rather than remedy pay inequalities. New York bars employers from engaging in salary-matching for that very reason, in an effort to enforce the EPA.”339 Because the employer had not explained how the differences in physicians’ prior salaries reflected any difference in value, the court rejected its attempt to use prior salary as a justification for the wage disparity.340 The court came to a different conclusion regarding plaintiff’s Title VII claim, however, due to the different burden-shifting regime employed by that statute. The court explained: “In the EPA context discussed above, Plaintiff's prima facie case caused the burden of persuasion to shift to Defendants, and they failed to meet that burden for purposes of summary judgment. Under Title VII, on the other hand, Defendants bear only a burden of production, to proffer a non-discriminatory reason for the disparate pay, and they have met it.”341 The court further explained that, “under the EPA a pay disparity is sufficient for liability unless the defendant can prove that the reason for the disparity is non-discriminatory,” but under Title VII, “disparate pay gives rise to liability only if the plaintiff can prove that the reason was discriminatory.”342 In other words, Title VII requires a plaintiff to show the additional element of discriminatory intent. Plaintiff failed to establish that because she had not shown that the employer implemented its salary-matching practice with the intent to discriminate against women. In fact, the evidence showed that plaintiff’s salary was initially set at a time when the employer had assumed she was male, before learning her gender.343 That evidence was sufficient to defeat a showing of discriminatory intent. 3. Challenging The Factor Other Than Sex: Salary History And Beyond At its core, equal pay litigation is about how employers set and adjust salary levels. In a free and competitive marketplace, starting salary must take some account of applicants’ prior salary. If employers cannot meet or exceed that salary, they risk losing applicants to other employers who will. One issue that comes up frequently in equal pay litigation, therefore, is whether and to what extent an employer can justify a pay disparity by pointing to employees’ prior salaries at the time they were hired. Many employers take the commonsense view that they must start higher-paid applicants at a higher salary, or those applicants will not take the job. On the other hand, some courts and commentators have argued that paying employees based on past earnings only perpetuates a systemic gender pay gap. It is therefore invalid as a factor other than sex, because female employees’ prior salaries may have been kept artificially and unfairly low compared to their male peers. One of the key trends driving equal pay litigation today is whether and to what extent an employer can rely on a factor other than sex defense when that factor may itself be tainted by discrimination. Rizo v. Yovino344 is a significant decision bearing on this issue.345 The district court in that case held: “[A] pay structure based exclusively on prior wages is so inherently fraught with the risk—indeed, here, the 338 Id. at *6. The employer also argued that the difference in pay was justified by the fact that the physicians’ salaries were based on negotiations that took account of their productivity while in private practice: “[Employers] argue that these negotiations are sexneutral and backed by a ‘legitimate business reason’ because they could not otherwise recruit doctors from private practice.” But the court held that the employer’s explanation could not account for why plaintiff was paid less per unit of productivity than her comparators. Id. at *5. 339 Id. 340 Id. 341 Id. at *9. 342 Id. 343 Id. 344 Rizo v. Yovino, 854 F.3d 1161 (9th Cir. 2017), aff’d en banc, 887 F.3d 453 (9th Cir. Apr. 9, 2018), rev’d, 139 S.Ct. 706 (2019). 345 In that case, a county employee challenged the county’s practice of using prior salary to determine starting salaries. Id. at 1163. The county used a salary schedule to determine the starting salaries of management-level employees, which used prior salary to
RkJQdWJsaXNoZXIy OTkwMTQ4