On February 25, 2019, the United States Supreme Court remanded a case captioned Yovino v. Rizo to the Ninth Circuit Court of Appeals. In Yovino, the Ninth Circuit held that a company’s utilization of a female employee’s prior salary as a factor in paying her less than a male counterpart violated the Equal Pay Act. Under the Equal Pay Act, an employer has a defense to a gender-based pay disparity if the disparity is based on i) a seniority system, ii) a merit system, iii) a system which measures earnings by quantity or quality of production, or iv) any other factor other than sex. The employer in Yovino argued the utilization of prior salary constituted a factor “other than sex.” The Ninth Circuit rejected this argument, finding prior salary is not a permissible “factor other than sex” because prior salary is not a job-related factor and perpetuates wage disparities based on gender. The Ninth Circuit rendered its decision en banc, meaning the entire court (11 judges) heard the case; the decision was split 6-5. However, prior to the issuance of the decision, the judge who authored the court’s opinion died.
The employer filed a petition for writ of certiorari in the Supreme Court, challenging the decision on the ground that the court could not count the vote of the deceased judge. The Supreme Court agreed, granting the petition, vacating the judgment of the Ninth Circuit, and remanding the case for further proceedings. The significance of the Court’ decision is it did not reach the salient question, which is whether prior salary may be used to justify pay disparity. Moreover, it is unclear where the Ninth Circuit will land on this question considering how closely divided its decision was. Employers will have to wait for guidance on the important issue raised by the Yovino case.