Rizo v. Yovino

• Decision Date: 09 April 2018
• Docket Number: No. 16-15372,16-15372
• Citation: 887 F.3d 453
• Parties: Aileen RIZO, Plaintiff-Appellee, v. Jim YOVINO, Fresno County Superintendent of Schools, Erroneously Sued Herein as Fresno County Office of Education, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

887 F.3d 453

Aileen RIZO, Plaintiff-Appellee,

v.Jim YOVINO, Fresno County Superintendent of Schools, Erroneously Sued Herein as Fresno County Office of Education, Defendant-Appellant.

No. 16-15372

United States Court of Appeals, Ninth Circuit.

Argued and Submitted En Banc December 12, 2017, San Francisco, California

Filed April 9, 2018

Shay Dvoretzky (argued), Jones Day, Washington, D.C.; Michael G. Woods and Timothy J. Buchanan, McCormick Barstow Sheppard Wayte & Carruth LLP, Fresno, California; for Defendant-Appellant.

Daniel M. Siegel (argued) and Kevin Brunner, Siegel & Yee, Oakland, California, for Plaintiff-Appellee.

Jessica Stender (argued), Equal Rights Advocates, San Francisco, California, for Amici Curiae Equal Rights Advocates; 9to5, National Association of Working Women; American Association of University Women; American Association of University Women—California Chapter; ACLU of Northern California and ACLU Women’s Rights Project; Atlanta Women for Equality; California Women’s Law Center; Feminist Majority Foundation; Legal Aid at Work; Legal Voice; National Organization for Women (NOW) Foundation; National Partnership for Women and Families; National Women’s Law Center; Southwest Women’s Law Center; Women Employed; and Women’s Law Project.

Barbara L. Sloan (argued), Attorney; Margo Pave and Elizabeth E. Theran, Assistant General Counsel; Jennifer S. Goldstein, Associate General Counsel; James L. Lee, Deputy General Counsel; P. David Lopez, General Counsel; Office of the General Counsel, Washington, D.C.; as and for Amicus Curiae Equal Employment Opportunity Commission.

Laurence S. Zakson, Aaron G. Lawrence, and Marianne Reinhold, Reich Adell & Cvitan APLC, Los Angeles, California, for Amici Curiae Make-Up Artists and Hair Stylists Guild, Local 706 of the International Alliance of Theatrical State Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, AFL-CIO, CLC; Costume Designers Guild, Local 892 of the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, AFL-CIO, CLC; and Orange County Managers Association.

Rae T. Vann and Danny E. Petrella, Washington, D.C., for Amicus Curiae Center for Workplace Compliance.

Before: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt^* , M. Margaret McKeown, William A. Fletcher, Richard A. Paez, Marsha S. Berzon, Richard C. Tallman, Consuelo M. Callahan, Mary H. Murguia, Morgan Christen and Paul J. Watford, Circuit Judges.

Concurrence by Judge McKeown ;

Concurrence by Judge Callahan ;

Concurrence by Judge WatfordThe Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex. The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history, and purpose of the Equal Pay Act, the answer is clear: No. Congress recognized in 1963 that the Equal Pay Act was long overdue: "Justice and fairplay speak so eloquently [on] behalf of the equal pay for women bill that it seems unnecessary to belabor the point. We can only marvel that it has taken us so long to recognize the fact that equity and economic soundness support this legislation."¹ Salaries speak louder than words, however. Although the Act has prohibited sex-based wage discrimination for more than fifty years, the financial exploitation of working women embodied by the gender pay gap continues to be an embarrassing reality of our economy.

Prior to this decision, our law was unclear whether an employer could consider prior salary, either alone or in combination with other factors, when setting its employees’ salaries. We took this case en banc in order to clarify the law, and we now hold that prior salary alone or in combination with other factors cannot justify a wage differential. To hold otherwise—to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum —would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.

Fresno County Office of Education ("the County")² does not dispute that it pays Aileen Rizo ("Rizo") less than comparable male employees for the same work. However, it argues that this wage differential is lawful under the Equal Pay Act. In relevant part, the Act provides,

No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex .

29 U.S.C. § 206(d)(1) (emphasis added). The County contends that that the wage differential is based on the fourth exception—the catchall exception: a "factor other than sex." It argues that an employee’s prior salary can constitute a "factor other than sex" within the meaning of the catchall exception. However, this would allow the County to defend a sex-based salary differential on the basis of the very sex-based salary differentials the Equal Pay Act was designed to cure. Because we conclude that prior salary does not constitute a "factor other than sex," the County fails as a matter of law to set forth an affirmative defense. We affirm the district court’s denial of summary judgment to the County and remand for proceedings consistent with this opinion.³

Background

Aileen Rizo was hired as a math consultant by the Fresno County Office of Education in October 2009. Previously, she was employed in Maricopa County, Arizona as a middle and high school math teacher. In her prior position, Rizo earned an annual salary of $50,630 for 206 working days. She also received an educational stipend of $1,200 per year for her master’s degrees in educational technology and mathematics education.

Rizo’s new salary upon joining the County was determined in accordance with the County’s Standard Operating Procedure 1440 ("SOP 1440"), informally adopted in 1998 and formally adopted in 2004. The County’s hiring schedule consists of 10 stepped salary levels, each level containing 10 salary steps within it. SOP 1440 dictates that a new hire’s salary is to be determined by taking the hired individual’s prior salary, adding 5%, and placing the new employee on the corresponding step of the salary schedule. Unlike the County’s previous hiring schedule, SOP 1440 does not rely on experience to set an employee’s initial salary. SOP 1440 dictated that Rizo be placed at step 1 of level 1 of the hiring schedule, corresponding to a salary of $62,133 for 196 days of work plus a master’s degree stipend of $600.

During a lunch with colleagues in 2012, Rizo learned that her male colleagues had been subsequently hired as math consultants at higher salary steps. In August 2012, she filed a complaint about the pay disparity with the County, which responded that all salaries had been set in accordance with SOP 1440. The County claimed to have reviewed salary-step placements of male and female management employees for the past 25 years (so including before the policy was even informally adopted), finding that SOP 1440 placed more women at higher compensation steps than males. Rizo disputes this analysis and claims that the data show men were placed at a higher average salary step.

Rizo sued Jim Yovino in his official capacity as the Superintendent of the Fresno County Office of Education in February 2014. She claimed a violation of the Equal Pay Act, 29 U.S.C. § 206(d) ; sex discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"); sex discrimination under California Government Code § 12940(a) ; and failure to prevent discrimination under California Government Code § 12940(k). Rizo v. Yovino , No. 1:14-cv-0423-MJS, 2015 WL 9260587, at *1 (E.D. Cal. Dec. 18, 2015), vacated , 854 F.3d 1161 (9th Cir.), reh’g en banc granted , 869 F.3d 1004 (9th Cir. 2017).

In June 2015, the County moved for summary judgment. It asserted that, although Rizo was paid less than her male counterparts for the same work, the discrepancy was based on Rizo’s prior salary. The County contended that her prior salary was a permissible affirmative defense to her concededly lower salary than her male counterparts under the fourth, catchall clause, a "factor other than sex." Rizo , 2015 WL 9260587, at *7. The district court denied summary judgment, reasoning that SOP 1440 "necessarily and unavoidably conflicts with the EPA" because "a pay structure based exclusively on prior wages is so inherently fraught with the risk—indeed, here, the virtual certainty—that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand." Id. at *9. It certified the legal question for interlocutory appeal, recognizing that denying summary judgment for the County "effectively resolves the issue of liability on Plaintiff’s claims in her favor." Id. at *12.⁴

This Court granted the County’s petition for permission to file an interlocutory appeal. The three-judge panel vacated the denial of summary judgment and remanded. Rizo v. Yovino , 854 F.3d 1161, 1167 (9th Cir.), reh’g en banc granted , 869 F.3d 1004 (9th Cir. 2017). The panel concluded that Kouba v. Allstate Insurance Co ., 691 F.2d 873 (9th Cir. 1982) was controlling and that it permits prior salary alone to constitute a "factor...