Greater Philadelphia Chamber of Commerce v. City of Philadelphia, 020620 FED3, 18-2175

Docket Nº:18-2175, 18-2176
Opinion Judge:MCKEE, CIRCUIT JUDGE.
Party Name:GREATER PHILADELPHIA CHAMBER OF COMMERCE, Individually and on behalf of its members, Appellant v. CITY OF PHILADELPHIA; PHILADELPHIA COMMISSION ON HUMAN RELATIONS, Appellants
Attorney:Benjamin H. Field Jane L. Istvan Nicole S. Morris Marcel S. Pratt, Esquire, City of Philadelphia Law Department, Counsel for Appellants/Cross-Appellees. Adam R. Pulver Scott L. Nelson Public Citizen Litigation Group Counsel for Amicus Public Citizen Inc. Maura Healey Elizabeth N. Dewar Genevieve ...
Judge Panel:Before: McKEE, ROTH, and FUENTES, Circuit Judges.
Case Date:February 06, 2020
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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GREATER PHILADELPHIA CHAMBER OF COMMERCE, Individually and on behalf of its members, Appellant

v.

CITY OF PHILADELPHIA; PHILADELPHIA COMMISSION ON HUMAN RELATIONS, Appellants

Nos. 18-2175, 18-2176

United States Court of Appeals, Third Circuit

February 6, 2020

Argued on March 15, 2019

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2-17-cv-01548), Honorable Mitchell S. Goldberg District Judge.

Benjamin H. Field Jane L. Istvan Nicole S. Morris Marcel S. Pratt, Esquire, City of Philadelphia Law Department, Counsel for Appellants/Cross-Appellees.

Adam R. Pulver Scott L. Nelson Public Citizen Litigation Group Counsel for Amicus Public Citizen Inc.

Maura Healey Elizabeth N. Dewar Genevieve Nadeau Erin K. Staab Office of Attorney General Massachusetts One Ashburton Place McCormack Building, Counsel for Amicus Commonwealth of Massachusetts; District of Columbia; Commonwealth of Puerto Rico; Commonwealth of Virginia; State of Connecticut; State of Delaware; State of Illinois; State of New Jersey; State of New Jersey; State of New York; State of Vermont; State of Washington.

Zachary W. Carter Richard Dearing Devin Slack Eric Lee Jamison Davies New York City Law Department Room, Counsel for Amicus City of New York; City of Berkeley; City of Columbus; City of Oakland; County of Santa Clara; City and County of San Francisco; City of Seattle; City of South Bend.

Terry L. Fromson Amal Bass Women's Law Project, Counsel for Amicus Womens Law Project; 36 Organizations Dedicated to Gender Wage Equity.

Richard A. Samp Cory L. Andrews Washington Legal Foundation, Counsel for Amicus Washington Legal Foundation.

Kellam M. Conover Miguel A. Estrada, Amir C. Tayrani Gibson, Dunn & Crutcher LLP, Franco A. Corrado Marc J. Sonnenfeld Morgan, Lewis & Bockius, Kevin M. Siegel, Counsel for Appellee/Cross-Appellant.

Michael L. Kichline Michael H. McGinley Dechert, Counsel for Amicus African American Chambers of Commerce of Pennsylvania., New Jersey and Delaware.

Robert L. Byer John E. Moriarty Robert M. Palumbos Andrew R. Sperl Duane Morris.

Before: McKEE, ROTH, and FUENTES, Circuit Judges.

OPINION

MCKEE, CIRCUIT JUDGE.

Table of Contents

I. BACKGROUND ......................................................... 6

A. The Disparity And The Ordinance ....................... 8

B. Legislative Background ......................................... 9

1. Testimony Before the City Council ............. 10

a. Barbara Price .......................................... 10

b. Terry Fromson ........................................ 11

c. Marianne Bellesorte ............................... 14

d. Rue Landau ............................................. 15

2. Other Testimony Before the City Council .. 16

C. The Legal Challenge ............................................ 17

1. The Madden Affidavit .................................. 18

2. Declarations Filed by Chamber Members .. 23

D. The District Court Opinion ................................ 24

II. DISCUSSION .......................................................... 25

A. The Reliance Provision ........................................ 27

1. The District Court Correctly Concluded an Injunction as to the Reliance Provision Fails Because the Provision does not Implicate Speech ............................................................ 27

2. None of the Chamber's Arguments Call into Question the District Court's Conclusions . 29

B. The Inquiry Provision ......................................... 32

1. The Legal Standard ...................................... 32

a. Commercial Speech ................................ 32

b. Intermediate Scrutiny Under Central Hudson is Appropriate ........................... 34

c. Strict Scrutiny is Inappropriate Here ... 35

2. The Inquiry Provision Satisfies Central Hudson Intermediate Scrutiny .................... 38

a. The Speech at Issue is not "Related to Illegal Activity" ........................................ 39

b. The City has a Substantial Interest in Closing the Wage Gap ............................ 41

c. The Inquiry Provision Directly Advances the City's Interest in Pay Equity ........... 42

i. Caselaw Considering Whether a Legislature Relied on Substantial Evidence to Support a Speech Restriction Under Central Hudson Demonstrates that the City Presented Sufficient Evidence to Support the Ordinance ............... 45

ii. The Evidence Here is Stronger Than the Evidence Supporting the Restrictions in Florida Bar and King .............................................. 55

d. The Inquiry Provision is not More Extensive than Necessary ....................... 61

III.

CONCLUSION ......................................................... 67

This appeal requires us to decide whether a Philadelphia Ordinance that prohibits employers from inquiring into a prospective employee's wage history in setting or negotiating that employee's wage violates the First Amendment. The district court held the Ordinance unconstitutional insofar as it prohibits that inquiry. However, the court upheld the provision of the Ordinance that prohibits reliance on wage history based on the court's conclusion that such reliance did not implicate protected speech.

For the reasons that below, we affirm the court's order insofar as it upholds the Reliance Provision but reverse it insofar as it strikes down the Inquiry Provision.

I.

BACKGROUND

In 2017, the City of Philadelphia enacted an ordinance to address the disparity in the pay of women and minorities that is often called the "pay gap." The Ordinance contains two provisions: the "Inquiry Provision," which prohibits an employer from asking about a prospective employee's wage history, and the "Reliance Provision," which prohibits an employer from relying on wage history at any point in the process of setting or negotiating a prospective employee's wage. The Greater Philadelphia Chamber of Commerce filed this suit, individually and on behalf of some of its members, alleging that both provisions of the Ordinance infringe on the freedom of speech of the Chamber and its members. The Chamber concedes that the pay gap exists, and that the City has a substantial governmental interest in addressing it. However, the Chamber argues that the City passed the Ordinance "with only the barest of legislative records" and, therefore, did not present sufficient evidence to establish that the Ordinance would satisfy the City's objective.1 Accordingly, the Chamber claims that the Ordinance cannot survive its First Amendment challenge under either strict or intermediate scrutiny.

The district court agreed that the Inquiry Provision violated the First Amendment speech rights of employers and invalidated that part of the Ordinance. But the court concluded that the Reliance Provision withstood the Chamber's First Amendment challenge because it did not impact speech.

As we explain below, we conclude that the district court erred in holding that the Inquiry Provision was unconstitutional. We believe the court's analysis of that provision applied a much higher standard than required. The Supreme Court has not demanded that the enacting authority achieve legislative certainty or produce empirical proof that the adopted legislation would achieve the stated interest even when applying strict scrutiny. Rather, the appropriate inquiry requires courts to determine whether the legislature "has drawn reasonable inferences based on substantial evidence."2 The Supreme Court has even "permitted litigants to justify [analogous] speech restrictions by reference to studies and anecdotes pertaining to different locales altogether, or even, in a case applying strict scrutiny, to justify restrictions based solely on history, consensus, and 'simple common sense.'"3 In short, the Supreme Court has upheld similar restrictions based on much less evidence than the City presented here.

A. The Disparity And The Ordinance

According to the 2015 census, women in Pennsylvania earned 79 cents for every dollar earned by similarly situated men.[4] For women of color, the wage gap is even more profound. Black women earn 68 cents for every dollar paid to similarly situated men, and Latina women earn 56 cents for every dollar paid to similarly situated men.5 The gap begins for women as soon as they enter the workforce. In just the first year after college, fulltime working women earn, on average, just 82% of what their male peers earn.6 Overall, women under the age of 35 earn 88-91% of what their...

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