Panel Reverses Order Blocking Salary Inquiry Provision for Philadelphia Employers

The Third Circuit lifted an injunction that had frozen a measure to ban Philadelphia employers from inquiring about salary history.

On February 6, 2020, a panel of three judges reversed a district court decision that blocked the salary history inquiry provision of the city's equal pay reform from taking effect. Furthermore, the panel affirmed the district court's decision to not block the law's "reliance" provision which prohibited employers from using a candidate's wage history to establish a new salary.

In April 2018, Eastern District of Pennsylvania Judge Mitchell Goldberg granted a preliminary injunction on the salary inquiry ban provision. In defending this decision, Judge Goldberg stated that the city had not displayed that preventing employers from making inquiries about salary history would support narrowing the wage gap.

In advocating for the block, The Chamber of Commerce of Greater Philadelphia had contested that the law was in violation of the U.S. Constitution as it restricted employers as to what they can say when vetting applicants. The panel determined that the City's rationale behind the restriction was sufficient to justify the law in their reversal decision.

"The city enacted the inquiry provision in an attempt to address this persistent problem and the record is clearly sufficient to withstand this First Amendment challenge to it," stated the panel. Per this conclusion, the panel instructed the lower court to deny the Chamber's injunction bid.

In its reversal, the panel determined that the city possessed sufficient proof that banning salary history questions would assist both women and minorities. This proof included expert testimony from a leading labor economist who demonstrated an academic consensus that women are compensated less than their white, male counterparts and that these discrepancies occur even when evaluating certain criteria such as education and experience. The panel justified the decision further stating that the U.S. Supreme Court had previously "upheld similar restrictions based on much less evidence."

Philadelphia is one of several cities that has enacted salary inquiry laws which prohibit employers from asking applicants about their wage history. Philadelphia employers should invest the time and resources to ensure that all hiring and recruiting policies are compliant with this law.

Posted: February 11, 2020

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