Argued
and Submitted En Banc December 12, 2017 San Francisco,
California
Appeal
from the United States District Court for the Eastern
District of California Michael J. Seng, Magistrate Judge,
Presiding D.C. No. 1:14-cv-00423-MJS
Shay
Dvoretsky (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.
SUMMARY[**]
Employment
Discrimination
Affirming
the district court's denial of summary judgment to the
defendant on a claim under the Equal Pay Act, the en banc
court held that prior salary alone or in combination with
other factors cannot justify a wage differential between male
and female employees.
Overruling
Kouba v. Allstate Ins. Co., 691 F.2d 873 (9th Cir.
1982), the en banc court held that an employee's prior
salary does not constitute a "factor other than
sex" upon which a wage differential may be based under
the statutory "catchall" exception set forth in 29
U.S.C. § 206(d)(1). The en banc court concluded that
"any other factor other than sex" is limited to
legitimate, job-related factors such as a prospective
employee's experience, educational background, ability,
or prior job performance. By relying on prior salary, the
defendant therefore failed as a matter of law to set forth an
affirmative defense. The en banc court remanded the case to
the district court.
Concurring,
Judge McKeown, joined by Judge Murguia, wrote that she agreed
with most of the majority opinion, particularly its
observation that past salary can reflect historical sex
discrimination. She wrote that the majority, however, went
too far in holding that any consideration of prior pay is
impermissible under the Equal Pay Act, even when it is
assessed with other job-related factors.
Concurring,
Judge Callahan, joined by Judge Tallman, wrote that in
holding that prior salary can never be considered, the
majority failed to follow Supreme Court precedent,
unnecessarily ignored the realities of business, and, in
doing so, might hinder rather than promote equal pay for
equal work.
Concurring
in the judgment, Judge Watford wrote that in his view, past
pay can constitute a "factor other than sex, " but
only if an employee's past pay is not itself a reflection
of sex discrimination.
OPINION
REINHARDT, CIRCUIT JUDGE
The
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 other than
sex" under the Equal Pay Act. In Kouba, the
employer considered prior salary along with other factors,
"including 'ability, education, [and] experience,
'" in setting employees' salaries.
Rizo, 854 F.3d at 1166 (quoting Kouba, 691
F.2d at 874). The panel concluded, however, that because
Kouba "did not attribute any significance to
Allstate's use of these other factors, " that case
permits consideration of prior salary alone, as long as use
of that factor "was reasonable and effectuated some
business policy." Id. Because it believed it
was compelled to follow Kouba, the panel directed
the district court on remand to consider the reasonableness
of the County's proffered business reasons for its
reliance on prior salary.
We
granted the petition for rehearing en banc in order
to clarify the law, including the vitality and effect of
Kouba.
Standard
of Review
We
review the district court's denial of summary judgment
de novo. Diaz v. Eagle Produce Ltd.
P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008). Summary
judgment is available only when there are no genuine disputes
of material fact and the movant is entitled to judgment as a
matter of law. Id.
Discussion
Congress
enacted the Equal Pay Act in 1963 to put an end to the
"serious and endemic problem of employment
discrimination in private industry" and to carry out a
broad mandate of equal pay for equal work regardless of sex.
Corning Glass Works v. Brennan, 417 U.S. 188, 195
(1974). It set forth a simple structure to carry out this
simple principle. See 29 U.S.C. § 206(d)(1). A
plaintiff must show that her employer has paid male and
female employees different wages for substantially equal
work. Not all differentials in pay for equal work violate the
Equal Pay Act, however. The Act includes four statutory
exceptions-"(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"- which operate as affirmative
defenses. Id.; Corning, 417 U.S. at 196;
Maxwell v. City of Tucson, 803 F.2d 444, 446 (9th
Cir. 1986). "[A]n employer [must] submit evidence from
which a reasonable factfinder could conclude not simply that
the employer's proffered reasons could explain
the wage disparity, but that the proffered reasons do in
fact explain the wage disparity." EEOC v. Md.
Ins. Admin., 879 F.3d 114, 121 (4th Cir. 2018) (first
citing Stanziale v. Jargowsky, 200 F.3d 101, 107-08
(3d Cir. 2000); and then citing Mickelson v. N.Y. Life
Ins. Co., 460 F.3d 1304, 1312 (10th Cir. 2006)); see
also 29 U.S.C. § 206(d)(1) (exempting from
liability wage differentials only where payment of which was
"made pursuant to" an enumerated exception
(emphasis added)).
The
Equal Pay Act "creates a type of strict liability"
for employers who pay men and women different wages for the
same work: once a plaintiff demonstrates a wage disparity,
she is not required to prove discriminatory intent.
Maxwell, 803 F.2d at 446 (quoting Strecker v.
Grand Forks Cty. Social Serv. Bd., 640 F.2d 96, 99 n.1
(8th Cir. 1980) (en banc)). The County and Amicus Center for
Workplace Compliance contend that the Supreme Court in
Washington County v. Gunther, 452 U.S. 161 (1981),
infused into Equal Pay Act law Title VII's disparate
treatment analysis. This is clearly wrong. In Ledbetter
v. Goodyear Tire & Rubber Co., Inc., the Supreme
Court stated, "the EPA does not require . . . proof of
intentional discrimination." 550 U.S. 618, 641
(2007).[5] More recently, the Fourth Circuit
reaffirmed that "[a]n EPA plaintiff need not prove that
the employer acted with discriminatory intent to obtain a
remedy under the statute." Md. Ins. Admin., 879
F.3d at 120 (collecting cases). Accordingly, pretext as it is
understood in the Title VII context plays no role in Equal
Pay Act claims.[6]
Here,
the County does not dispute that Rizo established a prima
facie case and that none of the three specific statutory
exceptions applies. The County urges instead that the fourth
catchall exception, "any other factor other than sex,
" includes an employee's prior salary and applies
when her starting salary is based on her prior salary. It
acknowledges that if it is wrong, it has no defense to
Rizo's Equal Pay Act claim.
The
question in this case is the meaning of the catchall
exception. This is purely a question of law. We conclude,
unhesitatingly, that "any other factor other than
sex" is limited to legitimate, job-related factors such
as a prospective employee's experience, educational
background, ability, or prior job performance. It is
inconceivable that Congress, in an Act the primary purpose of
which was to eliminate long-existing "endemic"
sex-based wage disparities, would create an exception for
basing new hires' salaries on those very
disparities-disparities that Congress declared are not only
related to sex but caused by sex. To accept the County's
argument would be to perpetuate rather than eliminate the
pervasive discrimination at which the Act was aimed. As
explained later in this opinion, the language, legislative
history, and purpose of the Act make it clear that Congress
was not so benighted. Prior salary, whether considered alone
or with other factors, is not job related and thus does not
fall within an exception to the Act that allows employers to
pay disparate wages. Reflecting the very essence of the Act,
we hold that by relying on prior salary, the County fails as
a matter of law to set forth an affirmative defense.
A.
Allowing
an employer to justify a wage differential between men and
women on the basis of prior salary is wholly inconsistent
with the provisions of the Equal Pay Act.[7] As the Supreme
Court has emphasized, "[t]he Equal Pay Act is broadly
remedial, and it should be construed and applied so as to
fulfill the underlying purposes which Congress sought to
achieve." Corning, 417 U.S. at 208. The
remedial purpose of the Act is clear: to put an end to
historical wage discrimination against women. Representative
Florence Dwyer said in support of the bill: "The issue
here is really a very simple one-the elimination of
one of the most persistent and obnoxious forms of
discrimination which is still practiced in this enlightened
society."[8] Representative Harold Donohue in his
comments on the bill stressed a similar point: "[T]his
measure represents the correction of basic injustice
being visited upon women in many fields of endeavor . . .
."[9] In other words, the Equal Pay Act was not
intended to be a passive measure but a proactive one designed
to correct salary structures based on the "outmoded
belief" that women should be paid less than men. See
Corning, 417 U.S. at 195 (quoting S. Rep. No. 88-176, at
1 (1963)).
In
light of the clear intent and purpose of the Equal Pay Act,
it is equally clear that we cannot construe the catchall
exception as justifying setting employees' starting
salaries on the basis of their prior pay. At the time of the
passage of the Act, an employee's prior pay would have
reflected a discriminatory marketplace that valued the equal
work of one sex over the other. Congress simply could not
have intended to allow employers to rely on these
discriminatory wages as a justification for continuing to
perpetuate wage differentials.
Today
we express a general rule and do not attempt to resolve its
applications under all circumstances. We do not decide, for
example, whether or under what circumstances, past salary may
play a role in the course of an individualized salary
negotiation. We prefer to reserve all questions relating to
individualized negotiations for decision in subsequent cases.
Our opinion should in no way be taken as barring or posing
any obstacle to whatever resolution future panels may reach
regarding questions relating to such
negotiations.[10]
B.
Basic
principles of statutory interpretation also establish that
prior salary is not a permissible "factor other than
sex" within the meaning of the Equal Pay Act. The County
maintains that the catchall exception unambiguously provides
that any facially neutral factor constitutes an affirmative
defense to liability under the Equal Pay Act. It is
incorrect. The Supreme Court in Corning did not find
the Act clear on its face. Rather, that decision applied an
analytical framework similar to the one we use here by
looking to the history of the legislative process of the
Equal Pay Act as well as the context in which the Act was
adopted. 417 U.S. at 198-203. Following a similar method of
analysis, it is clear that when the catchall exception is
read in light of its surrounding context and legislative
history, a legitimate "factor other than sex" must
be job related and that prior salary cannot justify paying
one gender less if equal work is performed.
1.
The Act
"establishes four exceptions-three specific and one a
general catchall provision." Corning, 417 U.S.
at 196. Where, as here, a statute contains a catchall term at
the end of a list, we rely on the related principles of
noscitur a sociis and ejusdem generis to
"cabin the contextual meaning" of the term, and to
"avoid ascribing to [that term] a meaning so broad that
it is inconsistent with its accompanying words, thus giving
unintended breadth to the Acts of Congress." Yates
v. United States, 135 S.Ct. 1074, 1085-86 (2015)
(plurality opinion) (quoting Gustafson v. Alloyd
Co., 513 U.S. 561, 575 (1995)); id. at 1089
(Alito, J., concurring in judgment) (applying noscitur a
sociis and ejusdem generis).
The
canon noscitur a sociis-"a word is known by the
company it keeps"-provides that words grouped together
should be given related meaning. Id. at 1085
(plurality opinion). Here, the catchall phrase is grouped
with three specific exceptions based on systems of seniority,
merit, and productivity. These specific systems share more in
common than mere gender neutrality; all three relate to job
qualifications, performance, and/or experience. It follows
that the more general exception should be limited to
legitimate, job-related reasons as well.
A
related canon, ejusdem generis, likewise supports
our interpretation of the catchall term. We apply this canon
when interpreting general terms at the end of a list of more
specific ones. Id. at 1086. In such a case,
"the general words are construed to embrace only objects
similar in nature to those objects enumerated by the
preceding specific words." Circuit City Stores, Inc.
v. Adams, 532 U.S. 105, 109, 114- 15 (2001) (quoting 2A
Norman J. Singer, Sutherland on Statutes and Statutory
Construction § 47.17 (1991)). The inclusion of the
word "other" before the general provision in the
Equal Pay Act makes its meaning all the more clear:
"[T]he principle of ejusdem generis . . .
implies the addition of similar after the word
other." Antonin Scalia & Bryan A. Garner,
Reading Law: The Interpretation of Legal Texts 199
(2012). Here, we read the statutory exceptions as: "(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 [similar]
factor other than sex." 29 U.S.C. § 206(d)(1). A
similar factor would have to be one similar to the other
legitimate, job-related reasons.
The
presence of the word "any"-which the County
contends indicates the expansive reach of the fourth
statutory exception-does not counsel against our
interpretation. In Circuit City Stores, for example,
the Supreme Court interpreted § 1 of the Federal
Arbitration Act, which lists "seamen, railroad
employees, or any other class of workers engaged in
foreign or interstate commerce" to include only
transportation workers, not workers in literally any
industry. 532 U.S. at 109, 114-15 (emphasis added) (quoting 9
U.S.C. § 1); see also, e.g., In re Indian
Gaming Related Cases, 331 F.3d 1094, 1113-14 (9th Cir.
2003) (adopting district court's use of ...