The Third Circuit Court of Appeals recently upheld a Philadelphia ordinance prohibiting employers from asking job applicants questions about their salary history.
The case is Greater Phila. Chamber of Commerce v. City of Phila., 2020 U.S. App. LEXIS 3598 (3d Cir. 2020). In 2017, the City of Philadelphia passed an ordinance to combat the disparity in pay received by women and minorities. The ordinance contained two provisions: First, the “Inquiry Provision” prohibits employers from asking about a job candidate’s wage/salary history. Second, the “Reliance Provision” prohibits employers from relying on wage/salary history at any point in the process of setting or negotiating a job candidate’s wage/salary. The Greater Philadelphia Chamber of Commerce filed suit, claiming the ordinance violated the First Amendment rights of the Chamber and its members. The Chamber argued that the City failed to present sufficient evidence to establish that the ordinance would actually help address the wage gap.
The district court found the Inquiry Provision unconstitutional, but upheld the Reliance Provision, as it did not limit speech. The district court held the City failed to satisfy the level of scrutiny required to support the limitation of Plaintiffs’ First Amendment rights. The district court granted the Chamber’s request for a preliminary injunction and invalidated the Inquiry Provision. Both sides appealed to the Third Circuit.
The Third Circuit resolved both issues in the City’s favor, finding the Inquiry Provision directly advanced the City’s substantial interest in closing the pay gap, and affirming the lower court’s ruling that the Reliance Provision is constitutional. The Court dismissed Plaintiffs’ argument that the City was required to try less restrictive measures first, noting the pay gap had already survived many past remedial measures.
Nationally, 17 states and 20 municipalities have enacted similar legislation. Ohio does not have a statewide wage/salary history ban, but the City of Cincinnati and City of Toledo have both passed such legislation that will go into effect in 2020. Employers should remain vigilant, as this list of states and municipalities will likely only continue to grow and could impact how Ohio employers are legally permitted to make hiring decisions.
The attorneys at Fishel Downey Albrecht & Riepenhoff, LLP routinely advise public and private employers on state and federal employment laws and help draft policies consistent with these laws. If you have any questions about this case or any other matter, please contact us at info@fisheldowney.com or call 614.221.1216.