The Liberty Bell, Independence Hall, the Eagle’s Super Bowl 52 win; in Philadelphia, it’s easy to get caught up in history. However, after a federal appeals court ruling, employers in the city will need to steer clear of a candidate’s salary history.
Philadelphia banned employers from asking applicants about their salary history in 2017; the first such law in the nation. In addition to banning employers from inquiring into a prospective employee’s wage history, the law also stipulated that employers could not use wage history to set a lower salary than similarly qualified employees.
The Chamber of Commerce for Greater Philadelphia challenged the law in lower federal court, arguing it violated employers’ free speech rights and was a “poor fit for achieving the city’s anti-discrimination objective.” U.S. District Judge Mitchell S. Goldberg agreed with the chamber’s argument that the ban violated free speech, but stated the city may forbid employers from using a candidate’s salary history to set a lower salary.
On February 6, 2020, the U.S. Court of Appeals for the Third Circuit partially reversed this decision, allowing Philadelphia to ban inquiries into salary history. In the unanimous opinion, Judge Theodore McKee recognized the ban does limit speech, but argued, “only because that limitation prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary.” Additionally, according to the court, this “innovative solution” did not need to prove its efficacy in combating the wage-equity gap in order to be permissible. Philadelphia now joins a growing list of states and municipalities to ban such inquiries.
StraightforWARD Legal Advice:
Employers in Philadelphia and nationwide should make themselves aware of any such laws which would affect them. If a ban is in place, employers should ensure when discussing salaries with applicants, that the conversation is framed around salary expectations and demands, and not salary history. For more information, please feel free to contact Christopher Curci at 215.647.6603 or ccurci@thewardlaw.com.