News

To Speak or Not to Speak? That is the Question

Gender Pay Gap

As women across Texas know, the gender pay gap continues to exist. As of April 2017, Texas women are paid 79 cents to every dollar paid to men.  See www.nationalpartnership.org.

Efforts to narrow the gender pay gap are hurt by a common interview question: What do you earn in your current position?

Some states and cities have adopted legislation prohibiting employers from asking this question. Both Massachusetts and New York City prohibit employers from asking job applicants about their previous salaries.

The rationale for this prohibition is simple—an employer who asks about a female job candidate’s current or former salary can use the information to perpetuate any discrimination that candidate may have suffered in the past. If the female has been paid less than her male peers (even without knowing it), her disclosure of that salary serves as an “anchor point” in her new salary negotiation. The result: A starting salary otherwise lower than the employer would have been willing to pay, or lower than the salaries paid to comparable males.

The Paycheck Fairness Act—currently pending in Congress—prohibits employers from screening job applicants based on their salary history or requiring the disclosure of salary history during the interview and hiring process. Introduced by Senator Patty Murray (Wash.) and Rep. Rose DeLauro (Conn.), the odds of this legislation passing in this term are, unfortunately, not strong.

A recent federal appellate opinion highlights the need for this legislation. In April 2017, the Ninth Circuit held that the Fresno County of Schools had a legitimate defense to an Equal Pay claim because a female employee’s salary—which was lower than those of her male peers—was “based on any factor other than sex” because it had been based on her prior salary. The Court remanded the case for further consideration of whether Fresno County used the prior salary reasonably given its stated purposes and other business practices.  Critically, though, the court held that using an employee’s prior salary can be “a differential based on any other factor other than sex,” which is a significant defense to an Equal Pay claim. Rizo v. Yovino, 854 F.3d 1161 (9th Cir. 2017).

How can a woman prevent this conundrum when looking for a new job? Sometimes, if a woman can show she was discriminated against or treated differently than men during the salary negotiation process, she may get past this argument.

In a 2014 case, the Fifth Circuit recognized that a woman can be discriminated against in the pay negotiation process.  Thibodeaux-Woody v. Houston Community College, 593 Fed. Appx. 280 (5th Cir. 2014).  In that case, Woody (a female) interviewed for one of two open program manager positions. She told the hiring supervisor, Joseph Little, she wanted to negotiate for a higher salary. Little told Woody that the stated salary was the maximum and there could be no negotiation for more. When Woody was offered the job, she accepted the salary of $41,615 without negotiation based on Little’s claim. But when a male interviewed for the other program manager position, he made a counter-demand for a salary of $60,000—and the company ultimately agreed to a salary of $52,000.

When Woody found out about the salary disparity, she sued under Title VII and the Equal Pay Act.  The employer defended the suit by claiming the disparity was due to their different approaches to salary negotiation, which was a “factor other than sex.”

The Fifth Circuit rejected that argument because Woody brought forward evidence that allowed a fact finder to find that HCC discriminatorily applied its negotiation policy.  Woody was specifically told that she could not negotiate whereas the male could negotiate for a higher salary.

Women are in a tough spot in salary negotiations. If a woman does not negotiate the salary or if she discloses her salary (which may be artificially low due to prior pay discrimination), she risks losing a pay discrimination claim because the low prior salary can serve as a legitimate basis for a salary differential.

Until Congress or Texas enacts a law prohibiting an employer from asking a woman about her current or prior salary, a woman risks being underpaid—and that 21-cent wage gap will never be narrowed.