Philadelphia's Ban on Salary History Inquiries Upheld
Author: Michael Cardman, XpertHR Legal Editor
February 7, 2020
A federal appeals court has lifted the partial block on Philadelphia's long-delayed salary history ordinance.
The 3rd Circuit Court of Appeals' ruling in Greater Phila. Chamber of Commerce v. City of Phila. sets an important precedent for employers operating in Delaware, New Jersey and Pennsylvania.
It also may prove a bellwether for any legal challenges to the other state and local salary history inquiry bans across the nation.
Philadelphia enacted one of the nation's first salary history inquiry bans in January 2017. The ordinance has two main parts:
- An "Inquiry Provision," which prohibits an employer from asking about a prospective employee's wage history; and
- A "Reliance Provision," which prohibits an employer from relying on wage history at any point in the process of setting or negotiating a prospective employee's wage.
The Chamber of Commerce for Greater Philadelphia challenged the ordinance on the grounds that it violates the First Amendment.
In 2018, a federal district court held that the Inquiry Provision violated employers' First Amendment rights and invalidated that part of the ordinance. However, the district court let stand the Reliance Provision.
Finding itself with the right to ask about salary history information but without the right to do anything about it, the Chamber of Commerce appealed the ruling to the 3rd Circuit.
The 3rd Circuit's Ruling
In its Feb. 6 ruling, the 3rd Circuit concluded the district court applied a much higher standard than was required when it held that the Inquiry Provision was unconstitutional:
"The Supreme Court has not demanded that the enacting authority achieve legislative certainty or produce empirical proof that the adopted legislation would achieve the stated interest even when applying strict scrutiny. Rather, the appropriate inquiry requires courts to determine whether the legislature 'has drawn reasonable inferences based on substantial evidence.'"
The 3rd Circuit re-affirmed the Reliance Provision and reversed the lower court's preliminary injunction as to the Inquiry Provision. The ruling appears to give a green light to Philadelphia to begin enforcing its salary history law, but the Chamber of Commerce is reviewing its options.