Appeals Court Upholds Philadelphia Salary History Ban

Salary History Bans have been passed in multiple cities and states throughout the country. We have reported on recently enacted Salary History Bans in New York, New Jersey, and Cincinnati, Ohio. Philadelphia, Pennsylvania is the latest place to have Salary History Ban activity.

Initially signed into law on January 23, 2017, as a means to address pay disparities impacting women and minorities, Philadelphia’s Salary History Ban ordinance was subject to a lawsuit upon its passage. Enforcement of parts of the ordinance were reviewed by a United States District Court in 2018, with the District Court concluding that one provision (referred to as the “Inquiry Provision”) of the Salary History Ban ordinance violated the First Amendment of the United States Constitution (to read the full District Court opinion, click here).

In a decision published in February 2020, the Third Circuit Court of Appeals disagreed with the District Court. The Third Circuit stated that, “The City enacted the Inquiry Provision in an attempt to address this persistent problem [pay disparities impacting women and minorities] and the record is clearly sufficient to withstand this First Amendment challenge to it.” To read the full Third Circuit opinion, click here.

What could this mean for employers? Under the Philadelphia Salary History Ban ordinance, it is an unlawful employment practice, with some exceptions, for an employer, employment agency, or employee or agent thereof:

• • To inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history, or retaliate against a prospective employee for failing to comply with any wage history inquiry or for otherwise opposing any act made unlawful by this Chapter.
  • To rely on the wage history of a prospective employee from any current or former employer of the individual in determining the wages for such individual at any stage in the employment process, including the negotiation or drafting of any employment contract, unless such applicant knowingly and willingly disclosed his or her wage history to the employer, employment agency, employee or agent thereof.

  To read the Philadelphia Salary History Ban ordinance, click here.

  With the Third Circuit opinion upholding the legality of the Salary History Ban ordinance, it may be a good idea to check with your legal counsel to determine if this ordinance applies to you.