The United States Supreme Court has reversed a landmark decision that would have prevented employers from relying on an employee’s compensation history to justify pay disparities between men and women.

The Supreme Court did not comment on the merits of the underlying decision which interpreted the federal Equal Pay Act. Instead, it reversed on more technical grounds:  the underlying decision was not supported by enough judges where one supporting judge died before the decision was issued.

For New York employers, this means there isn’t a clear answer as to whether an employer can rely on compensation history to justify pay disparities between men and women. There is, however, a national trend towards prohibiting employers from relying or even inquiring about an employee’s compensation history. In New York City, for example, local law prohibits employers from asking about an employee’s compensation history during the hiring process.

Simply put, without clear guidance from the Supreme Court, employers wanting to rely on compensation history to justify discrepancies in pay between women and men should tread cautiously.

If you have questions about your company’s potential for liability, feel free to contact us. The attorneys at The Coppola Firm regularly counsel clients to effectively assess risk both proactively and in anticipation of, or during, litigation.