“…federal judges are appointed for life, not for eternity.”

By Fiona W. Ong - Shawe Rosenthal LLP

February 25, 2019

And with that elegantly pointed statement, the U.S. Supreme Court vacated an opinion on the Equal Pay Act that had been issued by the en banc U.S. Court of Appeals for the Ninth Circuit (i.e. the entire group of judges on the Ninth Circuit bench). The opinion had been authored by Judge Stephen Reinhardt, who unexpectedly passed away on March 29, 2018. The opinion was not issued until April 9, 2018 – 11 days after his death.

As we discussed in our April 2018 E-Update, the Equal Pay Act prohibits sex-based discrimination in compensation, and requires equal pay for equal work. The law recognizes legitimate pay differentials based on seniority, merit, the employee’s quantity or quality of work, and “any other factor other than sex.” In 1982, the Ninth Circuit found that prior salary was such a factor, and a three-judge panel of that same court came to the same conclusion in Rizo v. Yovino, which was issued in 2017. The full court was asked to revisit that opinion, Judge Reinhardt wrote the majority opinion that reversed the panel opinion and overturned the 1982 decision, holding that prior salary cannot constitute a legitimate “factor other than sex,” as it could perpetuate existing disparities based on sex.

The ten living judges on the Ninth Circuit were split evenly between approving Judge Reinhardt’s opinion and not. (Although those that did not were not opposed to the “majority” opinion – in fact they concurred with the opinion, but for different reasons). Thus, his vote made this a majority opinion with precedential effect – meaning that all other federal courts in the Ninth Circuit would be bound to follow the opinion as binding law. Noting that judges are allowed to change their minds up until the moment an opinion is issued, the Supreme Court found that Judge Reinhardt’s vote should not have counted. Rather, under Supreme Court precedent, only active status or senior judges may participate in an en banc decision; at the time of the decision, Judge Reinhardt was neither. As the Supreme Court stated, counting him as a member of the majority “effectively allowed a deceased judge to exercise the judicial power of the United States after his death.” Without his vote, there was no quorum, as required for a binding decision.

What does this mean for the Yovino v. Rizo case, and its impact on employers in the Ninth Circuit? Well, the en banc opinion no longer has effect and the case has been sent back to the Ninth Circuit for further proceedings. So, for the moment, from a technical standpoint, employers in the Ninth Circuit may continue to consider prior salary as a legitimate “factor other than sex,” which is the position that has also been taken by the Seventh Circuit. However, we would certainly caution those employers from proceeding blithely forward with that position – the Ninth Circuit seems to be heading in the direction set forth by Judge Reinhardt, sooner or later.