Tracey E. Diamond, of counsel with Pepper Hamilton, was quoted in the May 1, 2018 Philadelphia Inquirer article, "Court: Philly Salary-History Ban Violates Free Speech, But Firms Can't Use Data to Underpay."
"The court found that an employer's salary history question was 'commercial speech,' which is entitled to less protection than other forms of speech," said Tracey Diamond, an employment lawyer at Pepper Hamilton LLP. "But, the court then concluded that there was no evidence that the ban furthered the city's interests. That is, the city had failed to convince the court that banning the salary history question would achieve the city's purpose of reducing the wage gap."
What that means for business: Under Goldberg's ruling, "employers have to be careful. You can ask for their prior salary. But, once you know the salary, it's very difficult to 'unring that bell,'" and claim there was no discrimination, if employees later find they were underpaid relative to others in the same job, Diamond added.
"The court upheld the part of the city ordinance that prohibits employers from relying on an applicant's salary history on setting salaries. Thus, employers may ask the question, but cannot rely on the answer," she said. So, employers who persist in asking applicants' previous pay "will be in a difficult position of having to prove that any salary disparities [after they are hired] were not the result of the employer basing salary on prior salary history. This is similar to where the law stands for private employers in New Jersey."
Diamond concludes: "This is the first case that I am aware of where a court has considered the constitutionality of the salary history ban. I suspect that lawsuits in other jurisdictions will follow and, if the courts rule the other way, this eventually could lead to a Supreme Court showdown someday."