62 | Developments in Equal Pay Litigation 2025 ©2025 Seyfarth Shaw LLP employee’s starting salary constitute a per se violation of the Equal Pay Act . . .?”450 In that case, four named plaintiffs and twenty opt-in plaintiffs argued that the court should adopt the reasoning of the Ninth Circuit in Rizo and hold that prior salary history can never constitute a “factor other than sex” under the EPA, either alone or in combination with other factors.451 The court declined, noting that the Fourth Circuit “has not delineated the precise circumstances under which an employer may rely on prior salary as an affirmative defense in an EPA case.”452 But also noting that, in Spencer v. Virginia State University, the Fourth Circuit “has clearly indicated that it does not prohibit an employer from doing so.”453 Similarly, in McKinley v. United Parcel Service Inc.,454 the employer argued that pay differentials were justified because it had paid plaintiff within the pay bands applicable to her positions. But plaintiff tried to recast this as a defense based on her prior wages, noting that “the Seventh Circuit has held that basing pay on prior wages could be discriminatory if sex discrimination led to the lower prior wages.”455 She pointed to an alleged sexist comment made by a former manager in 1994 that she “chose a family over a career,” and the fact that she was not promoted for eighteen years. But the court found that she had not provided sufficient evidence to show that her past wages were a result of sex discrimination: “The evidence submitted by [employer] supports that it closely followed its pay band structure to determine compensation for its employment positions,” that “[plaintiff] was given raises in-line with the [employer] pay band for Part-Time Supervisors and that upon being promoted to a Specialist, her hourly pay rate increased to be consistent with the Specialist pay band,” and that “[employer] paid [plaintiff] at the top of the pay band for her position before she was promoted to a Specialist.”456 Relying on Lauderdale, the court concluded that the employer’s use of pay bands was a legitimate neutral factor accounting for the pay disparity because plaintiff was paid according to the pay band of her current and prior positions.457 450 Id. at 1. In that case, four named plaintiffs and twenty opt-in plaintiffs alleged that their employer’s “past practice of using pay history to determine new hire’s salary perpetuates the gender wage gap and violates the EPA.” Id. 451 Id. at 2. 452 Id. 453 Id., at 2-3 (citing Spencer v. Va. State Univ., 919 F.3d 199, 202-03 (4th Cir. 2019) (emphasis in original). The court noted that Spencer involved a female sociology professor who alleged she had been discriminated against in terms of her compensation because she was paid less than two comparable male professors whose salary was set as a percentage of their previous salaries as administrators at the same university. The Fourth Circuit determined that the university’s decision to set starting salaries for those purported comparators in that way established that the alleged pay differential was due to a factor other than sex. The court in Abe interpreted this to mean that “at minimum, the Fourth Circuit does not prohibit employers from raising prior salary as an affirmative defense in an EPA case.” Id. at 3. The court further rejected plaintiffs’ argument that the employer should at least have to prove that its use of salary history is job-related, as they argued the Fourth Circuit held in another case, EEOC v. Maryland Ins. Admin., 879 F.3d 114 (4th Cir. 2018). The Abe court sidestepped the issue. It held that it was not necessary to resolve that question to decide the narrow issue before the Court; namely: “May [defendant] raise prior salary as an affirmative defense?” Abe, 2021 WL 1250346, at 4. Based on the Fourth Circuit’s decision in Spencer, the Court held that it could and denied Plaintiff’s motion to strike the employer’s affirmative defense that was based on prior salary. See also McGee v. Va. Dep’t of Envtl. Quality, 624 F. Supp. 3d 616, 632 (E.D. Va. 2022) (noting that “[t]his Court has previously held that employers may raise prior salary as an affirmative defense in EPA cases as a ‘factor other than sex,’ and holding that defense was met where plaintiff’s comparator’s salary was set because the employer, “knew that his private sector job probably paid more,” and even raised its initial offer after his prior employer offered a salary increase to entice him to stay). 454 McKinley v. United Parcel Serv. Inc., No. 1:19-cv-2548-TWP-DLP, 2021 WL 4477830 (S.D. Ind. Sept. 30, 2021). 455 Id. (internal quotations omitted). 456 Id. at *16. 457 Id. Some courts have allowed prior salary history to be considered in connection with theories of “salary compression,” i.e., a pay discrepancy that is the result of later-hired employees starting at a higher salary, which widens over time as a result of regularly scheduled percentage pay increases. See, e.g., Kellogg v. Ball State Univ., No. 1:18-cv-2564-TAB-TWP, 2020 WL 707846, at *2-3 (S.D. Ind. Feb. 12, 2020) (holding that the Seventh Circuit allowed theories of “salary compression” as a justification for wage disparities, pointing to the Seventh Circuit’s reasoning contrary to Rizo, and finding that employer’s reliance on salary compression qualifies as a factor other than sex that “comports with current Seventh Circuit precedent”), rev’d on other grounds, 984 F.3d 525 (2021); Stice v. City of Tulsa, No. 17-cv-261-CVE-FHM, 2018 WL 3318894, at *2-5 (N.D. Okla. July 5, 2018) (holding that “salary compression” could be a factor other than sex—explaining that a system of percentage-based salary increases provides a nondiscriminatory explanation for the differences in pay—and holding that neither Rizo, nor the Tenth Circuit has held that the use of prior salary history can never be a consideration to justify a pay disparity, just that it cannot be the only consideration, but ultimately rejecting employer’s motion for summary judgment because that explanation was “not so convincing that any rational jury would find in favor of defendant on plaintiff’s EPA claim”) (citing and quoting Angove v. Williams–Sonoma, Inc., 70 F. App’x 500, 508 (10th Cir. July 8, 2003)).
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