Philadelphia May Set the Stage for Other Constitutional Challenges to Salary History Bans

In a recent twist in the cascade of state and municipal laws prohibiting employers from asking about an applicant’s salary history, a federal judge has ruled that Philadelphia’s salary history ban violates the First Amendment of the US Constitution by limiting employers’ free speech rights.  This ruling may have a significant impact on other state and municipal laws that seek to similarly restrict what employers may ask applicants.

The Ruling

Following passage of Philadelphia’s ordinance prohibiting inquiries into applicant’s salary histories, the Chamber of Commerce for Greater Philadelphia filed a federal lawsuit challenging the constitutionality of the ordinance based on its limitation of employers’ First Amendment rights.  The court agreed in part.

In partially ruling for the Chamber of Commerce, the court held that the ordinance is unconstitutional in its prohibition relating to employers asking applicants about their salary history because that prohibition implicates the First Amendment’s free speech clause.  At the same time, the court held that the second part of the ordinance, which prohibits employers from relying on salary history information at any time in the employment process to determine an employee’s salary, is constitutional and enforceable.

Thus, the court’s ruling enables Philadelphia employers to ask about an applicant’s salary history but leaves in place strict limitations on how they may use that information.

Takeaways

It is expected that similar constitutional challenges will be brought in other jurisdictions with similar salary history laws. Employers should keep an eye out for these challenges as they might have an impact on laws applicable to their operations. In the meantime, employers should continue to comply with existing employment laws relating to salary history inquiries and should review their hiring and pay practices for compliance with these laws if they have not already done so.