A federal appeals court has allowed Philadelphia to enforce a law that will bar employers from asking prospective employees about their salary history.
A three-judge panel of the U.S. Court of Appeals for the 3rd Circuit ruled in favor of the city (pdf) on Thursday, reversing a lower court’s preliminary injunction blocking a provision of the Wage Equity Ordinance from going into effect.
The ordinance was signed into law in Jan. 2017 and following the law’s passage, the Chamber of Commerce for Greater Philadelphia and its business members challenged the law in a federal court, arguing that two of its provisions violated the First Amendment of the Constitution. The city claims that the ordinance would address the perceived wage disparity, for example between men and women, in Philadelphia.
One of the provisions, the inquiry provision, prohibited employers from asking job applicants about their wage history. The second “reliance” provision, meanwhile, made it illegal for employers to rely on the wage history of a job applicant to determine wages for the applicant at any stage of the employment process.
Violations of the ordinance subject employers to civil and criminal penalties, including up to $2,000 in punitive damages per violation, and an additional $2,000 and 90 days’ incarceration for a repeat offense.
During the case, the chamber argued that the city did not demonstrate how its ordinance would satisfy its objective, adding that the city had passed the law “with only the barest of legislative records” and had not provided sufficient evidence to show that the law would further the city’s objective.
The district court held that the inquiry provision violated the First Amendment speech rights of employers and granted a preliminary injunction for that provision, however the court upheld the reliance provision, saying that it did not impact speech.
In Thursday’s ruling, the majority opinion written by Judge Theodore McKee reversed the lower court’s decision to block the inquiry provision, allowing both provisions of the ordinance to go into effect.
The city’s Democratic Mayor Jim Kenney said in a statement he was pleased with the 3rd Circuit’s ruling.
Liz Ferry, the chamber’s vice president of state legislative affairs, told The Epoch Times in an emailed statement that they were disappointed by the ruling.
“We are clearly disappointed, but as we review the court’s opinion and potential next steps, we look forward to continuing a productive conversation with the city on this important issue,” Ferry said.
Other states have signed similar laws in recent years, including New York (pdf), Massachusetts, and New Jersey.