Philadelphia Delays Ban on Salary History Inquiries Pending Court Challenge

Philadelphia Delays Ban on Salary History Inquiries Pending Court Challenge

Philadelphia has delayed enforcement of a local ordinance enacted in January that would bar employers in the city from asking job candidates for salary histories, which was supposed to go into effect on May 23, pending resolution of a lawsuit filed by the local Chamber of Commerce for Greater Philadelphia, attorneys Allan Bloom and Laura Fant of Proskauer Rose report at the National Law Review:

Following a motion for a preliminary injunction by the Chamber of Commerce, the district court granted a stay of the law’s implementation until the motion is resolved. Subsequently, the City of Philadelphia agreed to delay implementation of the ordinance indefinitely, saying in a statement that “volunteering to postpone implementation provides a benefit to the City in the litigation because it gives the court, and defense, more time to sort through the legal, factual and procedural issues addressed by plaintiff’s filings.”

In a statement issued when the lawsuit was filed earlier this month, the Chamber of Commerce argued that the ordinance would do nothing to close the gender pay gap—its stated goal—and violated employers’ First Amendment right to free speech:

Reflecting the views of its thousands of members, the Chamber has very serious concerns because the Ordinance contains numerous obstacles for businesses operating in the City, such as the exclusion of important information from the hiring process, no consideration for varying business needs, and potential civil and criminal penalties. The Ordinance makes searching for and recruiting top talent more difficult, which makes businesses in Philadelphia less competitive. The inevitable consequences will be companies choosing to do business elsewhere and the loss of jobs for city workers, among other negative impacts.

The lawsuit seeks to overturn the ordinance on several legal and constitutional grounds, attorney Martha Keon of Littler Mendelson explains at SHRM:

The suit alleges that … the ordinance takes an ineffective, roundabout and over-inclusive approach that violates:

  • The First Amendment by chilling protected speech of employers and impairing their ability to make informed hiring decisions.
  • The Due Process Clause by imposing severe penalties for violation of vague provisions, e.g. “knowing and willing disclosure” and a definition of “employer” that would apply beyond the city limits and Pennsylvania borders
  • The Commerce Clause by having extraterritorial effect that burdens interstate commerce.
  • The Pennsylvania Constitution and the Pennsylvania Home Rule Act by regulating individuals who neither live nor work in the city of Philadelphia.

The outcome of this lawsuit could have consequences beyond Philadelphia, particularly in New York City, which passed its own salary history ban earlier this month, opponents of which might be encouraged to bring a similar suit if Philadelphia’s ban is overturned in court.