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Delaware: The First State . . . to Pass a Law Unconstitutionally Infringing Free Speech of Employers? A Lesson For Equal Rights Amendment Efforts.

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Delaware’s General Assembly has demonstrated a propensity to pass legislation regarding hot topics of the day, sometimes seeming to place the value of being first or “progressive” above the value of careful deliberation, resulting in law that might not survive judicial scrutiny.

That seems to be true of 19 Del. C. § 709B (the “Delaware Compensation History Law”), which might be unconstitutional due to a violation of First Amendment free speech rights of businesses, as perhaps suggested in a ruling dated April 30, 2018, regarding a Philadelphia ordinance that is similar to the Delaware Compensation History Law.  See Chamber of Commerce for Greater Philadelphia v. City of Philadelphia, No. 17-1548, 2018 LEXIS 72758 (E.D. Pa. April 30, 2018) (the “Philadelphia Wage Case”).

The Delaware Compensation History Law applies to an employer or an employer’s agent (thus creating individual liability).  It apparently applies to employers having even one employee, though not expressly stated.  “Compensation” includes more than just wages, probably including vacation days, bonuses, health insurance, etc.  The law prohibits the mere “seeking” (which includes “requesting”) of compensation history; and it is a strict liability law, which means reasons for asking prohibited questions do not matter.

Although the bill leading to this law underwent significant and meaningful change before becoming law (improving it), the Delaware State Chamber of Commerce, Employer Advocacy and Education Committee opined (directly to the bill sponsor) that the bill still went too far by restricting speech rights of businesses.  The freedom of speech is among the very first rights identified in the United States Constitution’s Bill of Rights.  The Bill of Rights of the Delaware Constitution also guarantees any citizen the right to “freely speak.”  Free speech applies even when the speech at issue is unpopular.  Indeed, with the ebbs and flows of popular thought, the freedom of speech arguably is most prized for assuring that unpopular speech is protected.  As many argued before the Delaware Compensation History Law became law, governments should tread very lightly when trespassing on free speech rights – doing so only upon a well-developed record that can survive the rigor of a constitutional analysis.

Nonetheless, the Delaware Compensation History Law became law and currently binds Delaware employers.  It appears to be the first of its kind for any state.  Massachusetts passed a law similar to the Delaware Compensation History Law sooner than Delaware, but Delaware’s law became effective sooner (i.e., the Massachusetts law does becomes effective until July 1, 2018, but Delaware’s law became effective this past December 2017).  Timing certainly appeared to be part of the motive for what seemed to be a rush to move the bill through the General Assembly with its applicable effective date.

But being first here might not make Delaware best – perhaps it only makes Delaware the first state to violate free speech rights in this way.  The Philadelphia ordinance at issue in the Philadelphia Wage Case is similar to the Delaware Compensation History Law.  It became effective on May 23, 2017, near the same time as Delaware passed its law (i.e., June 14, 2017).  At that time, litigation was initiated regarding the Philadelphia ordinance, but the litigation was dismissed.  It recommenced the day before Delaware’s Governor signed into law the Delaware Compensation History Law.

As the nearly sixty-page-long Philadelphia Wage Case reveals, the analysis of if and how a government can infringe speech rights can be nuanced if not complex.  Significantly, the existence of a constitutional right substantively impacts the analysis regarding if and how a law can be made that impacts such right; and some laws (including State law and City ordinance) can go too far in trampling constitutional rights, as in the case of the Philadelphia ordinance (and perhaps the Delaware Compensation History Law).

The Court noted that the existence of a Philadelphia “gender pay disparity” was not really disputed.  But the Court also noted that employers might want to ask about compensation history for any number of legitimate reasons – including reasons having nothing to do with pay disparity, and even reasons other than in setting compensation rates (e.g., in determining whether the employer can afford the applicant, which the Court seemed to accept as proper).  Of course, Delaware’s Compensation History Law, in addition to prohibiting seeking compensation history, prohibits the screening of applicants based on compensation history.  Regardless, the Court noted that the existence of a wage history is not in and of itself illegal – meaning that asking about such is not inherently suspect.

Ultimately, the Court was not persuaded that those (in Philadelphia) voting to take away the speech rights of businesses relied upon sufficient evidence to conclude that the wage gap is a result of discrimination and that curtailing inquiry into allegedly discriminatory wage history will alleviate this gap.   The Philadelphia legislative body relied upon at least eight witnesses, including six professionals with some impressive credentials and certainly good-sounding sound bites.  Nonetheless, the court found even the “substantial” evidence considered by that legislative body was merely avowals of unsubstantiated conclusions, mostly conjectural in nature.  Although perhaps logical and maybe even “common sense,” the court noted that, when it comes to trespassing on free speech rights “more is needed” than “various tidbits” and “educated guesses.”  As the court noted and even Philadelphia’s own witness corroborated, “disparate wages could also be based on factors having nothing to do with discrimination, such as qualifications, experience, or any number of other factors.”

Notably, the evidence considered in Philadelphia appears to be far more (both in terms of quantity and quality) than the Delaware General Assembly considered.  Since the evidence in the Philadelphia Wage Case was found to fail the “substantial evidence” test, it is reasonable to question whether the Delaware Compensation History Law would survive judicial scrutiny – or, like the Philadelphia ordinance, be found to be at odds with the First Amendment.

In the wake of the ruling on the Philadelphia ordinance, Delaware’s General Assembly might want to revisit the Compensation History Law before someone asks a court to declare that Delaware has violated speech rights.  Then again, perhaps the Compensation History Law will be defended successfully.  Maybe it will not even be challenged. Perhaps the federal court decision will be overturned.

Time likely will tell.

As we wait, it is worth emphasizing that the creation of constitutional rights impacts analysis regarding whether a law is constitutional.  As the Philadelphia Wage Case illustrates, well-intended laws can be made unlawful as a result of interference with constitutional rights.  Thus, the creation of a constitutional right should be very carefully considered for all the pros and cons that come along with it.  The analysis should transcend popular thought of the day, sound bites, and rhetoric – more sophisticated than merely asking if the intent is good.

This has direct application to the “Equal Rights Amendment” to the Delaware Constitution (which is different in a number of ways to the “Equal Protection” Clause of the U.S. Constitution).  The Equal Rights Amendment flew through the House of the General Assembly with a vote of 34 “yes” to 5 “no” vote (with two absences).

On May 9, 2018, the Equal Rights Amendment was defeated narrowly in the State Senate. However, it later came back up and passed in the Senate with changes made, meant formally to clarify the intent.

On June 7, 2018, a version of the ERA with changes passed through the House. Since it amends the Constitution, instead of going to the Governor to be signed into law, it now must first be voted on by the next General Assembly.

Although perhaps it is unpopular to speak so much as a word seemingly against anything styled as “equal pay” or “equal rights” (for fear that someone might accuse such person wrongly of not supporting the sound bite), it is good citizenship and certainly good governance to participate in assuring careful consideration of the impact of laws on constitutional rights and vice versa – certainly including when it comes to determining whether to create new constitutional rights.  Things like the level of judicial scrutiny of laws should be considered very carefully (i.e., strict scrutiny, intermediate/heightened scrutiny, or rational basis scrutiny).  To be sure, there is a nuanced if not complex body of law at issue.

Some who did not vote for the ERA on the first pass (before the changes were made) received scathing criticism. But valid questions existed. Would passage of the Equal Rights Amendment make Delaware law enabling the existence of single-sex charter schools unconstitutional?  Would it make the existing of Delaware’s “Office of Women’s Advancement and Advocacy” unconstitutional?  What would the impact of such have on hot-button issues like abortion?  Could a private employer face suit based on the ERA? Maybe the answers to these questions were easy or obvious.  Maybe not. Perhaps recent clarifications answer what previously was unanswered. Maybe not.  The point is that such questions should be asked and answered. Good for those who participated productively in efforts to ask questions and answer them. And good for those who chose to work together rather than to name call.

It takes courage to be one of only a few who stand against a tide of support for anything, by asking questions and encouraging substantial, evidence-based analysis over a “hurry up and get this done because it sounds good” approach, which seems often to appeal to the masses (including voters).  These courageous people (including legislators) risk being kicked by the knee jerk of sentiment that they must be against the stated objective behind such tide.  But such approach does not mean that the stated objective behind an effort is opposed.  Shame on any politician playing to such knee jerk.  Debate is healthy.  Caution is good.  Indeed, the lack of “substantial evidence” is at least a primary reason why the Philadelphia ordinance was found to be unconstitutional.

Thank goodness for free speech and those who exercise it even at personal risk.  Let’s hope that, in every debate, people on both sides of every issue can see the value of thoughtful consideration; and embrace it.  Let’s applaud those who demand such.

After all, being best is more important than being first.

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