News & Insights

The Uncertain Future of Law Restricting Employer Ability to Ask About Compensation History of Candidates

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Yesterday, I wrote about Delaware HB 1, which would prohibit many Delaware employers from, among other things, seeking from any prospective employee any information about a candidate’s monetary wages, benefits, or other forms of compensation.

While publishing that article, the Chamber of Commerce for Greater Philadelphia, on behalf of its members, filed suit in the United States District Court for the Eastern District of Pennsylvania, seeking declaratory and injunctive relief to prevent the City of Philadelphia and the Philadelphia Commission on Human Relations from giving effect to or enforcing a similar Philadelphia ordinance. A copy of the complaint can be found here.

The ordinance at issue in that suit (attached as Exhibit A in the lawsuit) became law in Philadelphia earlier this year and is set to go into effect soon. In addition to the recent judicial challenge, that ordinance faces legislative challenge in the General Assembly of Pennsylvania, where Senate Bill 241 is pending and, if passed, would override the Philadelphia ordinance and block similar ordinances statewide – pursuant to preemption. Such law could moot the need for injunctive relief concerning the Philadelphia ordinance and perhaps end that litigation. Or maybe not . . .

While the suit over the Philadelphia ordinance is based, in part, on arguments that might be unique to Pennsylvania, it also proffers arguments based on the First Amendment, the Due Process Clause of the Fourteenth Amendment, and the Commerce Clause of the United States Constitution. Thus, the complaint could provide a play book for litigants opposing similar laws in other states (such as Massachusetts and perhaps, later, Delaware). As the list of similar laws grows (e.g., New York City Council, on April 5, 2017, voted to pass legislation to ban employers from asking job applicants to state their previous salary information), it will be interesting to watch the reaction (legislation and litigation) and see where the dust settles regarding what employers can and cannot ask candidates.

Time will tell if HB 1 becomes law in Delaware. If it does, time will tell if litigation similar to that initiated yesterday will take place here. Even if not, the litigation regarding the Philadelphia Ordinance, in theory, could find its way to the United States Supreme Court, which obviously looks a little different after today’s vote concerning Justice Neil Gorsuch, who (despite “no” votes by Delaware’s two senators) is now the 113th justice to serve on the nation’s highest court. If that happens, even if HB 1 becomes law and even if litigation does not emerge specifically to enjoin a law that emerges from HB 1, HB 1 (or at least an ordinance that essentially prohibits what HB 1 prohibits) could be deemed unconstitutional. Or maybe not . . .

Let the debates flow (civilly) about whether there should be law limiting employers’ ability to inquire into and rely on prospective employees’ compensation history.

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