Greater Phila. Chamber Commerce v. City of Phila.

949 F.3d 116

GREATER PHILADELPHIA CHAMBER OF COMMERCE, Individually and on behalf of its members, Appellant in No. 18-2176

v.CITY OF PHILADELPHIA; Philadelphia Commission on Human Relations, Appellants in No. 18-2175

Nos. 18-2175 & 18-2176

United States Court of Appeals, Third Circuit.

Argued on March 15, 2019

Opinion filed: February 6, 2020

Benjamin H. Field, Jane L. Istvan, Nicole S. Morris, Marcel S. Pratt, Esquire (Argued), City of Philadelphia, Law Department, 1515 Arch Street, Philadelphia, PA 19102, Counsel for Appellants/Cross-Appellees

Adam R. Pulver, Scott L. Nelson, Public Citizen Litigation Group, 1600 20th Street NW, Washington, DC 20009, Counsel for Amicus Public Citizen Inc.

Maura Healey, Elizabeth N. Dewar, Genevieve Nadeau, Erin K. Staab, Office of Attorney General Massachusetts, One Ashburton Place, McCormack Building, Boston, MA 02108, Counsel for Amicus Commonwealth of Massachusetts; District of Columbia; Commonwealth of Puerto Rico; Commonwealth of Virginia; State of Connecticut; State of Delaware; State of Illinois; State of New Jersey; State of New Jersey; State of New York; State of Vermont; State of Washington

Zachary W. Carter, Richard Dearing, Devin Slack, Eric Lee, Jamison Davies, New York City Law Department, Room 6-178, 100 Church Street, New York, NY 10007, Counsel for Amicus City of New York; City of Berkeley; City of Columbus; City of Oakland; County of Santa Clara; City and County of San Francisco; City of Seattle; City of South Bend

Terry L. Fromson, Amal Bass, Women’s Law Project, 125 South 9th Street, Suite 300, Philadelphia, PA 19107, Counsel for Amicus Womens Law Project; 36 Organizations Dedicated to Gender Wage Equity

Richard A. Samp, Cory L. Andrews, Washington Legal Foundation, 2009 Massachusetts Avenue, N.W., Washington, DC 20036, Counsel for Amicus Washington Legal Foundation

Kellam M. Conover, Miguel A. Estrada (Argued), Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, 1050 Connecticut Avenue, N.W., Washington, D.C. 20036

Franco A. Corrado, Marc J. Sonnenfeld, Morgan, Lewis & Bockius, 1701 Market Street, Philadelphia, PA 19103

Kevin M. Siegel, Suite 201, 10000 Lincoln Drive East, Marlton, NJ 08053, Counsel for Appellee/Cross-Appellant

Michael L. Kichline, Michael H. McGinley, Dechert, 2929 Arch Street, 18th Floor, Cira Centre, Philadelphia, PA 19104, Counsel for Amicus African American Chambers of Commerce of Pennsylvania., New Jersey and Delaware

Robert L. Byer, John E. Moriarty, Robert M. Palumbos, Andrew R. Sperl, Duane Morris, 30 South 17th Street, Philadelphia, PA 19103, Counsel for Amicus Chamber of Commerce of the United States of America; National Federation of Independent Business Small Business Legal Center; Pennsylvania Chamber of Business & Industry; Pennsylvania Manufacturers Association

Before: McKEE, ROTH, and FUENTES, Circuit Judges

OPINION OF THE COURT

McKEE, Circuit Judge

Table of Contents

I. BACKGROUND...121

A. The Disparity And The Ordinance...122

B. Legislative Background...123

1. Testimony Before the City Council...123

a. Barbara Price...123

b. Terry Fromson...124

c. Marianne Bellesorte...126

d. Rue Landau...127

2. Other Testimony Before the City Council...127

C. The Legal Challenge...128

1. The Madden Affidavit...128

2. Declarations Filed by Chamber Members...131

D. The District Court Opinion...132

II. DISCUSSION...133

A. The Reliance Provision...134

1. The District Court Correctly Concluded an Injunction as to the Reliance Provision Fails Because the Provision does not Implicate Speech...134

2. None of the Chamber’s Arguments Call into Question the District Court’s Conclusions...135

B. The Inquiry Provision...136

1. The Legal Standard...136

a. Commercial Speech...137

b. Intermediate Scrutiny Under Central Hudson is Appropriate...137

c. Strict Scrutiny is Inappropriate Here...138

2. The Inquiry Provision Satisfies Central Hudson Intermediate Scrutiny...140

a. The Speech at Issue is not "Related to Illegal Activity"...141

b. The City has a Substantial Interest in Closing the Wage Gap...142

c. The Inquiry Provision Directly Advances the City’s Interest in Pay Equity...142

i. Caselaw Considering Whether a Legislature Relied on Substantial Evidence to Support a Speech Restriction Under Central Hudson Demonstrates that the City Presented Sufficient Evidence to Support the Ordinance...144

ii. The Evidence Here is Stronger Than the Evidence Supporting the Restrictions in Florida Bar and King...150

d. The Inquiry Provision is not More Extensive than Necessary...154

III. CONCLUSION...157

This appeal requires us to decide whether a Philadelphia Ordinance that prohibits employers from inquiring into a prospective employee’s wage history in setting or negotiating that employee’s wage violates the First Amendment. The district court held the Ordinance unconstitutional insofar as it prohibits that inquiry. However, the court upheld the provision of the Ordinance that prohibits reliance on wage history based on the court’s conclusion that such reliance did not implicate protected speech.

For the reasons that below, we affirm the court’s order insofar as it upholds the Reliance Provision but reverse it insofar as it strikes down the Inquiry Provision.

I. BACKGROUND

In 2017, the City of Philadelphia enacted an ordinance to address the disparity in the pay of women and minorities that is often called the "pay gap." The Ordinance contains two provisions: the "Inquiry Provision," which prohibits an employer from asking about a prospective employee’s wage history, and the "Reliance Provision," which prohibits an employer from relying on wage history at any point in the process of setting or negotiating a prospective employee’s wage. The Greater Philadelphia Chamber of Commerce filed this suit, individually and on behalf of some of its members, alleging that both provisions of the Ordinance infringe on the freedom of speech of the Chamber and its members.

The Chamber concedes that the pay gap exists, and that the City has a substantial governmental interest in addressing it. However, the Chamber argues that the City passed the Ordinance "with only the barest of legislative records" and, therefore, did not present sufficient evidence to establish that the Ordinance would satisfy the City’s objective.¹

Accordingly, the Chamber claims that the Ordinance cannot survive its First Amendment challenge under either strict or intermediate scrutiny.

The district court agreed that the Inquiry Provision violated the First Amendment speech rights of employers and invalidated that part of the Ordinance. But the court concluded that the Reliance Provision withstood the Chamber’s First Amendment challenge because it did not impact speech.

As we explain below, we conclude that the district court erred in holding that the Inquiry Provision was unconstitutional. We believe the court’s analysis of that provision applied a much higher standard than required. The Supreme Court has not demanded that the enacting authority achieve legislative certainty or produce empirical proof that the adopted legislation would achieve the stated interest even when applying strict scrutiny. Rather, the appropriate inquiry requires courts to determine whether the legislature "has drawn reasonable inferences based on substantial evidence."² The Supreme Court has even "permitted litigants to justify [analogous] speech restrictions by reference to studies and anecdotes pertaining to different locales altogether, or even, in a case applying strict scrutiny, to justify restrictions based solely on history, consensus, and ‘simple common sense.’ "³ In short, the Supreme Court has upheld similar restrictions based on much less evidence than the City presented here.

A. The Disparity And The Ordinance

According to the 2015 census, women in Pennsylvania earned 79 cents for every dollar earned by similarly situated men.⁴ For women of color, the wage gap is even more profound. Black women earn 68 cents for every dollar paid to similarly situated men, and Latina women earn 56 cents for every dollar paid to similarly situated men.⁵ The gap begins for women as soon as they enter the workforce. In just the first year after college, full-time working women earn, on average, just 82% of what their male peers earn.⁶ Overall, women under the age of 35 earn 88-91% of what their male peers earn.⁷ Rather than improve, as women gain experience in the work force the situation gets worse. Women aged 35 and over earn only 77-81% of what male peers earn.⁸

In response to this persistent wage disparity, the City of Philadelphia enacted the Ordinance at the center of this dispute. The Ordinance states:

It is an unlawful employment practice for an employer ...

(i) To inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history, or retaliate against a prospective employee for failing to comply with any wage history inquiry.

(ii) To rely on the wage history of a prospective employee from any current or former employer of the individual in determining the wages for such individual at any stage in the employment process, including the negotiation or drafting of any employment contract, unless such applicant knowingly and willingly disclosed his or her wage history to the employer, employment agency, employee or agent thereof.

(c) For purposes of this Section 9-1131, "to inquire" shall mean to ask a job applicant in writing or otherwise. ...⁹

Employers who violate the Ordinance are subject to civil and criminal penalties, including compensatory damages, up to $2,000 in punitive damages per violation, and an additional $2,000 and 90 days’ incarceration for a repeat offense.¹⁰

B. Legislative Background

The City seeks to justify the Ordinance by relying on the testimony of witnesses who testified before the City Council prior to the enactment of the Ordinance and an affidavit by Dr. Janice Madden that the City submitted to the district court in response to the Chamber’s...