Chamber of Commerce to sue Philly over wage equity law

The Chamber of Commerce for Greater Philadelphia plans to file a federal lawsuit Thursday to block the city’s newly signed wage equity law, arguing that it violates businesses’ freedom of speech and will do little to close the gender pay gap.

The law, which bans employers from asking applicants for salary history, is to take effect May 23.

Rob Wonderling, the chamber’s president and CEO, said the organization is seeking an injunction because it believes the law is flawed but also to send a wider message: The city has placed too many burdens on its business community.

“We think the law is unconstitutional, and we want to stand up for the economic rights and the free speech rights the First Amendment guarantees,” Wonderling said. “Second, we think it's a good venue to really signal that we would like to see a shift in the regulatory environment of our local government.”

Mayor Kenney signed the legislation in January, despite pressure from Comcast Corp. and the chamber to veto it or risk a legal battle. After learning of the suit late Wednesday, his office showed no sign of changing course.

“We have not received the complaint yet, but as we’ve said previously, we’re confident that the law will withstand a challenge,” Kenney spokeswoman Lauren Hitt said in a statement.

The law — the first of its kind passed by a U.S. city — is intended to close the pay gap between men and women, which some argue starts early in women’s careers and is perpetuated when they are asked to state their salaries going forward. Women make on average 79 cents for every dollar made by men, and the disparity is greater for women of color.

The measure faced little public scrutiny before being passed by City Council in December. Wonderling submitted testimony opposing the legislation but did not attend the hearing on it.

So it took many by surprise when the chamber and Comcast the following month privately raised concerns about the bill with Kenney and his staff. In a legal memo sent to the city and obtained by the Inquirer, an attorney hired by Comcast, Miguel Estrada, urged Kenney to veto it. The mayor paused only long enough for his staff to review the legal claims and find the legislation sound.

Estrada, a well-known litigator who has argued 22 cases before the U.S. Supreme Court, claims in the suit to be filed Thursday that any attempt to limit free speech must be rooted in evidence that doing so will solve the problem at hand. He said there is no proof that not asking about salary history, which could be based on a number of factors, including a person’s experience and job performance, is the best way to combat wage discrimination.

“There is no evidence that even if this question were forbidden it would significantly and materially, and those are the words of the Supreme Court, contribute to end the problem in question,” Estrada said Wednesday.

Wonderling said the chamber’s executive committee, consisting of more than two dozen members, last month voted unanimously to file the suit. He said that in his nearly eight years at the chamber, he had not seen a “more visceral reaction to a public policy issue.”

John Fry, chairman of the chamber’s board, said many members feel the law is “unnecessarily burdensome.”

“We didn't take this action lightly,” he said.

Comcast senior executive vice president David L. Cohen has been a critic of the measure and voted, as a member of the chamber’s executive committee, in favor of the legal action. He could not be reached Wednesday, and a Comcast spokesman deferred comment to the chamber.

The scrutiny of Philadelphia’s law comes as other cities are considering similar measures. In fact, the council in New York City passed its own bill blocking questions about salary history as the chamber was putting the finishing touches on its lawsuit Wednesday. A similar law, which Philadelphia’s was modeled after, was passed by the Massachusetts legislature in August.

Neither the efforts in New York City nor those in Massachusetts has faced legal challenges, and both were supported by local chambers of commerce.

City Councilman William Greenlee, who sponsored the legislation, let out a sigh Wednesday after learning of the lawsuit.

“This is quite disappointing, to say the least,” he said.

Greenlee said he understands the effort is not a silver bullet to solving wage disparity. But he said that he thinks it will make a difference and that until a city tries the idea out, no one will have the evidence of its impact the chamber is seeking in its legal arguments.

“We’re not just talking about it and saying, ‘Oh, it's terrible a Latina is getting paid 55 cents or something like that for every dollar a white male is.' ” Greenlee said. “We’re trying to do something.”