Chamber files new suit, leaving city's wage equity law on hold

For months, Philadelphia’s chamber of commerce has said a broad coalition of businesses were opposed to the city’s new wage equity law — while declining to provide names for most of those concerned business owners.

Two weeks ago, a judge pointed out the deficiency when he tossed out a suit the chamber filed opposing the law, saying it hadn’t identified a single business the law would harm.

This week, the chamber finally named names.

In an amended lawsuit filed Tuesday, it identified more than a dozen members it says are opposed to the law, which would ban them from asking job applicants for salary history information. The list includes Children’s Hospital of Philadelphia, Drexel University, and Comcast Corp., the company that along with the chamber began quietly lobbying against the legislation in January.

“What is certain is that the ordinance will significantly disadvantage Philadelphia businesses — and especially the city’s small businesses — by depriving them of important information on which they regularly and appropriately rely to find the right employees,” the chamber’s lawsuit said.

Mike Dunn, a spokesman for Mayor Kenney, on Wednesday said the city remained “confident that the law will withstand this challenge.” The city has agreed to delay enforcement of the law, which was to take effect May 23, until a there is ruling on a motion for a preliminary injunction.

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.

In its suit, the chamber said the law unfairly violates businesses’ right to freedom of speech, which can only be limited if there is clear evidence doing so will solve a problem at hand. It argues the law is a “poor fit for achieving the city’s anti-discrimination objective.”

Councilman Bill Greenlee, who introduced the legislation, has argued the law does not keep applicants from providing salary history information. He said it only keeps businesses from being the first to ask for it.

“They still could have a discussion. They still could have negotiations,” Greenlee said. “This bill didn’t stop any of that. All it says is, you can’t start with the premise of what the person made if they’re not willing to disclose it.”

The city’s lawyers have yet to respond to the chamber’s legal arguments, instead saying the chamber did not have standing to file the suit since it had not identified a member who would be harmed. Federal court Judge Mitchell Goldberg agreed with the city last month.

The judge gave the chamber 14 days to file an amended complaint. In the suit, the chamber names various businesses and gives different ways the law would harm them, including:

  • CHOP, which the suit says recruits nationally for specialized positions and “could not readily determine how its compensation fits in the marketplace,” hurting its competitiveness.
  • Drexel, which the suit says receives “dozens or even hundreds” of applications for a single position and uses wage history as one of several factors to narrow the pool.
  • Comcast, which it says would not be able to “determine an appropriate compensation offer without discussing with the applicant what he or she might be leaving behind.”

A similar law passed by the Massachusetts legislature in August, and which Philadelphia’s law was modeled after, has not been challenged in court.

Correction: This story has been updated to reflect that Judge Mitchell Goldberg is a federal court judge. 

Thirteen business leaders are named in the suit. They are:

  • Emily Bittenbender, founder of Bittenbender Construction
  • David L. Cohen, Senior Executive Vice President of Comcast Corp.
  • Robert Croner, Senior Vice President of Human Resources of Children's Hospital of Philadelphia
  • Heidi Cunningham, talent acquisition employee at Liberty Property Trust
  • Keith S. DiMarino, president of DocuVault Delaware Valley LLC
  • John Fry, president of Drexel University
  • Susan Jacobson, president of Jacobson Strategic Communications
  • Anna L. Mikson, senior vice president and chief human resources officer of FS Investments
  • Ronald P. Sandmeyer, Jr. president and CEO of Sandmeyer Steel Company
  • Judith M. von Seldeneck, founder of Diversified Search
  • Robert C. Wonderling, president of the Chamber of Commerce for Greater Philadelphia
  • Christina Wong, vice president of ESM Productions
  • Harold L. Yoh III, CEO of Day & Zimmermann