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President Obama Signs Lilly Ledbetter Fair Pay Act

Earlier today, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009. The Act reverses the United States Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007) which requires an employee to bring a federal claim of pay discrimination in violation of the Title VII of the Civil Rights Act of 1964 (Title VII) within 180 days (or in some states, including New York and New Jersey, within 300 days) of the decision that caused the pay disparity.

In the Ledbetter case, the Supreme Court ruled that Lilly Ledbetter was outside of Title VII’s filing deadline when she initiated her gender discrimination claim against Goodyear. Ms. Ledbetter was seeking damages because she was paid less than men in comparable positions at the company. The Supreme Court found that her claim was untimely because she did not file a charge of discrimination with the United States Equal Employment Opportunity Commission (EEOC) within 180 days after the company’s initial discriminatory decision, even though she was still underpaid due to the past discrimination in that her salary remained lower than her male coworkers.

The Ledbetter decision was highly criticized on the basis that employees usually do not know how much their coworkers are paid, making it difficult or impossible for them to determine that they are experiencing discriminating against with respect to their compensation. As a result, employees who have been underpaid because of their race, color, sex (gender), religion, national origin, or disability are unlikely to know about it until long after the 180 (or 300) day EEOC filing deadline.

The Lilly Ledbetter Fair Pay Act amends both Title VII and the Americans with Disabilities Act of 1999 (ADA) by making it a separate violation of the law each time (1) a company adopts a discriminatory compensation decision or practice, (2) a company subjects an employee to a discriminatory compensation decision or practice, or (3) an employee is affected by a discriminatory compensation decision or practice, including each time an employee receives any wages, benefits, or other compensation that is at least in part the result of a discriminatory decision or practice.

Under the law, a new 180 (or 300) day period starts each time an individual is paid less due to his or her race, color, sex (gender), religion, national origin, or disability. In addition, the law permits an employee to prove damages resulting from pay discrimination for up to two years before the employee filed a charge of discrimination with the EEOC. The law is retroactive, applying to all covered discrimination that occurred on or after May 28, 2007, and to all claims that have been pending in the EEOC or in Court since that date.

As discussed in a previous article, the United States Senate voted in favor of the the Fair Pay Act on January 22, 2009. The House of Representatives voted in favor of the Act on January 27, 2009, paving the way for the President to sign it into law today.