Senate Votes in Support of Fair Pay Act

On January 22, 2009, the United States Senate voted to pass the Lilly Ledbetter Fair Pay Act of 2009. If into becomes law, the Act would reverse 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 too late when she filed her gender discrimination lawsuit against Goodyear. In her case, Ms. Ledbetter as seeking damages because she was paid a lower salary than men in comparable positions at the company. The Supreme Court ruled 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, since her salary remained lower than her male coworkers throughout her career.

The Ledbetter decision has been highly criticized ever since it was decided. One problem with it is that employees generally do not know how much their coworkers are paid, often making it difficult or impossible for them to determine that their employers are discriminating against them 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 would amend 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.

As a result, under the law a new 180 (or 300) day period would start 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 would permit an employee to prove damages resulting from pay discrimination for up to 2 years before the employee filed a charge of discrimination with the EEOC. The law, as currently drafted, would be retroactive so it would apply to all covered discrimination that occurred on or after May 28, 2007, as well as to all claims that have been pending in the EEOC or in Court since that date.

Before the Fair Pay Act can become law, it still needs to be approved by the United States House of Representatives, and then to be signed into law by President Obama.