Lilly Ledbetter Fair Pay Act

On January 27, 2009, the House gave final approval to the Lilly Ledbetter Fair Pay Act  by a vote of 250-177.  President Obama signed the measure into law on January 29, 2009.
 

  • Restores employee rights to challenge pay discrimination.
  • A narrow fix to reverse Ledbetter and restore prior law.  

On May 29, 2007, in its 5-4 Ledbetter v. Goodyear decision, the Supreme Court severely restricted the rights of employees to challenge unlawful pay discrimination.  Under the Ledbetter ruling, if an employee does not file a claim within 180 days of her employer's decision to pay her less, she is barred forever from challenging the discriminatory paychecks that follow.  The discrimination is immunized.  And the employee must live with discriminatory pay for the rest of her career.  (Note: Under certain circumstances in some jurisdictions, the statute of limitations is 300, not 180, days for discrimination claims.)

Under the law before Ledbetter, every discriminatory paycheck was a new violation that restarted the clock for filing a claim.  The bill restores that rule.

The Court’s misguided decision is already having very harmful consequences far beyond Ms. Ledbetter’s case. According to The New York Times, the Ledbetter decision was cited in at least 300 cases in the 19 months after the Supreme Court's ruling. Not only have pay discrimination cases been adversely impacted, but Fair Housing, Title IX, and even the Eighth Amendment also have been affected.

 

The Ledbetter v. Goodyear Decision

Supervisor Lilly Ledbetter worked for Goodyear for more than 19 years. She experienced sexism on the job.  A supervisor, for example, told her that "the plant did not need women, that [women] didn't help it, [and] caused problems."  But she did not know that such animus extended to her pay until 1998, when someone anonymously left a paper in her mailbox showing her what she was being paid compared to her male counterparts.  Her supervisor salary was 20 percent lower than that of the lowest-paid male supervisor.  She immediately filed an EEOC claim under Title VII.

A jury found that Goodyear had intentionally discriminated against her in pay and awarded her $3.8 million in back pay and damages, which was reduced to $360,000 because of caps on Title VII damages.

The Supreme Court reversed the decision, 5-4.  The majority, led by Alito, found that while Ledbetter may have filed a charge within 180 days of receiving a discriminatory paycheck, she did not file within 180 days of Goodyear's decision to pay her less.  The Court rejected prior case law holding that every discriminatory paycheck is a new violation and dismissed her case.  Despite the pay discrimination found by a jury, Ledbetter had no remedy.

In her dissent, Justice Ginsburg said the majority "does not comprehend, or is indifferent to, the insidious way in which women can be victims of pay discrimination."  She explained that the majority's rule makes discriminatory pay decisions "a fait accompli beyond the province of Title VII ever to repair."  The majority ignored precedent, congressional intent, and the realities of the workplace.  She called on Congress to reverse the ruling legislatively.

The bill does precisely that.

Supreme Court Decision Guts the Law Against Pay Discrimination

After Ledbetter, to have the right to challenge pay discrimination an employee must file her charge within 180 days of the decision to pay her less.  This requirement ignores the realities of the workplace.  As Ledbetter experienced, it is very difficult to discover pay discrimination:

  • One-third of employers have adopted specific rules prohibiting employees from discussing their pay with their coworkers.
  • Even where employees are permitted to discuss pay, social norms of the workplace keep employees from asking or answering questions from each other about their pay.
  • Discriminatory pay compounds over time and may become readily apparent only long after the initial decision to discriminate was made.

Given how difficult it is for an employee to eventually discern pay discrimination, by narrowing the window for a timely claim, the Supreme Court has rendered civil rights law on pay virtually unenforceable.

Supreme Court Decision Creates All the Wrong Incentives

Bad Incentives for the Employer:

Before the Ledbetter decision, when any discriminatory paycheck was subject to challenge, employers had an incentive to review their payrolls and pay structures and correct discrimination. 

After the Ledbetter decision, employers have an incentive to simply keep discriminatory pay decisions hidden for 180 days and then never correct them.  Once 180 days has elapsed since the decision, the employer can continue paying discriminatory wages to the employee for the rest of her career and reap the economic benefit of not paying certain employees as much as he should.

Bad Incentives for the Employee:

Before the Ledbetter decision, when employees could file a charge after any discriminatory paycheck, employees could attempt to figure out whether their suspicions of discrimination were justified before jumping the gun and filing a charge of discrimination.  When they had sufficient evidence, they could approach the employer and attempt to resolve their complaint informally.

After the Ledbetter decision, because employees can be fired for complaining to their employer about discrimination without sufficient evidence, employees now have an incentive to immediately file a charge with the EEOC after every pay decision, simply to preserve their rights to challenge discrimination.  The law was intended to encourage informal conciliation between employers and employees.  The Ledbetter decision encourages immediate filings, sparking more conflict and litigation.

The Lilly Ledbetter Fair Pay Act Is a Narrow Fix to Ledbetter v. Goodyear

GMLedbetterRA2007.JPGUnder the bill, every paycheck or other compensation resulting, in whole or in part, from an earlier discriminatory pay decision or other practice would constitute a violation of Title VII, which guards against discrimination on the basis of race, sex, color, national origin, and religion.

In other words, each discriminatory paycheck would restart the clock for filing a charge. As long as workers file their charges within 180 days (or 300 days in some jurisdictions) of a discriminatory paycheck, their charges will be considered timely.

Since the Ledbetter decision can impact pay discrimination claims under other statutes, the bill ensures that these simple reforms extend to the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act to provide the same protections for victims of age and disability discrimination. 

No one should ever be forced to work for discriminatory pay without recourse.

The Lilly Ledbetter Fair Pay Act Restores Prior Law

  • Before Ledbetter, the law was clear in circuit after circuit:  every discriminatory paycheck was a new violation of the law that restarted the clock for filing a claim.  Only the 11th Circuit, in the Ledbetter appeal itself, strayed from this rule.
  • The EEOC had adopted the rule that every discriminatory paycheck was a new violation of the law, using the rule in its own handbook on discrimination.
  • Employers and employees had lived with and accepted this rule for years.  While opponents of the bill claim that the sky will fall if Ledbetter is reversed, the sky certainly had not fallen before Ledbetter
  • The bill maintains the current 180/300 day statute of limitations.  The clock will run out if the discriminatory pay stops -- either because the employee left employment or the employer has started paying the employee fairly.
  • The bill creates no incentive for employees to sit on their rights.  Title VII restricts back pay to just two years -- the longer you wait to file, the less pay you will receive.  The bill does not change that.  In the real world, employees subject to discrimination want and need their fair pay now -- they have no reason to wait.  In the odd case where an employee intentionally sits on her rights and files long after knowing she had a claim, the court can dismiss the case under the common law employer defense of laches.

Supporters of the Lilly Ledbetter Fair Pay Act

Letter of support from Lilly Ledbetter »

9to5, National Association of Working Women
Atlanta 9to5 Working Women
9to5 Colorado
9to5 Milwaukee
9to5 Bay Area
Los Angeles 9to5
ACLU
Alliance for Justice
American Association of University Women
AAUW of South Dakota
AAUW of Alabama
AAUW of Alaska
AAUW of Arizona
AAUW of Arkansas
AAUW of California
AAUW of Colorado
AAUW of Connecticut
AAUW of Delaware
AAUW of District of Columbia
AAUW of Florida
AAUW of Georgia
AAUW of Hawaii
AAUW of Idaho
AAUW of Illinois
AAUW of Indiana
AAUW of Iowa
AAUW of Kansas
AAUW of Kentucky
AAUW of Louisiana
AAUW of Maine
AAUW of Maryland
AAUW of Massachusetts
AAUW of Michigan
AAUW of Minnesota
AAUW of Mississippi
AAUW of Missouri
AAUW of Montana
AAUW of Nebraska
AAUW of Nevada
AAUW of New Hampshire
AAUW of New Jersey
AAUW of New Mexico
AAUW of New York
AAUW of North Carolina
AAUW of North Dakota
AAUW of Ohio
AAUW of Oklahoma
AAUW of Oregon
AAUW of Pennsylvania
AAUW of Rhode Island
AAUW of South Carolina
AAUW of Tennessee
AAUW of Texas
AAUW of Utah
AAUW of Vermont
AAUW of Virginia
AAUW of Washington
AAUW of West Virginia
AAUW of Wisconsin
AAUW of Wyoming
A Better Balance: The Work and Family Legal Center
American Federation of Teachers
American Federation of Labor-Congress of Industrial Organizations (AFL-CIO).
Association for Women in Science
American Jewish Committee
Anti-Defamation League
Bazelon Center for Mental Health Law
BCN Consulting
Business and Professional Women/USA
Arkansas Federation of Business and Professional Women
Business and Professional Women/Arizona
Business and Professional Women/Florida
Business and Professional Women/Iowa
Business and Professional Women/Kansas
Business and Professional Women/Maine
Business and Professional Women/New Jersey.
Business and Professional Women/Rhode Island
Business and Professional Women/Texas
Business and Professional Women/Virginia
Business and Professional Women of New York State
Maryland Business and Professional Women
Massachusetts Federation of Business and Professional Women
Michigan Federation of Business and Professional Women
Minnesota State Federation of Business and Professional Women
Missouri Federation of Business and Professional Women Clubs, Inc
Montana Business and Professional Women
Nebraska Federation of Business and Professional Women
New Mexico Federation of Business and Professional Women
Ohio Federation of Business and Professional Women
Oregon Business and Professional Women
Pennsylvania Federation of Business and Professional Women
Tennessee Federation of Business and Professional Women
Utah State Business and Professional Women
Center for Inquiry
Clearinghouse on Women's Issues
Coalition for Equal Pay (south SF Bay Area)
Coalition of Labor Union Women
Equal Rights Advocates
Federally Employed Women
Feminist Majority
Finger Lakes Women's Bar Association
First Impressions
Gender Equity Club at the University of Hawaii at Manoa
General Federation of Women's Clubs
Hadassah, the Women's Zionist Organization of America
Hard Hatted Women
Idaho Women Lawyers, Inc.
Iowa Commission on the Status of Women
Law Students for Reproductive Justice
Legal Momentum
Maine Women's Lobby
Mexican American Legal Defense & Educational Fund (MALDEF)
MHB Consulting, LLC
Michigan Federation of Business and Professional Women
Minnesota State Federation of Business and Professional Women
Missouri Federation of Business and Professional Women Clubs, Inc
MomsRising
Montana Business and Professional Women
Montgomery County Commission for Women
National Asian Pacific American Women’s Forum
National Association of Commissions for Women
National Association of Mothers' Centers and its MOTHERS Initiative
National Association of Nurse Practitioners in Women's Health (NPWH)
National Capital Area Union of Retirees (NCAUR)
National Committee on Pay Equity »
National Council of Jewish Women
National Council of Negro Women
National Council of Women's Organizations
National Education Association
National Employment Lawyers Association
National Family Planning & Reproductive Health Association
National Organization for Women
National Partnership for Women and Families »
National Women’s Law Center
National Women's Conference Committee
National Women's Political Caucus
New York Women's Agenda
OWL - The Voice of Midlife and Older Women »
People For the American Way »
Project Kid Smart
Sisters in the Building Trades Inc
Southwest Women's Law Center
The Church Women United Board
The Lawyers’ Committee for Civil Rights Under Law
The WAGE Project
Union for Reform Judaism
United Methodist Church, General Board of Church and Society
Washington Office Of Public Policy, Women's Division, General Board of Global
Ministries
Wider Opportunities for Women
Women’s City Club of New York
Women's Committee of 100
Women's Division
Women Employed
Women’s Information Network
Women’s Law Center of Maryland Inc.
Women’s Law Project
Women of Reform Judaism
Women Under Forty PAC
Women’s Voices. Women Vote Action Fund
Women Work! The National Network for Women's Employment
YWCA USA
Click here to read a letter of support from all of the above organizations »

AARP »
U.S. Women's Chamber of Commerce »
Institute for Women's Policy Research »