On Thursday, January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act ("Ledbetter Act"), the first new statute he has signed. The Ledbetter Act amends Title VII of the 1964 Civil Rights Act and the Age Discrimination in Employment Act ("ADEA") to provide that a charge of employment discrimination may be filed within 300 days of each paycheck which is paid pursuant to a discriminatory compensation decision or practice. Because the Ledbetter Act amends Title VII and the ADEA, it applies to all types of discrimination covered by those statutes, including discrimination based on race, color, religion, gender, national origin and age. In addition, because the Americans With Disabilities Act follows the same procedural rules with respect to time limits for filing charges of discrimination as does Title VII, the new Ledbetter Act also applies to claims of discrimination based on disability.
The purpose of the Ledbetter Act is to expressly set aside the May 2007 decision of the United States Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). In Ledbetter, the Supreme Court held that the 300 day chargefiling period1 under Title VII runs from the time a discriminatory decision with respect to pay is first made, and not from the time each paycheck pursuant to that decision is paid. In the Ledbetter case, because the allegedly discriminatory decision with respect to Ledbetter's pay was made years before she learned of it and filed her lawsuit, Ledbetter's claim was found to be untimely. Ledbetter claimed that she had only learned of the difference between her pay and that of her male coworkers through an anonymous note which she received years after the pay discrimination began. Lilly Ledbetter herself played a role in President Obama's campaign ads, discussing her case and Obama's support for Congressional action which would reverse the Supreme Court's decision. Thus, in making the Ledbetter Act a priority of his new administration, Obama has fulfilled a campaign promise. Support for the bill in both the Senate and the House of Representatives fell largely along party lines.
The new statute undoubtedly will make it easier for employees to bring claims of pay discrimination, and makes it more likely that such claims will be pursued, if only because of the attention it brings to the subject. In essence, however, the Ledbetter Act restored the law with respect to the limitations period for filing a charge of pay discrimination to what it had been prior to the Supreme Court's Ledbetter decision. Specifically, in a 1986 case, Bazemore v. Friday, 478 U.S. 385, 395 (1986), Justice Brennan for a unanimous Supreme Court had famously written: "Each week's paycheck that delivers less to a black than to a similarly-situated white is a wrong actionable under Title VII . . ."Thus, for more than twenty years before the Supreme Court decided the Ledbetter case, it had been commonly understood that no firm 300-day window following the discriminatory pay decision applied to claims of pay discrimination. Similarly, claims of gender-based pay discrimination under the Equal Pay Act ("EPA") are governed by the timeliness provisions of the Fair Labor Standards Act ("FLSA")(of which the EPA is a part), and under the FLSA, claims charging a gender-based denial of equal pay generally accrue each day that an employee is paid in a manner which violates the statute.
The Ledbetter Act may not open new floodgates of litigation, because its principal provision merely restores the law to what most employment law practitioners understood it to be prior to the Supreme Court's decision. However, one aspect of the law is likely to create confusion. Specifically, the statutory language allows for more leniency in the time for filing a charge based on "when an individual is affected by application of a discriminatory compensation decision or other practice."This language is likely to engender litigation about what sorts of discriminatory decisions or practices are among those subject to the more flexible charge-filing rule established in the new statute, and that issue may ultimately return to the Supreme Court for decision.
The Senate, but not the House of Representatives, had also passed a bill along with the Ledbetter Act entitled the Paycheck Fairness Act, which would amend the Equal Pay Act (and therefore would apply only to gender-based discrimination). The Paycheck Fairness Act is intended to abolish certain defenses an employer has been entitled to assert under the Equal Pay Act, and therefore make it easier for employees to bring claims of gender-based pay discrimination under the Equal Pay Act. Specifically, the Paycheck Fairness Act would abolish the employer's affirmative defense that a wage differential was based on a factor other than sex, and it would also eliminate the employer's ability to argue that only comparisons among employees in the same geographic market or location as the complaining employee are relevant. In addition, the Paycheck Fairness Act would expand the damages available under the EPA to permit recovery of compensatory and punitive damages, rather than just the back pay and liquidated damages which are currently available. The House has not yet acted on the Paycheck Fairness Act, and it remains to be seen what will happen to that bill.
Footnote
1. 180 days in states without a Title VII deferral agency with which charges of discrimination may be filed.
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