The Lilly Ledbetter Fair Pay Act Basics

| Marcus, Ellen

"The Lilly Leadbetter Fair Pay Act Basics"

When we promised yesterday that we would have more on the Lilly Ledbetter Fair Pay Act of 2009 later this week, we hadn’t realized that Ms. Ledbetter would be speaking to the Democratic National Convention about it last night.  As Ms. Ledbetter reminded the crowd last night, the law named after her was the first bill that President Obama signed into law

In a nutshell, the Ledbetter Act was Congress’s response to the U.S. Supreme Court’s holding in Ledbetter v. Goodyear Tire & Rubber Co., Inc., that Ms. Ledbetter, a nearly 20-year employee of Goodyear, did not timely file an EEOC charge against Goodyear alleging that, in violation of Title VII, Goodyear paid her less because of her gender.

The decision was 5-4 – Justice Alito wrote the Court’s opinion, and Justice Ginsburg wrote the dissenting opinion

Lilly Ledbetter had presented evidence at trial that she was paid substantially less by Goodyear than men doing the same job that she did, and contended that the disparity resulted from a number of decisions about her pay by her manager, whom she claimed held a grudge against her for refusing to date him.  Ms. Ledbetter did not file her EEOC charge within 180 days (as we mentioned yesterday, Title VII’s limitations period) of those decisions being made about her pay, but did file the charge within 180 days of her last paycheck from Goodyear. 

The EEOC’s position at the time was that each paycheck delivering discriminatory compensation re-started the 180-day clock.  The Supreme Court rejected this view, holding that Ms. Ledbetter’s EEOC charge was untimely under Title VII, because it was not filed “within 180 days after the alleged unlawful employment practice occurred.”  According to the Supreme Court, for purposes of the Title VII limitations period, the unlawful employment practice occurred when the discriminatory decision about pay was made.  Otherwise, employers could find themselves having to defend against claims arising from decisions made years before, perhaps long after the relevant witnesses left the company and memories grew stale.

With President Obama’s signing of the Ledbetter Act nearly two years after the Supreme Court’s decision, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act were amended – retroactively to May 28, 2007 (the day before the Supreme Court’s decision) – to undo the decision.  Now, those laws expressly provide that a person may file an EEOC charge within 180 (or, sometimes, 300) days of “when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”  So, if Ms. Ledbetter were still working at Goodyear today, so long as she filed her EEOC charge within 180 days of her last discriminatory paycheck, her charge would be timely.

By the way, Ms. Ledbetter also had a claim under the Equal Pay Act, but the lower court threw it out and Ms. Ledbetter didn’t pursue it after that.  The Equal Pay Act prohibits an employer from paying lower wages to a person than the wages the employer pays a person of the opposite sex for equal work.  Ms. Ledbetter’s Equal Pay Act claim did not face the same hurdles as her Title VII claim.  Claims brought under the Equal Pay Act are not subject to a 180-day time limit.  In fact, an employee claiming a violation of the Equal Pay Act can go directly to the courthouse to file her claim (bypassing the EEOC) at any time up to two years (three years for willful violations) from the time of each discriminatory paycheck.  However, unlike Title VII, Equal Pay Act damages are limited to backpay and liquidated damages – compensatory and punitive damages are not available.   That’s why many plaintiffs claiming that they were discriminated against in their pay because of their gender bring claims under both Title VII and the Equal Pay Act.

The proposed Paycheck Fairness Act, which the House passed in 2009 but has twice been defeated in the Senate (most recently this June), is intended to beef up (from employees' perspective) the Equal Pay Act, which has been on the books since President Kennedy signed it into law in 1963.  We will keep you posted.