Mountain Law: What is the Lilly Ledbetter Fair Pay Act?
October 30, 2012
President Obama touted at one of the recent debates his accomplishment of signing into law the Lilly Ledbetter Fair Pay Act of 2009. What is the act and what does it do?To provide some background, Ledbetter was employed by Goodyear Tire & Rubber Company from 1979 until 1998. After retiring in 1998, she filed a claim against Goodyear under Title VII (the federal discrimination statute) alleging that she had been denied pay raises a number of times during her employment because of sexual discrimination. As a result, she was earning significantly less than her male counterparts at the end of her time with the company. At trial, the jury found in Ledbetter’s favor and awarded her back pay and other damages. Goodyear then appealed the case on the basis that Title VII requires claims to be made within a few months after alleged discrimination occurs and Ledbetter did not show that any discrimination occurred during this period before she made her claim. In response, Ledbetter argued that each lower paycheck she received was discriminatory because it reflected the company’s past discriminatory actions. The case ultimately reached the Supreme Court, which found in a four to five decision in 2007 that Ledbetter’s claim was untimely under Title VII. In reaching this decision, the court focused on when the discrimination itself occurred, not when the impact was felt. It found that a person must show that discrimination itself occurred during the few months allowed for a Title VII claim, not just that the impact of the discrimination occurred during that period (e.g. in the form of lower paychecks). Otherwise, Ledbetter could make a claim in 1998 for Goodyear’s discrimination in 1979 because the impact was felt in 1998. The court concluded that, when Congress imposed the strict Title VII claims period, it did not intend to allow claims for actions occurring outside the claims period.Congress did not agree with the Supreme Court’s interpretation of Title VII, so it passed the act in direct response to, and for the purpose of reversing, the Supreme Court’s decision. The act specifically expressed Congress’s belief that the decision “unduly restrict[ed] the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices, contrary to the intent of Congress.” As a result, the act amended Title VII, the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA) and the Rehabilitation Act of 1973 so that the time for an employee to make a claim against an employer for illegal practices resulting in unequal pay or benefits under any of those laws can run from when the employee receives the unequal pay or benefits. The act would allow Ledbetter to make a claim against Goodyear for discrimination resulting in unequal pay so long as she made the claim within a few months after receiving her last paycheck with the unequal pay. The act is retroactive to May 28, 2007, meaning it would include any illegal employment practice that occurred before May 2007 if it resulted in lower pay or poorer benefits the employee was still receiving as of May 28, 2007.Proponents of the act trumpet that it greatly expands the time in which employees can make claims for pay discrimination, which is necessary given the difficulty of discovering pay disparity. In contrast, critics of the law bemoan that it overturns longstanding Supreme Court precedent and will expose employers to stale claims that may be difficult to defend given the passage of time. As with many laws, where people stand may depend on where they sit. Noah Klug is principal of The Klug Law Firm, LLC, located in Summit County. His practice focuses on business, real estate, and litigation. He may be reached at (970) 468-4953 or Noah@TheKlugLawFirm.com.