ACTION ALERT: Congress set to vote on the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act

The House is scheduled to vote on the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act Tomorrow (Friday 1/09/09) and the Senate will take up the bills next week. CONTACT YOUR REPRESENTATIVES TODAY and encourage them to vote YES on both the Ledbetter Fair Pay Act and the Paycheck Fairness Act

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Lilly Ledbetter Fair Pay Act:

DETAILED SUMMARY OF THE LILLY LEDBETTER FAIR PAY ACT - H.R. 2831

On July 31, 2007, the House passed H.R. 2831, the Lilly Ledbetter Fair Pay Act. This is a critical bill for women, rectifying the Supreme Court decision in Ledbetter v. Goodyear that made it much harder for women and other workers to pursue pay discrimination claims. This week, the Senate will take up the House-passed version of the bill – in an attempt to send the bill directly to the President’s desk.

In May 2007, the Supreme Court handed down a 5-4 decision, Ledbetter v. Goodyear, which tosses aside longstanding prior law and makes it much harder for women and other workers to pursue pay discrimination claims. On May 29, 2007, the Supreme Court handed down a 5-4 ruling that would make it significantly harder for women and other workers to sue their employers for discrimination in pay. The Court ruled that since Lilly Ledbetter, a long-time employee of Goodyear, had not filed her charge of pay discrimination within 180 days of her employer’s initial decision to pay her less, she could not receive any relief.

By its ruling, the Supreme Court stripped Title VII of the Civil Rights Act of much of its potency. As a New York Times editorial (5/31/07) pointed out, “The Supreme Court struck a blow for discrimination this week by stripping a key civil rights law of much of its potency. The majority opinion … forced an unreasonable reading of the law, and tossed aside longstanding precedents to rule in favor of an Alabama employer that had underpaid a female employee for years.”

In overturning the Supreme Court, this bill simply restores the longstanding interpretation of Title VII of the Civil Rights Act. The Supreme Court ruling overturned longstanding precedent. Under longstanding precedent and the interpretation of the EEOC, every paycheck resulting from an earlier discriminatory pay decision is considered a violation of Title VII of the Civil Rights Act and other key anti-discrimination statutes. Therefore, as long as a worker files within 180 days of a discriminatory paycheck, their charges are considered as timely. The legislation would also clarify that, once a worker files a charge, he or she needs not keep filing new charges with each new paycheck.

Lilly Ledbetter’s case was a clear case of pay discrimination on the basis of sex. Lilly Ledbetter worked for nearly 20 years as a supervisor at a Goodyear Tire and Rubber Company facility in Alabama. She sued the company after learning that she was paid less than her male counterparts at the facility, despite having more experience than several of them. A jury found that her employer had unlawfully discriminated against her on the basis of sex. However, the Supreme Court ruled that Ledbetter had waited too long to sue, despite the fact that she filed a charge with the EEOC as soon as she received an anonymous note alerting her to pay discrimination. The court ruled that, since Ledbetter did not raise a claim within 180 days of the employer’s initial decision to pay her less, she could not receive any relief. Employees in Ledbetter’s position would be forced to live with discriminatory paychecks for the rest of their careers under this Supreme Court decision.

This Supreme Court decision ignores the realities of the workplace. The majority in this decision failed to take into account the realities of the workplace. Employees generally do not know enough about what their co-workers earn, or how pay decisions are made, to file a complaint precisely when discrimination first occurs. Indeed, in a large proportion of American companies, salaries are confidential. The court’s new rules would make it extraordinarily difficult for women and other victims of pay discrimination to sue under Title VII.

In her dissent, Supreme Court Justice Ruth Bader Ginsburg urged Congress to quickly pass a law correcting this damaging decision. As the New York Times (5/30/07) reported, “In a vigorous dissenting opinion that she read from the bench, Justice Ruth Bader Ginsburg said the majority opinion ‘overlooks common characteristics of pay discrimination.’ She said that given the secrecy in most workplaces about salaries, many employees would have no idea within 180 days that they had received a lower raise than others. … Justice Ginsburg noted that even a small differential ‘will expand exponentially over an employee’s working life if raises are set as a percentage of prior pay.’” In her dissent, Justice Ginsburg invited Congress to correct the Court’s misinterpretation of Title VII: “[t]he ball is in Congress’ court … the Legislature may act to correct this Court’s parsimonious reading of Title VII.”

Finally, the bill maintains the law’s current statute of limitations and limits on back pay recovery. Contrary to opponents’ claims, the bill does not eliminate the statute of limitations. Under this bill, an employee must still file a charge within the statutory filing period after receiving a discriminatory paycheck. Moreover, employees have no incentive to sit on their rights. The bill maintains Title VII’s limitation of two years for back pay recovery. The longer an employee waits, the more back pay is rendered unrecoverable.

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. 

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Paycheck Fairness Act:

The Paycheck Fairness Act would help end the discriminatory practice of paying men and women unequally for performing the same job. The bill, which was introduced by Rep. Rosa DeLauro, will strengthen the Equal Pay Act and close the loopholes that have allowed employers to avoid responsibility for discriminatory pay.

Although the wage gap between men and women has narrowed since the passage of the landmark Equal Pay Act in 1963, gender-based wage discrimination remains a problem for women in the U.S. workforce. According to the U.S. Census Bureau, women only make 78 cents for every dollar earned by a man. The Institute of Women’s Policy Research found that this wage disparity will cost women anywhere from $400,000 to $2 million over a lifetime in lost wages. 

DETAILED SUMMARY OF THE PAYCHECK FAIRNESS ACT - H.R. 1338

The Paycheck Fairness Act:

(1) Enhances the Enforcement of Equal Pay Requirements

a. In suits where a female employee alleges wage discrimination, the employer could raise an affirmative defense to justify the disparate treatment only by demonstrating that a bona fide factor other than sex, such as education, or experience and one that is related to the position in question and furthers a legitimate business purpose is the reason for the difference in pay;

i. The DeLauro proposal imposes a stricter burden on an employer who wishes to affirmatively defend its actions by citing non-gender reasons for the difference in wages. Currently, under the Equal Pay Act once a prima facie case has been established by the employee, the burden shifts to the employer who can justify the pay differential by citing a differential based on any factor other than sex. This affirmative defense has been used as a broad catch-all exception that embraces an almost limitless number of factors, so long as they do not involve sex.

b. Employers would be prohibited from retaliating against employees who share salary information with their co-workers;

c. Female employees would be able to sue for compensatory and punitive damages. Currently, the Equal Pay Act only provides for back pay and double that amount for a willful violation.

(2) Provides for Enhanced Training

a. Subject to the availability of funds, the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs would be required to provide training to Commission employees on matters involving discrimination in the payment of wages;

b. The Secretary of Labor would be authorized, after consultation with the Secretary of Education, to establish a grant program to carry out negotiation skills training programs for girls and women. This training would help girls and women strengthen their negotiations skills to obtain higher salaries and the best compensation packages possible.

(3) Provides for Research, Education and Outreach

a. The Secretary of Labor would be directed to conduct studies and provide information to employers, labor organizations and the general public concerning ways to eliminate pay disparities.

(4) Establishes an Employer Recognition Program and Provides Technical Assistance

a. The Secretary of Labor would be directed to develop guidelines for employers to evaluate job categories based on objective criteria such as educational and skill requirements, working conditions, and decisionmaking responsibility.

b. The Secretary of Labor would also be required to establish a program to provide recognition for employers who adjust their wage scales to ensure that women are paid fairly in comparison to men.

c. The Secretary of Labor would be afforded the ability to provide technical assistance to an employer in carrying out wage evaluations.