Senate Passes Ledbetter Fair Pay Act

On January 22, 2009, the Senate passed the Lilly Ledbetter Fair Pay Act by a vote of 61-36, a filibuster proof majority.  The legislation will now need to be reconciled with the version passed by the House of Representatives, which included additional provisions that would increase penalties and clear the way for class action lawsuits under the Equal Pay Act.  It is expected that this legislation will soon be passed by both houses of Congress, and President Obama is expected to sign it. 

When it becomes law, the new legislation will overturn the Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber, in which the Court rejected Lilly Ledbetter’s Title VII sex discrimination claim against Goodyear Rubber.  To maintain a lawsuit under Title VII, an employee must first file a charge of discrimination within 180 days after the alleged act of discrimination occurred.  (In states like Illinois with their own civil rights enforcement agencies, the charge must be filed within 300 days.)  In Ledbetter’s case, the Supreme Court found that the alleged discriminatory pay decisions occurred more than 180 days before Ledbetter filed her charge of discrimination.  Ledbetter argued that she should be allowed to maintain her lawsuit because she continued to feel the effects of the discriminatory pay decision within the 180-day period.  Rejecting this argument, the Supreme Court held that an act of discrimination “occurs” when the decision is made, not when its effects are felt. 

Reversing the Supreme Court’s ruling, the Ledbetter Fair Pay Act amends Title VII, the Age Discrimination in Employment Act, the Americans With Disabilities Act, and the Rehabilitation Act to provide that, with respect to compensation discrimination, an act of discrimination occurs when the discriminatory practice or decision is adopted, when an individual becomes subject to the practice, or when an individual is affected by the practice, including each time compensation or benefits are paid. 

This legislation will open the door to many claims of pay discrimination that, under current law, would be time-barred.  Further, because it will allow employees to challenge employment decisions that occurred many years ago, the claims allowed by the new law may be particularly difficult for employers to defend, as witnesses and documentation may no longer be available. 

The Washington Post reports the Senate’s approval of the Act in an article found here.