House Clears Ledbetter Bill

As expected, the Lilly Ledbetter Fair Pay Act (S. 181) breezed through the U.S. House of Representatives today by a vote of 250 to 177. The House had previously voted to consider the bill under a closed rule excluding the introduction of amendments, virtually guaranteeing its passage. The Senate approved S. 181 on January 22 by a vote of 61-36 without amendment, despite a number of modifications Republican senators attempted to make to this wage discrimination legislation to limit its scope.

The House on January 9 passed an identical bill (H.R. 11) by a margin of 247-171, although this version was combined with the Paycheck Fairness Act (H.R. 12) when it was sent to the Senate for consideration. H.R. 12 would weaken an employer’s affirmative defense in a wage discrimination lawsuit and provide for compensatory and punitive damages, essentially lifting the damages cap for such claims. The Senate decided to consider each measure separately, most likely to ensure that President Obama would have at least one employment-related bill to sign within a month of his taking office.

The Lilly Ledbetter Act effectively eliminates the statute of limitations in wage discrimination cases by resetting the time limit for filing suit every time a claimant receives a paycheck or other form of compensation whose amount stems from an alleged act of discrimination. This bill applies to all claims of compensation discrimination under Title VII, the Age Discrimination in Employment Act, Title I and Section 503 of the Americans with Disabilities Act, and Sections 501 and 504 of the Rehabilitation Act. In addition, this legislation would apply retroactively to May 28, 2007, the day before the U.S. Supreme Court decided in Ledbetter v. Goodyear Tire & Rubber Co. that applying this “paycheck rule” was incorrect. The bill also entitles a plaintiff to recover back pay for up to two years preceding the filing of the charge.

From a logistical standpoint, this bill poses severe problems for employers attempting to gather evidence to defend against wage discrimination lawsuits for events/decisions that occurred years before the wage claim is made. Many current employers will be the unwitting beneficiaries of claims stemming from decisions made by those who no longer work for the company. If this bill is signed into law – which is almost a certainty – anticipate a dramatic increase in wage discrimination claims.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.