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LABOR & EMPLOYMENT LAW — 01/22/09

Senate moves forward on the Lilly Ledbetter Fair Pay Act

Unlike in the last legislative session when the Senate fell four votes short of the 60 required to invoke cloture, on January 15, 2009, the Senate voted 72-23 to invoke cloture and proceed with floor debate and a vote on final passage of the Lilly Ledbetter Fair Pay Act of 2009 (S. 181). The bill is seen as a legislative "fix" to the US Supreme Court's controversial May 29, 2007, decision in Ledbetter v Goodyear Tire & Rubber Co, Inc (89 EPD ¶42,827), where the High Court limited the time in which employees can bring disparate pay claims under Title VII.

Media reports indicate that a final vote on the bill could occur within a week, with Senate Republicans wanting more time to investigate adding possible amendments to the bill, and voicing concerns that the legislation weakens the statute of limitations for employment discrimination claims and is designed to create a massive amount of new litigation in the courts. One amendment expected to be offered is from Senator Kay Bailey Hutchison (R-Tex). The amendment, which would mirror the Title VII Fairness Act, legislation she introduced in last legislative session (S. 3209) and also just reintroduced in the Senate (S. 166), would extend the time limit workers have to file employment discrimination suits in certain cases. The amendment would extend the time limits employees have to file employment discriminations suits if the employee can demonstrate that he or she did not have, and should not have been expected to have, enough information to support a reasonable suspicion of discrimination on the date in which the alleged unlawful employment practice occurred. If the worker makes such a showing, the charge filing period would begin to run when the worker has or should be expected to have, enough information to support a reasonable suspicion of such discrimination.

Any changes to the bill made by the Senate would require negotiations with the House, which approved the measure (H.R. 11) January 9 by a vote of 247-171. The bill, which faced a veto threat from President George W. Bush during the last legislative session, has the backing of President-elect Barack Obama. It is the intention of the Congressional Democrats for the Lilly Ledbetter Fair Pay Act to be potentially the first bill Obama signs into law when he takes office January 20. The same day the House approved the Lilly Ledbetter Fair Pay Act, it passed the Paycheck Fairness Act (H.R. 12) by a vote of 256-163.

The Paycheck Fairness Act would amend the Equal Pay Act of 1963 (EPA) by imposing stiffer penalties against employers who violate the EPA, prohibit employers from retaliating against employees who share salary information with their coworkers and require employers who make legitimate employment decisions based on "factors other than sex" to prove those factors are "job-related" and "consistent with business necessity." While the House combined both fair pay bills for Senate consideration, the Senate is considering the two bills separately, dealing with the Lilly Ledbetter Fair Pay Act first. No date has been set for floor debate on the Paycheck Fairness Act in the Senate.

Background. In Ledbetter, the Supreme Court limited the time in which employees can bring disparate pay claims under Title VII. The High Court held that employees cannot bring Title VII disparate pay claims alleging discrimination occurring outside the 180-day time period (or a 300-day period if the charge is also covered by a state or local antidiscrimination law) for filing a charge with the Equal Employment Opportunity Commission (EEOC), even when a paycheck is received during that same period. "Treating pay discrimination as a discrete act, limited to each particular pay-setting decision," the Court explained that the unlawful employment action at issue is the employer's decision regarding the pay differential, not the subsequent issuance of paychecks reflecting that differential. In its holding, the Court emphasized the distinction between past acts of disparate pay (which occur when employers make adverse pay decisions) and the present effects of those acts (which are found in employees' paychecks), when concluding that the Petitioner, Lilly Ledbetter, should have challenged Goodyear's alleged intentionally discriminatory pay decision within 180 days of the decision itself.

Bill provisions. Introduced by Senator Barbara Mikulski (D-Md) on January 8, the Lilly Ledbetter Fair Pay Act would amend Title VII, the Age Discrimination In Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Rehabilitation (Rehab) Act to impose a "paycheck accrual" rule specifying that discriminatory pay decisions or other discriminatory practices that start the 180-day time period (or a 300-day period if the charge is also covered by a state or local antidiscrimination law) for filing a charge of discrimination with the Equal Employment Opportunity Commission occur each time a discriminatory paycheck is issued. Accordingly, the bill would clarify that every paycheck or other compensation resulting, in whole or in part, from an earlier discriminatory pay decision constitutes a violation of Title VII, the ADEA, ADA or Rehab Act. As long as employees file their charges within 180 days of a discriminatory paycheck, their charges would be considered timely. In addition, employees who are victims of discrimination would be entitled to up to two years of back pay, as already provided by the various Acts.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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