N. Pete Lareau on Lilly Ledbetter Fair Pay Act

N. Pete Lareau on Lilly Ledbetter Fair Pay Act

On January 22, 2009, President Obama signed the Lily Ledbetter Fair Pay Act of 2009. This commentary, written by N. Pete Lareau, after summarizing the facts and holding of the Supreme Court's Ledbetter decision, examines the new law, what it is intended to accomplish, and some practical ramifications that may arise from its enactment.

[Editor’s Note: Reader s that register and log on to this site may access a FREE DOWNLOAD of Lily Ledbetter Fair Pay Act of 2009,Pub. L. No. 111-2, Section 2(1), 123 Stat. 5 (Jan. 29, 2009), by clicking on the link at the top of this post.]

In Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court addressed an issue that had plagued it in the past -- whether and in what circumstances a Title VII plaintiff may state a claim for relief based on present day harm suffered as the result of the lingering effects of discriminatory acts that occurred outside of Title VII's limitations period. The Court held that a plaintiff who alleges that she is paid less today than her male colleagues solely because, during an earlier period of time (outside of Title VII's limitations period), she was denied appropriate salary increases on account of her sex, does not state a claim cognizable under Title VII. More particularly, the Court held that each paycheck a plaintiff receives reflecting compensation that the plaintiff asserts is less than it would be but for past discrimination does not constitute an actionable wrong.

In an Expert Commentary posted shortly after that decision issued, Peter Lareau, author of  NLRA: Law and Practice and numerous other books and articles in the field of employment law, suggested that the decision might prompt Congress to "take yet another look at the breadth of its determination to eliminate discrimination in employment -- this time with respect to pay discrimination claims." This prediction proved accurate and, on January 22, 2009, two days after taking the oath of office, President Obama signed the Lily Ledbetter Fair Pay Act of 2009 ("LLFPA"), the stated purpose of which is "to clarify that a discriminatory compensation decision or other practice that is unlawful . . . occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice . . . ."

The law signed by President Obama on January 22, 2009, reverses the Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., expressly stating:

"The Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades. The Ledbetter decision undermines those statutory protections by unduly restricting 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."

The author writes: “There can be little doubt that the LLFPA's enactment will sharply increase the number of pay discrimination cases filed. There is no lack of individuals who, rightly and wrongly, believe that their present levels of compensation have been adversely affected by past discrimination. Therefore, one certain ramification of the law will be an increase in the pay discrimination dockets of the federal district courts.”

The author concludes: “Of even more concern is the potential that these cases will present the difficult case management issues that arise in the litigation of events that occurred in the distant past. Balancing those difficulties, however, is the fact legitimate claims of discrimination will not go unremedied simply because of (for pay discrimination claims) a practically unworkable statute of limitations. The LLFPA effectively responds to the dissent's concern that (prior to the LLFPA) plaintiffs, in many cases, were required to sue too soon to prevail, and were time barred from filing a claim once the pay differential was large enough to enable them to mount a winnable case.”

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