Lilly Ledbetter Fair Pay Act FAQ
On May 29, 2007, in its decision in Ledbetter v. Goodyear Tire & Rubber, the Supreme Court upended years of court precedent and thwarted congressional intent by giving victims of paycheck discrimination only a narrow window of time in which to seek redress for their injury. The Lilly Ledbetter Fair Pay Act amends Title VII, the Americans With Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA), to undo the Supreme Court’s activism and restore the intent of Congress by making it clear that these laws give employees a fair and reasonable opportunity to pursue a remedy for paycheck discrimination under our antidiscrimination laws.
What happened in the Ledbetter decision?
By a 5-4 majority, the Supreme Court held that the Title VII only allowed victims to file a claim for pay discrimination within 180 days of the original pay-setting decision. Nearly all of the federal courts had previously interpreted Title VII to allow claims within 180 days of the last paycheck. In other words, under this decision, if an employer decides to deny an employee a raise based on her gender, that employee must bring a claim within 180 days of the employer’s decision even though she is unable to readily determine how much her male peers are making and what raises they are receiving, and even though she continues to receive reduced paychecks well after the 180-day period.
What does the Lilly Ledbetter Fair Pay Act do?
It returns the law to the way it was commonly understood before the Ledbetter decision: A person has 180 days to sue from the last discriminatory paycheck he or she received. In most cases, the victim can still only collect backpay for the last two years.
Why is the Ledbetter decision bad for employees?
The decision fails to protect most victims of pay discrimination because it ignores workplace reality. Very few employees have ready access to their colleagues’ salaries, or to any other information which would clue them in to the fact that they are being paid less than their peers. In the case of Lilly Ledbetter, the plaintiff in the Ledbetter case, she only found out about the discrimination against her when she received an anonymous note well after the discrimination had begun. As a result of the Ledbetter decision, employees who don’t learn about paycheck discrimination until more than 180 days past the moment when the decision to pay them less is made will have no remedy. The Lilly Ledbetter Fair Pay Act gives employees a fair and reasonable opportunity to file paycheck discrimination claims.
Who is affected by this decision?
Victims of discrimination based on gender, race, age, disability, and religion. Although the Ledbetter decision specifically addressed lawsuits under Title VII (covering race, gender and religion), the ADA (covering people with disabilities), and the ADEA (covering older people) are likely to be subject to a similar interpretation unless the Lilly Ledbetter Fair Pay Act clarifies the time period for filing claims under all of these statutes.
Why is the decision bad for employers as well?
The decision gives employees an incentive to file claims as soon as possible, even if they don’t have all the facts. Under the Ledbetter decision, once 180 days have passed from a pay-setting decision, an employee loses the right to seek redress. So employees will file claims early just to preserve a remedy, even if there isn’t any firm basis yet to believe there has been discrimination. The Lilly Ledbetter Fair Pay Act will prevent the filing of premature lawsuits.
Under the Lilly Ledbetter Fair Pay Act, wouldn’t employees decide to wait a long time before filing claims in order to cash in on years of discrimination?
No. Backpay for most claims could only include the last two years of paychecks, so employees have incentive to file a claim right away. Plus, employees would be highly unlikely to forego a full and fair paycheck right now in order to wait and sue years later to recover money they could have received years earlier.
Will the Lilly Ledbetter Fair Pay Act result in more lawsuits?
No. In fact, the number of lawsuits will likely be reduced because employees will not feel rushed to file a suit within 180 days of a pay decision, but instead will be able to wait and gather all the facts to determine whether discrimination has occurred.
Why not just make the period of time to file a claim longer than 180 days and leave the starting point as the original pay-setting decision?
Lilly Ledbetter didn’t find out about the pay discrimination against her until she received an anonymous note well after the pay-setting decision was made. Her story shows that knowledge of a discriminatory practice often comes many years after the discrimination begins. Setting an arbitrary period of time will prevent employees from seeking a remedy, even if they had no way of knowing about the discrimination within the time period. Although some have argued that the passage of too much time from the discriminatory decision will make it harder to recover evidence, this fact hurts employees as much or more than it hurts employers since employees bear the burden of proving discrimination in these cases.
Why not have the 180-day clock start to run when an employee knew or should have known about the decision?
This rule would result in significant litigation – costly to both victims and employers – over when the employee knew or should have known about the discrimination. Moreover, such a rule would serve no use. Employees have no reason to delay filing a claim once they have reason to believe they are victims of discrimination, and they will seek redress immediately, because in most cases they can only collect backpay for up to two years, and they would needlessly defer getting their fair pay by delaying their filing of a claim.
5/2/08
