Pay Discrimination Bill Becomes Law

Ever have a boss who was impossible to deal with? Okay, that's a rhetorical question. There's no question that in general employers can and will treat employees in an unfair, arbitrary, stingy, and irrational manner. We have first-hand knowledge of hard-working, conscientious employees who got a raw deal. Sometimes the unfairness rises to the level of illegal discrimination, but often--for better or worse--it doesn't. Falling short of an actual labor-law violation never justifies an employer's bad acts, but it just means that there is no remedy to be found in the courthouse. At the same time, let's face it; there are employees who are clearly working the system, at the expense of those workers legitimately wronged.

Today, the president signed a bill known as the Lilly Ledbetter Fair Pay Act of 2009--a huge bonanza to the trial lawyers and a recordkeeping nightmare for employers--that overrules a May 2007 U.S. Supreme Court ruling that said that workers had to file equal pay lawsuits within 180 days. Ledbetter, the plaintiff/appellant in that case, worked at Goodyear's Gadsden, Alabama, plant from 1979 until 1998 when she took early retirement.

Under this newly signed legislation which the Obama's Congressional allies fast tracked to the president's desk, each new allegedly discriminatory paycheck extends the statute of limitations for a second 180 days. In other words, the measure will make it easier for workers to file claims for pay bias. But as a practical matter, extending the deadline seems to undermine the whole idea of having a statue of limitations of any kind. The full text of the bill can be found here.

If a particular legal deadline is legitimately unfair to workers who are really harmed (rather than just based on political posturing), why not consider some flexibility if it makes sense? But is this new law based on a faulty premise?

Karen Lee Torre suggests in the Connecticut Law Tribune that Lilly Ledbetter herself--who palled around with Obama on the campaign trail--appears to lack "clean hands," as they say in legal jargon:

As a plaintiff-side employment litigator, I am expected to join the chorus championing a congressional override of the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co. The bill is a political scam. If Congress wants to amend Title VII and greatly expand the statute of limitations for employment discrimination claims, it is certainly within its authority to do that, the wisdom of it aside. But supporters of the Ledbetter bill have engaged in dishonest rhetoric in portraying her as a victim of both her employer and the Supreme Court justices who affirmed the Eleventh Circuit’s dismissal of her claims as time-barred….

I have represented many sex discrimination victims. I have won their cases. After 20 years of such efforts, I know a victim when I see one. Let me tell you something: Lilly Ledbetter is no victim...

Ledbetter waited until she retired to sue Goodyear for “discrimination” she allegedly suffered 12 years earlier. Goodyear, like many employers, awarded salary increases based on annual performance reviews. Ledbetter’s supervisor at the time of the alleged discrimination did not think much of her performance and she did not get a raise. (Nor did Ledbetter get a raise in the last two years of her employment – for the same reasons of weak performance, but notably she did not claim those decisions were discriminatory).

While she was working, Ledbetter never complained, filed no grievance, and Goodyear never knew that she thought that particular performance review was the product of gender bias. Way more than a decade later, after Ledbetter walked out the door with her retirement benefits, she hit Goodyear with a lawsuit, the basis of which was the claim that the initial poor reviews affected her salary for the rest of her tenure...

Here’s another fact ignored in the political rhetoric. Ledbetter, for unexplained reasons, abandoned an Equal Pay Act claim asserted in her suit. The Equal Pay Act does not contain Title VII’s filing limitations, nor does it require plaintiffs to prove intent. It was a much better claim, easier to prove, and it was timely.

The bill even allows family members and others "affected by application of a discriminatory compensation decision or other practice" to file claims, which could really open the floodgates.

Writing for the majority in the Ledbetter decision, Justice Alito cited various precedents in observing that:

Statutes of limitations serve a policy of repose...They “represent a pervasive legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time and that ‘the right to be free of stale claims in time comes to prevail over the right to prosecute them.’” The EEOC filing deadline “protect[s] employers from the burden of defending claims arising from employment decisions that are long past....” Certainly, the 180-day EEOC charging deadline...is short by any measure, but “[b]y choosing what are obviously quite short deadlines, Congress clearly intended to encourage the prompt processing of all charges of employment discrimination...." This short deadline reflects Congress’ strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation.

This bill, which amends Title VII of the U.S. Civil Rights Act, is the first piece of legislation signed by the new president, who was elected in part to straighten out the country's financial mess. We're not carrying water for management, but with a bad economy, high unemployment, and many companies teetering on the brink, should we really be subjecting more of them to never-ending litigation?

Update: Writing in the National Journal, Stuart Taylor says that the new law "seem likely to make it harder than ever for employers to defend themselves against bogus (as well as valid) discrimination claims, effectively adding to the cost of each new hire. This would be justified if job discrimination were indeed pervasive." Taylor's take on the law can be found here. And Hans Bader of OpenMarket.org describes the distorted media coverage of the Supreme Court decision.