The Lilly Ledbetter Fair Pay Act of 2009

All workers deserve fair pay, but this does not always happen. Just days after moving into the White House in Washington, DC, President Barack Obama signed a new piece of legislation, Public Law No. 111-2. The law, known as the Lilly Ledbetter Fair Pay Act of 2009 (the “Act”), overturned the 2007 Supreme Court decision Ledbetter v. Goodyear Tire & Rubber Co. and amended the Civil Rights Act of 1964. The Act seeks to increase protections and bring fair pay to American workers.

The Lilly Ledbetter Act has significantly impacted wage discrimination claims and empowers employees to fight for their rights in cases of pay disparity. If you believe you have an employment pay discrimination claim concerning a pay disparity, working with an experienced wage-and-hour lawyer in your area can help protect your rights.

Background of Lilly Ledbetter’s Case

Lilly Ledbetter was a supervisor in the Goodyear plant in Gadsden, Alabama, one of the few female supervisors. She had worked there for almost two decades, where she faced sexual harassment at the plant. She did not know she was subject to pay discrimination for equal work until she received an anonymous note revealing the salaries of three male co-workers.

Armed with the information that she was paid substantially less than other male managers, she filed a complaint with the EEOC.

The Lower Court Decisions

Lilly Ledbetter’s case went to trial, and a jury awarded her back pay and approximately $3.3 million in compensatory and punitive damages. The Eleventh Circuit Court of Appeals reversed the jury verdict, asserting that she filed her case too late.

The United States Supreme Court Decision

In 2007, the United States Supreme Court held in a 5-4 decision that the statute of limitations for bringing an employment compensation discrimination lawsuit begins when the parties agreed upon the pay and not on the date the employee received the most recent paycheck.

The ruling meant that under Title VII of the Civil Rights Act, plaintiffs who alleged a pay gap due to gender or racial discrimination had only 180 days from the date the employer made the pay decision to bring a lawsuit.

Justice Ginsburg wrote the dissenting opinion. Justice Ginsburg’s dissent reasoned that because discriminatory pay practices take place over time and because it can be challenging to ascertain what other employees are being paid, the majority’s holding of calculating the statute of limitations as 180 days from the date the parties made the pay decision was incorrect and inconsistent with the law. She found that if the employer is “knowingly carrying past pay discrimination” forward, then the 180-day statute of limitations should still be running.

Understanding the Lilly Ledbetter Fair Pay Act

Congress and the Executive branch acted quickly after the Supreme Court’s decision. Both the House and the Senate passed the Lilly Ledbetter Fair Pay Act of 2009. The Act restored the protection against pay discrimination and the wage gap. It seeks to address the unfair wage gap that exists for women and women of color who experience an even greater wage gap.

The Act makes it clear that pay discrimination claims based on sex, race, national origin, religion, and disability accrue under the following circumstances:

• An employee receives a discriminatory paycheck
• An employer adopts a discriminatory pay decision
• An employee becomes subject to a discriminatory pay decision
• When a person is otherwise affected by the decision or practice

Democrats in the 111th Congress agreed with Justice Ginsburg and introduced legislation to overturn the Supreme Court’s Ledbetter decision. Accordingly, the legislation seeks to amend Title VII of the Civil Rights Act of 1964. It adds language to the law, making it an unlawful employment practice to provide unequal pay and discriminate in pay when the payment decision is made and other circumstances, including each time the employer pays wages, benefits, or other compensation based on a discriminatory decision.

Impact on Wage Discrimination Claims

The Ledbetter Act, enforced by the Equal Employment Opportunity Commission (EEOC), extended the statute of limitations for discriminatory compensation decisions to what it was before 2007. This means that every time a paycheck is issued that violates the Civil Rights Act or other applicable federal law, the statute of limitations begins again.

Congress also amended other laws to extend the statute of limitations for other forms of alleged discrimination, such as discrimination based on disability or age. These other amended laws include:

• The Age Discrimination in Employment Act of 1967 (ADEA)
• The Americans with Disabilities Act of 1990 (ADA)
• The Rehabilitation Act of 1973

These amendments ensured that in discrimination cases, individuals facing pay discrimination under these laws could file claims within a reasonable time period, even if the employee discovered the discrimination later.

How the Act Empowers Employees

Under the Act, each discriminatory paycheck resets the 180-day time limit for filing a claim. The clock is not limited to starting at a specific point when the original decision to discriminate occurred.

This ensures employees have adequate time to file a complaint once they learn of equal pay violations. Employees should have the ability to claim under wage-and-hour laws.

Employers also have a strong incentive to eliminate discriminatory practices. They will be liable for discriminatory pay practices, and the Ledbetter decision removes the incentive for employers to hide discrimination.

Steps to Take if You Face Wage Discrimination

If you face wage discrimination, you have every incentive to challenge the practice. You should do so quickly after learning about the unfair practices. You are still subject to Title VII’s two-year statute of limitations on back pay. Also, because you bear the burden of proof in Title VII discrimination cases, you will be most disadvantaged by delayed litigation.

If you experience wage discrimination, speak with an experienced wage-and-hour lawyer.