Labor and Employment

Lily Ledbetter Fair Pay Act

Proving discrimination is very difficult, but for Lily Ledbetter, who now has a discrimination bill named after her, it was worth the wait.

Ms. Ledbetter worked as a supervisor at a Goodyear Tire plant in Gadsden, Alabama. During the 20 years she worked there, she suspected her pay was less than her male counterparts, but proving it was harder. One day she received an anonymous note showing that her male colleagues were being paid 15-40% more than she was and that was the first step.

A few days after receiving that note, Ledbetter filed a complaint with the Equal Employment Opportunity Commission (EEOC). She was required to do this before she could file a lawsuit in federal court.

Court Rulings on Ledbetter's Case

Ledbetter won her case at trial. The jury found that Goodyear had discriminated against her in violation of Title VII of the Civil Rights Act of 1964, and it awarded Ledbetter a large damages award. But her victory was short-lived.

The US Supreme Court threw out the verdict saying that Ledbetter had waited too long to complain. According to the Court, her pay discrimination complaint must have been filed within 180 days of the first time she got a discriminatory paycheck. That is because of a provision in the Civil Rights Act known as the "statute of limitations." The statute of limitations is intended to limit how long you can sit on a claim before acting on it, which for these cases is 180 days.

The Supreme Court decided that it was tough luck for Ledbetter and others. By creating this loophole, the Supreme Court reversed what had been the law in every part of the country: That an employee could challenge each and every discriminatory paycheck she received. It didn't take long for federal courts to apply this rule to block all types of cases, not just pay discrimination ones.

Lily Ledbetter Fair Pay Act

On January 27, 2009, Congress enacted the Lily Ledbetter Fair Pay Act. President Obama signed the bill into law on January 29, 2009. It was the first bill that President Obama acted on. The new law restores the old rule that an employee suffers a new injury each and every time he or she receives a discriminatory paycheck. In other words, you can once again challenge discriminatory paychecks as long as you continue to receive them.

Your case can proceed as long as you file a discrimination complaint with the EEOC within 180 days of receiving your most recent discriminatory paycheck. The new law also amends Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973.

The New Law

The United States Congress acted quickly, believing that the Supreme Court's Ledbetter rule made little sense in the real world. It may take years for an employee to discover pay discrimination. Many companies keep salary information confidential. Such discrimination may only be discovered by accident.

Workers rarely know the salaries of their coworkers. And you can't expect people to go around asking their coworkers how much money they're making. Doing that can get you fired at some companies.

Also, the Supreme Court's ruling rewarded employers for actively hiding discriminatory pay practices. If an employer succeeded in hiding an unlawful pay decision for 180 days, then the employer was basically free to continue the discrimination for the remainder of the employee's career. The same rule applies whether the discrimination is based on gender, race, religion, color, national origin, age or disability.

Two Year Limitation on Back Pay Recovery

However, the new law doesn't give you more money if you wait longer to sue. In fact, you can only recover back pay only for two years before the date you file your complaint with the EEOC.

Questions for Your Attorney

  • What does it mean for a claim under the Ledbetter law if I've held several positions with a company over the years? Does it make any difference?
  • What does recovery for back pay include - just wages, or items related to wages, such as retirement contributions, bonuses or other benefits that are part of my compensation package?
  • Does the change in the law only apply to usual wages or salaries, or does it also apply to compensation paid on an annual basis, such as a bonus or other incentive payment?
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