The Lilly Ledbetter Fair Pay Act: what it means for you and your company

by | Feb 23, 2009 | Law Alerts

Restoring protections against pay discrimination, President Obama signed the Lilly Ledbetter Fair Pay Act (“LLFPA”) into law on January 29, 2009. The LLFPA amends Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act, and the Rehabilitation Act of 1973 to clarify that with respect to compensation an unlawful employment practice occurs when:

  1. a discriminatory compensation decision or other practice is adopted;
  2. a person becomes subject to the discriminatory decision or practice; or
  3. a person is affected by application of the discriminatory decision or practice, including each time wages, benefits, or other compensation is paid.

Although the LLFPA does not create any new causes of action or substantive rights, its clarification affects the triggering event from which the statute of limitations to bring a charge of discrimination begins to run. Every paycheck or other act of compensation resulting from a discriminatory pay decision (i.e., paying certain employees less than other employees solely on the basis of their protected class – race, sex, color, national origin, religion, disability, age) is a separate violation of the applicable anti-discrimination statute. For acts of discrimination in violation of federal law, an employee has 180 days from the discriminatory conduct to bring a charge of discrimination, and for violations of Florida law, an employee has 365 days to file charge of discrimination.

The LLFPA also provides that the employee may recover damages, including back-pay, for the two-year period preceding the employee’s filing of a charge of discrimination based on a violation of Title VII, the ADA, and the Rehabilitation Act. (Note, the LLFPA is silent as to the two-year damages provision for compensatory discriminatory practices based on age.) Further, the LLFPA’s effect is retroactive to May 28, 2007. The effect of the LLFPA is illustrated by looking at the Lilly Ledbetter case itself.

Lilly Ledbetter worked for Goodyear Tire & Rubber Co. from 1979 to 1998. After receiving an anonymous tip that she was being paid less than her male counterparts, she filed a discrimination lawsuit. The jury found in her favor, awarding her $3 million in back pay, which the trial court reduced to $300,000. However, when the case reached the U.S. Supreme Court, in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), the Court found that Ms. Ledbetter was required to bring her charge of discrimination within 180 days of the initial act of discrimination (the decision to pay her less) even though she was not previously aware that she was being paid less. Thus although the jury found that the employer discriminated against Ms. Ledbetter, the Court found that her claims were time-barred, and she failed to state a claim as a matter of law. In her dissenting opinion, Justice Ginsberg called upon Congress to correct the law. The LLFPA does just that — under the LLFPA, Ms. Ledbetter’s claims would not have been time-barred and her damages could have included back pay for up to two years.

The Schwarzberg & Associates Employment Law and Compliance Team has extensive experience in developing effective policies, procedures and proactive responsive measures to deal with a myriad of workplace issues. Please do not hesitate to contact one of our members; Steve Schwarzberg or Lisa Kohring at (561) 659-3300 to obtain more information about our firm and its various employment law compliance and defense services.

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