What is the Lilly Ledbetter Act?

The Lilly Ledbetter Act enacted in 2009, put into force legislative rules to equitable pay for women. Disproportionate earnings by men, and especially white males, historically is a political and legal issue not yet entirely met with satisfactory remedy. Indeed, women today are:

  • Paid, on average, 77 cents per every dollar paid to men
  • African American women earning a ratio of 64 cents per every dollar paid to men
  • Latina women earn a mere 55 cents cents per every dollar paid to men 

Signed by President Obama, the Act restored protections from pay discrimination that had been eliminated by the U.S. Supreme Court decision to Ledbetter v. Goodyear Tire & Rubber Co. Under the Ledbetter Act, employees can sue at any time after alleged discrimination occurred, and have been in receipt of payroll compensation in the preceding 180 days.

Public rhetoric surrounding the Supreme Court's 2007 Ledbetter decision, argued the ruling an end to sufficient employee protections from discrimination, as well as rights to procedural authority to pay during a discrimination claim. When the plaintiff filed a charge against Goodyear Tire & Rubber Co., alleging pay discrimination under the Equal Employment Opportunity Commission (EEOC), she was denied rights to equitable pay. Unequal pay, then, was not considered suffrage by a member of a protected class. Ledbetter was a woman with more than an arbitrary claim. According to the legislative overturning of the Ledbetter decision, the plaintiff had performing work equal to male co-workers. The fact that compensation for the work was lower for Ledbetter than for male co-workers, exhibits the basis of her complaint.

Dissenting opinion by Supreme Court Justice Ginsburg to judicial opinion in the Ledbetter case, identifies the issue of pay discrimination. Distinct from other forms of workplace discrimination, pay discrimination provides material evidence of a "hostile work environment" claim, where payroll record reflects repeated, ongoing conduct by an employer who has kept accounting record for purposes of Internal Revenue Service (IRS) reporting. Congressional review of the case suggests that the limitations period present in the statute must be expanded to accommodate victims who may not be able to file in time due to not meeting the other requirements (i.e., filing fees), or for the reason of no awareness about their right to complaint. The Lilly Ledbetter Fair Pay Act, introduced shortly after the Court decision, passed in the House, adopts Justice Ginsburg's opinion.

Amending civil rights laws and employment laws where discrimination was concerned, had to be to the effect that each time a violation occurs, legislative protections and the court would provide adequate compensation, pay, and benefits as remedy to discriminatory practice. The new rule eliminates time constraints, insofar as even retirees could file lawsuits alleging pay-related discrimination from employment contracts terminated decades before. The rationale to the reform is that price of compensation (i.e., remedy) would be affected by discrimination, and that justice may only be served when the victim becomes aware of a credible legal claim.

The Ledbetter Act allowed employee plaintiffs allowed for differences in women’s pay to be defined as valid claim of discrimination. Opponents argue that Ledbetter does not account for any number of non-discriminatory factors, such as experience once minority complaint is at the gate. Under EEOC provisions, it is argued, employers are defendants in discrimination cases, where plaintiffs present evidence of a present wage gap, allegations of long-ago discrimination, and a story connecting the two. The dearth of lawsuits is not limitless, however, because, employers change their hiring, firing, and wage practices to reduce the risk of lawsuits as result.

The Ledbetter Act: Sacrificing Justice for "Fair" Pay?

Proponents say that the legislation is necessary to overturn a Supreme Court decision that misconstrued the law and impaired statutory protections against discrimination, but the Court's decision reflected both longstanding precedent and Congress's intentions at the time the law was passed. Eliminating the limitations period on claims would be bad policy. Although limitations periods for EEOC complaints may eliminate plaintiff protections in a credible claim, designation of a period leading to scheduled deadline, for filing eliminates the potential that expired evidence or confusion surrounding the history of a complaint, overrule dismissal on basis of official procedure. EEOC rules are a mandatory disclosure for employers in hiring practice for this reason.

Origins of the Act

The act is named after a production supervisor at a Goodyear tire manufacturer in Alabama who filed a lawsuit in 1998 stating that her pay reflected sex discrimination. Lilly Ledbetter alleged that she was sexually harassed at the Goodyear plant where she worked. She also alleged that her supervisor had verbally told her that he “didn’t think a woman should be working there.” The case fact pattern outlines the history of Ledbetter’s sustained abuses, and accounts for her initial negotiation of the subject of discrimination as an employee who wanted to maintain her job. Receipt of an anonymous communication revealing the salaries of three male co-workers with comparable status at the company, clarified the material effects of the discrimination, and explicitly, the differential valuation of her labor in the payroll record.

Lilly Ledbetter’s EEOC claim was followed by a lawsuit. The jury in case awarded Ledbetter $3.3 million in compensatory and punitive damages, as well as back-pay for the tortious violation of her person in the negligent act of pay discrimination by her employer. The Eleventh Circuit, Court of Appeals reversed the original decision, holding that Ledbetter had filed her case too late, and that the company was protected by the fact that employment agreement stipulated her salary. The Supreme Court held that employees may not contest wage discrimination if more than 180 days have passed since the initial wage discrimination occurred; even if continued with subsequent paychecks. The Ledbetter decision created incentive for employers to conceal discriminatory misconduct until the 180-day period had passed.

The Purposes of Limitations Periods

The direct intent of the Civil Rights Act of 1964, by drafters who reasoned that the limitations period to filing complaint with the EEOC should be short to expedite the administrative process; leading to resolution of most discrimination complaints quickly. The Act also articulates this intent in the spirit of cooperation and voluntary compliance by employers. Today, the Statute of Limitations guiding rule incorporation of time limits in EEOC legislation, focuses on equity in filing; whereby plaintiffs should have sufficient time to be educated on their right to file complaint, and to access resources in support of a filing should it proceed in response to investigation. In some cases, plaintiffs may wait for evidence favorable to the defense to disappear or be discarded, for memories to fade and witnesses to move on, before bringing claims. Interpretation of the Statute of Limitations in the 1964 Act, applies to circumstances of damage; continuing violations or punitive damages. It also accounts for the fact that plaintiffs may face the incentive to keep quiet about violations as the potential pool of damages grows.

The Legislative Fix: The Lilly Ledbetter Fair Pay Act of 2009

The Act rehabilitates U.S. employment law, ensuring the rights of workers subjected to unlawful pay practices with basis in discrimination, to effectively file complaint federal EEO law. Paychecks are understood to be separate acts of discrimination; rather than a single discriminatory decision leading to longstanding pay reductions. EEOC rules to claim filing, reset the 180-day limit to file a claim to the last act of discrimination, or in this case, paycheck. Employers must voluntarily comply with the Act and do not have any incentive to hide pay discrepancies. The Lilly Ledbetter Fair Pay Act promotes voluntary compliance by employers. Employers will have a strong incentive to eliminate any discriminatory compensation practice, or to hide discrimination.

About Equal Pay in the United States

In 1963, the Equal Pay Act, passed by President Kennedy, stipulates that employees at a company performing the same type of work, must receive equal pay regardless of gender.

Under Equal Pay Act merit or seniority based pay may be unequal, is these systems are administered fairly. The Fair Pay Act is an amendment to this original Act that expands provisions under which employees may challenge workplace discrimination and unequal pay. Still, women continue to earn less than men across the board. It is important to note that for African American women, the circumstance is even more unequal, with the ratio of pay even lower than other female, not to mention male co-workers. The ratio of inequality persists at all levels of professional rank and educational attainment. Gender inequality, then, reflects a hierarchy of difference, and one in perpetual stasis, despite legislative reforms.

Pay Transparency

Pay transparency is a key tool to help reduce wage disparities, giving workers more information about what similar workers are paid and whether they’re being undercut. Reducing these informational asymmetries and setting clear standards of pay can eliminate or diminish the effects of racial and gender discrimination, whether it’s societal or endemic to a specific firm. In some workplaces, setting clear standards of pay is accomplished through negotiations by unions. Accordingly, the gender pay gap in unionized workforces is smaller than in nonunionized workforces.

Equal Employment Opportunity Commission - EEOC

The Equal Employment Opportunity Commission (EEOC) was formed by the Congress to enforce Title VII of the Civil Rights Act of 1964. The EEOC investigate allegations of discrimination against employers. Complaint is provided for under federal law.

Big Payoffs for the Trial Bar

In Ledbetter, appellate decision set the stage for Congressional debate over application of the Statute of Limitations in cases where an employee been harmed by discrimination, and that harm is over pay disparity in a case where the allegation is discrimination of a minority worker. The continuance of Ledbetter’s pay during the EEOC claim a source of disagreement in the case, promulgated review of the lawsuit by the Supreme Court. The reform of EEO Title VII legislation by Congress, allows for punitive damages in addition to several years' worth of deficient pay. Opponents argue that the case opened the gate for class action lawsuits should similar reasoning be applied to a multitude of employment cases.

The Ledbetter Act accounts to victims of discrimination, or those who have been subject to unjustified pay differentials.

Safer Solutions

Proponents of the Ledbetter Act have argued, that the statute of limitations for Title VII more abbreviated in time than most others. Indeed, some Members of Congress favored voluntary conciliation over litigation. The "Title VII Fairness Act" (S. 3209, 110th Cong.), it was argued, should stand in lieu of Title VII reform.

A Perfect Storm

The facts behind the Supreme Court's decision in Ledbetter, appear to be the perfect conditions for civil rights reformation of civil law and employment law. The federal legislative reform to ultimately result from the EEOC claim by Ledbetter, initiated a shift in legal interpretation. The legislative rule implementation goes beyond reversal of Supreme Court decision. The Lilly Ledbetter Fair Pay Act remapped the playing field for employees who had suffered wage disparity under the former rules.

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