President Obama Signs the Lilly Ledbetter Fair Pay Act

January 30, 2009

On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act. The Act is the first bill signed into law by President Obama since taking office. Under the new law, it is now easier for workers to sue their current and former employers for pay discrimination. The Ledbetter Fair Pay Act moved quickly through the new Congress. It was initially a part of a larger pay discrimination package that the House of Representatives approved on January 9, 2009. The Senate approved the Act less than two weeks later, on January 22, 2009. It was signed into law by President Obama only a week after that. The Ledbetter Fair Pay Act amends provisions in the Rehabilitation Act, Americans With Disabilities Act, Title VII of the 1964 Civil Rights Act, Age Discrimination in Employment Act, and Fair Labor Standards Act prohibiting discrimination in pay. The Act is named after Lilly Ledbetter, a female employee of Goodyear Tire & Rubber Co. who brought suit against that company for pay discrimination as a result of being paid less than her male colleagues who performed the same job. Ledbetter, a former supervisor at a Goodyear plant in Alabama, sued the company for paying her less than her male counterparts over the course of 20 years. The Supreme Court, in a 5-4 decision, held that Ledbetter should have filed her claim within 180 days after Goodyear decided to pay her less than her male counterparts, rather than 180 days after she received her final paycheck from the company. The new law overturns the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). As passed, the Ledbetter Fair Pay Act restarts the statute of limitations for filing a lawsuit each time an employee receives a paycheck that contains discriminatory pay. More specifically, the Act 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 to clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes. Proponents of the Ledbetter Fair Pay Act purport that it corrects an injustice among women and minorities that has prevailed in the area of pay discrimination. According to one Senate democrat, the Act “keeps open the courtroom doors to women, minorities and people with disabilities.” Sen. Barbara Mikulski, D-Maryland. Opponents of the Act counter that the new law eviscerates the statute of limitations and subjects businesses to suits involving people who no longer work at a company or may have even died. In any event, the Ledbetter Fair Pay Act is now the law in the United States. Employers must be prepared. If a current or former employee complains about discriminatory pay – even if it happened several years ago – employers must take the allegations very seriously and do their homework. Moreover, it may be necessary for employers to maintain records relating to compensation decisions indefinitely. If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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