Q&A Regarding the Lilly Ledbetter Fair Pay Act

President Obama has received and signed his first new law from Congress dealing with employment discrimination. Here to discuss the new legislation is attorney Michael Solomon.

Kim: This new law is called the Lilly Ledbetter Fair Pay Act. Who is Lilly Ledbetter?

Mike: Lilly Ledbetter worked for almost 20 years for Goodyear Tire. Shortly before she was to retire, she found out that she was earning less over most of her career than male employees doing the same job. She sued for discrimination under the Civil Rights Act and a jury awarded her $3 million dollars in back pay and punitive damages which was later reduced by the trial court.

Normally, under the Civil Rights Laws, you have 180 days from after the alleged discrimination to file a claim. However, in 2007, the Supreme Court, in a 5-4 decision, held that the 180 day time period to file a discrimination claim began to run when the initial employment decision was made to discriminate against her—almost 20 years ago when she was hired—not when she discovered the discrimination almost 20 years later. The Court kicked her case out.

Ms. Ledbetter argued that employees don’t always know what other people are making in salary, so the 180 day limit should not have begun until she discovered the discrimination.

Kim: How does this new law change things?

Mike: Under the new law, each paycheck that an employee receives starts a new 180 day period to file a claim. Basically, each paycheck is a new act of employment discrimination. This new law also applies not only to sex discrimination, but to discrimination based upon age, religion, national origin and disability.

Kim: Why would anyone be against this law?

Mike: Businesses have several concerns:

  • Old Claims . Businesses are concerned that this new law will allow lawsuits related to alleged discrimination that occurred years or even decades ago, and it will be hard to gather evidence to defend themselves. Some of the people involved could be long gone.
  • Pension Claims . Some experts claim that retirees who are currently receiving pension benefits that are lower because of alleged discrimination that occurred years ago can now file a claim within 180 days of their most recent pension check.
  • More Lawsuits . Any expansion of an employment discrimination law will invite more lawsuits and employers will incur more legal fees defending themselves, which is hard in these tough economic times.

It’s a big change in the employment law, and we will have to see how the courts interpret it.

Kim: Thank you.