Recent Court Decision Analyzes Reach of Lilly Ledbetter Fair Pay Act

Posted on June 5, 2009 by Nicole J. Quathamer

Last week, a United States District Court Judge for the Eastern District of Pennsylvania issued one of the few decisions thus far to analyze the reach of the Lilly Ledbetter Fair Pay Act.  In Rowland v. CertainTeed Corp., 2009 U.S. Dist. LEXIS 43706, Judge Schiller held that the Ledbetter Act’s extension of the statutory time period for claiming pay discrimination does not apply to a failure-to-promote case. In so holding, Judge Schiller reasoned that Congress limited the Ledbetter Act to claims of “discrimination in compensation.” 

Under the Ledbetter Act, an unlawful employment practice occurs “when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to a discriminatory compensation decision or other practice, or when a person is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.” 29 U.S.C. § 626(d)(3) (2009). This legislation followed the Supreme Court’s decision in Ledbetter v. Goodyear, which limited Ledbetter’s claim to adverse actions taken within 300 days of filing the EEOC Charge.  

 

In Rowland, the plaintiff claimed that her employer denied her a series of promotions because of her sex. She further argued that the Ledbetter Act should be applied to enlarge the actionable period to extend to all of those adverse decisions, not just those that preceded her EEOC Charge by less than 300 days. As support, she analogized her continuing failure to be promoted to the continuing compensation practice complained of in Ledbetter v. Goodyear. She argued that the Ledbetter Act’s expansion of "unlawful employment practice" broadens the scope of the Act to failure-to-promote claims because promotions directly impact compensation.

Judge Schiller declined the invitation to apply the Ledbetter Act to these facts. He ruled that a "continuing violation" theory is inapplicable in the context of a failure to promote and explained that a “failure-to-promote claim divorced from a discriminatory compensation claim, as is the case here, does not fall within the purview of that newly enacted law…." Rather, each adverse action, namely the decision to deny her a promotion, is "a discrete act" that must be analyzed and complained of within 300 days of each discrete action as required by Title VII. Otherwise, the Ledbetter Act “would eliminate any statute of limitations with respect to reporting discrimination to the appropriate agency, a change in law not found in the Ledbetter Act."

In the coming months, we will see whether other courts follow Judge Schiller’s lead and limit the scope of the Ledbetter Act to only claims exclusively related to “discrimination in compensation.” But the analysis set forth in Rowland may, at least for now, be useful to support an employer’s argument favoring such a restriction when confronted with a Ledbetter Act argument outside the context of a compensation claim. 

 
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Obama Signs First Bill Into Law: The Lilly Ledbetter Fair Pay Act

Posted on February 3, 2009 by Christy Pate

On January 29, the Lilly Ledbetter Fair Pay Restoration Act was the first bill signed into law by President Obama. As discussed in prior blog entries, the new law gives a employee or former employee the right to file a charge of discrimination within 180 days (or 300 days in some states, including Ohio) of their most recent paycheck. The Act overturns a U.S. Supreme Court decision holding that the statute of limitations started to run as soon as an employee received his or her first unfair paycheck. Under the new law, each new paycheck alleged to be discriminatory extends the statute of limitations for an additional 180 (or 300) days. 

The new law will significantly impair the ability of companies to defend claims about old pay decisions in federal court, especially for those employers who have forgotten or have not retained documentation as to why a given pay decision was made in the first place.

 

To read our client alert on this new law, click here.

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House to Vote on "Ledbetter" and "Paycheck Fairness" Acts

Posted on January 9, 2009 by Marc Fleischauer

Today the U.S. House of Representatives is expected to vote on and pass two controversial bills affecting employers. Both bills have the strong support of Democrats in Congress and the incoming Obama administration.

The “Lily Ledbetter Fair Pay Act,” which was defeated in 2007 due to a Republican filibuster in the Senate, would effectively and drastically extend the statute of limitations for discrimination claims related to disparate pay practices. Currently, employees are required to sue within 180 days (or, in certain circumstances, 300 days) after alleged discrimination takes place under federal law.   The Act would permit employees to sue for an unlimited number of past pay periods, however long ago they took place, so long as suit is initiated within 180 days of the most recent paycheck claimed to be discriminatory. The Act would overturn a 2007 decision by the United States Supreme Court based on existing law.

 

The “Paycheck Fairness Act” would amend the existing Fair Pay Act by requiring that employers allow their employees to share salary information with each other for purposes of rooting out gender discrimination. The Act would expressly prohibit employers from retaliating against employees who share such information, and it would make punitive damages available for the first time under the Fair Pay Act.

 

As both bills are expected to pass the House, it again falls on the Senate to protect employers from these attempts to placate unions and plaintiffs’ lawyers by curtailing employers' rights. The current makeup of the Senate, however, makes another filibuster unlikely, and both bills may be conveniently teed up for President Obama’s signature soon after his January 20 inauguration.

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