• Ledbetter 'Fair Pay' Act Keeps Claims Alive Forever
  • June 22, 2010 | Author: William H. Fallon
  • Law Firm: Miller Johnson - Grand Rapids Office
  • Who could possibly object to the notion of “fair pay” and a nice name like Lilly? But, despite its innocent-sounding title and the fanfare over its arrival, the Lilly Ledbetter Fair Pay Act of 2009 does not prohibit any form of pay-related discrimination that was not already illegal under existing laws; and it does effectively extinguish the deadline for filing a pay discrimination claim, no matter how long ago an allegedly discriminatory pay decision was made. Under the new Fair Pay Act, an employer may be sued and held liable today for alleged discrimination that occurred as long as 45 years ago.


    Congress enacted the new law to overturn a 2006 decision by the U.S. Supreme Court. Lilly Ledbetter filed an EEOC charge against her employer alleging sex-based discrimination in her pay. She claimed that discriminatory decisions made up to nine years earlier caused her to receive lower raises than her male colleagues. Ordinarily, an EEOC charge must be filed within 300 days of the date of the allegedly discriminatory job action. But Ledbetter claimed she didn’t discover the alleged pay discrimination until shortly before she retired, long after the filing deadline had passed. She argued that her case should be considered timely because the past discrimination continued to affect her paycheck each week—even though there were no subsequent discriminatory decisions. The Supreme Court rejected her argument, holding that the filing deadline was triggered years earlier when the discriminatory pay actions were taken and that each new paycheck was not a new discriminatory action.


    The Ledbetter Act now holds that each paycheck can give rise to a new legal claim. As a result, if a paycheck issued today reflects a discriminatory decision made years ago, the employee may file a discrimination claim within 300 days of that paycheck. In effect, no matter how many years go by, an employer can never be certain that a decision made years ago will not someday become the subject of a discrimination claim. The Ledbetter Act is not limited to discrimination claims based on sex; it includes claims based on any category protected by federal discrimination laws.


    In every area, the law says that at some point in time old events must be left to rest and can no longer be the basis of a legal claim. If a wrong has been done, it is in the interest of the participants and society that the wrong be addressed and resolved with reasonable promptness. Memories fade; people with the best knowledge of relevant events move on; and records are destroyed in the ordinary course of business. (Federal law only requires employers to keep payroll records for three years!)


    In employment disputes, Congress has generally considered it sound public policy to set short deadlines—so that matters worth arguing about do not go unresolved for long periods of time. After all, if as a society we truly seek the fairest and most correct outcome in a dispute, we want that dispute presented and resolved when the facts and records are relatively fresh. The Ledbetter Act defeats this goal.


    Worse yet, it does not simply correct the perceived “problem” with the Supreme Court’s decision. That could have been done simply by extending the time to sue if a plaintiff was unable for some reason to “discover” the alleged discrimination within the traditional time period. Instead, the response was to effectively eliminate the statute of limitations for any claim of pay discrimination under any federal discrimination law (age, sex, race, disability, and so on). Quite literally, an employee could appear at his or her retirement party in 2009, claim that a supervisor discriminated in assigning raises as long as 40 years ago, that the unfair raise so long ago has continued to affect his or her paycheck—and under the Ledbetter Act that claim will apparently be completely timely.


    If you have any questions about this article or the Lilly Ledbetter Fair Pay Act of 2009, please contact Bill Fallon or another Miller Johnson employment and labor attorney.