JUNE 1, 2009
LAW | REAL ESTATE | FINANCE
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tion law?
The Ledbetter Act has
greatly extended the time
for employees to bring suit
for pay discrimination. In
Ledbetter v. Goodyear Tire
& Rubber Co., the Supreme
Court ruled an employee’s
Boyer
Leitner
time to file a charge of pay
discrimination started from
resident Obama made
the date of purported disa number of promises
criminatory pay decision.
during his campaign
Applying the rule, if a Florida
about changes he wanted to
see in labor and employment employer decided to not give
laws, including pay discrimi- an employee a raise Jan. 1
nation based on any protected on account of her gender,
she would have had only
characteristic.
In pursuit of his promises, 300 days to file a discrimination charge. That has now
the very first bill he signed
changed.
was the Lilly Ledbetter Fair
Now, every time an emPay Restoration Act of 2009,
ployee receives a paycheck
which overturned a 2007
that reflects a discriminatory
U.S. Supreme Court decision
decision, the employee’s time
limiting the time period for
to bring a charge starts anew.
employees to sue for alleged
discriminatory pay practices. The Ledbetter Act broadly
applies to all types of pay disInside the Beltway, many
crimination claims including
believe the Ledbetter Act is
those based on disability, age,
just the first of many forthnational origin and race discoming statutory changes.
With potentially more pay dis- crimination.
The Ledbetter Act is retcrimination legislation in the
roactive to the day before
pipeline, employers should
the Supreme Court decision
act now to ensure their paysetting policies and practices on May 28, 2007. It applies
to all claims pending on or
are not discriminatory, will
survive legal scrutiny and are after May 28, 2007. This
could mean that untimely
adequately documented.
claims have been revived.
How has the Obama administration altered the legal The Ledbetter Act also on its
landscape of pay discrimina- face applies to other practices
P
that relate to discrimination
in pay, not just pay-setting
decisions. Accordingly, some
have argued that a claim alleging the denial of a promotion or transfer many years in
the past, for example, could
be revived if an employee’s
paycheck continued to reflect
discrimination based on the
past employment decision.
However, an employee could
recover for only two years of
back pay even if the decision
at issue happened more than
two years ago.
Beyond the impact of the
Ledbetter Act, employers
should track the progress
of the bill known as the
Paycheck Fairness Act, which
if passed would overhaul the
Equal Pay Act. The PFA was
introduced in the Senate in
January. Among its provisions, the bill would forbid
an employer from retaliating
against an employee who
shares pay information with
co-workers, remove caps
on compensatory damage
awards and allow punitive
damages against employers
even for unintentional violations.
The measure also would
substantially limit the defenses available to employers.
In a gender bias claim, employers would need to prove
some bona fide factor other
than gender caused the pay
differential and the decision
was consistent with business
needs. Under this standard,
an employer could be liable
for a pay differential, even
one unrelated to gender, if
an employee could show an
alternative pay policy would
further the same business
practice without resulting in
the pay differential. Finally,
the bill would allow employees to compare themselves to
similarly situated workers at
different locations operated
by the same employer.
What steps should employers take?
Employers should expect
an increase in pay discrimination lawsuits as a result of the
passage of the Ledbetter Act
and the potential passage of
other employment laws. This
means employers must apply
hindsight to ensure all past
decisions were well-reasoned
and well-documented and,
at the same time, apply foresight to ensure pay decisions
are not based on a protected
characteristic and support for
decisions is well-documented.
April Boyer is a partner and
Robert Leitner is an associate in
K&L Gates’ Miami office, where
they counsel and represent employers on Florida and federal
employment law.
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