What the Ledbetter Fair Pay Act of 2009 Means to You

By: Ellis B. Murov

On January 29, 2009, President Obama signed into law the Lily Ledbetter Fair Pay Act of 2009. The Act is significant because it amends laws prohibiting discrimination on the basis of age, color, disability, national origin, race, religion and sex by deeming that each pay check and/or post-retirement benefits check can form the basis of a discriminatory pay claim.  The Act further allows a prevailing plaintiff to recover a pay differential starting with a date two years preceding the filing of a Charge and going forward until resolved.  It also authorizes introduction of evidence going even further back in time.

Congress passed this Act in response to the decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). Ms. Ledbetter was arguably the victim of pay discrimination on the basis of sex going back almost 20 years. However, she was unaware of the pay disparities between similarly situated males and her. Once she learned of the pay disparities, she sued.

Her employer made two arguments. First, Goodyear showed that, in recent years, she, like other similarly situated male supervisors, each received periodic pay increases in the same percentage terms. Thus, any pay differentials were due to years old decisions. Second, Title VII requires a plaintiff to file a Charge of Discrimination within 180 days of the allegedly discriminatory decision or act. Since the discriminatory acts/decisions occurred years prior to the filing of her Charge, Goodyear asserted that the Court should dismiss Ms. Ledbetter’s suit as untimely. The Court agreed and then did so.

In response to this Act and the amendments to Title VII and other employment discrimination laws, employers should review their compensation plans to determine whether there are any facially discriminatory pay examples. Depending on the results, employers then may need to further examine the specific examples and broader practices. Regardless, the Act puts a premium on maintenance of evidence reflecting the basis for decisions to increase, maintain or decrease pay, because the decision-makers may not be with your company when the decisions are litigated.

Written for The Legal Blueprint, 2009, Issue 1.