Just days after being inaugurated, President Barack Obama signed a new piece of legislation that was designed to bring fair pay to American workers. The law, known as the Lilly Ledbetter Fair Pay Act of 2009, overturned the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Co and amended the Civil Rights Act of 1964.
History of the Act
In 2007, the United States Supreme Court held in a 5 -4 decision that the statute of limitations for bringing an employment compensation discrimination lawsuit began at the time that the pay was agreed upon and not on the date that the most recent paycheck was received as the 11th Circuit Court of Appeals had held. That meant that pursuant to Title VII of the Civil Rights Act, plaintiffs who alleged gender or racial discrimination in their pay had only 180 days from the date the pay decision was made by the employer to bring a lawsuit.
Justice Ginsburg wrote the dissenting opinion for the 4 judges who dissented from the majority opinion. Justice Ginsburg’s dissent reasoned that because discrimination takes place over time and because it can be difficult to ascertain what other employees are being paid that the majority’s holding of calculating the statute of limitations as 180 days from the date the pay decision was made was incorrect and inconsistent with the law. She found that if the employer is “knowingly carrying past pay discrimination” forward then the 180 day statute of limitation should still be running.
Revisions to the Civil Rights Act of 1964
Democrats in Congress agreed with Justice Ginsburg and introduced legislation to overturn the Supreme Court’s Ledbetter decision. Accordingly, the legislation was designed to amend Section 706(e) of the Civil Rights Act of 1964. Language was added to the law that made it an unlawful employment practice to discriminate in pay at the time that the payment decision is made or “when an individual 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.”
Other laws were also amended to extend the statute of limitations for other forms of alleged pay discrimination pay such as discrimination on the basis of disability or age.
The Ledbetter Effect
The new law restores the statute of limitations for discriminatory pay to what it was prior to 2007.It means that every time a pay check is issued that is in violation of the Civil Rights Act or other applicable federal law, the statute of limitations begins again.
It is important to note that this law was controversial. John McCain and many other notable republicans opposed the bill during the 2008 electoral campaign. Some argue that the legislation would subject employers to lawsuits many years after the discriminatory act was alleged to take place. However, these opponents lost the debate on this bill and the law was ultimately passed by the House and Senate and signed by the President to protect the rights of American workers.
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