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Jan 2009
29
January 29, 2009

Ledbetter Fair Pay Act Becomes Law

President Obama today signed into law the Lilly Ledbetter Fair Pay Act of 2009. The new law significantly lengthens the time employees have to bring a claim for discrimination in compensation. The new law overturns the Supreme Court's 2007 decision in Ledbetter v. Goodyear Tire and Rubber Company, Inc. In that case, Ms. Ledbetter had argued to the Court that each paycheck that she received amounted to a new incident of discrimination even though the alleged discriminatory decision, an unfair performance review, had occurred years earlier. The Court disagreed with her and held that Ms. Ledbetter's claim of pay discrimination was time barred because the "later effects of past discrimination don't restart the clock for filing an EEOC charge."

The Act which was signed today, amends the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 and modifies the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973. Specifically, Ledbetter states that for purposes of Title VII, the ADEA, the ADA and the Rehabilitation Act, "an unlawful employment practice occurs, with respect to discrimination in compensation:

  • when a discriminatory compensation decision or other practice is adopted
  • when an individual becomes subject to a discriminatory compensation decision or other practice
  • 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."

Under the new law the limitations period for filing a charge now resets each time an employee receives a paycheck that is affected by a past discriminatory decision. You can see a copy of the entire law on our Web site at this link. If you have any questions about the new law or how it might affect your compensation practices please call any member of the WNJ Labor and Employment Group.
 

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