President Obama today signed his first bill as President—the Lilly Ledbetter Fair Pay Act of 2009—which expands the time period in which workers can sue employers for discrimination in pay. Although the Act brings clarity to the timeliness of a pay discrimination claim, it also creates expanded liability for employers. For example, an employer could be sued over an alleged discriminatory pay practice that arose years earlier by virtue of the fact that the practice is reflected each time the employer issues paychecks.

The Act, retroactive to May 28, 2007, amends Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967. It also applies to discrimination in compensation claims brought under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973. The result is to clarify that unlawful discrimination occurs each time compensation is paid pursuant to the discriminatory compensation decision or other discriminatory practice.

The Act is Congress' response to the Supreme Court's ruling in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). Lilly Ledbetter, who worked for Goodyear Tire and Rubber in Gadsden, Alabama, for 19 years, sued after early retirement, filing, inter alia, a Title VII pay discrimination claim alleging that for years she had been paid less than male counterparts. However, because Title VII required that an EEOC charge be filed within 180 days of the alleged unlawful employment practice, the Supreme Court determined, in a split decision, that claims related only to the two most recent pay decisions were filed within the required 180 day period and therefore subject to a Title VII claim. According to the Court, the effects of past discrimination did not restart the clock for filing an EEOC charge.

In finding the Supreme Court's ruling unduly restrictive and at odds with the "robust application of the civil rights law that Congress intended," Congress expanded the time period in which victims of discrimination can recover for discriminatory compensation decisions. Under the Act, an unlawful employment practice occurs when:

1. a discriminatory compensation decision or other practice is adopted;

2. an individual becomes subject to a discriminatory compensation decision or other practice; or

3. 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 decision or other practice.

Further, the Act provides that, in addition to other relief provided in Title VII, an aggrieved person may obtain back pay for up to two years preceding the filing of the charge where the unlawful employment practices occurring during the charge filing period are similar or related to the unlawful employment practice occurring outside the time for filing a charge.

If you have any questions about the Lilly Ledbetter Fair Pay Act of 2009, please contact Louis L. Chodoff at 856.761.3436 or chodoffl@ballardspahr.com, Michelle M. McGeogh at 410.528.5661 or mcgeoghm@ballardspahr.com, or any other member of the Labor, Employment and Immigration Group.


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