Sunday, January 25, 2009

Cheerleading for Ledbetter Law Drowns Out Discussion of More Progressive Pay Equity Measure

The Lily Ledbetter story illustrates some of the difficulties that civil rights plaintiffs face when they seek judicial redress. Ledbetter discovered that her employer had paid her less than her male colleagues for many years. She filed a lawsuit alleging sex discrimination, and a jury returned a verdict in her favor. On appeal, the Supreme Court applied a tougher statute of limitations analysis and reversed the judgment for Ledbetter.

Statute of Limitations "for Dummies"
I do not want to get too technical in my analysis, but here is a little background for nonlawyers. Each type of claim a plaintiff asserts in a lawsuit (breach of contract, negligence, trespass, trademark infringement) has a "statute of limitations," which establishes a time period during which a plaintiff must commence a litigation. If the plaintiff fails to file before the limitations period expires, the court will dismiss the suit as "time barred."

Difficulties often arise in this area of law, however. For instance, determining when the clock begins is not always an easy proposition. Consider a claim such as medical malpractice. A patient might not discover the impact of a doctor's misdiagnosis until years after the negligent doctor rendered care. In order to address this matter, courts and legislatures have created more flexible standards under which the limitations period does not begin until such time that the plaintiff could have reasonably "discovered" the violation. [Editor's Note: Although news accounts accurately report that most Republicans voted against the Ledbetter legislation, most reports neglect to mention that several Republicans supported a proposal that would have applied a "discovery rule," instead of the paycheck rule.] Courts apply several other exceptions in this area of law in order to balance plaintiffs' interest in obtaining justice with defendants' interest in not being hauled into court to account for actions taken many years in the past.

Pre-Ledbetter Statute of Limitations Rule
Prior to the Ledbetter decision, federal and state courts applied a flexible rule that alleviated the burden for civil rights plaintiffs. [Editor's note: Because the Ledbetter ruling only addresses claims under federal law, state courts do not have to follow it when deciding cases brought under state civil rights statutes. For the same reason, the legislation pending in Congress will not affect state court rulings that rigidly interpret statutes of limitations for state civil rights statutes].

The pre-Ledbetter standard was known as the "paycheck rule," under which each new discriminatory pay period reset the statute of limitations clock, thus giving plaintiff more time to file a claim. This approach is quite helpful for plaintiffs because most federal equal employment provisions have very short limitations periods -- usually just 180 days. By contrast, the statute of limitations for breach of contract is as high as fifteen years in some states. Because workers typically do not know the salaries of their colleagues, by the time they discover the sex-based pay differentials, the window for filing a lawsuit would have expired.

Even under the old flexible standard, however, plaintiffs could only recover up to 2 years of backpay. So, if a plaintiff discovered that for five years she had received a lower salary than her male colleagues, she would have 180 days after her last paycheck to bring a lawsuit, but she could only recover damages for the previous 2 years of discriminatory pay.

In the Ledbetter case, the conservative bloc of the Supreme Court invalidated the paycheck formula and held that the limitations period begins on the date of the initial discriminatory wage decision and that subsequent paychecks do not reset the clock. This ruling would prove disastrous for most pay equity litigants -- which is why businesses strongly support it.

Remedial Legislation: The Ledbetter Fair Pay Act
Immediately after the case, several members of Congress sponsored legislation that sought to reverse the ruling. Although the House ultimately passed a measure, Senate Republicans blocked its passage in early 2008. In any event, President Bush had threatened to veto any measures that reversed the Ledbetter ruling. Republican opposition to the legislation became a presidential campaign issue.

The Democrats have now flexed their muscles and have passed the Ledbetter Fair Pay Act, pending the outcome of a conference committee and final vote. Media accounts suggest that Obama, who really knows how to work a narrative, wants this as the first piece of legislation he signs as president. And if news accounts are accurate, he will probably get his wish. The Ledbetter remedial legislation will probably become law within a week.

The "Real" Equal Pay Legislation Has Received Very Little Discussion
At the same time that the House passed its version of the Ledbetter legislation, it also voted to enact a more progressive measure called the "Paycheck Fairness Act." Sponsored by Representative Rosa DeLauro of Connecticut, this measure received even more "yes" votes than the widely reported Ledbetter legislation. The House appended this provision to the Ledbetter legislation and sent the complete package to the Senate.

In 2007, Hillary Clinton introduced an almost identical version of the Paycheck Fairness Act in the Senate. The Senate, however, has apparently tabled consideration of DeLauro's proposal and will instead rush the narrower Ledbetter legislation to President Obama.

Although Congress will presumably (and hopefully) revisit the legislation sponsored by Clinton and DeLauro, the cheerleading surrounding the more discrete and moderate Ledbetter Fair Pay Act has drowned out discussion concerning the more expansive and progressive Paycheck Fairness Act. I understand why Democrats want to rush and get the Ledbetter law enacted and to host a press-heavy signing ceremony with Obama flanked by Ms. Ledbetter and activists (for some reason I wasn't invited). This, however, should not preclude reform-minded individuals from considering and advocating the enactment of more progressive measures. But if we continue to define "reversing Bush" as the sole measure of progressive politics, then more substantive policies like the Paycheck Fairness Act will continue to receive little attention in the media and among politicians and progressives.

Highlights from the Paycheck Fairness Act
Although I do not agree with every item in the legislation introduced by Clinton and DeLauro, I think that we should consider and debate all options. In order to facilitate that process, I have provided some highlights from the more expansive House bill.

The proposed measure acknowledges that existing legislation mandates pay equity, but it finds that:

Artificial barriers to the elimination of discrimination in the payment of wages on the basis of sex continue to exist decades after the enactment of the Fair Labor Standards Act of 1938 . . . and the Civil Rights Act of 1964. . . .

These barriers have resulted, in significant part, because the Equal Pay Act has not worked as Congress originally intended. Improvements and modifications to the law are necessary to ensure that the Act provides effective protection to those subject to pay discrimination on the basis of their sex.
The proposed measure would modify existing law in the following ways:

  • It would require employers to justify sex-based pay differentials in the same job category by proving the existence of a "bona fide" business necessity related to the work the position;
  • Plaintiffs could demonstrate that employers could achieve the business necessity with less discriminatory means;
  • The measure would prohibit employers from retaliating against employees who inquire about or discuss the wages of other employees or who file claims alleging discrimination;
  • The measure would allow for punitive damages, upon a finding that the employer acted "with malice";
  • The measure would establish various programs to help industry reduce and eliminate gender-based pay discrepancies, including the provision of "technical assistance" to companies and the training of "women" and "girls";
  • The proposal would require the Secretary of Labor to collect sex-specific salary data as a part of the routine compilation of employment statistics by the government.
I do not agree with all of these measures. In particular, I believe that punitive damage awards are almost always excessive because they do more than "compensate" victims and basically allow juries to express outrage. Also, I am not sure that the training programs will work. But other measures, such as the bona fide business necessity requirement, appear promising, because employers often successfully explain away discrimination by offering flimsy excuses. Tightening this loophole could help victims of discrimination tremendously.

Related Readings on Dissenting Justice:

Much Ado About Nothing? Liberals Absolutely Ecstatic Over Return to Pre-Bush Status Quo

For additional reading on all sides, see:

Senate Moves Forward on Lily Ledbetter Fair Pay Act

Equal Pay Measure Will Ignite Litigation

Making Ledbetter Better, Or at Least Less Bad

Democratic Death Wish On Labor Relations

Support the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act

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