Politics

Lilly Ledbetter Fair Pay Act, Obama to sign Ledbetter Act, Congress passes Ledbetter bill
Susan Walsh/AP
Lilly Ledbetter

Congress Passes Fair Pay Act After Months of Opposition

January 28, 2009 11:31 AM
by Josh Katz
Congress has passed the Lilly Ledbetter Fair Pay Act and President Obama is expected to sign it as his first major piece of legislation; but opponents say business will suffer.

Ledbetter Fair Pay Act Passes Congress

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President Barack Obama is expected to sign the Lilly Ledbetter Fair Pay bill into law on Thursday. The bill, which the House of Representatives passed on Tuesday by a vote of 250-177, will “give workers alleging unequal pay the right to sue within 180 days of their most recent paycheck,” according to CNN. The Bush White House and the Republicans in the Senate prevented the bill from passing last year, and it became a campaign issue during the presidential election.

The law will reverse a U.S. Supreme Court decision from 2007, which said that women could not sue for wage discrimination unless they filed the claim within 180 days of receiving their first discriminatory paycheck. In the Supreme Court case, Lilly Ledbetter argued that she did not know about the wage discrimination until the latter part of her 19-year career as a Goodyear Tire & Rubber Co. worker. Almost “two decades of discrimination meant her salary was 15 percent to 40 percent lower than what her male counterparts earned,” Bloomberg writes.

The new bill, which modifies the Civil Rights Act of 1964, says that each discriminatory paycheck renews the 180-day statute of limitations period. In addition to gender, the law will apply to wage discrimination based on race, religion, disability and country of origin.

“Wage discrimination still exists because there are loopholes in our federal laws,” said the bill’s sponsor, Maryland Democrat Barbara Mikulski, according to Bloomberg. “We want to close the loopholes.”

The bill’s supporters have claimed that most workers don’t compare their paychecks with each other and thus don’t discover any inequality until much later on. But opponents argue that trial lawyers will seize upon the more relaxed legislation and barrage the courts with lawsuits; furthermore, employees could potentially hold off filing their claims until later to obtain more money, opponents say, according to the Associated Press. They also say that the bill will hurt business by increasing costs.

An alternative Republican proposal was turned down. It “would have required employees alleging discrimination to act within 180 days after they would have reasonably been expected to know they were being discriminated against,” Bloomberg writes.

The House initially passed the bill on Jan. 9 but had combined the bill with another one, which made it easier to obtain discrimination awards. The Senate detached that more controversial measure when approving the bill 61-36 on Jan. 22, forcing the House to vote again.

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Opinion & Analysis: Debating the Lilly Ledbetter Fair Pay Act

The Los Angeles Times rebuked the Supreme Court for its narrow interpretation of the Civil Rights Act of 1964, calling it “so narrow the justices must have been squinting when they read it.” According to the Times “The act, which President-elect Obama is eager to sign, states the obvious: that a violation occurs with every paycheck that continues a discriminatory practice,” and “Prudent employers will take stock of Washington’s changed politics and use this moment to set right their training, hiring, promotion and pay practices.”

But Andrew Grossman of The Heritage Foundation disagrees, saying that, “Since ancient Roman times, all Western legal systems have featured statutes of limitations for most legal claims.” According to Grossman, the Lilly Ledbetter Fair Pay Act “would push down both wages and employment, as businesses change their operations to avoid lawsuits. Perversely, it could actually put women, minorities, and workers who are vocal about their rights at a disadvantage if employers attempt to reduce legal risk by hiring fewer individuals likely to file suit against them or terminating those already in their employ.”

Key Player: Lilly Ledbetter

Lilly Ledbetter, 70, had been working at a Goodyear Tire plant in Alabama for nearly two decades when an anonymous note left in her mailbox indicated that three male employees in the same position were being paid more than she. Ledbetter headed to court with an Equal Employment Opportunity Commission complaint, but her case was struck down by a 5–4 ruling of the Supreme Court that EEOC complaints had to be made in the first 180 days of salary negotiations.

Ledbetter’s speech at the 2008 Democratic National Convention served to spotlight this issue and President Barack Obama’s support of the legislation.

Related Topic: Democratic Congress takes on new legislation

The Democratically controlled government made the passage of the Lilly Ledbetter Fair Pay Act a possibility. Last year, Bush’s pledge to veto and the expected Senate filibuster halted the bill from becoming a law. The 111th Congress, with the help of President Obama, is likely to pass many bills that never had a chance under the previous government.

Reference: Supreme Court’s Ledbetter ruling; discrimination law

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