July 7, 2009

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President Signs Lilly Ledbetter Fair Pay Act

President Obama has followed through with his campaign pledge to nullify Ledbetter v. Goodyear by signing the Lilly Ledbetter Fair Pay Act of 2009 (the "Ledbetter Act") into law. The Ledbetter Act amends the Civil Rights Act of 1964 by stating that the 180-day statute of limitations for filing an equal-pay lawsuit over pay discrimination resets with each new discriminatory paycheck.

The legislation is named for an Alabama woman who, at the end of her 19-year career as a supervisor at a tire factory, learned that her male colleagues earned much more than her. This discovery prompted her to file a charge with the Equal Employment Opportunity Commission ("EEOC") alleging discrimination. When her case eventually went to trial, a jury concluded she had indeed suffered illegal pay discrimination on the basis of sex and awarded her $3 million (which was later reduced to $300,000 in accordance with Title VII's damages cap).

However, on appeal, the Supreme Court threw out Ms. Ledbetter's case after Goodyear successfully argued that her claims were time-barred because she failed to file her suit within 180 days (the limitations period under Title VII) of the date that her employer first paid her less than her peers.

The Ledbetter Act is a direct response to the Supreme Court's decision holding that the statute of limitations for presenting an equal-pay based lawsuit runs from the date of a pay decision setting a discriminatory wage. The Ledbetter Act attempts to "fix" this controversial holding by specifying that the 180-day limitations period runs from the date of any paycheck that contains an amount affected by a prior discriminatory pay decision.

Because the Ledbetter Act amends Title VII, it also extends the time period during which employees can pursue disparate pay claims under other anti-discrimination statutes that borrow Title VII's limitations period, including the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act. The Ledbetter Act is made retroactive to May 28, 2007, one day before the Supreme Court issued its ruling in Ledbetter.

Following its enactment, the EEOC announced that it intends to enhance enforcement in the area of pay discrimination. Accordingly, it is recommended that employers analyze their compensation practices to minimize their increased potential liability under the Ledbetter Act. Specifically, employers should:

• Evaluate all policies or practices that impact pay directly or indirectly (hiring, promotions, bonus payouts, merit-based salary adjustments, etc.);
• Conduct a statistical analysis of past and current employee compensation rates to identify disparities by protected categories;
• Consider the amount of discretion supervisors have to make compensation decisions, and re-educate those making pay decisions;
• Review compensation record retention policies to ensure that documentation reflecting when and why compensation decisions are made are retained in order to defend discrimination claims.

Feds Delay E-Verify Rule Once Again

The effective date of the Federal Contractor E-Verify Rule, a rule requiring federal contractors to certify workers' immigration status through E-Verify, has been postponed once again. The new implementation date is now scheduled for September 8, 2009 (extended from June 30, 2009). The rule was originally due to take effect on January 15, 2009, but has since been postponed several times.

For questions or assistance with these or other labor and employment matters, please contact the Chair of Ryley Carlock & Applewhite's Labor & Employment Practice Group.