Foul Play on Fair Pay

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Some say the Lilly Ledbetter Fair Pay Act, which passed the House of Representatives last June and failed to clear the filibuster hurdle in the Senate last week, is about correcting past wrongs — unequal pay for women.

Senator Obama said, “Passing this bill is an important step in closing the pay gap, something I helped to do in Illinois, and something I’ve fought to do since I arrived in the Senate.”

And Senator Clinton declared, “Nearly a century after women earned the right to vote, women still make 77 cents to every man’s dollar,” ignoring that women’s choices of training, careers, time in the workforce, and time spent at work are the major cause of the difference.

The new legislation would create an extraordinary new set of rights for plaintiffs in employment disputes. For the first time, employers typically would face no time limits on when suits may be filed, a legal status generally reserved for crimes such as murder.

The House bill would overturn a 2007 Supreme Court decision, Ledbetter v. Goodyear Tire.

The Court upheld an Eleventh Circuit Court decision that Title VII of the Civil Rights Act of 1964 requires suits to be filed within 180 days (300 in some states), of an alleged “discriminatory pay decision.” The court threw out the discrimination case of Lilly Ledbetter, a Goodyear manager in Alabama for 19 years who sued for 19 years of cumulative salary discrimination four months before she retired.

Under Title VII “discriminatory pay decisions” mean decisions about rates of pay done with discriminatory intent, not paychecks. Yet feminists say that women should be able to sue for discrimination after 180 days of receiving a paycheck because it sometimes takes longer than 180 days for employees to ascertain whether discrimination is taking place.

Under a different law, the Equal Pay Act of 1963, women can sue within two or three years of receiving alleged discriminatory paychecks, because the Act does not require “discriminatory intent” for redress, just discrimination. Women have to show that they are paid less than men for doing the same work.

The existence of the Equal Pay Act means it’s incorrect to say, as did the co-president of the National Women’s Law Center, Marcia Greenberger, on April 23, that, “Those who supported a filibuster delivered a cruel blow to American women and their families. They kept the Senate from joining the House in restoring the basic right to equal pay that Americans cherish and rely on.”

Ms. Ledbetter filed for discrimination under the Equal Pay Act, but her suit was dismissed on the grounds that her pay was the result of her “weak” performance. She then sued under the Civil Rights Act, asserting that she had been the victim of years of discriminatory pay decisions when she was hired by Goodyear. Only after 19 years, she said, did she learn that men were paid more. The Fair Pay Act would change Title VII to say that unlawful discrimination also occurs “each time” a paycheck is issued, or “when a person is affected by the application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid.”

This would be a radical change from present law, because employees could argue that their current compensation flows from discriminatory decisions made years back. Those who made the salary decisions could be dead — as was Ms. Ledbetter’s former supervisor.

The extension of discrimination to “other practice” could waive statutes of limitations for many claims, such as promotion and termination decisions, now regarded as actionable only when they occur, and opens the door for suits that go beyond pay disputes. Other practices could include attendance at meetings or assignment of tasks.

If 180 days is too short, the statute could be revised to extend the period to two years. This would help counter race-based as well as sex-based discrimination. Since the 1963 Equal Pay Act applies only to women, it can’t be used to challenge race-based discrimination.

Plaintiffs don’t get punitive damages under the Equal Pay Act — which is why many prefer to sue under Title VII. Senator McCain, the presumptive Republican presidential nominee, declared on April 23 that “I am all in favor of pay equity for women, but this kind of legislation, as is typical of what’s being proposed by my friends on the other side of the aisle, opens us up to lawsuits for all kinds of problems.”

Senators Clinton and Obama, supporters of the proposed legislation, each received $15 million in contributions from lawyers this presidential election cycle, whereas Mr. McCain, who doesn’t support the legislations, has received $4 million. Lawyers would be additional beneficiaries of removing the statute of limitations.

Supporters of the Fair Pay Act promise to bring the bill to the floor this session, but in its present form it would likely face a presidential veto. If proponents were truly interested in reducing discrimination, they would simply extend the 180 day limitation period rather than trying to make legal history by removing it altogether.

Ms. Furchtgott-Roth, a senior fellow at the Hudson Institute, is coauthor of “Women’s Figures: An Illustrated Guide to the Economic Progress of Women in America.”


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