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Momentum Builds to Lengthen Pay Discrimination Lawsuit Limitations

July 23, 2007
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Related Topics: Compensation Design and Communication, Diversity, Discrimination and EEOC Compliance, Latest News
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Legislation that would overturn a recent Supreme Court decision on pay discrimination is gaining momentum on Capitol Hill.

On Friday, July 20, Sen. Edward Kennedy, D-Massachusetts, along with 11 other Democrats and two Republicans, introduced a bill that would allow victims to file a claim within 180 days of any paycheck that has been diminished by bias—even if the discriminatory act occurred decades ago.

Business advocates worry that such a revision of the statute of limitations could make companies vulnerable to stale claims involving supervisors and employees who have long since left the company.

A similar bill was approved by the House Education and Labor Committee in late June, just days after it had been officially introduced. That measure is awaiting action by the full House.

Both pieces of legislation were inspired by a contentious 5-4 Supreme Court ruling on May 29. The court held that a discrimination claim must be filed within 180 days of the moment that an unfair pay decision is made.

Outside of that statutory window, which in some states is 300 days, an employer is not liable, the court said. The decision significantly narrowed the scope of pay cases.

Supreme Court Justice Ruth Bader Ginsburg excoriated the majority for a ruling that she said ignored the realities of today’s workplace—where pay levels are secret and women and minorities can feel intimidated. She encouraged Congress to clarify the statute of limitations language in federal discrimination law.

Democrats in the House and Senate quickly responded, holding up the Supreme Court plaintiff, Lilly Ledbetter, as a civil rights hero.

The Supreme Court ruled that Ledbetter, a former supervisor at a Goodyear plant in Gadsden, Alabama, could not sue the company for paying her less than it paid men for the same job over most of her nearly 20-year tenure because she did not file the suit when the discrimination first occurred. Ledbetter said she did not discover the disparity until years later.

Democrats contend that a narrow statute of limitations allows companies to avoid punishment for discrimination by hiding it long enough.

“This is unacceptable—that you win by being able to keep an illegal act secret,” said Rep. George Miller, D-California and chairman of the House labor committee, when the panel approved the bill. “That’s what cries out for this legislation.”

House Republicans criticized Democrats for rushing the legislation ahead to score political points without considering its potential consequences.

“This bill guts the statute of limitations and Equal Employment Opportunity Commission charging requirement contained in current law,” said Rep. Howard “Buck” McKeon, R-California and ranking member of the House labor committee.

McKeon’s GOP colleagues said the bill could create myriad new liabilities for companies and subject them to expensive jury verdicts.

“This bill will destroy American jobs,” said Rep. John Price, R-Georgia.

The American Benefits Council, which represents Fortune 500 companies, raised concerns about how the bill would affect a company’s retirement plan if it had to recalculate benefits payable to a plaintiff.

Rep. Robert Andrews, D-New Jersey, said that language in the bill would prevent each pension payment from being a cause of action in a suit.

He also asserted that the measure would not make it easier to win discrimination cases. “It is the burden of the plaintiff to prove that a payment has been infected by discrimination,” he said.

Both the Senate and House bills would maintain the two-year limit on back pay in discrimination cases.

“Under the Kennedy bill, employers would not have to make up for salary differences that occurred decades ago,” said a statement announcing the introduction of the legislation.

—Mark Schoeff Jr.

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