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Senate Approves Pay Discrimination Measure

Democrats want to send the legislation to President Barack Obama quickly so it can be one of the first bills he signs. The president and first lady Michelle Obama made it a centerpiece of campaign events designed to highlight women’s issues.

January 22, 2009
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The Senate approved a measure Thursday, January 22, that would make it easier for workers to sue for pay discrimination. It will now likely be among the first that President Barack Obama signs into law.

The Lilly Ledbetter Fair Pay Act, which passed 61-36, would restart the statute of limitations for filing a lawsuit each time an employee receives a paycheck that has been diminished by discrimination. It was part of a larger pay discrimination package that the House approved January 9.

The Senate decided to act just on the Ledbetter bill, which means it now must go back to the House, where quick approval is expected. Obama and first lady Michelle Obama made the Ledbetter bill a centerpiece of campaign events designed to highlight women’s issues.

Ledbetter was the plaintiff in a controversial 2007 Supreme Court case and has become an icon for the fair-pay movement. She appeared Thursday at a Capitol Hill press conference and traveled with President Obama and Vice President Joseph Biden on their train trip to Washington before the inauguration Tuesday.

“We have now overwhelmingly passed a bipartisan bill to correct an injustice among women and minorities that has prevailed in the pay discrimination area,” said Sen. Barbara Mikulski, D-Maryland, who led the floor debate for her party. “Today, we changed the law; we changed direction; we changed history.”

Corporate advocates opposed the bill, contending that it undermines the statute of limitations in civil rights law and would foster costly lawsuits at a time when businesses are coping with the recession.

The HR Policy Association criticized the Senate process for considering the legislation, which went straight to the floor without committee hearings or votes.

The Ledbetter bill was originally introduced in the previous Congress. It was approved by the House in 2007 but was blocked by a Senate filibuster in 2008.

“We had hoped that the pronouncements of the new administration about seeking bipartisan consensus solutions would carry over into the human resources policy field,” Daniel Yager, chief policy officer and general counsel for the association, said in a statement. “This steamrolling of the bill is more akin to the old-school style of one group pushing through legislation without trying first to resolve differences among the various stakeholders.”

This week, Senate Republicans offered several amendments that would narrow the scope of the lawsuit filing deadline, limit suits just to those involving pay, and clarify that only an employee, rather than anyone “affected by” pay discrimination, could sue. They were all defeated.

Proponents say the measure would overturn a 2007 Supreme Court decision that resulted in workplace injustice.

“It keeps open the courtroom doors to women, minorities and people with disabilities,” Mikulski said.

Critics counter that the bill would eviscerate the statute of limitations and subject businesses to suits involving people who no longer work at the company or may even have died.

“It’s terrible public policy to say that you can be sued [for] something that happened 30 years ago,” said Larry Lorber, a partner at the law firm Proskauer Rose in Washington.

Ledbetter, a former supervisor at a Goodyear Tire & Rubber plant in Alabama, sued the company for paying her less than her male counterparts for 20 years.

The Supreme Court held, 5-4, that Ledbetter should have filed her claim within 180 days of the initial discriminatory decision rather than nearly two decades later. She said she didn’t realize the pay discrepancy existed until a colleague placed an anonymous note in her mailbox many years later.

November’s elections put Senate Democrats in a much stronger position to push Ledbetter’s cause. The party’s majority increased to at least 58, with a Minnesota seat still in dispute. Last week, the Senate easily overcame a filibuster when Democrats agreed to consider amendments.

One of them, offered by Sen. Kay Bailey Hutchison, R-Texas, would have started the clock on the statute of limitations when a plaintiff “knows or should have known” about pay discrimination. The proposal had the backing of business groups.

The amendment was defeated, 55-40. Democrats asserted that the language would place an unreasonable burden on plaintiffs.

Holly Eng, a partner in the labor and employment group at Dorsey & Whitney in Minneapolis, said the Hutchinson amendment would have made the Ledbetter bill more palatable.

“It gives [an employee] a little more flexibility, but it also gives employers reassurance that we may not have to defend completely stale claims,” Eng said.

Hutchison said she was trying to provide balance to the Ledbetter bill. Mikulski, however, said that the Supreme Court ruling ignored workplace realities and tipped the scales toward companies.

“Their decision was biased and protects corporate interests over human interests,” Mikulski said.

With the Ledbetter bill certain to become law, HR professionals need to be prepared to address pay questions.

“If an employee complains about a prior action, you have to pay attention and you have to do your homework,” Eng said.

It also might be necessary to keep copious records of compensation decisions indefinitely.

The frontline burden in pay is going to fall on HR people,” Lorber said.

But Mikulski asserted that life does not have to become more difficult for companies.

The best way to avoid a lawsuit is, don’t discriminate,” she said.

—Mark Schoeff Jr.

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