Employment Law Updates: The Lilly Ledbetter Fair Pay Act of 2009

The Lilly Ledbetter Fair Pay Act of 2009 became law earlier this year, and successfully reverses a 2007 U.S. Supreme Court decision (Ledbetter v. Goodyear Tire & Rubber Co.) in which a woman had sued her employer over wage discrimination. The court ruled that because the company’s initial wage decision had occurred many many years earlier, Ledbetter’s claim was time-barred even if it had an ongoing discriminatory impact on her present pay level.

The fundamentally grievous flaw in this decision is obvious: an employee may not learn until years later about their employer’s discriminatory decision regarding wages! (The ongoing taboo in the U.S.A. regarding talking about one’s salary works to an employer’s advantage.) Under the 2007 Ledbetter decision, if you found out years into your employment that a discriminatory wage decision had sent you down a path of lower wages and fewer benefits, well that sure is too bad but it's too late for you to do anything about it. In short, the employer would have gotten away with it.

The Ledbetter Fair Pay Act of 2009 changes the definition of the actionable event. The 2007 Supreme Court decision opined (albeit very closely) that it was the 'original decision' about wages and compensation which started the clock ticking. This legislation reverses course and says that an act of wage discrimination occurs *each time* wages, benefits or other compensation are paid.

Why is this a good thing for workers? A discriminatory decision about wages can have a long-term – even lifetime – impact on a person’s earnings. While the Act still limits the scope of recoverable back pay to the two years before the filing of the claim, at least it greatly expands the scope of when a person may file.