Preparing for Fair Pay Legislation - Part 3

As this has made the national news and all the labor reports, I won't dwell again on the effect of S.181. I will simply amplify a few points some I made previously. S.181, officially titled the Lily Ledbetter Fair Pay Act of 2009 passed without amendments. That means several things.

Title II of HR 11, which would have changed the Equal Pay Act and dramtically affected pay setting decisions, was not voted on by the Senate. It wasn't even considered. (Don't assume that is the final word on this, however.) Before S.181 can be presented to the President (who has said he will sign it), the House must vote and approve S.181. Look for that to happen next week.

The Senate vote was pretty much along party lines with all Democrats present (Clinton having resigned without an appointed successor, Franken not being certified and Kennedy not being present) voting for and most Republicans, except for Hutchison, Snow and Murkoswski, voting against passage. Both Tennessee senators voted against passage.

I have already addressed the impact of S.181 (at least as it appeared in Title I of HR 11). It gives employees (not just females) the right to sue for discriminatory pay no matter when the actual pay setting decision was made. So long as one discriminatory pay setting decision was made that continues to affect an employee's compensation within the 300 day (as it is in Tennessee) limitation period for filing a charge, that pay setting decision can be challenged. As I said in a prior post, the employee's back pay recovery is limited to two years prior to the charge. But in theory (and the reality, as in Ledbetter's lawsuit) employers could be faced with defending pay decisions that are quite old and long since forgotten.

More importantly, the bill specifies that it "takes effect" on May 28, 2007, the day before the Supreme Court issued the Ledbetter decision and applies to claims pending on that date. (In Ledbetter's case (or any other person whose lawsuit was legally final) should she try to reopen it, that move raises very interesting constitutional problems.)

I should also mention one other point about S.181. It permits an employee to challege any "other practice" that causes discriminatory pay. In addition to the actual pay setting decision, if a performance appraisal has an effect on pay setting, the ratings on the appraisal could be challenged as well. The important point is that the phrase "other practice" doesn't actually mean any "other practice" can be challenged. In urging the Senate to reject an amendment that would strip the "other practice" language from S.181, Senator Mikulski (the floor sponsor of S.181) explained: "The bill specifically says that it is addressing ‘‘discrimination in compensation.’’ That limiting language means that it already only covers such claims—nothing more, nothing less."

I still intend to addres what employers can do, in light of S.181 (assuming it passes) and even if Title II of HR 11 were to pass, to help protect themselves from compensation discrimination claims (stale or otherwise). I will close this post, however, by quoting the no doubt, well-meant, but utterly naive statement by Senator Mikulski made in urging the Senate to reject an amendment by Senator Hutchison. "I say to the private and nonprofit sector: If you don’t want to be sued, don’t discriminate. That is the best way to go. If you don’t want to be sued, don’t discriminate."

If only it were so easy.