Lilly Ledbetter Fair Pay Act Restores Discovery Rule to Pay Discrimination Cases

In one of the first strokes of his pen since his election, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009. The effect of this legislation was to reverse the U.S. Supreme Court decision in the case of Ledbetter v. Goodyear Tire & Rubber Co., Inc.

That case reversed a judgment in favor of Ledbetter, which she had won after discovering her employer had been giving her unequal pay for over nineteen years.  Although she had been a very productive employee for those nineteen years, Goodyear paid Ledbetter less than the comparable male employees doing similar work. As she was retiring, Ledbetter was informed that this pay discrimination had been on-going for as long as she had worked for Goodyear.  At trial, a jury found that Goodyear was liable for discrimination, and awarded Ledbetter damages. But the Supreme Court reversed the judgment, reasoning in its split (5-4) decision that Ledbetter should have filed her suit 180 days after the first act of discrimination.

The lower courts had consistently held that the 180 day requirement began to run only after the employee had discovered the discriminatory act (commonly known as the “discovery rule”). The Supreme Court upended the discovery rule.  The Lilly Ledbetter Fair Pay Act restores the discovery rule to pay discrimination claims.

The Act also applies to race, gender, color, religious, and national origin claims under Title VII; to age discrimination claims under the Age Discrimination in Employment Act; and handicap discrimination claims under the Americans with Disabilities Act.

Two other aspects of the Act are of importance:  The Act allows employees to claim back pay for a period of up to two years prior to the filing of the claim with the Equality Employment Opportunity Commission. The Act is also retroactive, with an effective date of May 28, 2007.  The Act does not restore the damages awarded to Ledbetter in her case.

What Should Employers Do? Discrimination in its many forms is, of course, illegal. Each unequal paycheck will constitute a separate violation, and employees will have 180 days to file their claims once the acts are discovered.  If you are in doubt about the pay practices of your company, you should promptly consult an experienced employment attorney to address those issues.

Massachusetts Supreme Judicial Court Defines Pregnancy Discrimination Rights Against Small Employers

In an important case decided today, the Massachusetts Supreme Court has announced that the Massachusetts Equal Rights Act does allow a plaintiff who works for an employer with fewer than six employees to sue for pregnancy discrimination. The case clearly opens the door for additional pregnancy discrimination claims against Massachusetts employers.

However, preganancy discrimination claims against smaller employers still cannot be brought in the Massachusetts Commission Against Discrimination, which has jurisdiction only over employers with six or more employees. Claims against smaller employers will proceed directly to court.

Prior to this ruling, it was unclear under Massachusetts law whether employers who did not fall within the jurisdictional limitations of the Massachusetts General Laws chapter 151B (requiring 6 or more employees) could be sued for pregnancy discrimination. The SJC made it clear that these employers are not exempt from pregnancy discrimination claims.

Small employers will benefit from the fact that defending the claim will at least be less expensive than the two step process under G.L. c. 151B.

Larger employers are still required to defend pregnancy discrimination claims at the MCAD, where the claimant has the option of maintaining the claim for part of its handling, or all of its determination, as well as the option of removing the case to court. The employer does not have the option of removal.

The MCAD process is very expensive (and distracting) for any employer and the financial and business burden would have greatly impacted employers with fewer than 6 employees. From an economical and business perspective, MERA provides these employers with the right to defend claims just once, rather than duplicating their costs through the MCAD investigation process and then, if removed by the plaintiff, incur those costs and distractions once again in court.

For these smaller employers, one forum is more than enough for them to bear.

The case is THURDIN vs. SEI BOSTON, LLC.

If you would like to discuss the impact of this case on your business, please call me.