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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.

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