WASHINGTON (Aug. 17, 2009)—A political hot potato involving Goodyear, a manager who sued the company for pay discrimination and election-year politics ended Jan. 29 when President Barack Obama signed the first legislation to cross his desk—the Lilly Ledbetter Fair Pay Act.
It came too late to help the bill's namesake—a 30-year Goodyear employee who found out just before retiring that her male peers were paid considerably more than she was paid throughout her career.
The legislation is a monumental civil rights achievement for women and all workers, according to proponents of the law that overturns a controversial Supreme Court ruling on wage discrimination.
Not so, say others who opposed the legislation and see it as spawning frivolous lawsuits against employers.
Dan Danner, executive vice president-public policy and political for the National Federation of Independent Business, sums up their thinking: “This bill will force (employers) into the position of trying to defend an employment decision that occurred in the distant past,” he said in a Jan. 15 letter to the Senate, which passed the bill 61-36.
“Discrimination cases usually rely upon circumstantial evidence—‘he said, she said' testimony. The best time to reconstruct what actually occurred is immediately after the event happened, not years later.”
Twists and turns
What is undisputed is that the Ledbetter case became the highest-profile employment discrimination event in a decade. Among the twists and turns were:
* Ms. Ledbetter won her original complaint; a federal jury found a $3.8 million judgment against Goodyear;
* Federal caps on pay discrimination cases reduced the award to $360,000;
* Goodyear won on appeal, because the law said a claim had to be filed within 180 days of the first discriminatory paycheck—although Ms. Ledbetter had no knowledge of the alleged discrimination until a month before she retired.
* The U.S. Supreme Court, in a bitterly disputed decision, upheld the appeal for Goodyear.
* The Democrat-controlled U.S. House of Representatives passed a bill last year changing Title VII of the Civil Rights Act, overturning the Supreme Court decision.
* Senate Republicans effectively killed the bill.
* In the 2008 presidential election, the Democrats ran campaign ads featuring Ms. Ledbetter, who pointed out Republican presidential candidate John McCain was against the legislation.
* The Ledbetter Act, re-introduced after the election, passed in the House and Senate. This time four Republican female senators voted for it, while all but one of the male GOP senators—including Mr. McCain—voted against it.
Amends Civil Rights Act
The Ledbetter law amends the Civil Rights Act to make it plain that an act of pay discrimination is compounded with each new paycheck, rather than limited to the initial act. That means women and minority workers can file pay discrimination claims within 180 days of their most recent paychecks, rather than the original paychecks.
As the name of the law makes clear, it began with the pay discrimination claim of Ms. Ledbetter, a salaried, non-union supervisor at Goodyear's Gadsden, Ala., tire plant. She was the only woman among 16 area supervisors at the facility.
Less than a year before her retirement, Ms. Ledbetter discovered via an anonymous note that she was being paid more than $500 a month less than the lowest-paid male supervisor at Gadsden—a man with considerably less seniority than she.
“When I saw that, it took my breath away,” Ms. Ledbetter—who couldn't be reached for comment for this story—told National Public Radio in a Feb. 11 interview. “I felt humiliated, I felt degraded.”
Ms. Ledbetter said an Alabama congressman had compared her with Rosa Parks, whose refusal to give up her bus seat to a white man was the spark that ignited the civil rights movement of the 1950s and 1960s.
“I feel honored to be compared to Rosa Parks,” she said. “She stood up for what she believed in, and so did I.”
The path to the law
Ms. Ledbetter filed her complaint with the Equal Employment Opportunity Commission (EEOC) in Birmingham, Ala., in 1998. Goodyear claimed her low pay was based on a poor performance evaluation shortly after she joined the firm in 1979. Ms. Ledbetter, however, said that evaluation was performed by a male supervisor whose sexual advances she had rebuffed.
After she won in a jury trial and lost in federal appeals court, Ms. Ledbetter brought her case to the Supreme Court, which ruled in Goodyear's favor on May 29, 2007.
While the Supreme Court majority professed to uphold the letter of Title VII, its decision went against the usual interpretation of Title VII in federal courts up to that time, according to Fatima Goss Graves, senior counsel for the National Women's Law Center (NWLC).
It was the NWLC that, more than any other organization, took up Ms. Ledbetter's cause after the Supreme Court decision.
In the years after Title VII's passage in 1964, Ms. Graves said, federal appeals courts generally ruled each discriminatory paycheck was a separate discriminatory act.
The Ledbetter decision, according to Ms. Graves, was one of the first after both Chief Justice John Roberts and Justice Samuel Alito had been installed on the court. “This was a real surprise,” she said. “This sent a bullet through the way Title VII had been interpreted. They just didn't understand how Title VII worked all these years.”
No one ever will really know how many pay discrimination cases were turned away in the years between the Supreme Court ruling and the signing of the Ledbetter Act, according to Ms. Graves. The Supreme Court ruling was cited in more than 300 cases that reached the courts, she said, but there's no way to count how many claims were withdrawn or never filed because of it.
But Gerald Maatman, an attorney with the Chicago firm of Seyfarth Shaw, said the case record before the Supreme Court ruling wasn't quite so simple. Mr. Maatman specializes in defending employers accused of work place discrimination, mainly in class-action lawsuits.
“There was a lot of debate in the law as to when the (Title VII) statute applied,” Mr. Maatman said. Some states allowed for a 300-day clause, rather than 180 days, and there was considerable disagreement within the federal circuits as to when the statute of limitations could be extended.
The National Passenger Railroad Corp. vs. Morgan case of 2002—concerning ongoing racial harassment—established the principle that continuing violations existed in work place harassment cases, according to Mr. Maatman. But in other discrimination cases, the law was more ambiguous. “It was a very complex issue that depended on the issues involved,” he said.
What does the law do?
Organizations that favor employers like to point out the very low number of discrimination claims that are found to have “reasonable cause,” meaning clear evidence of discrimination. Of 818 equal pay discrimination charges filed with the EEOC in fiscal year 2007, 61 were found to have reasonable cause, according to the agency's latest statistics.
More than half the cases were found to have “no reasonable cause,” or no persuasive evidence of discrimination. Another 132 were “administrative closures,” dropped for reasons that had nothing to do with the merits of the case.
However, merely citing the small percentage for “reasonable cause” cases is misleading, according to Dianna Johnston, EEOC assistant legal counsel, and Ernest Haffner, EEOC senior attorney adviser.
Quoting those statistics ignores the large number of cases—219 in fiscal year 2007—that had “merit resolutions,” or resolutions favorable to the workers who brought them, according to Ms. Johnston and Mr. Haffner. These don't necessarily mean that discrimination was found, they said, but they can include negotiated settlements, conciliations or withdrawal of cases after the charging parties received the benefits they wanted.
However the pay discrimination cases shake out, all parties are agreed on one thing: After the Ledbetter Act, there will be more of them.
“We know employers will need to spend a lot more time and resources researching records of work place decisions and old complaints,” said Mike Eastman, executive director of labor policy for the U.S. Chamber of Commerce. “The vast majority of civil rights claims don't have merit, but you still need to research them.”
While it is difficult to quantify how much the new law will cost employers, Mr. Maatman said, it constitutes “a perfect storm” for the filing of lawsuits, particularly in a depressed economy.
“Those suits will all be won or settled, meaning a lot more money in the pockets of plaintiffs' attorneys,” he said.
To Ms. Graves, the Ledbetter Act is “a good step forward” toward providing pay equality for women in the workplace. “It's a huge reminder to employers not to engage in discriminatory pay practices,” she said.
According to the NWLC, despite decades of activism to achieve equal pay for women in the work place, women still earn on average 78 cents for every dollar earned by men in equivalent jobs. Although the Ledbetter Act is a step forward for women, sources said, its application is restricted to the length of time women have to file pay discrimination claims.
The Paycheck Fairness Act—which would strengthen the Equal Pay Act by putting gender-based wage discrimination on an equal footing with race-based wage discrimination under the law, thus allowing full compensatory and punitive damages—would further redress pay inequities, according to an NWLC fact sheet.
That bill passed the House with the Ledbetter Act but wasn't taken up by the Senate, according to Ms. Graves. The NWLC hopes to see the Senate consider the legislation later this year, she said.