Equal Pay for Women: The First Step

Yesterday, President Obama signed his first legislative action, endorsing the Fair Pay Act intended to give workers more time to sue in court for pay discrimination based on sex or race.  The new law passed by Congress, the “Lilly Ledbetter Fair Pay Act” reverses the Supreme Court decision in Ledbetter v. Goodyear which held that the 180-day statute of limitations for pay discrimination cases begins to run from the time of the first initial pay decision.  That rule meant that Lilly Ledbetter, a manager at a Goodyear plant in Alabama for 19 years, could not sue for her unequal pay that continued up until she filed suit, but which first began 19 years ago.  The Court was sharply divided, with Justice Alito writing the opinion for the conservative majority of 5.  Justice Ginsburg wrote the dissent, noting that that such pay disparities are “often hidden from sight.”  In signing the new legislation, the President cited Census Bureau figures demonstrating that women still earn about 78 cents for every dollar men earn for doing equivalent jobs, and the disparity is even greater for women of color.  Michelle Obama’s first official First Lady function was a luncheon yesterday for Ledbetter as the figurehead of the equal pay movement: “She knew unfairness when she saw it, and was willing to do something about it because it was the right thing to do—plain and simple.”

Goodyear issued a statement vehemently denying that it had discriminated against Lilly Ledbetter, saying that she was paid the same as similar male workers at the plant.  They criticized Ledbetter for ignoring Goodyear’s policy of reporting concerns about discrimination and suing only after she retired.  Ledbetter claims she did not know about the pay discrimination until then, which she discovered inadvertently when a co-worker’s paycheck ended up by mistake in her pay envelope.  Ledbetter was making $3,727 per month, while men doing the same job were paid $4,286 to $5,236 per month. Ledbetter filed a complaint with the EEOC and was then assigned to lift heavy tires, which she felt was retribution.  A jury originally awarded her $3.3million, which was later reduced to $300,000.  Opponents of the Fair Pay Act claim that the law will encourage frivolous lawsuits.  However, the Fair Pay Act simply reinstates the longstanding time rule that was in place prior to the Supreme Court’s 2007 decision in Ledbetter.  Ledbetter herself will not be able to benefit from the new law due to the Supreme Court’s conclusive decision in her case and her retirement (and thus cessation of pay) from Goodyear.