Federal Judiciary

Congress overturns Court on job bias

By Akin Gump Supreme Court Practice Group

Rewriting a law to overcome a narrowing by the Supreme Court, Congress on Wednesday finished passage of a bill that will make it illegal each time an employer writes a paycheck that gives some workers less than others, because of race, sex, disability, religion or national origin.  The so-called “Lilly Ledbetter Fair Pay Act of 2009″ has been assured of approval by President Obama, and, when signed into law, will apply to bias claims that were in court as of May 28, 2007, or after that date.  The text of the new law, Senate bill 181, in final form, can be found here.

The bill is a direct response to the Supreme Court’s 5-4 decision on May 29, 2007, in Ledbetter v. Goodyear Tire & Rubber Co. (docket 05-1074).  The Court’s ruling can be found here.

In that decision, the Court interpreted Title VII of the Civil Rights Act of 1964 to mean that a violation of that law through biased pay scales occurs only when the pay policy is instituted, and thus there is no new violation each time a paycheck is issued to implement that policy.  That significantly shortemed the time when a worker could bring a Title VII bias claim, and could mean that, if a worker did not learn of the discrimination until some time later, beyond the filing deadlines under the law, the claim would have to fail.

That is, theCourt said, if a biased pay scale goes unchallenged within 180 days, “current effects alone cannot breathe life” into a claim filed beyond that period, even if the worker’s discovery of the differential is belated.

The new law, because it would apply to cases still pending that were filed the day before the Court’s ruling, or thereafter, it has the specific effect of overturning the Ledbetter decision.  It cannot alter any case that has been finally decided, however. Congress had the authority to overturn the Ledbetter ruling because that was based only on the Court’s reading of a statute, and not a constitutional provision.

Congress, in the preamble to the new bill, said the Supreme Court decision “significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades.”

The decision, it added, “ignores the reality of wage discrimination and is at odds with the robust application of the civil rights laws that Congress intended.”

The measure applies not only to discriminatory pay claims under Title VII, covering bias based on race, color, religion, sex or national origin, but also to such claims under the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act of 1973.

The key provision says that “an unlawful employment practice occurs” not only when a compensation policy or practice is adopted, but also when a worker becomes subject to the policy, or when the policy is applied to any worker “each time wages, benefits, or other ocmpensation is paid,” resulting from the discriminatory policy.

In referring to benefits, as well as wages, the new Act might be interpreted to mean that a workers’ entitlement to something other than wages or salary may be covered, so long as it is tied to the discriminatory pay scale. Thus, pension benefits linked to wage or salary levels perhaps also are covered.

Full post as published by SCOTUSBLOG on January 28, 2009 (boomark / email).