Corporate & Securities Law

The Lilly Ledbetter Fair Pay Act and Syntactic Ambiguity?A Cautionary Tale

By Ken Adams

Reader Kazu brought to my attention the following language from the recently enacted Lilly Ledbetter Fair Pay Act (emphasis added):

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

What we have here is repeated instances of two modifiers (discriminatory and compensation) preceding two nouns (decision and practice), hence the possibility of syntactic ambiguity. (See MSCD 11.3.)

In Jottings by an Employer’s Lawyer, Michael Fox suggests that courts might be willing to hold that only discriminatory, and not compensation, modifies practice. That could result in the law reaching “all types of employment decisions that affect pay beyond a simple decision on wages, including demotions and promotions.”

By contrast, Ross Runkel of LawMemo says that compensation modifies both nouns, so that whatever the “other practice” is, it must relate to compensation.

I can think of another possibility, at least a theoretical one: that discriminatory and compensation both modify just decision and not practice.

The quoted text makes it clear that the language applies in the context of discrimination in compensation, so I think a reasonable reader would conclude that discriminatory compensation modified both decision and practice. But it’s unfortunate that one should even have to think about this.

Michael Fox suggests that he doesn’t know how to avoid this sort of problem with a new piece of legislation. I have an idea! Don’t botch the drafting! If you draft statutes or contracts, you should become familiar with the sources of syntactic ambiguity and learn how to purge it from your drafting. (You might want to check out chapter 11 of MSCD.)

In this case, it would have been simple enough to refer to “a discriminatory compensation decision or other discriminatory compensation practice.” That would have precluded any arguments and reader miscues.

Full post as published by AdamsDrafting on February 12, 2009 (boomark / email).