IN THE NEWS – FAIR PAY ACT EXTENDS TIME FOR CLAIMS

President Obama signed into law on January 29, 2009 the Lilly Ledbetter Fair Pay Act, extending the time period for filing of wage discrimination claims. This legislation was passed specifically in response to a 2007 decision of the U.S. Supreme Court dismissing as untimely an employee’s Title VII sex discrimination claim that for many years she was paid significantly less than her male counterparts for performing the same job.

Most discrimination claims require timely filing with the EEOC or applicable state agency. In Florida, claims under Title VII and/or the Florida Civil Rights Act must be filed with the EEOC within 300 days, and with the Florida Commission on Human Relations (the FCHR) within 365 days, of the incident giving rise to the claim.

While this rule makes sense with respect to discreet acts of discrimination, such as termination of employment, many critics of the U.S. Supreme Court’s decision in the Ledbetter case (including Justice Ruth Bader Ginsburg, who wrote a strong dissenting opinion in the 5-4 decision), have pointed out that because workers generally treat salary information as confidential, an employee may be unaware for years that a pay disparity exists. In the Ledbetter case the plaintiff, who had worked as a supervisor at a Goodyear Tire and Rubber Company plant for 19 years, started out at the same salary as her male counterparts. By the time she discovered the pay difference as she neared retirement, her salary was 40% lower than male supervisors, who had received significantly higher raises over the years.

Under the new law, the statute of limitations period is restarted every time the employee receives a paycheck.

As a practical matter, this decision means that more employees will have the opportunity to file wage claims under the sex discrimination prohibition in Title VII (which provides higher damages), and will no longer be limited to the remedies under the Equal Pay Act (which has a lower cap on damage awards and no provision for punitive damages).