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Protect Your Company from a Ledbetter-Style Equal Pay Claim
By Elizabeth M. Garcia on March 21, 2014

Eight years ago, the United State Supreme Court decided Lilly Ledbetter, saying that Ledbetter could not sue her employer for discriminatory wages, because she waited too long to file the suit.

Eight years ago, the United State Supreme Court decided Lilly Ledbetter, saying that Ledbetter could not sue her employer for discriminatory wages, because she waited too long to file the suit.

Lilly Ledbetter was the plaintiff in the American employment discrimination case Ledbetter v. Goodyear Tire & Rubber Co. Ledbetter was hired by Goodyear in 1979; she retired from the company in 1998. She then sued the company for paying her significantly less than her male counterparts. Eventually, the lawsuit reached the U.S. Supreme Court, which denied her claim because she did not file suit 180 days from her first pay check, even though she was unaware of the issue at the time.

As a result, the Lilly Ledbetter Fair Pay Act of 2009 was signed into law, amending the Title VII of the Civil Rights Act to make it easier for employees to file suit. The 180-day statute of limitations now resets with each paycheck received by the employee.

Since the signing of the Lilly Ledbetter Fair Pay Act of 2009, the number of Equal Employment Opportunity Commission complaints filed for equal pay have risen to a 16-year high. The Act allows an employee to recover back pay for up to two years preceding the filing of a wage discrimination claim. The changes to the Fair Pay Act also apply to claims filed under the Americans with Disabilities Act of 1990 (ADA) and the Rehabilitation Act of 1973.

Although an employer cannot completely insulate itself from a lawsuit, there are a few things which can be done proactively to reduce a company’s exposure.  First, analyze the pay, salary and benefit structure. At a minimum, pay rates/salaries should be reviewed based on sex, age, race, religion, national origin or disability. The EEOC may be able to provide software to assist in this analysis.

Second, if certain classes of employees receive less pay than others for similar work, bring the pay, salary and/or benefits of those employees more in line with your other employees. If you have legitimate, non-discriminatory business reasons which can be clearly articulated to explain why these employees are paid less, consult with an attorney to determine how best to defend the company if a suit is filed. However, do not undertake the analysis if the company knows it will not rectify the situation. This may be a recipe for punitive damages. In other words, if there is no plan to change the employee’s pay, do not conduct an analysis.

Remember, if you treat your employees fairly and equally regardless of their race, color, creed or other protected class, your company is better positioned to defend a lawsuit under Title VII.

Tags: Equal-pay
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