Over the last week, two unrelated stories caught my eye.  For employers, they are a reminder that claims of pay inequality based on gender are still something to be concerned about. 

Photo Courtesy Library of Congress c. 1943

The first story is that Governor Malloy announced plans for a new study to examine “factors that contribute to the gender wage gap in Connecticut’s workforce.” 

The study will be run by  new Connecticut Department of Labor Commissioner Sharon Palmer and Department of Economic Development Commissioner Catherine Smith.  The Governor has asked the commissioners to make recommendations on the issue by October 2013.   

I’ve talked about this issue before; there are some who believe that the wage gap is overstated.  But the study will make headlines this year and this renewed focus in Connecticut on the issue should have employers revisiting their own practices.

The second story illustrates the claim in much more real world terms and shows the perils of trying to navigate your way through such claims. 

In Morse v. Pratt & Whitney, decided last week, a federal court — among other issues — denied an employer’s motion for summary judgment on an Title VII unequal pay claim.

Continue Reading Gender Inequality Claims Make Headlines in Case and in New Study

Two stories over the last few weeks have been percolating that may be of interest to employers in Connecticut.  You may not see the impact immediately, but the implications are certainly there.

First, the EEOC is now looking to conduct more direct investigations — that is, investigations that are initiated without any claim by an employee or former employee — to see if gender-based pay bias is out there. 

As reported by Employment Law Daily:

In an effort to combat gender-based pay discrimination, the commission has launched pilot programs at three of its district offices to figure out the best approach to using its authority to conduct direct investigations — investigations initiated without any prior charge of pay discrimination — to determine whether Equal Pay Act violations are occurring.

The article goes on to note that the agency is also looking to see if it can use its authority to root out discrimination based on sexual orientation. That will have less impact in Connecticut, where the laws preventing discrimination on the basis of sexual orientation and gender identity are already on the books. 

Second, the NLRB recently issued a decision that calls into question whether an employer can instruct employees to keep an investigation confidential and not discuss it with co-workers.  It left Jon Hyman, from the Ohio Employer’s Law Blog, “speechless”, who noted today that the EEOC is also taking the same position. 

Numerous blogs have recapped the decision.  Here are a few to take a look at:

  • The In-House Advisor blog was quick to note that the NLRB’s admonition isn’t absolute and that an employer may be justified if: a witness needs protection; evidence is at risk of being destroyed; testimony is in danger of being fabricated; or there is a need to prevent a cover-up.
  • The veteran Employer Law Blog says that the “the NLRB’s position puts employers in a tough spot. How do you protect the integrity of an ongoing investigation without asking witnesses to maintain confidentiality at least while the investigation is ongoing? Employers should treat each investigation on an individualized basis. If a decision is made to request confidentiality during an investigation, the employer should document its specific business reason for requesting confidentiality in that case. “
  • The New York Labor & Employment Law Report also does a nice job summarizing the key points.

For employers returning from their summer vacations, these new developments may just make your fall a little more interesting. 

 

As those who have been following my tweets know, I have been at the American Bar Association’s House of Delegates and midyear meetings. There’s lots of substance to these meetings and you can certainly follow along with the ABA Journal.

Among the topics discussed today, was the Paycheck Fairness Act now pending in Congress. If you are not familiar with it, you should be because by all accounts, it’s moving front and center this year as an important piece of legislation for the Obama Administration and others.  Rep. Rosa DeLauro of Connecticut is the primary sponsor of the bill in the House of Representatives.

John Phillips reported on this recently. As a result, employers should take stock of their compliance programs and certainly begin a review (if it is not done regularly) of your current compensation procedures.

What does the bill do? John has a good summary but some of the key changes would be to revise the remedies for sex discrimination in the payment of wages by permitting uncapped punitive and compensatory damages and limit employers’ ability to defend against EPA claims. The bill would also prohibit an employer from retaliating against an employee who inquires about, discusses, or discloses his/her own wage or that of another employee unless the disclosing employee has access to that wage information as part of his/her essential job function. 

 

 

There’s a relatively new children’s book out now entitled, "The Wolf Who Cried Boy". It’s a humorous take on the old fable and I read it outloud one evening this week at home.  

I can’t help but be reminded of both the classic and new story, reading all of the hyperbole and hype of the last 24 hours regarding the new Ledbetter Fair Pay Act and those who are quick to predict that the floodgates of employment litigation are now open. 

Let’s clarify a few issues up front: 

  • Is the Ledbetter Fair Pay Act important for employers to understand? Sure, just as all changes to employment laws are important. 
    .
  • Does it dramatically change the law? Not really.  Before this law, employers still weren’t allowed to engage in pay discrimination; it’s just that the time frames for bringing suit under some pay discrimination claims had been defined narrowly by the U.S. Supreme Court in 2007.   This Act extends the time frame for bringing suit by treating each new paycheck as a basis for a discrimination lawsuit, rather than just the original decision to discriminate. 
     
  • Will this lead to a dramatic upturn in pay discrimination lawsuits? The jury is definitely still out on this one.  

Here’s the greater perspective.  Before the U.S. Supreme Court decision in 2007, women could bring pay discrimination lawsuits under both Title VII’s overall scheme, or the Equal Pay Act.  For reasons that are still not fully known (though discussed by National Journal’s Stuart Taylor here (H/T Point of Law)) , Ms. Ledbetter did not pursue her Equal Pay Act claim on appeal after it was dismissed on the merits (effectively forfeiting it).  The U.S. Supreme Court ruled only that for pay discrimination claims brought under Title VII, a 180-day statute of limitations applied to pay discrimination decisions.Courtesy of the White House

Thus, after Ledbetter, if the employer’s discriminatory pay decision occurred in 2007, the employee was out of luck now to sue under Title VII.  Each new paycheck was not an "act" of discrimination. 

The new law treats each paycheck as a new "act" of discrimination, effectively re-starting the statute of limitations each time a paycheck is issued.

But here’s why the fuss about the new act is overblown. The employee still could sue under the Equal Pay Act. Indeed, employers should be much more concerned about the Equal Pay Act — which was unaffected by the Fair Pay Act —  when it comes to pay discrimination claims.  

Unlike Title VII pay discrimination claims, employees do not need to file their Equal Pay Act claims with the EEOC, and claimants have two years in which to file their claim under the Act (three years if the violation is willful).

But here’s the kicker for Equal Pay Act claims: The employee does not need to prove discriminatory intent, unlike Title VII.  In fact, the Equal Pay Act focuses on disparity in pay for substantially similar work; contrast that with Title VII which focuses on a discriminatory action that causes a disparity in pay.  So, when the employee is paid less than similarly situated employees of the opposite sex, an Equal Pay Act claim can arise without showing that the employer intended to discriminate. 

Does this mean that employers have no reason to be concerned about the Ledbetter Fair Pay Act? Of course not. The act has the potential of opening of employers to older claims of discrimination against managers and supervisors who have long since gone. But remember, employees will still need to show that the employer intended to discriminate — a burden that is not insignificant.  And former employees are not going to be able to revive a claim of pay discrimination without a recent "paycheck" to go along with it. 

It’s difficult to get exact numbers of pay discrimination claims and look at the numbers of claims filed both before and after the Ledbetter decision came out, but a cursory review of the statistics published by federal agencies under the No Fear Act doesn’t seem to reflect a big downturn in the numbers of pay discrimination claims after Ledbetter.  In fact, the United States Postal Service reports more pay discrimination claims being made in 2008 (after Ledbetter), than 2007.  Thus, with Ledbetter effectively being overturned, it’s hard to believe that the Act will impact the numbers of claims significantly. 

There is another bill that would change the underlying law that employers should follow closely — the Paycheck Fairness Act (H.R. 12). The Paycheck Fairness Act would limit an employer’s ability to justify paying different salaries to workers based in different locations with different costs of living. The bill would lift the caps on compensatory or punitive damages for which employers would be liable, in addition to current liability for back pay. These damage penalties would apply to even unintentional pay disparities.

The House passed that bill as part of the Ledbetter Fair Pay Act bill, but the U.S. Senate did not take that up.  Backers of that bill, including Rep. Rosa DeLauro of Connecticut, will continue to press on

For employers, the Ledbetter Fair Pay Act should just be another reminder to be vigilant in the monitoring of your compensation practices.  The EEOC’s Compliance Manual (H/T Moore) gives some suggestions on the issues that employers can review to determine their compliance with the applicable laws.  

There’s little reason for employers to cry "wolf" or "boy" over this latest Act. Stay focused and use this current annual review season to ensure that your pay practices are supported by accurate data and are fair. 

To the surprise of absolutely no one, the U.S. House of Representative overwhelmingly passed two employment law bills addressing compensation issues.  

The Lilly Ledbetter Fair Pay Act, HR 11, pretty much split among party lines 247-171. The Paycheck Fairness Act, HR 12, passed 256-163.  

The bills now move on to the Senate, where the vote is expected to be closer.  

 

One of the more interesting television shows out there now is the Emmy award-winning  "The Amazing Race". At the start of the show, the host shouts, "Ready, Set, Go!" and off the contestants go on a race around the world places as yet unknown.copyright 2009 Daniel A. Schwartz All Rights Reserved

That, in essence, is what 2009 is shaping up to be in employment law: a race to change things as fast as you can with the final destination (and pitstops) as yet unknown.

This week, for example, two employment-law bills are on the fast-track for passage in the U.S. House, but it’s being done so quickly that you may have a tough time catching up. 

Several Washington, D.C.- based blogs (including the Washington Labor & Employment Wire) are reporting this site that two pay-related bills are on the fast-track for consideration by Congress, perhaps in an effort to get them on to President-Elect Obama’s desk by the time inauguration rolls around.

From the Washington D.C. Employment Law Update:

…House Majority Leader Steny Hoyer (D-Md.) announced that two employment-related bills will reach the House floor later this week. Both the Paycheck Fairness Act (H.R. 1338) and the Lilly Ledbetter Fair Pay Act (H.R. 2831) were introduced and easily passed the House during the last Congress, but stalled in the Senate due primarily to Republican opposition and a presidential veto threat. It is noteworthy that both bills are being sent directly to the House floor instead of being vetted through the committee process….

The Paycheck Fairness Act [version that]… will reach the House floor this week aims to do the following:

  • Amend the Fair Labor Standards Act (FLSA) to allow victims of pay discrimination to potentially recover more remedies than those currently provided in the FLSA

  • Enforce a new concept of “equal pay for comparable work”

  • Prohibit employers from reducing other employees’ wages to achieve pay equity

  • Require employers to disclose job categories and pay scales as needed to enforce the law

  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases; instead, employers must additionally prove that such factor is “job related” and serves a “legitimate business purpose.” An employee could rebut this claim by showing that an “alternative employment practice” exists that could achieve the same business purpose

  • Entitle employees to unlimited punitive and compensatory damages, regardless of whether the wage discrimination was intentional.

You can view some of my earlier posts about the Paycheck Fairness Act starting here.  As I said then, this bill will re-emphasize to employers the importance of documenting pay decisions. 

On the Lilly Ledbetter bill, I summarized it and discussed the issues related to it in posts such as this one.   My comments then are fairly relevant to today as well:

The issue in Ledbetter case was, in many ways, a technical question of how far back an employee should be able to go to challenge past pay practices — in other words, about deadlines and "statute of limitations". The Supreme Court said that the 180-day deadline found in the statute should apply. Should the statute of limitations remain at 180 days? 1 year? 2 years? 5 years? 20 years? I don’t suggest to know what the right answer is. Ultimately, the answer to that question will help shape the Paycheck Fairness Act bill’s final outcome and it should be the one that the politicians focus on.   Employers would certainly like shorter statute of limitations and have good arguments that because supervisors leave, short statute of limitations prevent stale claims from being brought. But employees have decent arguments that a longer statute of limitations should apply because discriminatory pay practices are often learned of only after they occur.
 

For employers, the debate over the Paycheck Fairness Act is one worth paying attention to because the real-world consequence of the bill’s passage (whether now or next year) will be to increase the importance of documenting pay practices and to give employers another reason to preserve such documents for future litigation.

Hopefully, as the bill progresses, we’ll see more debate on the pros and cons on having longer deadlines to file suits.

With the bills on the fast-track, i doubt we’ll see much substantive debate on the bills, which is unfortunate. In the election, the concept of "change" was thrown about. This week is the first real sign that, for employment law issues, change is here.

Earlier this month, I provided a legislative update on the Paycheck Fairness Act bill, which passed the U.S. House of Representatives. Long-time Congresswoman Rosa DeLauro (D-Conn, 3rd) has been a leading sponsor of the bill and she has a long and distinguished career in the House. 

Yesterday, Rep. DeLauro issued a column in the Huffington Post about the bill.  Front and center in her discussion is the case of Lilly Ledbetter and her lawsuit against Goodyear Tire & Rubber Company that went before the U.S. Supreme Court.  

As a result, Rep. DeLauro says that the bill would close the "loopholes" in the law.

On Thursday July 31st, the House of Representatives took the next step to correct this injustice by passing H.R. 1338, the Paycheck Fairness Act by a vote of 247-178. This vote was about ensuring that women who work hard and productively and carry a full range of family responsibilities are paid at a rate they are entitled. So many employers and companies do the right thing as a matter of course, but passing this bill says that this is now a matter of right and wrong, that discrimination is unacceptable anywhere and we are all diminished when we fall short. We have the chance to make all men and women whole and contribute to the richness of America. 

What’s fascinating is the fact that the Ledbetter case has gotten intertwined in the political arena (in fact, Ms. Ledbetter will be a featured speaker at the Democratic National Convention on Tuesday).  The issue in Ledbetter case was, in many ways, a technical question of how far back an employee should be able to go to challenge past pay practices — in other words, about deadlines and "statute of limitations".  The Supreme Court said that the 180-day deadline found in the statute should apply. 

Should the statute of limitations remain at 180 days? 1 year? 2 years? 5 years? 20 years?  I don’t suggest to know what the right answer is.  Ultimately, the answer to that question will help shape the Paycheck Fairness Act bill’s final outcome and it should be the one that the politicians focus on. 

Employers would certainly like shorter statute of limitations and have good arguments that because supervisors leave, short statute of limitations prevent stale claims from being brought. But employees have decent arguments that a longer statute of limitations should apply because discriminatory pay practices are often learned of only after they occur. 

For employers, the debate over the Paycheck Fairness Act is one worth paying attention to because the real-world consequence of the bill’s passage (whether now or next year) will be to increase the importance of documenting pay practices and to give employers another reason to preserve such documents for future litigation.   

Hopefully, as the bill progresses, we’ll see more debate on the pros and cons on having longer deadlines to file suits.

Lastly, employers should not lose sight of other potential claims that can still arise, regardless of what happens with the Paycheck Fairness Act legislation. Indeed, the irony of the Ledbetter case is that there already exists a law that would have permitted Ledbetter to sue. The Equal Pay Act specifically addresses pay disparity and has a longer statute of limitations. But for some reason, Ledbetter’s attorney chose to sue under the all-purpose anti-discrimination law, Title VII, thus dooming her claims.

(H/T: Rep. DeLauro cross-posted her statement at My Left Nutmeg)