What Ledbetter Has Wrought

It hasn't taken long for the effects of The Lilly Ledbetter Fair Pay Act to be felt.

My colleague in Morristown, New Jersey, David Copus has been following the Act closely, as well as warning about its potential impact. Here's the latest:

The key section of the Act provides as follows:

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.

The reason for highlighting the phrase “other practice” is because plaintiffs are already successfully arguing that the Act reaches all types of employment decisions that affect pay beyond a simple decision on wages, including demotions and promotions.

And to further make his point, here are two cases he has found in the first week after the bill was signed:

Bush v. Orange County Corrections Dept., No. 6:07-cv-588-Orl, 2009 WL 248230 (M.D. Fla. Feb. 02, 2009) at *2. The court held that plaintiffs could timely challenge demotions, which resulted in reductions in pay, that occurred 16 years before plaintiffs filed their EEOC charges. The Court noted the irony of the timing of the Act’s passage: “Thus, while [defendant’s] untimeliness argument was valid prior to last week, with the passage of the Act Plaintiffs' Title VII claims are no longer administratively barred.”

Gilmore v. Macy’s Retail Holdings, No. 06-3020 (D.N.J. Feb. 4, 2009). The Court held that the Ledbetter Fair Pay Act applies to an allegedly discriminatory promotion decision, where the promotion would have been to a higher paying job.

Fasten your seat belts.

Update 2.12.09: I noticed the ABA Journal has picked this up, and also it is running at least for now on the front page of law.com, so a higher number of hits today than usual. In light of that, I should make clear that some loose wording on my part has actually not made clear what actually happened in the two cited cases.

Rather than plaintiffs making the arguments, in both cases the issue was raised by the Court on its own initiative. In both cases, it ultimately didn't matter as the Court ruled on the merits in favor of the employer, still the import of the Ledbetter Act seemed clear to these two judges.

Ross Runkel, who always provides a voice of reason thinks the rationale is wrong (and my concern premature) and explains why in, Ledbetter Act apply to demotions and promotions? I hope Ross is right, but even if he is, it points out one of the dangers of any legislation. Until it is sorted out, it makes things unclear as to what the law is, which always leads to more litigation and more cost. I do not know of any way to avoid that with a new piece of legislation, but that cost is certainly one that should be factored in when considering the alleged benefit of any legislation.

2nd Update 2.12.09: Jeff Siegel of Boston's Morgan, Brown & Joy who represented Macy's in the New Jersey case was kind enough to offer more insight, as well as a gentle correction, about that case:

I represented Macy's in the Gilmore matter in which the Court, sua sponte, applied Ledbetter, and argued the Ledbetter application before Judge Simandle. Your analysis is slightly mistaken - the Court did not rely on the promotion decision (which was disposed of at summary judgment). Rather, the Court found a bonus plan that had been in place was subject to the Ledbetter amendments. Notably, one of the bigger issues concerned whether emotional distress damages would be available, and what period the jury should consider when deciding to award (or not award) such damages based on conduct outside of the 300 day filing period. After considering the issue, the Court agreed that emotional distress would only be available back to the limits of the 300 days (or, in our case, the NJLAD) and not further. The jury returned a defense verdict, finding no discrimination occurred, so these issues will not be flushed out further.

3rd Update, 2.13.09: The plaintiffs' in a case that has already been argued before the U.S. Supreme Court, AT&T v. Hulteen, have now filed a supplemental brief arguing that the case is now resolved in their favor because of the Ledbetter Fair Pay Act. See comments on this development at Workplace Prof Blog and by Ross Runkel.