With the State of the Union Likely To Highlight Gender Equality, It is Time to Ask Whether Your Organization is on Track for a Ledbetter-style Equal Pay Claim

by Hirschfeld Kraemer LLP

It has been almost eight years since the United States Supreme Court decided the Lilly Ledbetter case under Title VII and six years since President Obama invited Ledbetter to attend his State of the Union address.  You may or may not remember that Ledbetter’s attempt to sue under the theory that the statute of limitations on 25+ years of discriminatory wage decisions by Goodyear reset with each paycheck was roundly rejected by the Supreme Court.  Shortly after Obama’s inauguration, he signed the Lilly Ledbetter Fair Pay Act of 2009 (Pub.L. 111–2, S. 181) into law, amending Title VII to adopt Ledbetter’s statute of limitations argument for Title VII wage claims.  The Equal Pay Act itself has a separate three year statute of limitations. 

So how much has changed?  Well, in terms of EEOC claims, the numbers are at a 15 year high.  Title VII claims with a wage discrimination component lead the pack by a wide margin.  In addition, the number of Equal Pay Act claims has been rising slowly since the Supreme Court’s decision, resulting in $9.9 million in “monetary benefits” changing hands through the EEOC’s efforts in 2012, alone.  While the number of Equal Pay Act claims was only 1,082 in 2012, the simple math is that individuals filing these claims, if successful through trial on the merits or through settlement, walk away with more money than individuals filing almost any other type of claim.

How can your organization avoid these claims?  It is simple; the numbers will set you free.  When it is time to adjust salaries and award bonuses, run the numbers or have your supervisors do so and run them by HR for approval.  Decide whether one gender or racial group (or any legally protected category) is trailing the others.  If so, fix it.  Start now.  With the slow growing wave of Lilly Ledbetter Fair Pay Act and Equal Pay Act claims out there, it may only be a matter of time before there is activity on your shores.

Be proactive, given that this issue is also still squarely on the Obama Administration’s agenda.  Look for this year’s “equality” guest at the January 28, 2014 State of the Union.  Amanda McMillan attended last year’s State of the Union as a guest of First Lady, Michelle Obama.  By that act, the Administration gave a spotlight to its continued efforts on this issue and a nod to continued activism by the EEOC.  The EEOC prosecuted McMillan’s case against Forrest City Grocery Co. and resolved the matter through settlement.  McMillan had alleged that her supervisors’ failure to promote her to a higher-paying job in sales was a result of gender discrimination.  According to McMillan, “They told me that people would not want to do business with a woman,” and that “. . . I would not be a very good mother if I was out on the road doing sales calls while my kids were still in school and they could possibly need me.”  2014 promises to see additional efforts on this issue and another equality guest at the State of the Union.  As had been widely reported, a recent e-mail from White House Senior Adviser Dan Pfeiffer declared, “President Obama has a resolution for 2014: that this will be a year of action.”

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Hirschfeld Kraemer LLP

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