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Another Ledbetter Observation

In writing about the Ledbetter "fair pay" legislation to be considered in the U.S. Senate tomorrow, we neglected to link to a good analysis of the bill that Ted Frank wrote for NPR's "Talking Justice" blog last February. His conclusion:

Employers are not stupid. To the extent every employee is a potential lawsuit, that is a cost of hiring an employee. As those costs go up, employers will hire fewer employees, and charge "insurance" to the employees they do hire by reducing their wages to account for the possibility of a future lawsuit. If the misnamed "Lilly Ledbetter Fair Pay Act" passes, the vast majority of workers will be worse off, as money that would have gone to pay employees will instead go to pay attorneys. There should be a better reason to pass such harmful legislation than the fact that Ms. Ledbetter's attorney sued under the wrong statute. If Congress really wishes to help workers, they should reject this legislation, and aim a closer eye at the liability system that hurts our economy.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.