Results matching “Ledbetter Fair Pay”

How the trial-lawyer tax is hurting hiring - PointOfLaw Forum

Charles Hugh-Smith and Jim Geraghty note that if an employee cannot generate revenue to cover his or her wages plus overhead costs, he or she won't be hired. This is absolutely true, but both understate the problem, and the degree to which the Obama administration has made it worse, and is planning on exacerbating it.

One of the biggest overhead expenses is the expected litigation expense of an employee. Employees have a wide variety of rights under federal and state law to sue their employer—not just for the hiring and firing decision, but for promotions or work conditions. A dishonest employee can impose a great deal of cost on an employer by bringing a meritless suit; whether the employer takes a hard line or pays the Danegeld, these are very real expenses. (For example, defending against the notorious meritless Jamie Leigh Jones suit cost KBR $2 million.) It's little surprise that California, where employees can sue for a variety of technicalities in a lawyer-friendly litigation environment, has a much higher unemployment rate than the rest of the nation, despite a dynamic technology industry and being so attractive to millionaires that the state thinks it can raise revenue rather than drive away taxpayers with a 13.3% tax rate.

That overhead cost isn't just awards to plaintiffs with meritorious, or even plaintiffs with unmeritorious, grievances. It's the lawyers, on both plaintiffs' and defense sides, who collectively receive more than employees take home from litigation victories and settlements. But it's also the (as-far-as-I-know yet-unmeasured) compliance costs: the vast human resources bureaucracy that keeps track of these laws and maintains the paperwork to protect the company in the event of future litigation. The compliance costs can have non-monetary effects as well. But take, for example, something as simple as employee appearance. Even something as simple as "It's not good for the corporate image to have someone with a Maori face tattoo interacting with customers" has an litigation minefield overlay, including EEOC litigation. That costs money, and that money comes at the expense of hiring.

So it's worth noting that these laws, on balance, hurt the average employee. Plaintiffs' attorneys' fees often outstrip the returns to the clients; add to that the defense attorneys' cost, and the cost of a human resources apparatus to ensure compliance, and the vast majority of the benefits of employment litigation is going to white-collar professionals, and most of that going to attorneys in the top decile, or even the top 1%. That overhead cost may add up to more than 10 percent of wages: a $30/hour employee is, instead of being paid $33/hour, getting a $3+/hour "benefits" package, most of which ends up in the pockets of people wealthier than him or her. Now, perhaps we as a society are willing to accept these costs to vindicate the relatively rare cases where a bigot or predator unfairly treats an employee and management acts against the company's interest in letting qualified employees be chased away. (One of the silliest things about the Wal-Mart employment litigation was the premise that the most aggressive cost-cutting company in the world would systematically choose to throw money out the window just to discriminate against qualified women in promotion decisions.) But these costs are rarely ever acknowledged in the policy debates in the first place.

And, even as structural unemployment rises to scary levels, this administration has sought to increase these overhead expenses to make hiring more expensive. The Lilly Ledbetter Fair Pay Act makes it easier to bring meritless suits by obliterating the statute of limitations. (Statutes of limitations are important for justice. Without a statute of limitations, someone can sue for very old alleged injuries, and a defendant would not have a fair chance to defend herself. (Ledbetter sued over her pay after she was retired!) Memories fade, evidentiary documents are discarded, people change employers. If an employee can wait until a middle manager of years ago died before accusing the company of discrimination, justice is impossible.) The EEOC has become increasingly intrusive. Though courts have largely rejected the move as arbitrary and capricious, Obama's NLRB appointments have sought to abolish arbitration agreements as an unfair labor practice. All in the supposed name of increasing workers' rights, but with the effect of exacerbating inequality and unemployment.

The State of the Union bodes more of the same. Not just the proposed minimum wage increase from $7.25 to $9, which will fall disproportionately upon unskilled workers who already have a double-digit unemployment rate. But the administration is reiterating its proposal for a "Paycheck Fairness Act that will surely increase unemployment as well. (More from Hans Bader.)

A Lilly Ledbetter reminder - PointOfLaw Forum

As we've repeatedly pointed out over the years, not only did Lilly Ledbetter deservedly lose her lawsuit, the bill passed in her name has cost jobs and done nothing to reduce the gender gap in wages, which, in the 21st century, is a result of phenomena other than discrimination. Heaven forfend all the fact-checkers incorrectly calling out the Romney campaign on welfare do their jobs in this particular instance.

Lilly Ledbetter Act, job creation, and inequality - PointOfLaw Forum

Before the Lilly Ledbetter Act was passed, there were already federal laws on the books prohibiting sex discrimination in pay. The only thing the Ledbetter Act does is make it easier for employees to bring bogus fair-pay claims accusing long-gone or dead managers of discrimination. (One such bogus fair-pay claim is Lilly Ledbetter's own lawsuit, yet the media regularly buys into the portrayal of her as a victim.) This raises the expected litigation expense of hiring or retaining employees—which in turn reduces hiring and wages, kills jobs, and transfers wealth from the middle class to the wealthy—and male-dominated—legal profession. The law is a golden example of President Obama and a Democratic Congress favoring a wealthy special interest at the expense of everyday Americans and the economy.

So when Mitt Romney's campaign is asked about the law, why can't they say that? Instead of making an argument against the Obama presidency, they let themselves be mau-maued into implausibly claiming support for a Democratic bill. It's hard to imagine the pander gaining them any votes; and it's hard to imagine how Romney is going to win in November if he can't or isn't willing to construct a coherent argument for how Obama is hurting the economy.

More: Stuart Taylor @ NJ; Bader @ Examiner; Overlawyered. Earlier.

The National Association of Manufacturers just released its congressional ratings for the 111th Congress, and noticeable by their absence are key votes on civil justice reform issues. In years past, high-priority pieces of tort reform legislation (think Class Action Fairness Act) were included the NAM's Key Vote Committee rankings, but in 2009-2010, no separate tort reform bills were rated.1 Neither did bills to expand liability reach the point of a floor vote.

We covered some of the flurry of legislative action in the last week before recess. Here's Part II, highlighting the inaction.

Legislation Congress Did Not Pass

  • The Medical Device Safety Act, meant to overturn the Supreme Court's decision in Riegel v. Medtronic. (H.R. 1346, S. 540)

  • The Motor Vehicle Safety Act, introduced as a reaction to the Toyota recalls. Turns out that truth - in this case, the reality of operator error - helped discourage passage of the expanded regulatory control and liability applied to automakers. (H.R. 5381)
  • Expansion of liability under maritime law proposed in the wake of the Deepwater Horizon accident.2 Here's a list of the 95 bills, resolutions and amendments introduced in the 111th Congress with the term "oil spill" in them.

  • The Discount Pricing Consumer Protection Act, S. 148, meant to overturn the U.S. Supreme Court's decision in Leegin Creative Leather Products, Inc. v. PSKS, which held that resale price maintenance agreements were not per se illegal under federal antitrust law. The bill by Sen. Herb Kohl (D-WI) was reported out of the Senate Judiciary Committee, however.

  • Bills sponsored by Sen. Arlen Specter (D-PA) and Rep. Artur Davis (D-AL) to allow trial lawyers to deduct expenses from contingency lawsuits. (S.437 and H.R.2519)

  • Sen. Specter's federal media shield legislation, with the potential to weaken protections of corporate trade secrets and confidential personnel records. (S. 448)

Yes, it is possible that Congress will act on some of these bills in the lame-duck session, which convenes Nov. 15. You would think that extending the tax 2001 rates would come first, but who knows what might happen? November promises to be an unsettled period full of recriminations and last gasps -- an environment that invites legislative excesses.

Perhaps Senators will give expression to their warm feelings of affection for Sen. Specter and pass all his bills as a final tribute. If the winds of change have been especially scouring, the litigation lobby may call on their congressional supporters to use their last opportunity to enact all sorts of liability-expanding legislation.

1 The NAM rated two bills in the area of employment law, the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act. The first, which became law, removed statutes of limitation on employment discrimination suits. The second, which passed the House, lifts caps on punitive damages.

2 No legislation, plenty of litigation. The Washington Post today reports: "METAIRIE, LA. - The BP oil spill cleanup is winding down, but the lawyers are just warming up. The gusher of litigation might not be capped for years."

One last push for the misnamed Paycheck Fairness Act - PointOfLaw Forum

Senate Majority Leader Harry Reid on Monday, Sept. 13, introduced S. 3772, the Paycheck Fairness Act, giving new, election-season impetus for the bill that would encourage lawsuits against employers.

The House passed its own version, H.R. 12, in January 2009 in tandem with the Lilly Ledbetter Fair Pay Act, which removed statutes of limitations on employment pay suits. Reid's bill supplants the one introduced by Sen. Hillary Clinton (D-NY), S. 182, before she became Secretary of State.

Free market advocates oppose the bill for government's interference in supply and demand and contracts, well summarized by Hans Bader of the Competitive Enterprise Institute as "[forcing] employers to pay some people equal amounts for doing unequal work." (Washington Examiner, Aug. 4, "Paycheck Fairness Act would mandate equal pay for unequal work, triggering flood of lawsuits.")

Business groups also object to the legislation's provisions that would encourage more lawsuits against employers. As the National Association of Manufacturers' "key vote" letter opposing the House bill summarized:

By removing all limits to punitive and compensatory damage awards on claims made under the Equal Pay Act (EPA), the Paycheck Fairness Act (H.R. 12) would expose employers to increased threats of litigation - even when unintentional pay disparities may have occurred. Its passage would likely prompt many employers to purchase additional legal liability insurance, increasing their costs and decreasing their ability to raise wages, increase benefits or hire new U.S. House of Representatives workers. In fact, it is difficult to imagine a scenario in which the bill would not lead to lower wages and fewer jobs.

The White House has stepped up its advocacy for the bill, with adviser Valerie Jarrett having an op-ed published in The Washington Post promoting the bill, "Closing the wage gap: It's a matter of survival for working families" adding some "it's a matter of life or death!" hyperbole to the usual "women only make 77 cents for every dollar a man makes" misrepresentation. Thankfully, Diana Furchtgott-Roth is always prepared with a factual refutation as in this letter, "After almost 50 years, the gender gap in pay still resonates."

UPDATE (4:40 p.m.): The head lobbyist for the Association of American University Women had a meeting with Senate Majority Leader Harry Reid this afternoon on the issue, or so her Twitter report has it.

The Senate Health, Education, Labor, and Pensions Committee on Thursday, March 11, holds a hearing, "A Fair Share for All: Pay Equity in the New American Workplace." The hearing marks the re-emergence of the Paycheck Fairness Act in Congress, in this case, S.182, to amend the Fair Labor Standards Act of 1938 (FLSA) known as the Equal Pay Act to increase liability and penalties for gender-based wage discrimination. For example, the bill:

  • Makes employers who violate sex discrimination prohibitions liable in a civil action for either compensatory or (except for the federal government) punitive damages.

  • States that any action brought to enforce the prohibition against sex discrimination may be maintained as a class action in which individuals may be joined as party plaintiffs without their written consent.

  • Authorizes the Secretary of Labor (Secretary) to seek additional compensatory or punitive damages in a sex discrimination action.

The House passed its own version, H.R. 12, along with the Lilly Ledbetter Fair Pay Act on Jan. 9, 2009. The House sponsor, Rep. Rosa DeLauro (D-CT), is the first witness at Thursday's hearing, which also includes testimony from an economist from the Center for American Progress, as well as Deborah Frett, CEO of the Business and Professional Women's Foundation, who contends women are underrepresented in "green jobs." We hope to hear the employers' perspective from Jane McFetridge, the managing partner of Jackson Lewis' Chicago office.

The 2008 presidential and congressional campaigns featured impassioned activism tied to the Ledbetter legislation, and the new push for the Paycheck Fairness Act comes just as that kind of political enthusiasm is needed for the 2010 elections.

My last post showed some of the major legislative efforts that trial lawyers have successfully pushed through Congress in the last 2 years. But as Carter's post last month on the trial lawyers' legislative "agenda" shows, they're hardly slowing down. Trial Lawyers, Inc.: K Street focuses on five of the most significant efforts currently underway to increase the litigation industry's profits: loosening pleading standards, expanding securities litigation, rolling back federal preemption, limiting private arbitration, and cutting taxes on plaintiffs' litigation.

  • Pleading standards. Point of Law readers are already familiar with the Supreme Court's recent decisions to limit the outer boundary of notice pleadings in Ashcroft v. Iqbal (2008) and Bell Atlantic v. Twombly (2006) (see postings for each, here and here, respectively), as well as the Congressional effort to reverse the two decisions. What's most important to keep in mind about the legislation purportedly designed to overturn Twombly and Iqbal (S. 1505, H.R. 4115) is that it would do far more; as the K Street report notes, it "would likely interfere with statutory pleading requirements well beyond the scope of the Court's recent decisions." (See also Michael Dorf's comments here; Gregory Garre's testimony here).
  • Securities litigation. In another bill designed to overturn a Supreme Court decision, Arlen Specter's Liability for Aiding and Abetting Securities Violations Act (S. 1551) would undo the Supreme Court's 2007 decision in Stoneridge v. Scientific-Atlanta. In Stoneridge, as our readers will recall, the Supreme Court considered a class action lawsuit filed by a cable company's shareholders against other companies that had done business with their own and thus, the shareholders alleged, "aided and abetted" the company's accounting frauds. Finding no evidence of Congressional intent to authorize third-party securities through private rights of action, the Court determined that to do so would "expose a new class of defendants," raise "the costs of doing business," deter "[o]verseas firms . . . from doing business here," "raise the cost of being a publicly traded company under our law," and "shift securities offerings away from domestic capital markets." Senator Specter's bill would do just that.
  • Federal preemption. A fourth Supreme Court decision in the trial-lawyer lobby's crosshairs is Riegel v Medtronic (2008), in which the Court, by a vote of 8 to 1, determined that the 1976 Medical Devices Amendments to the Food, Drug & Cosmetic Act expressly preempted state tort lawsuits for Class III medical devices that had gone through the FDA's extensive premarket approval process. (For an extensive discussion of the preemption issues in this and related cases, see this report that I authored with my Manhattan Institute colleage Paul Howard last spring.) As the K Street report notes, the proposed legislation (H.R. 1346, S. 540) would "permit suits to proceed that stem from injuries that originated long before the law's effective date, if otherwise valid under state law."
  • Private arbitration. As I noted in my last post, discussing the Franken amendment, the trial lawyers are doing their best to push federal legislation that broadly bars private arbitration agreements in hosts of contexts. Pro-litigation legislators have introduced bills that would limit or eliminate arbitration clauses in nursing home agreements (The Fairness in Nursing Home Arbitration Act, H.R. 1237, S. 512), for mortgage loans or home-equity lines of credit (The Mortgage Reform and Anti-Predatory Lending Act, H.R. 1728), for payday loans (The Payday Loan Reform Act, H.R. 1214), for tax-refund loans (The Taxpayer Abuse Prevention Act, S. 585), in consumer contracts (The Consumer Fairness Act, H.R. 991), and in all employer, franchise, and consumer contracts (The Arbitration Fairness Act, H.R. 1020, S. 931).

  • Contingent-litigation taxation. Finally, Senator Specter has also introduced a bill (S. 437) that would give contingent-fee lawyers a $1.6 billion tax break. Traditional prohibitions against champerty and maintenance precluded what today is commonplace -- trial lawyers fronting their clients' expenses. As the K Street report explains, "the personal-injury bar's financing structure -- the 'contingent fee,' the share of the proceeds that a winning client pays his attorney, who has fronted the cost of the litigation -- runs afoul of the historical understanding of champerty. Therefore, expenses in contingent-fee cases have been treated by courts not as support of litigation per se but rather as loans to clients, to be repaid upon a winning lawsuit's resolution." Senator Specter's legislation would, for federal taxation purposes, change the status of contingent-fee litigation costs from loans to expenses -- thus allowing plaintiffs' lawyers working on contingency an immediate deduction of all costs against their taxes. Specter argues, in essence, that lawyers should be treated no different than any other business (a telling statement on the evolution of the legal "profession" into an industry). However one views this question as a theoretical matter, there's no question that Specter's legislation would pour lots of new money into the trial bar's coffers -- and lots of new lawsuits onto judges' dockets.

Those keeping count will note that the above legislation includes efforts to overturn four different Supreme Court decisions (Iqbal, Twombly, Stoneridge, and Riegel). A fifth piece of legislation (H.R. 1478), mentioned only briefly in the K Street report, would overturn a 60-year-old Supreme Court decision, Feres v. United States, 340 U.S. 135 (1950) (holding that the United States is immune from liability suits by active duty personnel under sovereign immunity principles). And of course, two of the recent bills already signed into law also reversed recent Supreme Court decisions (The Lilly Ledbetter Act, overturning Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007); and the Fraud Enforcement and Recovery Act, overturning Allison Engine Co. v. United States, 128 S. Ct. 2123 (2008)).

Trial Lawyers, Inc.: K Street -- Federal Government Relations (I) - PointOfLaw Forum

As my last installment on Trial Lawyers, Inc.: K Street, I'm scheduled to discuss the trial bar's federal efforts to expand litigation opportunities. Because the K Street report is national in scope, these efforts are extensively covered, and federal legislation comprises two subsections of the report, roughly twice as much material as is devoted to state activities. Thus, I'm breaking my posts into two parts: first, today, I'm going to go into already-passed legislation. Then, over the weekend, I'm going to do a second post with proposed/pending legislation. Finally, I'll add a brief concluding post, with a roadmap back over where we've been.

As we note in our report, the lawyers' aggressive affirmative agenda in Washington is something of a paradigm shift. "Until recently, the main purpose of Trial Lawyers, Inc.'s involvement in federal politics was to block reform legislation that would deny it various lucrative lines of business" -- such as Bill Clinton's veto of product liability reform legislation and securities class action reform legislation in the 1990s (the latter overridden and enacted), or Senate Democrats' stifling of medical-malpractice and asbestos litigation reforms during the Bush administration.

In the last two years, Congress has acted to expand consumer litigation, expand employment litigation, expand qui tam litigation, and limit private arbitration. Many of the pieces of federal legislation will be familiar to our readers, but a brief summary is still in order:

Be on guard when Congress decides to review a U.S. Supreme Court decision with an eye toward "correcting a mistake" or "restoring the law" prior to the decision. You wind up with brand new law, expansive and expensive, like the Lilly Ledbetter Fair Pay Act. (See earlier post on Ledbetter..)

So while we haven't seen any bill yet, the upcoming hearing Tuesday certainly draws our attention. The House Judiciary Committee, Subcommittee on Courts and Competition Policy has scheduled, "Bye Bye Bargains? Retail Price Fixing, the Leegin Decision, and Its Impact on Consumer Prices." The hearing will examine the 2007 Supreme Court decision in the antitrust case, Leegin Creative Leather Products, Inc. v. PSKS, Inc. (Opinion here.) The issue facing the court was whether resale price maintenance should always be considered a violation of the antitrust laws (and subject to treble damages), or whether legitimate business and procompetitive justifications for such provisions. As David Rossmiller wrote following the court's opinion:

When the only tool in your toolbelt is a hammer, every problem looks like a nail. The Supreme Court has increasingly recognized this in its recent antitrust jurisprudence by moving away from inflexible per se rules of anticompetitive conduct that fail to differentiate between truly anticompetitive acts that hurt consumers and acts that merely hurt competitors: they are not the same thing....[The Leegin antitrust case] marked another step in the court's walk away from per se standards toward a more flexible case-by-case analytical standard.

My employers at the NAM filed an amicus brief in the Leegin case that aligns with the shift away from per se. (See the Legal Beagle entry for the brief and more.)

Sen. John Cornyn (R-TX) sponsored a Senate Republican Conference hearing (i.e., a partisan hearing) this afternoon on legal reform in the 111th Congress, "Protecting Main Street Jobs from Lawsuit Abuse." His thesis is that meritless and nuisance lawsuits raise the costs of business and jobs creation, having a disproportionate impact on small business: "Nevertheless, the leadership of this Congress seems oblivious to these facts and determined, to reward political allies and benefactors in the trial bar by passing legislation designed to not decrease but rather increase the number of lawsuits in America." (From the .mp3 file of his opening statement.)

Sen. Cornyn cited several bills already passed that will increase litigation: The Lilly Ledbetter Fair Pay Act, the stimulus bill's permitting state AGs to hire contingency lawyers to sue for HIPAA violations, and the omnibus appropriations bill's encouragement of contingency lawyers in Truth in Lending litigation.

Looking forward, Sen. Cornyn said, "There will also be efforts to undue the important reforms of the Class Action Fairness Act, reviving the class action strike suit, where trial lawyers may make millions while their clients receive nothing other than coupons as a result of their recovery."

That's the first we had heard of this disturbing possibility. For more on the 2005 legislation, we refer you to this 2007 paper by Point of Law contributor Ted Frank of the American Enterprise Institute, "The Class Action Fairness Act Two Years Later."

Ted also testified at today's hearing, addressing a wide range of civil litigation issues, including medical malpractice, asbestos and mass tort fraud. His prepared testimony is available here. From the abstract:

Our nation's tort system is substantially more expensive than that of other nations. Features unique to the United States--unbounded non-economic damages; a broader use of punitive damages; contingent fees of a percentage of recovery; the lack of loser-pays; extraordinarily broad discovery; class-action litigation; the use of speculative and non-scientific expert testimony in some state courts--raise costs tremendously. Yet, despite these increased costs, there is no evidence that the United States tort system provides marginal benefits relative to other nations. For example, New Zealand does not even offer the availability of private medical malpractice litigation, yet there is no evidence that medical care in New Zealand is of substandard quality due to the lack of fear of malpractice litigation. If anything, it is quite likely that the arbitrary nature of the American tort system has distorting effects that make it perform worse than that of other nations...

In the extended entry, more comments from Sen. Cornyn...

Ledbetter and the press, cont'd - PointOfLaw Forum

Hans Bader is still going after the shortcomings in media coverage of the employment-law cause celebre, and Prof. Obbie takes note. Earlier here, here, here, and here.

Because everyone knows all suits are meritorious - PointOfLaw Forum

Slate's "BizBox" blogger writes that the Lilly Ledbetter Fair Pay Act "only has the potential to harm" those businesses "who, frankly, deserve to be harmed".

President Obama's executive orders on labor/management - PointOfLaw Forum

President Obama brought labor leaders to the White House again today, following yesterday's signing of the Lilly Ledbetter Fair Pay Act. Today's occasion was the issuing of three executive orders sought by organized labor, as described by CQ Politics:

  • One order requires government contractors to offer jobs to qualified employees when contracts change.
  • Obama also undid a Bush executive order that required employers to post signs informing workers of their right to limit financial support of unions serving as their collective bargaining representatives.
  • A third directive prohibits government contractors from being reimbursed for expenses incurred trying to influence workers on whether to form unions or engage in collective bargaining.

The orders are not online yet at, but we did get them through a legal colleague and posted them at Shopfloor:

The White House tried to make the big deal of the day its announcement of its Middle Class Task Force headed by Vice President Biden. A task force! Talking about green jobs!

Meanwhile, a search for "card check" or "Employee Free Choice Act" turns up no references at So that's good.

UPDATE (6:20 a.m. Saturday): Judging by the metadata of one file, one of the regulations was written by the SEIU's legal counsel, or associate general counsel, Craig Becker -- although he may have gone to work for the Administration. (See this post.) Remember all those headlines from eight years ago along the lines of "White House lets business lobbyists write the law?"

Lilly Ledbetter Fair Pay Act - PointOfLaw Forum

Much of what you think you know about it is wrong, argues Stuart Taylor, Jr. at National Journal. Hans Bader is even more critical of the factual representations being made by many advocates of the law, while Jane Genova wonders whether it's okay to go back 27 years in remembering mistreatment.

As Carter noted the other day, the bill is retroactive, with an effective date of May 28, 2007 (play game first, change rules later!) And, after all, time limits on the right to file lawsuits couldn't really be part of the law's "purpose", could they?

Our coverage of the original Ledbetter suit, the Supreme Court decision in which it resulted, the ensuing controversy, and the newly enacted legislation can be found here.

More: Daniel Schwartz argues that symbolism aside, the new enactment will make less difference than either foes or friends generally seem to realize. George Lenard takes a comprehensive look at the new law. And Prof. Obbie at LawBeat has favorable words for the Stuart Taylor National Journal piece linked above.

"The Mirage of Pay Equity" - PointOfLaw Forum

Diana Furchtgott-Roth on the Ledbetter and Paycheck Fairness bills (via NewMajority). More: Bader, CEI.

The House just voted 250-177 to pass S. 181, the Lilly Ledbetter Fair Pay Act, a mostly partyline vote (roll call here). This is the bill that supporters say is necessary to correct the Supreme Court's reading of discrimination law (Title VI of the Civil Rights Act) in Ledbetter v. Goodyear Tire & Rubber. The bill now goes to President Obama for his signature; the White House over the weekend reiterated his full-bore support for the bill.

By lifting all statutes of limitations on employment discrimination suits, the new law will subject employers to many more speculative discrimination lawsuits. That said, organized labor and the activist grievance industry have been the more vocal supporters. Trial lawyers have mostly stayed quiet, a good move in terms of selling the bill politically.

Note the effective date:


This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.

May 28th? The Supreme Court issued its Ledbetter ruling on May 29, 2007, so Lilly Ledbetter's suit was still pending then. So does she get another shot at her lawsuit?

Earlier posts here.

When in doubt, sue -- Senate passes Ledbetter bill - PointOfLaw Forum

The U.S. Senate yesterday passed S. 181, the Lilly Ledbetter Fair Pay Act, sold politically as a limited fix to the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber, disallowing an employee's pay discrimination complaint because she brought it after (years after) the clearly written 180-day statute of limitation expired. The vote was 61-36, with five Republicans voting in support and no Democrats voting in opposition. (Roll call.)

Defeated was an amendment by Sen. Mike Enzi (R-WY) to clarify standing so only the allegedly discriminated employee could bring suit, not just somebody "affected" by the consequences of the discrimination. Table (killed) was an amendment by Sen. Johnny Isakson (R-GA) to limit the law's application to claims resulting from discriminatory compensation decisions that occurred after the act's adoption; the law will now allow the filing of claims years, even decades old. An amendment by Sen. Specter to provide a rule of construction was tabled. And the substitute amendment by Sen. Hutchison (R-TX) was defeated on a partyline-minus-one vote (Snowe being the Republican).

In short, any amendment to limit the opportunities for speculative, excessive and "creative" lawsuits was defeated. Sen. Enzi noted several times the bill was run to the floor without any committee hearings that could have allowed more debate, consensus amendments and some bit of restraint. (Enzi is the ranking Republican on the HELP Committee, chaired by Sen. Kennedy.) The end result is surely a wave of new discrimination lawsuits against employers, increasing the marginal costs of new hires.

President Obama will surely sign the bill. Lilly Ledbetter became a cause celebre for Democrats and organized labor during the campaign, and she joined the President-elect on pre-inaugural train ride to Washington.

P.S. Much was made by Senate supporters of the new, positive tone of the debate. Here's Senator Byron Dorgan recalling the "night of terror" in Occoquan Prison in 1917, when suffragettes were brutally beaten. The point being...

UPDATE (10:30 a.m.): It appears the House will vote on the Senate version of the bill next week, dropping its own version that included the politically problematic Paycheck Fairness Act language, i.e., the stalking horse for comparable worth.

The Senate today continues its debate on S. 181, the Lilly Ledbetter Fair Pay Act, which inspires the most opposition among the business community for its elimination of the statutes of limitations in filing pay discrimination complaints under Title VII of the Civil Rights Act. Instead of requiring a complaint within 180 days of the alleged offense, the time limit is renewed every time the supposed victim receives a paycheck. With those standards, an employee could conceivably file a complaint 20, 30 years after the discrimination supposedly occurred. What business can defend against that?

But there's something equally or even more radical in this legislation, which supporters claim is a limited corrective to the U.S. Supreme Court in Ledbetter v. Goodyear Tire and Rubber. No longer is it only the alleged victim of the discriminatory act who has legal standing, it's anyone who is affected.


Section 706(e) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5(e)) is amended by adding at the end the following:

`(3)(A) 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.

When an individual is affected?

Sen. Kay Bailey Hutchison (R-TX) has submitted a substitute amendment to the bill. In her floor statement yesterday she clearly made the point:

[In] the bill before us there is a major change in common law and in tort law that has also been a part of our legal system and our case law since the beginning of law in our country and in other countries that have the types of laws we do; and that is that a tort accrues a right to the person who is offended or damaged or hurt by another action. It does not accrue to another person who is affected by or might be considered affected by this claim.

Now, there are exceptions to that. But in the main, it is, I think, essential, if we are going to have a statute of limitations that goes beyond the act itself--and in this case it would be 6 months, which is the law today--that it accrue to the person actually injured, the employee, and not some other person on behalf of the person who did not bring the case.

Under the Mikulski bill, the Ledbetter Act, a new right has been given to a person who may not be the person with the injury. So it could be a case where the person dies after working at a place of employment, a business. The person dies, and within 6 months of that person's last paycheck and subsequent death, some other person--an heir, a child, a mother, a father--could bring a case, which the person who has allegedly been discriminated against chose not to bring or did not bring. In such an absurd case, possible under the Ledbetter bill, you do not even have the person discriminated against to testify.

So much for the bill being a "narrow fix" of the Supreme Court ruling.

If you don't know about this consequence of the pending enactment, Michael Moore writes about it at the Pennsylvania Labor and Employment Blog.

The two labor/lawyer/grievance bills pass House - PointOfLaw Forum

Following up on Walter's posts of the day, we note the both bills passed on mostly partyline votes, as expected.

The House first passed H.R. 12, the Paycheck Fairness Act, by a vote of 256-163. Roll Call No. 8.

It then passed H.R. 11, the Lilly Ledbetter Fair Pay Act. The vote was 247-171. Roll Call No. 9. House Speaker Nancy Pelosi held the gavel for part of the debate, a symbolic statement of the importance Democratic leadership placed in the bills.

House Republican Leader John Boehner issued a statement in response to passage, "Flood of Special-Interest Bills Begins in Newly-Expanded Democratic Congress." Excerpt:

Today's effort by the Democratic Majority is not about workplace discrimination; it's the first step in an effort to begin rewarding the special-interest allies who helped give the Democratic Party control of Washington. These bills do not reflect the priorities of the American people; they reflect the narrow interests of the powerful trial lawyer industry that last year used its ill-gotten war chest to help the current majority tighten its grip on power.

House Majority Leader Steny Hoyer sees it differently, obviously, issuing two statements praising passage of the Paycheck Fairness Act (here) and the Ledbetter Fair Pay Act (here). I've got quite a few posts up on the bills over at Legal arguments aside, it's indisputable that these bills will raise the marginal costs of labor, discouraging the hiring of new employees -- a strange priority for lawmakers during a time of recession and layoffs.