Much attention has been focused on the Employee Free Choice Act (”card check”) legislation. But there’s been little commentary about a measure currently working its way through Congress that will provide a new bonanza to trial lawyers and deliver yet another headache to employers. A final vote in the Senate is expected today (after Republican amendments are voted down) on the Lilly Ledbetter Fair Pay Act of 2009 (S-181). A similar measure passed the House earlier this month.

This would overturn the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Company(2007).  Lilly Ledbetter was a Goodyear employee for almost twenty years. She filed a charge with the EEOC around the time of her retirement alleging pay discrimination because over the course of her career she received smaller pay increases than male co-workers. The Supreme Court ruled that Ledbetter was required to bring suit within 180 days of “the act of discrimination,” and rejected her argument that each paycheck should allow her to file a discrimination claim about business decisions made years earlier.

So what does the Senate bill do? It would overturn Ledbetter and specify that the statutes of limitations under several discrimination statutes (prohibiting discrimination on the basis of age, disability, race, color, religion, sex, and national origin) starts with each paycheck, essentially wiping out time limits for many employment discrimination claims. S. 181 would also expand the class of potential plaintiffs to anyone “affected by” discrimination. This could mean that a spouse or heir who receives pension checks and was not a victim of discrimination would have be able to file a lawsuit.

Republicans are trying to beat back the worst aspects of the bill. Andrew Grossman at the Heritage Foundation writes:

The most thoughtful alternative to the Ledbetter Act’s approach is embodied in an amendment (SA 25) proposed by Senator Kay Bailey Hutchison (R-TX) and based on her Title VII Fairness Act (S. 166). Rather than allowing any claim–no matter how old, no matter if the plaintiff delayed filing just to gain an upper hand–this amendment would start the limitations period running only when an employee reasonably suspects, or should reasonably suspect, that he or she has been discriminated against.

This kind of filing deadline, known as a “discovery rule,” protects employees who are kept in the dark about pay disparities and the like, while preventing stale claims and gaming of the system. It also preserves the incentive to bring claims quickly so that discrimination is halted sooner, to the benefit not just of the plaintiff but also other potential victims and the public. That, in the end, is what Title VII is all about: ending discrimination.

The Ledbetter Act, in contrast, has less to do with stamping out discriminatory practices than making money for plaintiff’s attorneys. By eliminating the filing deadline, it would actually undermine the law’s strong incentive to resolve cases quickly, and instead encourage savvy parties to strategically delay suit. While they sit on their claims, the passage of time would drive up damages available in court and allow defensive evidence to fade. In this way, other victims who are unaware of discrimination would continue to suffer its effects, while the would-be plaintiff games the law for private gain.

But alas Hutchinson’s amendment was defeated today. Unless lightning strikes, the bill is headed for passage and then reconciliation with the House version.

All of this is noteworthy for a few reasons. First, although President Obama argued that his number-one priority is creating jobs, it is clear that Democrats’ number-one legislative priority is paying off debts to Big Labor, trial lawyers, and the civil rights lobby. This bill has nothing to do, of course, with creating jobs. It has everything to do with increasing the legal cost for U.S. companies. Second, this is what happens when you lose Senate seats. Last year the bill was defeated on a cloture vote in the Senate 56-42. But those days are gone — the Democrats clearly have the votes this time.

So American employers — many that donated (via PACS and executives’ individual contributions) to Democratic candidates’ coffers should see this as a wake-up call. The next few years, even without card check legislation, are not going to be kind to business.

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This entry was posted on Thursday, January 22nd, 2009 at 5:03 PM and is filed under Contentions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.