Recently, Gardere notified you of the passage of the Lilly Ledbetter Fair Pay Act. Less than one month later, courts are expanding the Act`s reach beyond just compensation decisions and allowing acts to form the basis of pay discrimination claims that occurred years before a charge was filed.
Because The Fair Pay Act applies to discriminatory compensation decisions and ``other practices,`` employers are dealing with the effects of this broad definition. In Gilmore v. Macy`s Retail Holdings, the court, on its own motion, considered the impact of the Fair Pay Act on the plaintiff`s claim, even though a jury trial had commenced just two days before. No. 06-3020, 2009 WL 305045 (D. N.J. Feb. 4, 2009). Gilmore claimed she ``was denied the opportunity to fill in for certain absent [employees] on account of her race, and was thereby deprived the opportunity to earn bonuses on sales of more expensive products.`` The court ruled that the Fair Pay Act applied and ruled that liability and back pay could accrue for discrimination taking place as early as July 7, 2003 (two years prior to the filing of the charge).
Likewise, in Bush v. Orange County Corrections Dept., the Federal Middle District of Florida ruled that the plaintiffs could proceed with their claims regarding discriminatory demotions, which resulted in pay reductions, that occurred 16 years before suit was filed because the Fair Pay Act is retroactive and applies ```to all claims of discrimination in compensation under Title VII…that are pending on or after May 28, 2007.``` No. 6:07-cv 588, 2009 WL 248230 (M.D. Fla. Feb. 2, 2009).
In Vuong v. New York Life Insurance Company, the Federal Southern District of New York allowed a plaintiff to argue that his paychecks would have been larger if New York Life had not made a discriminatory allocation decision in February 1998 (over four years before he filed his charge). No. 03 Civ. 1075, 2009 WL 306391 (S.D.N.Y. Feb. 6, 2009). The court noted that the Fair Pay Act applied to the plaintiff`s claim because it was pending on or after May 28, 2007—the Act`s effective date.
These cases demonstrate the Fair Pay Act`s potentially ``game changing`` result on employers because the Act covers ``other practices`` which courts are expanding to other employment decisions that could affect pay, such as demotions, promotions, job evaluations, department assignments, pension calculations and staffing decisions.
By allowing employees to tie their discrimination claims to decisions that occurred well outside the 2-year statute of limitations, courts are entertaining litigation that would have been time barred before the Act.
Additionally, the Supreme Court is being asked to consider whether the recently enacted Lilly Ledbetter Fair Pay Act (the ``Act``) affects the timeliness of pregnancy discrimination claims for employees whose pensions were lowered by limited service credit for pregnancy leaves taken prior to the 1978 Pregnancy Discrimination Act. In AT&T Corp. v. Hulteen, employees contend that the Act applies to their case because it establishes that present effects of past discrimination trigger new claims under Title VII. Specifically, the employees argue that the Act confirms that lower pensions for women denied service credit for past pregnancy leaves raise new, current violations of Title VII. If the Supreme Court agrees with the employees` argument, employers may experience an influx of claims based on past alleged discriminatory conduct.
Employers need to immediately review all practices and decisions ``affecting compensation`` and revise their record-keeping policies in anticipation of claims being asserted years after those practices were instituted.