What is the Scope of the Lilly Ledbetter Fair Pay Act?
In less than a week after its enactment, two federal district courts held that the Lilly Ledbetter Fair Pay Act applies to all adverse employment actions that potentially affect pay, creating uncertainty as to the scope of the new law. Does the new law apply only to “direct inputs into compensation outcomes, such as performance ratings under a performance-based pay system, job classification decisions and work assignment decisions under a geographic pay structure,” as was suggested during floor debate, or does it have a much broader reach? .
What are the penalties for discrimination?
Not all of the discrimination laws have the same penalties. And, even under the same law, different types of violations may have different remedies. In general, these are the penalties that can result from unlawful acts of employment discrimination. For acts of discrimination or unlawful harassment, the following penalties apply:
- an order to "cease and desist" the discriminatory practice (Title VII, ADA, Equal Pay Act, NLRA)
- an order to employ or reinstate the victim of discrimination (Title VII, ADA, Age Discrimination in Employment Act, Equal Pay Act, NLRA)
- back pay, plus interest (Title VII, ADA, Age Discrimination in Employment Act, NLRA, Uniformed Services Employment and Reemployment Rights Act of 1994).
Does it matter whether or not the discrimination was intentional? Distinctions are made under the penalty provisions of some laws between acts of intentional discrimination and those employment practices that have a disparate impact. Those distinctions, and the laws under which the penalties are imposed, are reflected below.
Are double damages available? The Age Discrimination in Employment Act, the Uniformed Services Employment and Reemployment Rights Act of 1994 and the Equal Pay Act also provide for recovery of liquidated damages, commonly known as "double damages," in an amount equal to the unpaid back compensation. The Equal Pay Act provides that wages of the lower-paid group must be raised to equal those of the higher-paid group. Civil penalties (e.g. fines) of up to $10,000 may also be imposed for each employee willfully discriminated against under the ADEA or for each willful violation under the Equal Pay Act.
What are the penalties for intentional discrimination? For intentional acts of discrimination, the following penalties also may be imposed under Title VII, Section 1981a of the Civil Rights Act of 1866, Section 1983 of the Civil Rights Act of 1871, the Uniformed Services Employment and Reemployment Rights Act of 1994, and the ADA (for the ADA this means that compensatory and punitive damages can't be awarded for a failure to accommodate if good faith efforts were made):
- compensatory damages, which could include:
- future pecuniary losses
- emotional pain and suffering
- inconvenience
- mental anguish
- loss of enjoyment of life, and
- other nonpecuniary losses
- attorney fees
- punitive damages, if "malice" is shown, which has been defined as reckless indifference to a victim's federally protected rights.
What are the maximum penalties? Under Title VII and the ADA, damages may be "capped." Under certain circumstances, the sum of the compensatory and punitive damages awarded to each complaining party may not exceed:
- $50,000 for employers with more than 14 and fewer than 101 employees;
- $100,000 for employers with more than 100 and fewer than 201 employees;
- $200,000 for employers with more than 200 and fewer than 501 employees;
- $300,000 for employers with more than 500 employees.
What else can a court do? A court may also order "any other equitable relief as the court deems appropriate," which means that a court is free to fashion additional remedies not otherwise specified to rectify the discrimination.
What are the penalties under Title I of the Civil Rights Act of 1968? Penalties for noncompliance with this Act include fines and imprisonment for instances of job discrimination involving force. However, prosecution under the Act is allowed only upon certification by the U.S. Attorney General or Deputy Attorney General that it is deemed in the public interest and necessary to secure substantial justice.
Can a class action be brought against an employer for discriminatory hiring practices? Employment discrimination cases lend themselves to class action treatment when an alleged unlawful employment practice affects more employees or applicants than the one or ones who decide to go to court. However, a victim of one type of discrimination is not automatically entitled to challenge all unequal employment practices followed by the employer being sued.
Can the EEOC bring a lawsuit? The Equal Employment Opportunity Commission is empowered to bring pattern or practice suits where it finds evidence of systemic discrimination in violation of Title VII, and it can bring class action suits on behalf of discriminated-against individuals. In either case, the EEOC does not have to comply with the procedural rules for class action suits, according to the U.S. Supreme Court, but class actions are the exception rather than the rule, and a class is only certified after rigorous analysis. Separate rules for class action suits apply to the Equal Pay Act and the Age Discrimination in Employment Act.
When must a claimant bring a charge? Generally speaking, discrimination charges must be filed within 180 days after the alleged unlawful employment practice occurred (or 300 days if the charge is also covered by a state or local antidiscrimination law). Discrete discriminatory or retaliatory acts "occur" on the day that they happened. Therefore, a party must file a charge within either 180 or 300 days of the date of the act or lose the ability to recover for it. Each discrete act starts a new clock for filing charges alleging that act. They are not actionable if time barred, even when related to acts alleged in timely filed charges.
Compensation decisions. The Lilly Ledbetter Fair Pay Act of 2009 clarifies the general rule with respect to a discriminatory compensation decision or other practice. Under the law, a discriminatory compensation decision or other practice occurs when the decision or practice is adopted, when an individual becomes subject to it or when and individual is affected by its application (including each time compensation is paid pursuant to the discriminatory compensation decision or other practice). A claimant may recover back pay for up to two years preceding the filing of the charge. The law applies to claims of discrimination in compensation pending on or after May 28, 2007.
It is unclear how far the Act extends. In less than a week after its enactment, two federal district courts held that it applies to all adverse employment actions that potentially affect pay. One case involved Title VII race-based demotions, and the other a Title VII race bias claim that alleged an employee was denied the opportunity to fill in for an absent sales associate, thereby depriving her of the opportunity to earn bonuses on sales of more expensive products. However, a legal alert from the international law firm of Morgan Lewis & Bockius pointed out that Senator Barbara Mikulski (D-Md) provided assurances on the record during floor debate that the law was intended to apply to "direct inputs into compensation outcomes, such as performance ratings under a performance-based pay system, job classification decisions and work assignment decisions under a geographic pay structure" (see http://www.morganlewis.com/pubs/LEPG_LillyLedbetterFairPayAct_LF_27jan09.pdf).
Reprinted with permission. © CCH
<p>Courts have ruled that the Lilly Ledbetter Fair Pay Act applies to all adverse employment actions that potentially affect pay, creating uncertainty as to the scope of the new law. A claimant may recover back pay for up to two years preceding the filing of the charge.</p>