Court limits application of Lilly Ledbetter Fair Pay Act
Wage and Hour
In a small victory for employers, the Third Circuit U.S. Court of Appeals recently ruled that the Lilly Ledbetter Fair Pay Act (FPA) applies solely to compensation claims. The FPA allows employees to file a lawsuit against their employers for discrimination in pay, but what’s unique about the law is that it treats the payment of each paycheck (or retirement benefit) as a new act of discrimination. Thus, the pay decision could have been made years beforehand, but each paycheck restarts the running of the statute of limitations.
A Boeing employee recently tried to use the FPA to file a discrimination complaint with the Equal Employment Opportunity Commission (EEOC) for a promotion decision that occurred nearly five years earlier. The employee was not promoted as high as two white co-workers and he claimed it was because of race and national origin discrimination. Typically, a discrimination complaint needs to be filed with the EEOC within 300 days of the employment action (or 180 days, depending on the state where the claim is filed). But, since the promotion decision would have come with a significant pay increase, the employee tried to use the FPA as a means for extending the statute of limitations. In the first case of its kind, the court ruled that the FPA should only be used if an employee is specifically claiming compensation discrimination, as opposed to other types of employment discrimination. A claim based on a failure to promote, according to the Third Circuit, doesn’t meet that test (Noel v. Boeing, 3rd Cir, Oct. 2010).
Tips: It’s unknown whether the Ninth Circuit Court of Appeals (which covers California, Idaho, Oregon and Washington) would agree with this result. To be on the safe side, retain all documentation of job-related decisions affecting pay.