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Senate Panel Examines Effects of Equal Pay Case

On September 23, the Senate Judiciary Committee held a hearing, “Barriers to Justice: Examining Equal Pay for Equal Work.” The Senate Health, Education, Labor, and Pensions Committee held a hearing on pay equity in the wake of the Supreme Court’s ruling in Ledbetter v. Goodyear Tire and Rubber Co. on January 24 (see The Source, 1/25/08).

Sen. Dianne Feinstein (D-CA) said, “In today’s strained economy…there is no issue more important for women than their financial security. Put simply, women are still not paid as much as men, even when they do the exact same job…Lower paychecks are not the only problem. In a recession, women suffer disproportionately under almost every economic measure. As of April of this year women were losing jobs faster than men; women’s wages were falling more rapidly than men’s; women were disproportionately at risk for foreclosure and 32 percent more likely to receive subprime mortgages than men; women had fewer savings than men; and non-married women had a net worth 48 percent lower than non-married men.” Sen. Feinstein continued, “Once retired, women find themselves in even greater financial jeopardy. On average, women live approximately seven years longer than men, but they receive significantly fewer retirement benefits. Among women above retirement age, some do not receive any benefits at all because they have spent their working years inside the home caring for their children. Women who did work outside the home were often paid significantly less than their male counterparts. Their pension checks reflect this fact: their pension checks are as their paychecks once were lower than those of their male counterparts.”

Lilly Ledbetter, plaintiff in the wage discrimination case against Goodyear Tire Company, testified about the effect the Supreme Court’s ruling is having on pay discrimination cases. “According to these judges, any pay discrimination complaint must be filed within about six months of the first time a worker gets a discriminatory paycheck no matter how long the discrimination continues, no matter how much damage it causes the worker, and no matter how much the employer knows that it’s getting away with, and profiting from, its unlawful conduct. Justice Alito and four other Supreme Court justices sent the message that it’s just tough luck for the employee if she doesn’t complain at the time of the employer’s original decision, the employer gets to pay her less for the rest of her career…The Supreme Court took a law [the Equal Pay Act of 1963, P.L. 88-38] that was supposed to protect people like me, and created a loophole that employers can drive a truck through. Equally important, the higher courts rejected what had been the law in every part of the country before the 11th Circuit ruled in my case. I’m no lawyer, but my counsel told me that it was settled law that an employee could challenge each and every discriminatory paycheck she received. That approach seems to me to be not only right for the real world, but also the only sensible interpretation of the law: each time the employer pays you less on the basis of your sex, it’s an act of discrimination that the employer should correct or be challenged on.” She continued, “But my case is only the tip of the iceberg. With regard to pay discrimination, there are lots of other companies that got the Supreme Court’s message loud and clear: they will not be punished for discriminating, if they do it long enough and cover it up well enough…What is more, the legal repercussions from my case continue. For example, the Supreme Court is all set to hear a case [AT&T v. Hulteen] this fall that raises the question [of] whether employers who denied women credit for maternity leave in the 1970s can discriminate against them now in calculating their pensions and retirement eligibility. And I understand that since the Supreme Court’s ruling in my case, federal courts have applied it to bar all different kinds of cases, not just pay discrimination cases.”

Lawrence Lorber, an attorney at Proskauer Rose, LLP, highlighted the Paycheck Fairness Act (H.R. 1338) as having a detrimental effect on pay equity cases. “The Paycheck Fairness Act (‘the Act’) if enacted, would radically amend the Equal Pay Act (EPA) of 1963 in significant substantive and procedural ways. These amendments are based on an unsubstantiated premise that, throughout the United States, all unexplained wage disparities existing between men and women are necessarily the result of intentional discrimination by employers. On this assumption, the act would impose harsh, ‘lottery-style’ penalties upon all employers, lower the applicable standards for claims, and make available a more attorney-friendly class action device (among other suggested changes). The act’s proponents contend these changes are necessary to ensure that women receive equal pay for equal work. Nothing could be further from the truth. In reality, the act would expand litigation opportunities for class action lawyers seeking millions of dollars from companies without ever having to prove that the companies intentionally discriminated against women in setting compensation rates.” Mr. Lorber continued, “The proposed changes to the EPA are also contrary to the most fundamental underpinnings of that act — the requirement that equal pay for equal work be balanced against the mandate that government not interfere with private companies’ valuation of the work preformed for them and, more generally, the setting of wages. The proposed changes are also inappropriate given the EPA’s distinguishing features, relative to other nondiscrimination legislation. Perhaps the most notable difference is the lack of any requirement to actually prove intentional discrimination. This feature separates the EPA from Title VII [of the Civil Rights Act of 1964 (P.L. 88-352)], the ADEA [Age Discrimination in Employment Act (P.L. 90-202)], the ADA [Americans with Disabilities Act (P.L. 101-336)], as well as Section 1981 of the Civil Rights Act of 1866 [42 U.S.C. §1981] and Section 1983 of the Civil Rights Act of 1871 [42 U.S.C. §1983]. These statutes allow for the imposition of compensatory and punitive damages, but only upon a finding of intentional discrimination by the employer. Unlike these statutes, the EPA currently imposes liability on employers without any regard showing that the employer intended to discriminate against the worker.” 

Mr. Lorber added, “Commentators and courts have often referred to this leniency in the EPA as rendering employers ‘strictly liable’ for any pay disparity between women and men for equal work unless the employer meets its burden of proving that the rate differential was due to: a seniority system, a merit system, a system measuring quality of work, or any other factor other than sex…Because the EPA is a ‘strict liability’ statute requiring no showing of discriminatory intent to facilitate the imposition of unlimited punitive and compensatory damages, it is both unnecessary and inappropriate to amend the EPA.” 

Cyrus Mehri, a partner at Mehri and Skalet, PLLC, also testified.

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