Lilly Ledbetter, a retired supervisor at an Alabama plant for Goodyear Tire, for which she worked since 1979, made an initial inquiry in March 1998 reagarding possible gender-based pay discrimination. She learned that she made about $6500/year less than the lowest-paid male supervisor, and filed a complaint with the EEOC in July. After taking early retirement in November 1998, Ms. Ledbetter filed lawsuits, claiming violations of the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964.
The District Court found in favor of Goodyear with regards to the Equal Pay Act of 1963. This act does not rule out differences in pay due to merit-based differences, e.g., one has more experience, additional training or education, and/or performed more effectively, longer hours, etc.; it does rule out unfair decisions of the kind, say, she is single and he has a family to support, an extraneous factor.
The District Court did allow the Title VII lawsuit to proceed, and the jury found in favor of Ledbetter, awarding her back pay and damages based on her tenure with the company. Goodyear, which had defended itself on merit-based pay differences, appealed any damages preceding the fall of 1997, citing the statutory charging period. (It is unfair to hold higher-level managers accountable for wrongful decisions which they did not have an opportunity to address.) The Equal Pay Act, as well as TitleVII, has a limited 180 day charging period for an alleged discriminatory action, e.g., a pay raise denial. This statutory window basically provides a degree of fairness for an employer; higher-level managers may not be aware of wrongful decisions when they occur and have an opportunity to address them.
The Court of Appeals for the Eleventh Circuit overturned the jury decision, finding that Goodyear did not make a gender-biased compensation decision within the prescribed charging period and rejected Ledbetter's allegation that each paycheck was in itself a discriminatory act, the accumulated result of unfair performance appraisals preceding the statute of limitations. Ledbetter appealed to the Supreme Court.
The Supreme Court ruled 5-4, upholding the Court of Appeals verdict. Justice Ginsberg, in dissenting from the decision, argued a sort of stealth gender discrimination and the fact that the alleged victim may have limited knowledge about compensation matters of other workers.
The Lilly Ledbetter Fair Pay Act essentially attempts to argue the point that each paycheck issued is an act of discrimination, regardless of when alleged discrimination took place or whether the employee in question made a good faith attempt to resolve the injustice. The bill was killed when it failed to achieve enough votes in the Senate to bypass the risk of a filibuster.
The Democrats wanted John McCain on the record for this vote, which they cast as being for equal pay for women. Keep in mind that the law already allows a 6-month window for gender discrimination cases. McCain already said he opposed the bill, not because he's against equal pay for women, because he was concerned about a growing intrusion of the government into private enterprise compensation decisions and an explosion of frivolous litigation costs, as companies would be forced to defend the merit basis for compensation decisions made years ago. That is, in my own judgment, an undue burden on business. John McCain opposes what is really a boondoggle for a Democratic special-interest group, trial lawyers.
In a business world where talented people are in demand, companies making compensation decisions out of step with the market and for arbitrary reasons (e.g., gender), put themselves at a competitive disadvantage of possibly losing their best and brightest personnel. I've also seen some studies where women are enrolled in college in greater percentages, often have better scholastic averages, and are in increasing demand for the higher-paying jobs available to college graduates.
In fact, John McCain has underscored the latter point, that a principal response for women whom are in a lower-paying profession is to obtain the training or education they need to open up the possibility of higher-paying job offers.
