In a statement issued on June 10, 2010, President Obama made a direct call to the Senate to enact the Paycheck Fairness Act. As employers may remember, there was a flurry of activity surrounding the United States Supreme Court’s Lily Ledbetter decision which narrowly construed the applicable statute of limitations in cases brought under the Equal Pay Act. Indeed, the 2007 decision became a part of President Obama’s campaign platform of promoting equal opportunities for all people. It was no accident that the first bill signed into law by President Obama was the Lily Ledbetter Fair Pay Act, which directly overruled the Supreme Court’s decision. Nearly simultaneously, the Paycheck Fairness Act was introduced by then Senator Hillary Rodham Clinton and Rep. Rosa DeLauro to strengthen the Equal Pay Act (“EPA”). The Paycheck Fairness Act, as proposed, caused an initial stir, which was quickly lost in the fray surrounding the various economic stimulus initiatives and then the health care reform debate. Now that the Paycheck Fairness Act seems to be coming off the back-burner, employers should watch the debate with interest. The Paycheck Fairness Act, as proposed, makes several key changes to the EPA, which exposes employers to additional liability, which are as follows:
- Enhanced Damages — Plaintiffs would be permitted to recover compensatory and punitive damages. The EPA currently provides only for liquidated damages and back pay awards.
- Opt-out Class Actions — Class action lawsuits could be filed pursuant to the Federal Rules of Civil Procedure (FRCP). This would make it easier to file class actions as the EPA, adopted prior to the current federal class action rule, requires plaintiffs to opt in to a suit. Under the federal rule, class members are automatically considered part of the class until they choose to opt out of the class.
- Limitation of Affirmative Defense — Currently, an employer may assert an affirmative defense that the pay differential between men and women is based on a “factor other than sex.” This defense had been broadly interpreted. The Act tightens this affirmative defense so that it can excuse a pay differential for men women only where the employer can show that the differential is truly caused by something other than sex and is related to job performance and consistent with business necessity.
Remember, it’s never too early or too late to start talking to your elected representatives about the Act.