[Senate Hearing 110-825]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-825
 
    THE FAIR PAY RESTORATION ACT: ENSURING REASONABLE RULES IN PAY 
                          DISCRIMINATION CASES 

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING S. 1843, TO AMEND TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 
AND THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967 TO CLARIFY THAT AN 
 UNLAWFUL PRACTICE OCCURS EACH TIME COMPENSATION IS PAID PURSUANT TO A 
         DISCRIMINATORY COMPENSATION DECISION OR OTHER PRACTICE

                               __________

                            JANUARY 24, 2008

                               __________

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                                Pensions


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York     ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois               PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont         WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio                  TOM COBURN, M.D., Oklahoma

           J. Michael Myers, Staff Director and Chief Counsel

                 Ilyse Schuman, Minority Staff Director

                                  (ii)

  






















                            C O N T E N T S

                               __________

                               STATEMENTS

                       THURSDAY, JANUARY 24, 2008

                                                                   Page
Kennedy, Hon. Edward M., Chairman, Committee on Health, 
  Education, Labor, and Pensions, opening statement..............     1
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia, 
  opening statement..............................................     3
Murray, Hon. Patty, a U.S. Senator from the State of Washington..     4
    Prepared statement...........................................     4
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................     6
Ledbetter, Lilly, Resident, Jacksonville, AL.....................     7
    Prepared statement...........................................     9
Dorfman, Margot, Chief Executive Officer, U.S. Women's Chamber of 
  Commerce.......................................................    12
    Prepared statement...........................................    13
Bagenstos, Samuel R., Professor of Law and Associate Dean, 
  Washington University in St. Louis School of Law, St. Louis, MO    16
    Prepared statement...........................................    18
Dreiband, Eric S., Akin Gump Strauss Hauer & Feld LLP, 
  Washington, DC.................................................    23
    Prepared statement...........................................    25
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa, prepared 
  statement......................................................    42

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Enzi, Hon. Michael B., a U.S. Senator from the State of 
      Wyoming....................................................    49
    Clinton, Hon. Hillary Rodham, a U.S. Senator from the State 
      of New York................................................    52
    American Benefits Council (ABC)..............................    53

                                 (iii)

  


    THE FAIR PAY RESTORATION ACT: ENSURING REASONABLE RULES IN PAY 
                          DISCRIMINATION CASES

                              ----------                              


                       THURSDAY, JANUARY 24, 2008

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m. in 
room SD-430, Dirksen Senate Office Building, Hon. Edward M. 
Kennedy, chairman of the committee, presiding.
    Present: Senator Kennedy, Harkin, Mikulski, Murray, and 
Isakson.

                  Opening Statement of Senator Kennedy

    The Chairman. Come to order. Good morning. Equal pay for 
equal work is a fundamental civil right in our society. All 
workers should have the right to fair pay, regardless of their 
race, gender, national origin, religion, age, sexual 
orientation, or disability. Unfortunately, reality has too 
often failed to live up to this ideal. Prejudice and 
discrimination too often deny some employees their fair pay 
that they deserve for the work that they do.
    Civil rights is still the Nation's unfinished business. 
Over the years, Congress has stood up for justice and fairness 
by passing strong bipartisan laws against pay discrimination. 
The Civil Rights Act of 1964, the Equal Pay Act, the Age 
Discrimination in Employment Act, the Americans With Disability 
Act, the Civil Rights Act of 1991, all protect workers from pay 
discrimination, and these laws have made our Nation a stronger, 
better, fairer land.
    The U.S. Supreme Court's 5-4 decision last May in Ledbetter 
v. Goodyear Tire & Rubber Company undermined the fundamental 
protections against pay discrimination by imposing serious 
obstacles in the path of workers seeking to enforce their 
rights. Ledbetter was a textbook case of pay discrimination.
    Lilly Ledbetter, who is here today, was one of the few 
women supervisors at a Goodyear Tire & Rubber Company plant in 
Gadsden, AL. She worked at the plant for almost two decades, 
constantly demonstrating that a woman could do a job 
traditionally done by men.
    She endured the frequent scorn of her male co-workers, but 
she persevered and constantly gave the company a fair day's 
work for what she thought was a fair day's pay. What she didn't 
know, however, was that Goodyear wasn't living up to its part 
of the bargain. For almost two decades, the company used 
discriminatory evaluations to pay her less than her male 
colleagues who performed the same work.
    The jury saw the injustice in Goodyear's treatment of Ms. 
Ledbetter, and it awarded her full damages. But five members of 
the U.S. Supreme Court ignored that injustice and held that Ms. 
Ledbetter was entitled to nothing at all because she was too 
late in filing the claim. The court imposed the unreasonable 
rule that she should have filed her claim within 6 months from 
the day Goodyear first decided to discriminate against her.
    Never mind that Ms. Ledbetter didn't know about the 
discrimination when it first began. Never mind that she had no 
way to obtain this information because Goodyear kept such 
salaries confidential. Never mind that Goodyear continued to 
discriminate each and every time it gave Ms. Ledbetter a 
smaller paycheck than it gave her male co-workers.
    The court's decision gives employers free rein to continue 
such discrimination, and it leaves workers powerless to stop 
it. That result defies both justice and common sense.
    The bipartisan Fair Pay Restoration Act will restore the 
clear intent of Congress when we pass these important laws. It 
provides a reasonable rule that reflects how pay discrimination 
actually occurs in the workplace. It recognizes that workers 
may not know immediately that they are being underpaid because 
of discrimination. It specifies that the time for filing a pay 
discrimination claim begins on the date the worker receives a 
discriminatory paycheck. It gives workers a realistic 
opportunity to stop ongoing discrimination, and it holds firms 
accountable for violating the law.
    We know this legislation is fair and workable. It was the 
law in most of the land and had the support of the EEOC under 
both Democratic and Republican administrations until the U.S. 
Supreme Court upended the rules last year.
    As Justice Ginsburg wrote in her stirring dissent in the 
case, ``Once again, the ball is in Congress's court.'' We must 
act to correct this misreading of the law and must do so as 
soon as possible.
    I thank the witnesses for appearing today and look forward 
to their testimony and meeting our own responsibility to 
guarantee that our civil rights laws provide the full 
protection that America deserves.
    I would just mention here, if they would be kind enough, 
staff put this chart up. This is the chart of the various 
circuit courts. If you tip it over here, where do you think my 
eyes are?
    [Laughter.]
    If you would just look at this, we have got the Second 
Circuit, Third, Fourth, Sixth, Seventh, Eighth, Ninth, Tenth 
Circuit, and the DC Circuits.
    I am not going to take more time in my opening statement. 
But for those with wonderful eyes, or they may come up 
afterwards, they will note that in each of these, they have 
referred to the cases where these decisions were made. And each 
and every one of these cases notes that each discriminatory 
paycheck is a discrete act.
    And as the count in Forsyth v. Federation said, any 
paycheck given within the statute of limitations period 
therefore would be actionable, even if based on a 
discriminatory pay scale set up outside the statutory 
limitations period. These were the court decisions and, 
basically, the EEOC's position prior to a 5-4 decision that 
needs to be changed.
    Senator.

                      Statement of Senator Isakson

    Senator Isakson. Thank you, Mr. Chairman. Thanks for 
calling this hearing. I would like to welcome and thank all of 
the witnesses for taking their time and being here today.
    The legislation before us today would purportedly overturn 
the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire 
& Rubber in which the court determined that Ms. Ledbetter 
waited too long to file her claim against Goodyear.
    Certainly, all of us in this room agree that employment 
discrimination cannot be tolerated. But as even the editors of 
The Washington Post have noted, this legislation goes overboard 
in favor of trial lawyers. And in fact, this bill repeals any 
and all time limitations for employment discrimination claims, 
allowing employees to wait many years to file a claim and 
making it much more difficult for the employer to disprove an 
allegation that may be made.
    In Ledbetter, the court found that Ms. Ledbetter's lawsuit 
against her employer was barred because it was not filed in a 
fashion consistent with the time periods Congress set out in 
title VII, 180 days. In enacting title VII, Congress mandated 
that lawsuits must be filed no more than 180 days after the 
alleged employment practice occurred. That is not my opinion. 
That is the plain language of the law that has been in place 
for 40 years.
    The court's decision was not only consistent with plain 
language in title VII, but also with four previous U.S. Supreme 
Court decisions whereby the court held that title VII statute 
of limitations prohibits the filing of claims based on 
employment practices that occurred outside the 180-day window, 
even if those employment practices continued to affect the 
plaintiff 's pay.
    Proponents of the legislation will allow every paycheck to 
restart the 180-day clock and reopen the possibility of an 
employment discrimination allegation on the presumption that 
the discrimination victim is on a lower-paid track than his or 
her colleagues.
    Under this bill, losses could even be filed if the alleged 
discrimination occurred decades earlier and the offending 
supervisor is no longer with the company or, as in the 
Ledbetter case, the alleged offending supervisor is deceased. 
Indeed, by her admission, Ms. Ledbetter knew in 1992 that she 
was earning less than most of her male colleagues, but she 
waited until 1998 to sue after the alleged harasser had died.
    Proponents of the bill argue the Ledbetter decision leaves 
alleged victims with no adequate remedy for pay discrimination 
because they may be unaware what their peers are paid until 
after the 180-day period. That argument ignores the discovery 
rule. This rule, which is on the books today, allows plaintiffs 
to file an EEOC suit, case allegations up to 180 days after 
discovering the difference in pay.
    In summary, the legislation does not just allow, but rather 
encourages employees to wait many years to allege pay 
discrimination. The longer they wait, the more difficult it is 
for the employer to disprove the allegation. As such, the bill 
is ripe for abuse and amounts to nothing more than a gift to 
trial lawyers eager for a frivolous lawsuit.
    Again, I want to thank the Chairman for calling the hearing 
today, and thank all the witnesses for taking their valuable 
time to come.
    The Chairman. Thank you very much. Senator Murray is 
chairman of the Employment Subcommittee. If she wants to say a 
word, we would welcome it.

                      Statement of Senator Murray

    Senator Murray. Mr. Chairman, I can have Senator Mikulski 
go first. She was ahead of me. Thank you very much, and I thank 
Senator Mikulski as well.
    I really appreciate your calling this important hearing to 
talk about the need to restore workplace pay equity, and I want 
to thank all of our witnesses who are here today, particularly 
Lilly Ledbetter. She has turned the discrimination she suffered 
into a battle cry for justice, and we all really admire your 
courage. Thank you very much.
    Mr. Chairman, I will submit my full statement for the 
record.
    This is an important topic, and I want to just make a 
couple of points. Too many workers today have turned to their 
government for help recently and have found silence or 
injustice within this Administration.
    And now the highest court in our country has made it almost 
impossible for workers who suffer unfair pay discrimination to 
seek swift justice. The Ledbetter decision has become a 
roadblock to the workplace equality that Congress intended to 
achieve with the Civil Rights Act more than 40 years ago.
    In most of our workplaces, talking about your salary or 
raise or performance evaluation with your co-workers is taboo. 
So it can take a worker months before they realize, much less 
prove, that they are being paid less than their colleagues of a 
different gender, skin color, or who are born in another 
country.
    But now the U.S. Supreme Court has effectively said that 
workers have to figure that out within 6 months of their 
employer making that pay decision. Mr. Chairman, that sounds to 
me like we are asking our workers to be mind readers. It is 
unfair, and it may lead to unintended consequences down the 
road, and I think it is time for a change.
    So I hope all of our colleagues will join us in supporting 
this important bill and ensure that congressional intent is 
honored by our courts. I look forward to hearing from today's 
witnesses, and I really, again, want to thank you for calling 
this important hearing.
    [The prepared statement of Senator Murray follows:]

                  Prepared Statement of Senator Murray

    Thank you, Mr. Chairman, for calling this important hearing 
to discuss the need to restore workplace pay equality.
    I'd also like to thank our witnesses for joining us today, 
particularly Lilly Ledbetter, who's turned the discrimination 
she suffered into a battle cry for justice; we admire your 
courage.
    Unfortunately, the Supreme Court's Ledbetter decision does 
not stand out as an exception to the treatment workers have 
received from those meant to protect their rights. In fact, 
when workers have turned to their government for help, they've 
found silence or injustice over and over again. Too many 
workers who need skills training have been left high and dry by 
the President's budget cuts. Workplace safety seems to be an 
afterthought for this Administration, which has issued just one 
new standard in the last 8 years--and that one only by court 
order. And now the highest court in our country has made it 
almost impossible for workers who suffer unfair pay 
discrimination to seek swift justice.
    Title VII of the Civil Rights Act of 1964 was a major step 
forward for equality in our country. It leveled the playing 
field for tens of thousands of workers and opened the door to 
new opportunities.
    Unfortunately, the Ledbetter decision has become a 
roadblock to the workplace equality that Congress intended to 
achieve with the Civil Rights Act more than 40 years ago.
    In effect, the decision may create a catch-22 for workers 
who believe they've been discriminated against. If they file a 
claim too early, they run the risk of alienating their employer 
before they know all of the facts. If they file too late, 
they'll miss the narrow time frame established by the Ledbetter 
decision and forego their rights under the law. And this 
decision doesn't just affect workers who've been discriminated 
against because of their gender. It changes the rules for the 
countless number of workers who may experience employment 
discrimination based on their race, national origin, or 
religion.
    Mr. Chairman, we all know that pay discrimination is real, 
and it occurs in today's workforce. Last year, research showed 
that women still make only 77 cents for every dollar that their 
male counterparts make.
    That's real money taken from the pockets of single mothers 
trying to provide for their children, and from women who are 
trying to build their savings for retirement and make 
themselves less dependent on government services.
    In most workplaces, discussing salaries, raises and 
performance evaluations with co-workers is taboo.
    And it may take a worker months before they realize, much 
less prove, they're being paid less than their colleagues who 
may have been a different gender, have a different skin color, 
or who were born in another country.
    But the Supreme Court has effectively said that workers 
should figure this out within six months of their employer 
making the decision to pay them less. Mr. Chairman, that sounds 
a lot like we're asking workers to be mind readers. It's unfair 
and may lead to unintended consequences down the road.
    Mr. Chairman, this is just another example of how the 
deck's been stacked against working families in America, and 
it's time for a change.
    I hope my colleagues will join me in supporting this 
important bill and ensure that congressional intent is honored 
by our courts. And I look forward to hearing from our 
witnesses.
    The Chairman. Thank you very much.
    Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Thank you very much, Senator Kennedy. I 
know we want to get quickly to our witnesses, distinguished 
witness table. But first, Senator Kennedy, I want to thank you 
for your swift response to the U.S. Supreme Court decision 
regarding Ms. Ledbetter, the fact that you helped act so 
promptly and worked with us.
    When I say ``us,'' I know that Senator Clinton and I were 
working to put together a bill, and we thank you for taking the 
leadership. That is why we call these good guys that support us 
the ``Galahads of the Senate.'' Senator Clinton also feels very 
strongly about this legislation and wanted me to convey to you 
her gratitude, though she is a little tied up today.
    But to our witnesses and to everyone, I think this is one 
of the most important hearings and pieces of legislation we can 
have. Right now, everybody is jazzed and needs to talk about a 
stimulus package. Well, I will tell you, if you want to get the 
economy going, let us start paying women what they are worth. 
Let us start paying women equal pay for equal work or 
comparable work.
    What we saw in the U.S. Supreme Court decision was a 
dangerous message. So dangerous that it took Ruth Ginsburg 
speaking from the bench to object to it. It said that someone 
cannot sue their employer over unequal pay if the person 
doesn't file suit within 180 days after the pay was 
established.
    It ignores the reality of pay discrimination. How many 
people know the salary of their co-workers, especially in the 
first 6 months on the job? If you are hired at an equal rate, 
when do you know that someone, the guy next to you gets a 
raise? And I quote Justice Ginsburg, ``In our view, the court 
does not comprehend or is indifferent to the insidious way in 
which women can be victims of pay discrimination.''
    Well, I think we are here to right a wrong and to write a 
remedy that is sound, achievable, and affordable. So I thank 
you for the leadership on the legislation. And Ms. Ledbetter, I 
thank you on behalf of all the women who sometimes are just too 
scared to speak up and for the courage of your convictions. You 
know, each and every one of us can make a difference. But let 
us work together, and we will make change.
    The Chairman. Thank you very much, both of you, for your 
comments.
    We will have a very good panel this morning. We will start 
off with Lilly Ledbetter, who worked for Goodyear Tire & Rubber 
Company 19 years as a manager of the Goodyear Gadsden, AL, tire 
production plant. After learning she had been paid less than 
her male counterparts most of her career, Ms. Ledbetter fought 
back, filed a pay discrimination claim against Goodyear.
    In 2003, a jury agreed with Ms. Ledbetter, and awarded her 
more than $3 million in damages. The U.S. Supreme Court 
reversed that decision last year. Since the U.S. Supreme 
Court's decision, Ms. Ledbetter has become a strong public 
advocate in support of fair pay for all workers.
    After Ms. Ledbetter, we will hear from Margot Dorfman, who 
is the chief executive officer of the U.S. Women's Chamber of 
Commerce. In that position, she advocates across the country 
greater opportunities for women in business. Previously an 
executive, for General Mills, she has a Bachelor of Science 
degree from Northeastern University and a Master's degree in 
Education from Lesley College, in Massachusetts. Wonderful 
universities.
    And we will hear from Professor Samuel Bagenstos. He is the 
Associate Dean for Research and Faculty Development, Washington 
University School of Law, St. Louis. He teaches civil rights, 
disability rights, and employment discrimination law. Prior to 
coming to Washington University, the professor taught civil 
rights at Harvard Law School. He is also a former clerk to 
Justice Ruth Bader Ginsburg and a former attorney in the 
appellate section of the Civil Rights Division at the 
Department of Justice. We are glad to welcome you.
    Eric Dreiband is a partner of the law firm of Akin Gump 
Strauss Hauer & Feld. And Mr. Dreiband previously served as 
general counsel of the Equal Employment Opportunity Commission 
and as deputy administrator of the Department of Labor, Wage 
and Hour Division. He is a graduate of Princeton University and 
Northwestern University School of Law.
    Ms. Ledbetter, we will look forward to hearing from you. 
Thank you very much for being here. We know it is never easy to 
talk about your own personal kinds of challenges that impact 
you. So we are very appreciative and grateful for your 
willingness to share this life experience that you have had and 
caused a good deal of anxiety to you and your family. And to 
share it with us in public, we know this always takes special 
courage. And so, we are very grateful to you for joining us.

    STATEMENT OF LILLY LEDBETTER, RESIDENT, JACKSONVILLE, AL

    Ms. Ledbetter. Good morning. Thank you, Mr. Chairman and 
members of the committee, for the opportunity to testify before 
you. My name is Lilly Ledbetter. It is an honor to be here 
today to talk about my experience trying to enforce my right to 
equal pay for equal work.
    I wish my story had a happy ending, but it doesn't. I hope 
that this committee, and the Congress as a whole, can do 
whatever is necessary to make sure that in the future what 
happened to me does not happen to other people who suffer 
discrimination like I did.
    My story begins in 1979, when Goodyear hired me to work as 
a supervisor in their tire plant in Gadsden, AL. I worked hard 
at Goodyear, and I was good at my job. But it wasn't easy. I 
was one of only a handful of female supervisors, and I was 
subject to challenges the men didn't have to face.
    I faced flat-out discrimination by those who didn't want 
women in the workforce, as well as sexual harassment. I also, 
unbeknownst to me, faced pay discrimination for virtually my 
entire career at Goodyear. Toward the end of my career, I began 
to suspect that I wasn't getting paid as much as the men doing 
the similar jobs. Of course, it was hard to be sure, since 
Goodyear instructed us that we were not supposed to talk about 
our wages with our co-workers.
    All I knew before 1998 was that some of the men were 
bragging about how much overtime they got. It was more than me, 
but I didn't know the rate at which they were being paid, much 
less that it was the result of discrimination. I only got some 
real evidence when, in 1998, someone left an anonymous note in 
my mailbox at work, showing me how much less I got paid than 
the other three male managers.
    On my next day off after that, I filed a complaint with 
EEOC to challenge the pay gap. It was only after that, that I 
filed that complaint, that I was finally able to get the whole 
picture on my pay compared to the men's. It turned out that 
while at the end of my career I was earning $3,727 per month, 
the lowest-paid male was getting $4,286 per month, and the 
highest-paid male was making $5,236 for the same work.
    This happened because, time and again, I got smaller raises 
than the men, and over the years, those little differences 
added up and multiplied. So I was actually earning 20 percent 
less than the lowest-paid male supervisor in the same position. 
There were lots of men with less seniority than me who were 
paid much more than I was.
    At trial, the jury found that Goodyear had discriminated 
against me in violation of title VII. The jury awarded me back 
pay as well as more than $3 million in compensatory and 
punitive damages. And I can tell you that that was a good 
moment. It showed that the jury took my civil rights seriously 
and wasn't going to stand for a national employer like Goodyear 
paying me less than others just because I was a woman. And it 
seemed like a large enough award that the company like Goodyear 
might feel the sting and think better before discriminating 
like that again.
    I was very disappointed, however, when the trial judge was 
forced to reduce the award to $300,000 statutory cap. It felt 
like the law was sending a message that what Goodyear did was 
only 10 percent as serious as the jury and I thought it was.
    I am not a lawyer, but I am told that most of the time the 
law doesn't put an arbitrary cap like that on the amount a 
defendant has to pay in damages. I don't see why a company like 
Goodyear should get better treatment just because it broke a 
law protecting workers against discrimination instead of some 
other kind of law.
    But the worst was yet to come. By a single vote, the U.S. 
Supreme Court took it all away, even the back pay. They said I 
should have complained after the first time I was paid less 
than the men, even though I didn't know what the men were 
making, and I had no way to prove that that decision was 
discriminatory. But the court said that once 180 days passes 
after the pay decision is made, the worker is stuck with 
unequal pay for the rest of her career.
    Justice Ginsburg hit the nail on the head when she said 
that the majority's rule just doesn't make sense in the real 
world. You can't expect people to go around asking their co-
workers how much money they are making. At a lot of places, 
that could get you fired.
    Plus, even if you know some people are getting paid a 
little more than you, that is no reason to suspect 
discrimination right away. Pay can go up and down, and you want 
to believe that your employer is doing the right thing, and it 
will even out down the road. Especially where you are one of 
the only women in a male-dominated factory, you don't want to 
make waves unnecessarily. And any way, it is hard to fight over 
the small amount of money at issue early on and hard to prove 
discrimination unless you have proof that the pay disparity 
continues.
    What happened to me is not only an insult to my dignity; it 
also had real consequences for my ability to care for my 
family. While every paycheck I received I got less than what I 
was entitled to under the law, the U.S. Supreme Court said this 
didn't count as illegal discrimination. But it sure feels like 
discrimination when you are on the receiving end of that 
smaller paycheck and trying to support your family on less 
money than what the men are getting for the same job.
    It doesn't feel any less like discrimination because it 
started a long time ago. Quite the opposite, in fact. But 
according to the court, if you don't figure things out right 
away, the company can treat you like a second-class citizen for 
the rest of your career, and that is not right.
    The truth is Goodyear continues to treat me like a second-
class worker to this day because my pension and my Social 
Security is based on the amount I earned while working there. 
Goodyear gets to keep my extra pension as a reward for breaking 
the law.
    My case is over, and it is too bad that the U.S. Supreme 
Court decided the way that it did. But by enacting the Fair Pay 
Restoration Act, you can make sure that people will be able to 
challenge discriminatory paychecks as long as they continue to 
get them. The House has already passed this bill, which would 
protect workers like me and give employers the incentive to fix 
continuing pay problems.
    I urge the Senate to pass the bill as well so that our 
civil rights laws can once again offer effective protection 
against discrimination. Goodyear may never have to pay me what 
it cheated me out of, but if this bill passes, I will have an 
even richer reward because I will know that our daughters, our 
granddaughters, and all workers will get a better deal.
    That is what this fight is worth fighting for, and it makes 
this a fight that we must win. Thank you very much. I do 
appreciate this so much.
    [The prepared statement of Ms. Ledbetter follows:]
                 Prepared Statement of Lilly Ledbetter
    Good morning. Thank you, Mr. Chairman and members of the committee, 
for the opportunity to testify before you. My name is Lilly Ledbetter. 
It is an honor to be here today to talk about my experience trying to 
enforce my right to equal pay for equal work. I wish my story had a 
happy ending. But it doesn't. I hope that this committee, and the 
Congress as a whole, can do whatever is necessary to make sure that in 
the future, what happened to me does not happen to other people who 
suffer discrimination like I did.
    My story begins in 1979, when Goodyear hired me to work as a 
supervisor in their tire plant in Gadsden, AL. I worked hard at 
Goodyear, and I was good at my job. For example, Goodyear gave me a 
``Top Performance Award'' in 1996.
    But it wasn't easy. Of the approximately 80 people who held the 
same position that I did during the 19 years I worked at Goodyear, only 
a handful were women. And I was subject to challenges the men didn't 
have to face. For example, the plant manager flat out said that women 
shouldn't be working in a tire factory because women just made trouble. 
Also, one of my supervisors asked me to go to a local hotel with him. 
He promised that if I did, I would get good evaluations; if I didn't, 
he would put me at the bottom of the list. I didn't say anything about 
it at first because I wanted to try to work it out and fit in without 
making waves. But it got so bad that I finally complained to the 
company. The manager I complained to refused to do anything to protect 
me and just told me I was being a troublemaker. So I filed a charge 
with the EEOC, and they worked out a deal with the company to make sure 
the supervisor would no longer manage me. But the company continued to 
treat me badly, trying to isolate me, leaving me out of important 
management meetings, having employees refuse to talk to me. I got a 
taste of what happens when you complain about discrimination.
    Despite these problems with my supervisor, for virtually all of the 
time I worked at Goodyear, I did not know that I was also being 
subjected to discrimination in pay. When I first started at Goodyear, 
all the managers got the same pay, so I knew I was getting as much as 
the men. But then Goodyear switched to a new pay system based on 
performance. After that, people doing the same jobs could get paid 
differently. Goodyear kept what everyone got paid strictly 
confidential. No one was supposed to know. Over the following years, 
sometimes I got raises, sometimes I didn't. Some of the raises seemed 
pretty good, percentage-wise, but I didn't know if they were as good as 
the raises other people were getting.
    I only started to get some hard evidence of what men were making 
when someone anonymously left a piece of paper in my mailbox at work, 
showing what I got paid and what three other male managers were getting 
paid. I thought about just moving on, but in the end, I could not let 
Goodyear get away with their discrimination. So, I filed another 
complaint with the EEOC in 1998.
    After I filed my EEOC complaint and then filed a lawsuit, I was 
finally able to get the whole picture on my pay compared to the men's. 
It turned out that I ended up getting paid what I did because of the 
accumulated effect of pay raise decisions over the years.
    In any given year, the difference wasn't that big, nothing to make 
a huge fuss about all by itself. Some years I got no raise when others 
got a raise. Some years I got a raise that seemed OK at the time, but 
it turned out that the men got bigger percentage raises. And sometimes, 
I got a pretty big percentage raise, but because my pay was already 
low, that amounted to a smaller dollar raise than the men were getting.
    For example, in 1993, I got a 5.28 percent raise, which sounds 
pretty decent. But it was the lowest raise in dollars that year because 
it was 5.28 percent of a salary that was already a lot less than the 
men's because of discrimination. So the gap in my pay grew wider that 
year. Without knowing what the men were getting paid, I had no way of 
knowing whether that raise was potentially discriminatory or not. All I 
knew was that I got a raise.
    The result was that at the end of my career, I was earning $3,727 
per month. The lowest paid male was getting $4,286 per month for the 
same work. The highest paid male was making $5,236. So I was actually 
earning 20 percent less than the lowest paid male supervisor in the 
same position. There were lots of men with less seniority than me who 
were paid much more than I was.
    When we went to court, Goodyear acknowledged that it was paying me 
a lot less than the men doing the same work. But they said that it was 
because I was a poor performer and consequently got smaller raises than 
all the men who did better. That wasn't true, and the jury didn't 
believe it. At the trial, two other women managers took the stand and 
explained how they were also subject to discrimination. One of them was 
a secretary who got promoted to manager but was only paid a secretary's 
salary. The company kept telling her they would give her a raise, but 
they never did and she got fed up with that and went back to being a 
secretary. The other woman was also paid less than Goodyear's mandatory 
minimum wages.
    At the end of the trial, the jury found that Goodyear had 
discriminated against me in violation of title VII. The jury awarded me 
backpay as well as more than $3 million in compensatory and punitive 
damages.
    I can tell you that that was a good moment. It showed that the jury 
took my civil rights seriously and wasn't going to stand for a national 
employer like Goodyear paying me less than others just because I was a 
woman. And it seemed like a large enough award that a big company like 
Goodyear might feel the sting and think better of it before 
discriminating like that again.
    I was very disappointed, however, when the trial judge was forced 
to reduce that award to the $300,000 statutory cap. It felt like the 
law was sending a message that what Goodyear did was only 10 percent as 
serious as the jury and I thought it was. I'm not a lawyer, but I am 
told that most of the time, the law doesn't put an arbitrary cap like 
that on the amount a defendant has to pay for mental anguish or 
punitive damages. I don't see why a company like Goodyear should get 
better treatment just because it broke a law protecting workers against 
discrimination instead of some other kind of law.
    But the worst was yet to come. By a single vote, the Supreme Court 
took it all away, even the backpay. They said I should have complained 
after the first time I was paid less than the men, seemingly ignoring 
the fact that I didn't know what the men were getting paid and had no 
way to prove that the decision was discriminatory in any event. But the 
Court said that once 180 days passes after the pay decision is made, 
the worker is stuck with unequal pay for equal work for the rest of her 
career and there is nothing illegal about that under the statute.
    Justice Ginsburg hit the nail on the head when she said that the 
majority's rule just doesn't make sense in the real world. You can't 
expect people to go around asking their co-workers how much money 
they're making. At a lot of places, that could get you fired. And 
nobody wants to be asked those kinds of questions anyway.
    Plus, even if you know some people are getting paid a little more 
than you, that's no reason to suspect discrimination right away. Pay 
can go up and down, and you want to believe that your employer is doing 
the right thing and that it will all even out down the road. Especially 
when you work at a place like I did, where you are one of the only 
women in a male-dominated factory, you don't want to make waves 
unnecessarily. You want to try to fit in and get along. As I found out 
all too well, calling something ``discrimination'' isn't appreciated--I 
suffered the consequences when I went to the EEOC with proof of sexual 
harassment.
    Anyway, the small amount of money at issue early on isn't worth 
fighting over at first. No lawyer is going to take a case to fight over 
an extra $100 a month, and most people can't afford to pay a lawyer out 
of their own pockets. It would have been hard to demonstrate to the 
EEOC or a jury that the first $100 pay difference was discrimination. 
It was only after I got paid less than men again and again, without any 
good excuse, that I had a case that I could realistically bring to the 
EEOC or to court.
    What happened to me is not only an insult to my dignity, but it had 
real consequences for my ability to care for my family. With every 
paycheck I received, I got less than what I was entitled to under the 
law. The Supreme Court said that this didn't count as illegal 
discrimination, but it sure feels like discrimination when you are on 
the receiving end of that smaller paycheck and trying to support your 
family with less money than the men are getting for doing the same job. 
It doesn't feel any less like discrimination because it started a long 
time ago. Quite the opposite, in fact. But according to the Court, if 
you don't figure things out right away, the company can treat you like 
a second-class citizen for the rest of your career. That just isn't 
right.
    The truth is, Goodyear continues to treat me like a second-class 
worker to this day because my pension and social security is based on 
the amount I earned while working there. Goodyear gets to keep my extra 
pension as a reward for breaking the law.
    As you may know, making ends meet during retirement is not easy for 
a lot of seniors like me, even under the best of circumstances. It 
shouldn't be harder just because you are a woman who was discriminated 
against during your career.
    My case is over and it is too bad that the Supreme Court decided 
the way that it did. But this committee and the Senate have the chance 
to make sure that no one else will suffer the same injury that I have. 
Senator Kennedy and numerous others have introduced the Fair Pay 
Restoration Act, which would make sure that people can challenge 
discriminatory paychecks as long as they continue to receive them. The 
House has already passed this bill, which would protect workers like me 
and give employers the incentive to fix pay problems even after 180 
days has passed from the time of their original decision. I urge the 
Senate to pass the bill as well so that our civil rights laws can once 
again offer effective protection against discrimination.
    Goodyear may never have to pay me what it cheated me out of. But if 
this bill passes, I'll have an even richer reward because I'll know 
that my daughters and granddaughters, and all workers, will get a 
better deal. That's what makes this fight worth fighting and it's what 
makes this fight one we have to win.
    Thank you.

    The Chairman. Thank you very much, Ms. Ledbetter.
    Ms. Dorfman.

  STATEMENT OF MARGOT DORFMAN, CHIEF EXECUTIVE OFFICER, U.S. 
                  WOMEN'S CHAMBER OF COMMERCE

    Ms. Dorfman. Chairman Kennedy, Senator Isakson, and members 
of the committee, I thank you for the opportunity to testify on 
behalf of millions of American women business owners who seek 
your urgent action.
    The U.S. Women's Chamber of Commerce was founded to support 
the continued economic advancement for women in America. In 
essence, we are both a product as well as part of the great 
civil rights movement. The Women's Chamber has over 500,000 
members, and we reach into every State, young and old, students 
and retirees, employees and business owners, and all 
ethnicities.
    Our members understand that the fight for equal pay is part 
of the battle that all women face for economic independence. 
The economic successes and struggles of American women echo the 
story of our Nation as a whole. To gain our independence, 
establish economic fairness, and create new opportunities, 
women have moved from their homes to the factories, into the 
workforces and, finally, into business ownership.
    Just as America fought for her independence at each step of 
the road and to equality, women have been forced to fight for 
our own economic freedom. While the Civil Rights Act of 1964 
provided individuals with ground-breaking legal protection 
against discrimination, it has done much more in the 
intervening years.
    By assuring our civil rights and by putting the force of 
our legal system behind these rights, it has allowed America to 
ignite a generation of growth and prosperity. This sense of 
economic empowerment propelled an incredible surge of women 
into higher education, management, business ownership, and home 
ownership.
    But in spite of our long and dedicated struggle, women 
continue to earn less than their male counterparts. Women work 
full-time, earn on an average only 77 cents for every dollar 
men make. The figures are even worse for women of color.
    This persistent wage gap can be addressed and the promise 
of our civil rights advanced only if women are armed with the 
tools necessary to challenge sex discrimination against them. 
We can no longer blindly paint the fight for equal pay as a 
struggle between business owners and the labor force. The 
commitment to protect equal pay is important to America, 
period.
    The Fair Pay Restoration Act offers an opportunity to right 
a fundamental wrong that arose from the U.S. Supreme Court's 
decision in Ledbetter v. Goodyear Tire & Rubber Company. The 
Women's Chamber was deeply disappointed in the court's 
willingness to overturn decades of legal precedence and EEOC 
practice. We believe this misguided decision must be addressed 
with this timely legislative fix.
    With its short-sighted decision, the court ignores the 
realities of the 21st century workplace. For example, the 
confidential nature of employees' salary information 
complicates workers' abilities to recognize and report 
discriminatory treatment. And the Ledbetter decision turns a 
blind eye to the long-term effects of pay discrimination on 
individuals, their families, and our communities.
    Nearly 14 million American households are headed by women, 
who are entering their retirement years with fewer financial 
assets than men. Studies show that millions of women will run 
out of retirement savings. And even today, a woman is 41 
percent more likely to end up in poverty than a man.
    The 180-day time limit also creates incentives for business 
practices that will be detrimental to both business owners and 
workers. Rather than take the time necessary to evaluate their 
situation and confirm they have been subject to discrimination 
before filing a claim, the new deadline puts pressure on 
employees to file complaints as quickly as possible. This will 
prompt workers to act more hastily than they would have in the 
past.
    And while the previous system promoted voluntary employer 
compliance, this new interpretation provides an entirely 
different incentive. When each new paycheck triggered a new 
claim-filing period, employers had a strong motivation to 
eliminate discriminatory compensation practices. Under this 
decision, employers instead have a reason to be less vigilant 
about pay discrimination, knowing that after 180 days, they 
will be insulated from future challenges.
    There is a special concern to the Women's Chamber and its 
members. Why? As women have moved from employees to business 
owners, we have brought perspective to America's business 
leadership. Women now own over 30 percent of all firms in the 
United States and are exercising the decisionmaking authority 
that comes with the role to effect positive changes in the 
workplace.
    Studies have shown that women business owners frequently 
provide stronger employee benefits than their male 
counterparts. And our members tell us that even as business 
owners, they understand and respect the ongoing struggle 
against wage discrimination that women face. The Fair Pay 
Restoration Act rewards those who play fair, including women 
business owners, unlike the U.S. Supreme Court's decision, 
which seems to give an unfair advantage to those who skirt the 
rules.
    As Americans, we are privileged to live in a country that 
has taken the extraordinary step of clearly committing to the 
protection of individual rights. We believe the question is 
simple. Does the impact of our failure to protect a worker's 
civil rights end 180 days after the individual was first 
discriminated against? The Women's Chamber believes the answer 
is clearly no.
    I understand--I urge you now to keep the flame of economic 
independence alive and ask you to move quickly to pass the 
Ledbetter Fair Pay Restoration Act. I thank you for this time.
    [The prepared statement of Ms. Dorfman follows:]
                  Prepared Statement of Margot Dorfman
    Chairman Kennedy, Ranking Member Enzi, and members of the Senate 
Committee on Health, Education, Labor, and Pensions, my name is Margot 
Dorfman. I am the CEO of the U.S. Women's Chamber of Commerce. I 
appreciate the opportunity to testify today, and am here representing 
American women business owners who seek your urgent action.
    The U.S. Women's Chamber of Commerce was founded to support the 
continued economic advancement of women in America. In essence, we are 
both a product as well as a part of the great Civil Rights Movement. 
The Women's Chamber has over 500,000 members--young and old, students 
and retirees, employees and business owners. We have members in every 
State, and these members understand that the fight for equal pay is 
part of the battle that all women face for economic independence.
    While the Civil Rights Act of 1964 provided individuals with 
ground-breaking legal protection against discrimination, it has done 
much more in the intervening years. By assuring our civil rights, and 
by putting the force of our legal system behind these rights, it has 
allowed America to ignite a generation of growth and prosperity. This 
sense of economic empowerment propelled an incredible surge of women 
into higher education, management, business ownership, and home 
ownership.
    Consequently, the struggle for equal pay can no longer be blindly 
painted as a struggle between business owners and the labor force. The 
struggle for equal pay is important to America--period. In truth, the 
Civil Rights Act of 1964 gave legal authority to what we already knew 
in our hearts: we not only deserve the right to question inequality 
whenever and wherever it occurs--we must question it. We must question 
it if we are to keep the flame of economic opportunity and advancement 
alive in America.
    The Fair Pay Restoration Act (S. 1843) offers an opportunity to 
right a fundamental wrong that arose from the Supreme Court's decision 
in Ledbetter v. Goodyear Tire & Rubber Co. This decision severely 
limits the ability of victims of pay discrimination to seek a remedy 
under Title VII of the Civil Rights Act of 1964. The Women's Chamber 
was deeply disappointed in the Court's willingness to overturn decades 
of legal precedents and EEOC practice, and believes this misguided 
decision must be addressed with this timely legislative fix so that the 
flame of economic opportunity is not extinguished.
    The economic successes and struggles of American women echo the 
story of our Nation as a whole. To gain our independence, establish 
economic fairness, and create new opportunities, women moved from their 
homes to the factories, into the workforce, and finally into business 
ownership. Just as America fought for her independence, at each step in 
the road to equality, women have been forced to fight for our economic 
independence.
    In spite of this long and dedicated struggle, and more than four 
decades after Congress outlawed wage discrimination based on sex, women 
continue to earn less than their male counterparts. According to the 
U.S. Census Bureau, women who work full-time earn, on average, only 77 
cents for every dollar men earn. The figures are even worse for women 
of color. And while women are going to college in record numbers, that 
hasn't been the panacea we'd hoped it would be. According to the 
American Association of University Women's recent report, Behind the 
Pay Gap, just 1 year out of college, women working full-time are 
already earning less than their male colleagues--even when they work in 
the same field. Ten years after graduation, the pay gap widens. A gap 
remains even after controlling for hours, occupation, parenthood, and 
other factors known to affect earnings--and this unexplained gap is 
likely due to sex discrimination. This persistent wage gap can be 
addressed--and the promise of our civil rights advanced--only if women 
are armed with the tools necessary to challenge sex discrimination 
against them. As employees and business owners, women understand the 
profound need to actively advance and protect our civil rights. And, as 
one of our members said in a recent letter to Congress calling for 
passage of the Fair Pay Restoration Act, ``We deserve to question 
inequality at anytime it is occurring.''
    The Ledbetter decision represents a step backwards on this road to 
economic equality. Previously, title VII's requirement that employees 
file complaints within 180 days of ``the alleged unlawful employment 
practice'' was interpreted to include a worker's last paycheck tainted 
by discrimination. Despite their own precedent and congressional 
intent, the Supreme Court has narrowly re-defined the timeframe for 
discrimination claims, leading to the dismissal of Ms. Ledbetter's case 
on the grounds that she failed to file her complaint in a timely 
manner. As a result, Ms. Ledbetter was left with no recourse against 
discrimination that continued unabated for years. Now, potentially 
millions of other people maybe as well.
    With this misguided decision, the Court ignores the realities of 
the 21st century workplace. The confidential nature of employee salary 
information complicates workers' abilities to recognize and report 
discriminatory treatment. Employees generally do not know enough about 
what their co-workers earn, or how pay decisions are made, to file a 
complaint as quickly as required by the Court's reasoning. Justice Ruth 
Bader Ginsburg's dissenting opinion distinguishes pay disparities from 
other types of adverse employment actions, such as refusal to hire, 
failure to promote, or termination. Whereas these actions are clear to 
both the affected employee and others in her workplace, pay 
discrimination is rarely so obvious. In fact, special efforts are often 
undertaken to ensure that compensation details are not made public. 
Such was the case at Goodyear.
    According to Justice Ginsburg, ``The Court's insistence on 
immediate contest overlooks common characteristics of pay 
discrimination.'' She points out, and rightly so, that pay disparities 
tend to be incremental, making it difficult to detect discrimination 
until a significant amount of time has passed--easily more than the 180 
days that the Court's new standard now requires for most workers. The 
Women's Chamber wholeheartedly agrees with Justice Ginsburg's assertion 
that, ``This initial readiness to give her employer the benefit of the 
doubt should not preclude her from later challenging the then-current 
and continuing payment of a wage depressed on account of her sex.'' 
With time, these small differences can expand exponentially over the 
course of a worker's career, affecting future raises, pension 
contributions, and other earnings--related benefits in dramatic ways. 
Thus, the Ledbetter decision turns a blind eye to the long-term effects 
of pay discrimination on individuals, their families and our 
communities. Research shows that nearly 14 million American households 
are headed by women,\1\ who enter their retirement years with fewer 
financial assets than men. Millions of women run out of retirement 
savings, leaving a woman 41 percent more likely to end up in poverty 
than a man.\2\ Being paid less than men and taking time off work to 
raise our families already reduces the amount of retirement income we 
receive and limits the savings available to us. Who pays for that sad 
state of affairs--the company that paid these women unfairly or America 
as a whole?
---------------------------------------------------------------------------
    \1\ U.S. Census Bureau. ``Selected Social Characteristics in the 
United States: 2006.'' http://factfinder.census.gov/servlet/ADPTable?_ 
bm=y&geo_id=01000US&-qr_name=ACS_2006_
EST_G00_DP2&ds_name=ACS_2006_EST_G00_&_lang=en&redoLog=false&-_sse=on.
    \2\ Legal Momentum. ``Reading Between the Lines: Women's Poverty in 
the United States: 2006.'' http://www.legalmomentum.org/site/DocServer/
lm_povertyreport2006.pdf?docID=721.
---------------------------------------------------------------------------
    Not only does the 180 day time limit have the potential to prevent 
legitimate discrimination claims from being addressed, but the Women's 
Chamber is also concerned it creates incentives for practices that will 
be detrimental to both business owners and workers. Rather than take 
the time necessary to evaluate their situation and confirm that they 
have been subject to discrimination before filing a claim, the new 
deadline puts pressure on employees to file complaints as quickly as 
possible, which will prompt workers to act more hastily than they would 
have in the past. This change creates a potentially greater burden than 
the previous system, which provided our members with a well-
established, reasonable method for resolving discrimination complaints 
that protected the worker, recognized the demands on business owners, 
and balanced these factors in the context of the modern workplace.
    Good business practices are also at risk as a result of the 
Ledbetter decision. Whereas, the previous system promoted voluntary 
employer compliance, this new interpretation provides an entirely 
different incentive. When each new paycheck triggered a new claim 
filing period, employers had a strong motivation to eliminate 
discriminatory compensation practices. Under this decision, employers 
instead have reason to be less vigilant about pay discrimination, 
knowing that after 180 days they will be insulated from future 
challenges. This is of special concern to the Women's Chamber and its 
members. Why? As women have moved from employees to business owners, we 
have brought a new perspective to America's business leadership. Women 
now own over 30 percent of all firms in the United States \3\ and are 
exercising the decisionmaking authority that comes with that role to 
effect positive changes in the workplace. Studies have shown that women 
business owners frequently provide stronger employee benefits than 
their male counterparts. And our members tell us that--even as business 
owners--they understand and respect the ongoing struggle against wage 
discrimination that women continue to face, and they recognize the need 
to support workers as they seek fair treatment in the workplace. The 
Fair Pay Restoration Act rewards those who play fair--including women 
business owners--unlike the Supreme Court's decision, which seems to 
give an unfair advantage to those who skirt the rules.
---------------------------------------------------------------------------
    \3\ Center for Women's Business Women Research, ``Women's Owned 
Businesses in the United States 2006.'' http://www.cfwbr.org/national/
index.php.
---------------------------------------------------------------------------
    To effectively address the Court's detrimental decision in 
Ledbetter, the Women's Chamber urges Congress to move quickly to enact 
a legislative fix for Ledbetter. Rights must have enforceable remedies, 
and remedies must be adequate to deter discriminatory conduct. To 
ensure that effective remedies are available to women like Lilly 
Ledbetter who are victims of pay discrimination, Congress must pass the 
Fair Pay Restoration Act, which would amend Title VII of the Civil 
Rights Act of 1964 to make it clear that a pay discrimination claim 
accrues when a pay decision is made, when an employee is subject to 
that decision, or at anytime they are injured by it.
    A woman business owner's will to succeed, her will to offer 
meaningful opportunity to her employees, demands that you act now to 
guard this flame of economic opportunity that ensures that every 
citizen has the right and the ability to question inequality that 
stands in the way of that progress. As Americans, we are privileged to 
live in a country that has taken the extraordinary step of clearly 
committing to the protection of our individual civil rights. We do not 
value a person's civil rights for one day, one year, or one decade. In 
America, we value the civil rights of the individual every single day, 
whether you are female or male, black or white, from cradle to grave.
    In conclusion, the Women's Chamber would ask the committee to 
consider this simple question: does the impact of our failure to 
protect the worker's civil rights end 180 days after the individual was 
first discriminated against? We believe the answer is clear--absolutely 
not.
    We hope you agree, and urge you to move quickly to pass the 
Ledbetter Fair Pay Restoration Act. Thank you for the opportunity to 
testify today, and I look forward to taking any questions you might 
have.

    The Chairman. Thank you very much.
    Mr. Bagenstos.

    STATEMENT OF SAMUEL R. BAGENSTOS, PROFESSOR OF LAW AND 
 ASSOCIATE DEAN, WASHINGTON UNIVERSITY IN ST. LOUIS SCHOOL OF 
                       LAW, ST. LOUIS, MO

    Mr. Bagenstos. Yes, Mr. Chairman and members of the 
committee, Senator Isakson, I am pleased to testify before you 
today. My name is Samuel Bagenstos. I currently serve as 
Professor of Law and Associate Dean at the Washington 
University School of Law in St. Louis. And for the past 15 
years, I have spent my time litigating, studying, researching, 
writing about civil rights litigation in Federal courts.
    I have been invited by the committee to discuss the U.S. 
Supreme Court's recent decision in the Ledbetter v. Goodyear 
Tire case and the bill currently pending to overturn that 
decision, the Fair Pay Restoration Act. The Fair Pay 
Restoration Act would adopt a very simple and common-sense 
straightforward rule for governing the timeliness of pay 
discrimination claims.
    The rule would be each paycheck that is infected with an 
employer's discrimination is a separate violation of the 
employment discrimination laws, and the victim of pay 
discrimination may recover back pay for up to 2 years prior to 
the last discriminatory paycheck he or she has received.
    In these remarks, I want to make three essential points. 
First, the Ledbetter decision makes it exceptionally difficult, 
as we have heard a little bit about, to enforce the legal 
prohibitions on discrimination in pay.
    Second, the paycheck accrual rule that the Fair Pay 
Restoration Act adopts is not at all new or a change in the 
law. In fact, it was the law in most of the Nation before the 
court's decision last summer in Ledbetter, and there is simply 
no evidence, none, that it imposed significant burdens on 
employers.
    Third, the paycheck accrual rule is far preferable to the 
alternatives that have been most prominently suggested by 
opponents of the bill. So Ledbetter, as the committee has 
heard, requires an employee who is the victim of pay 
discrimination to file a charge with the EEOC within 180 days 
of the employer's original discriminatory pay decision, even if 
that initial decision continues to be reflected in the victim's 
paychecks many years later. That rule substantially undermines 
the enforcement of the prohibitions on pay discrimination.
    As I describe in my written testimony, as we have heard 
today, employees are unlikely to know that they have gotten 
paid less than their co-workers. They are unlikely to attribute 
differences in pay to discrimination, and they are unlikely to 
bring a lawsuit after the initial discriminatory pay decision 
even if they do know they have been the victims of 
discrimination because of the small stakes of any incremental 
pay discrimination decision.
    I should emphasize these problems aren't limited to sex 
discrimination cases and, in fact, may be especially 
significant outside of sex discrimination because the Equal Pay 
Act is available for sex discrimination cases, but not for race 
discrimination cases, national origin discrimination cases, 
disability discrimination cases, age discrimination cases. The 
paycheck accrual rule would solve the problem that Ledbetter 
created by permitting an employee to challenge any paycheck 
that continues to be infected by prior discriminatory 
decisions, and it would recognize the workplace realities that 
the Ledbetter court ignored.
    Now some opponents of the legislation adopting this rule 
contend that such legislation would make it very hard or 
impossible for employers to defend themselves against charges 
of pay discrimination. But there is just no evidence for this, 
and we actually had a good test of this because for many years, 
10 Federal circuit courts of appeals--actually the Eleventh 
Circuit, in addition to the circuits on the chart presented 
before, before the Ledbetter case, actually adopted the 
paycheck accrual rule.
    And yet there is no evidence that there was any difficulty, 
any particular difficulty for employers. No systematic studies, 
no significant anecdotal evidence. There is just no evidence 
employers had difficulty in defending pay discrimination 
claims. And that makes sense because the law gives employers 
substantial protections against late claims. The most important 
protection is the burden of proof.
    So it is not the case that the employer has to disprove an 
allegation of discrimination. The employee, the plaintiff, has 
to prove it, and the absence of evidence will inure to the 
detriment of the plaintiff. If it doesn't, right, then we still 
have the laches defense, which gives an employer the right to 
defend if the employee has slipped on her rights and the 
employer is prejudiced. And even absent that, this bill would 
incorporate a 2-year back pay cap, which would protect 
employers against open-ended liability.
    Now, opponents of the bill have suggested that equitable 
tolling principles or a discovery rule would mitigate the 
unfairness of this decision, but they are wrong. Equitable 
estoppel and the discovery rule--and equitable tolling as 
well--would give employers less certainty and repose than would 
the Fair Pay Restoration Act, right? An employer is never going 
to know when liability ends, unlike with the Fair Pay 
Restoration Act, where each paycheck starts the accrual of a 
claim. So the employer knows, has certainty as to when the 
claim runs.
    The doctrines would also promote wasteful satellite 
litigation over the employer's and the victim's conduct after 
the discrimination, moving the litigation away from what should 
be the issue in the litigation, which is whether the employer, 
in fact, discriminated. And it wouldn't solve the basic problem 
that it is so difficult to bring a lawsuit challenging pay 
discrimination initially, right?
    Experience with standards like the discovery rule and 
equitable tolling in lower courts suggest that it will not be 
sufficient, for reasons that I discuss in my written testimony. 
Now the question before the committee, I want to emphasize, is 
not whether the Ledbetter decision is consistent with the U.S. 
Supreme Court's earlier precedents. I think Justice Ginsburg 
makes a very strong case, persuasive case, that it was not 
consistent with the U.S. Supreme Court's earlier precedents.
    But the question before this committee is whether the 
Ledbetter decision is consistent with the policy that underlies 
the legal prohibitions on pay discrimination. And for the 
reasons I have explained here and in my written testimony, it 
is not.
    By adopting the paycheck accrual rule, which was the law in 
most of the country for many years before Ledbetter, the Fair 
Pay Restoration Act would properly balance the interest in 
employer repose against the imperative to enforce the laws that 
prohibit pay discrimination.
    Thank you very much.
    [The prepared statement of Mr. Bagenstos follows:]
               Prepared Statement of Samuel R. Bagenstos
    Mr. Chairman and members of the committee, I am pleased to testify 
before you today. My name is Samuel Bagenstos. I currently serve as 
Professor of Law and Associate Dean for Research and Faculty 
Development at the Washington University in St. Louis School of Law. 
For the past 15 years, I have been working on and writing about civil 
rights litigation. I served as an attorney in the Civil Rights Division 
of the U.S. Department of Justice in the mid-1990s. Since entering 
academia in 1999, I have focused my research and teaching on civil 
rights litigation and antidiscrimination law, and I have continued to 
serve as counsel for individuals and organizations in civil rights 
cases in the Federal Courts of Appeals and the Supreme Court.
    I have been invited to discuss the Supreme Court's recent decision 
in Ledbetter v. Goodyear Tire & Rubber Co.,\1\ and the bill currently 
pending before this committee to overturn that decision, the Fair Pay 
Restoration Act. The Fair Pay Restoration Act would adopt a simple and 
common sense rule to govern the timeliness of pay discrimination 
claims: Each paycheck that is infected with an employer's 
discrimination is a separate violation of the employment discrimination 
laws--lawyers call this the paycheck accrual rule--and the victim of 
pay discrimination may recover back pay for up to 2 years prior to the 
last discriminatory paycheck he or she has received.
---------------------------------------------------------------------------
    \1\ 127 S. Ct. 2162 (2007).
---------------------------------------------------------------------------
    In these remarks, I will make three essential points. First, the 
Ledbetter decision makes it exceptionally difficult to enforce the 
legal prohibitions on discrimination in pay--not just discrimination on 
the basis of sex, but also discrimination on the basis of race, 
religion, age, or disability. Second, the paycheck accrual rule that 
the Fair Pay Restoration Act adopts is not at all new; to the contrary, 
it was the law in most of the Nation before the Court's decision last 
summer in Ledbetter, and there is simply no evidence that it led to an 
avalanche of stale claims. Third, the paycheck accrual rule is far 
preferable to the alternatives that have been most prominently 
suggested: equitable tolling or a discovery rule.
  the ledbetter decision undermines enforcement of pay discrimination 
                                  laws
    Ledbetter requires an employee who is the victim of pay 
discrimination to file a charge with the Equal Employment Opportunity 
Commission within 180 or 300 days of his or her employer's 
discriminatory pay-setting decision.\2\ For a number of reasons, that 
rule substantially undermines the enforcement of the prohibitions on 
pay discrimination in Title VII, the Age Discrimination in Employment 
Act, and the Americans with Disabilities Act.
---------------------------------------------------------------------------
    \2\ See id. at 2166-2177.
---------------------------------------------------------------------------
    First, pay discrimination sneaks up on its victims. When an 
employer discriminates against an individual in hiring, promotion, or 
discharge, that individual will know at least that he has been 
disadvantaged--that he did not get the job or promotion he desired, or 
that he was discharged from his job. The individual may not know that 
the employer's action resulted from discrimination, but the employer's 
readily identifiable act of rejecting his application for a job or a 
promotion, or of firing him, puts him on notice of the adverse 
treatment that might form the basis for an antidiscrimination claim.
    Pay discrimination is very different. Although the practice is 
itself of dubious legality, many employers prohibit their employees 
from discussing how much they are paid with their co-workers.\3\ And 
even in the absence of an employer policy, many employees are unwilling 
to discuss their wages with their co-workers.\4\ As a result, a victim 
of pay discrimination is unlikely to know right away that other 
employees were paid more than she was. She might know, for example, 
that she received a raise, but she is unlikely to know that other 
employees received higher raises. As Justice Ginsburg explained in her 
dissent in Ledbetter, the victim of pay discrimination in such 
circumstances is especially unlikely to know that she has been treated 
less well than her colleagues: ``Having received a pay increase, the 
female employee is unlikely to discern at once that she has experienced 
an adverse employment decision.'' \5\
---------------------------------------------------------------------------
    \3\ See Adrienne Collella et al., Exposing Pay Secrecy, 32 Acad. of 
Mgt. Rev. 55, 57 (2007) (36 percent of surveyed employers ``prohibited 
discussion of pay'').
    \4\ See Leonard Bierman & Rafael Gely, ``Love, Sex and Politics? 
Sure. Salary? No Way'': Workplace Social Norms and the Law, 25 Berkeley 
J. Emp. & Lab. L. 167, 176-181 (2004) (discussing strong social norms 
that keep employees from discussing pay with co-workers).
    \5\ Ledbetter, 127 S. Ct. at 2182 (Ginsburg, J., dissenting).
---------------------------------------------------------------------------
    Even if an employee knows he has experienced an adverse employment 
decision, there is another hurdle: He has to understand that the 
adverse decision is based on discrimination. An extensive body of work 
by social psychologists shows that victims of discrimination ``often 
fail to notice discrimination, underestimate it, or deny being the 
target of discrimination, even when they objectively are.'' \6\ 
Individuals find discrimination ``difficult to detect on a case-by-case 
basis where each individual's outcomes can be attributed to multiple 
causes''--which will be true in nearly every pay discrimination 
case.\7\
---------------------------------------------------------------------------
    \6\ Cheryl R. Kaiser & Brenda Major, A Social Psychological 
Perspective on Perceiving and Reporting Discrimination, 31 Law & Social 
Inq. 801, 804 (2006); see also id. at 805 (``Results of several studies 
are consistent with the idea th[at] people often err on the side of 
minimizing, or not seeing, discrimination when it is directed at the 
self.'' ); Faye J. Crosby & Stacy A. Ropp, Awakening to Discrimination, 
in The Justice Motive in Everyday Life 382 (Michael Ross & Dale T. 
Miller, eds., 2002).
    \7\ Kaiser & Major, supra note 6, at 805.
---------------------------------------------------------------------------
    And even if an employee knows that she was paid less than her co-
workers and believes that the difference was the result of 
discrimination, she is still unlikely to file an EEOC charge 
immediately. Although it is not true of every victim of discrimination, 
psychological and sociological studies show that many ``underreport'' 
perceived discrimination due to a sense of shame or their rejection of 
victimhood, because friends, family, and co-workers discourage them 
from thinking they were victims of discrimination, or due to the 
interpersonal costs associated with making a discrimination claim.'' 
\8\ Those interpersonal costs can be severe. Workers who make 
discrimination claims ``report that they often are targeted by 
retaliation,'' and a body of psychological experiments demonstrates 
that people who claim discrimination are often viewed as troublemakers 
or complainers.\9\
---------------------------------------------------------------------------
    \8\ Laura Beth Nielsen & Robert L. Nelson, Rights Realized? An 
Empirical Analysis of Employment Discrimination Litigation as a 
Claiming System, 2005 Wis. L. Rev. 663, 683 (footnotes omitted); see 
also Charles Stangor et al., Reporting Discrimination in Public and 
Private Contexts, 82 J. Personal & Social Psychol. 69, 73 (2002) 
(concluding that ``because they are (or at least they are concerned 
about being) discriminated against, stigmatized individuals are 
particularly aware of the costs of claiming discrimination'' and that 
``the costs of reporting discrimination are particularly salient when 
the social context includes members of another social category'').
    \9\ Kaiser & Major, supra note 6, at 818-819.
---------------------------------------------------------------------------
    These problems are exacerbated by the small stakes in any challenge 
to a single, incremental act of pay discrimination--a point Justice 
Ginsburg noted in her Ledbetter dissent.\10\ As Lilly Ledbetter's case 
demonstrates, discriminatory pay decisions can accumulate into big 
money over a series of years--in her case, over the course of 20 years 
her pay fell 15 to 40 percent behind that of her similarly situated co-
workers.\11\ But in any given year, the difference will be quite small 
in absolute terms. Imagine two co-workers who start out receiving the 
same salary of $50,000.00 per year. In the first year, one gets a raise 
of 5 percent, and, for discriminatory reasons, the other gets a raise 
of 3 percent. If that pattern continues for 20 years, the victim of 
discrimination will be earning less than 70 percent of what her co-
worker earns--a difference of over $40,000.00 in annual salary. But 
after the first set of discriminatory raises, the gap will be much 
smaller: The victim of discrimination will still earn more than 98 
percent of what her co-worker earns, and the difference in annual 
salary will be only $1,000.00.
---------------------------------------------------------------------------
    \10\ See Ledbetter, 127 S. Ct. at 2182 (Ginsburg, J., dissenting) 
(``[T]he amount involved may seem too small, or the employer's intent 
too ambiguous, to make the issue immediately actionable or 
winnable.'').
    \11\ See id. at 2178.
---------------------------------------------------------------------------
    Few attorneys will be willing to take an employment discrimination 
suit where only $1,000.00 is at stake. The costs of bringing a suit are 
too high, and the potential recovery too low.\12\ A wise attorney might 
well counsel her client not to bring such a suit, because the risks for 
an employee are much higher than for a lawyer. An employee who files a 
claim of pay discrimination, as I have shown, subjects himself to 
retaliation. Although the Federal employment discrimination laws 
prohibit retaliation, that prohibition is often illusory in 
practice.\13\ With the prospect of only a very small recovery even if a 
claim of pay discrimination succeeds, even a small risk that the 
employer will retaliate will be enough to deter many employees from 
filing a claim in the first place.
---------------------------------------------------------------------------
    \12\ See Michael Selmi, Public vs. Private Enforcement of Civil 
Rights: The Case of Housing and Employment, 45 UCLA L. Rev. 1401, 1452-
1454 (1998) (explaining that statutory attorneys' fee recovery provides 
an ``insufficient'' incentive for private attorneys to bring civil 
rights suits, and that the prospect of significant damages recovery is 
therefore frequently necessary to encourage an attorney to bring such a 
suit); cf. John J. Donohue III & Peter Siegelman, The Changing Nature 
of Employment Discrimination Litigation, 43 Stan. L. Rev. 983, 1031-
1032 (1991) (explaining that few incumbent employees sue their 
employers for on-the-job discrimination, because the ``meager 
benefits'' are not worth the costs of bringing suit).
    \13\ See Deborah L. Brake, Retaliation, 90 Minn. L. Rev. 18 (2005).
---------------------------------------------------------------------------
    I should emphasize that these problems are not limited to sex 
discrimination cases. The statute of limitations provision that the 
Court interpreted in Ledbetter applies not just to sex discrimination, 
but also to discrimination on the basis of race, color, national 
origin, and religion.\14\ Title VII's statute of limitations provision 
is incorporated by reference in the Americans with Disabilities Act and 
the Rehabilitation Act, and the Age Discrimination in Employment Act 
contains a substantively identical provision.\15\ Indeed, there is good 
reason to believe that the Ledbetter decision will have more far-
reaching consequences in the race, color, national origin, religion, 
age, and disability contexts than in the sex context. Even after 
Ledbetter, many employees who challenge sex discrimination in pay can 
continue to sue under the Equal Pay Act, which incorporates a paycheck 
accrual rule in its statute of limitations.\16\ But the Equal Pay Act 
does not apply to race, color, national origin, religion, age, or 
disability discrimination.
---------------------------------------------------------------------------
    \14\ See 42 U.S.C. Sec. 2000e-2(a)(1) (prohibiting discrimination 
in terms and conditions of employment based on ``race, color, religion, 
sex, or national origin'').
    \15\ See 29 U.S.C. Sec. 626(d) (Age Discrimination in Employment 
Act); id. Sec. 794(d) (Rehabilitation Act); 42 U.S.C. Sec. 12117(a) 
(Americans with Disabilities Act).
    \16\ See Ledbetter, 127 S. Ct. at 2176 (``If Ledbetter had pursued 
her EPA claim, she would not face the title VII obstacles that she now 
confronts.'').
---------------------------------------------------------------------------
    The paycheck accrual rule incorporated in the Fair Pay Restoration 
Act avoids these problems. By permitting an employee to challenge any 
paycheck that continues to be infected by prior discriminatory 
decisions, that rule recognizes the workplace realities that the 
Ledbetter Court ignored. Absent such a rule, it will be extremely 
difficult to enforce the legal prohibitions on pay discrimination.
the paycheck accrual rule has been applied across the nation for years, 
                       with no dire consequences
    Some opponents of legislation adopting the paycheck accrual rule 
contend that such legislation would make it well nigh impossible for 
employers to defend themselves against charges of pay discrimination:

          An employer's ability to tell its story dissipates sharply as 
        time passes. Memories fade; managers quit, retire, or die, 
        business units are reorganized, disassembled, or sold; tasks 
        are centralized, dispersed, or abandoned altogether. Unless an 
        employer receives prompt notice that it will be called upon to 
        defend a specific decision or describe a series of events, it 
        will have no opportunity to gather and preserve the evidence 
        with which to sustain itself. . . . [W]hen an employee of even 
        moderate tenure delays in bringing a claim, the employer is 
        unlikely to have the necessary witnesses at its disposal to 
        defend itself.\17\
---------------------------------------------------------------------------
    \17\ Statement of the U.S. Chamber of Commerce Before the House 
Committee on Education and Labor 5-6 (June 12, 2007) (internal 
quotation marks and alterations omitted).

    What is notable about this contention is its entirely theoretical 
nature. Although 10 Federal Circuit Courts of Appeals had adopted the 
paycheck accrual rule before the Ledbetter case,\18\ the opponents of 
that rule have not pointed to any systematic evidence (or even any 
significant anecdotal evidence) that the rule caused employers to be 
unable to defend themselves against pay discrimination claims.
---------------------------------------------------------------------------
    \18\ See, e.g., Forsyth v. Federation Employment & Guidance 
Service, 409 F.3d 565, 572-573 (2d Cir. 2005); Reese v. Ice Cream 
Specialties, Inc., 347 F.3d 1007, 1013-1014 (7th Cir. 2003); Goodwin v. 
General Motors Corp., 275 F.3d 1005, 1009-1011 (10th Cir. 2002); 
Cardenas v. Massey, 269 F.3d 251, 257-258 (3d Cir. 2001); Anderson v. 
Zubieta, 180 F.3d 329, 335-336 (D.C. Cir. 1999); Ashley v. Boyle's 
Famous Corned Beef Co., 66 F.3d 164, 168 (8th Cir. 1995) (en banc); 
Brinkley-Obu v. Hughes Training, Inc., 36 F.3d 336, 346-347 (4th Cir. 
1994); Calloway v. Partners Nat. Health Plans, 986 F.2d 446, 448-449 
(11th Cir. 1993); Gibbs v. Pierce County Law Enforcement Support 
Agency, 785 F.2d 1396, 1399-1400 (9th Cir. 1986); Hall v. Ledex, Inc., 
669 F.2d 397, 398 (6th Cir. 1982); see also Lamphere v. Brown 
University, 685 F.2d 743, 747 (1st Cir. 1982) (``a decision to hire an 
individual at a discriminatorily low salary can, upon payment of each 
subsequent pay check, continue to violate the employee's rights'').
---------------------------------------------------------------------------
    That should not be surprising, for the law provides employers a 
number of protections against stale claims, even when those claims are 
not barred by a statute of limitations. The most fundamental of those 
protections is the burden of proof. It is the plaintiff who must show 
that her wages were discriminatory.\19\ If, because of the passage of 
time, relevant evidence becomes unavailable, it is the plaintiff who 
will suffer the consequences. And in the rare case in which an employee 
sleeps on her rights, and the burden of proof is not sufficient to 
protect the employer from prejudice, the employer has another 
protection. If the employer can show that the plaintiff 's lack of 
diligence in bringing her employment discrimination claim has caused 
``unreasonable and prejudicial delay,'' the action may be barred by the 
defense of laches.\20\
---------------------------------------------------------------------------
    \19\ See, e.g., Reeves v. Sanderson Plumbing Products, Inc., 530 
U.S. 133, 143 (2000).
    \20\ National R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 121-122 
(2002).
---------------------------------------------------------------------------
    The Fair Pay Restoration Act, in any event, protects employers 
against open-ended liability. The bill would reaffirm the law's current 
2-year cap on back pay awards.\21\ Under the bill, victims of pay 
discrimination would have no incentive to sleep on their rights. 
Because a plaintiff can recover back pay for only the 2 years preceding 
his filing of the charge with the EEOC, an employee who waits to file 
for more than 2 years after the initial discrimination will lose the 
chance to obtain full compensation. Given the complete lack of evidence 
that the paycheck accrual rule led to harmful results in the 10 
circuits that adopted it before the Ledbetter case, and given the 
substantial protections against stale claims that employers would 
retain under the Fair Pay Restoration Act, there is no basis for 
concluding that the bill will unfairly burden employers.
---------------------------------------------------------------------------
    \21\ See 42 U.S.C. Sec. 2000e-5(g)(1) (``Back pay liability shall 
not accrue from a date more than 2 years prior to the filing of a 
charge with the Commission.''); see also S. 1843, 110th Cong., 1st 
Sess. Sec. 3 (2007) (reaffirming that principle).
---------------------------------------------------------------------------
  neither equitable tolling nor a discovery rule solves the problems 
              created by the court's decision in ledbetter
    Opponents of the Fair Pay Restoration Act contend that the bill is 
unnecessary. In their view, existing principles of equitable tolling 
and estoppel are sufficient to mitigate any unfairness that might 
result from the Ledbetter decision.\22\ At most, they argue, Congress 
should pass legislation that makes clear that a discovery rule applies 
to pay discrimination cases--a rule that starts the statute of 
limitations at the time--``a `reasonable person' could or should have 
been aware of the discrimination.'' \23\ These contentions are 
profoundly misguided.
---------------------------------------------------------------------------
    \22\ See Statement of U.S. Chamber of Commerce, supra note 17, at 
9.
    \23\ Fair Pay, The Right Way: The House Overcorrects a Supreme 
Court Decision, Wash. Posts, Aug. 14, 2007, at A12. The Supreme Court 
has never resolved whether a discovery rule applies to employment 
discrimination cases, see Ledbetter, 127 S. Ct. at 2177 n.10, but four 
justices in Morgan, supra, endorsed such a rule. See Morgan, 536 U.S. 
at 124 (O'Connor, J., concurring in part and dissenting in part) (``In 
my view, therefore, the charge-filing period precludes recovery based 
on discrete actions that occurred more than 180 or 300 days after the 
employee had, or should have had, notice of the discriminatory act.'').
---------------------------------------------------------------------------
    Opponents of the bill before this committee place great emphasis on 
the employer's interest in certainty and repose.\24\ But the Fair Pay 
Restoration Act serves that interest far better than do the proffered 
alternatives of equitable tolling or the discovery rule. Under the Fair 
Pay Restoration Act's paycheck accrual rule, an employer knows that it 
has an obligation to avoid discrimination with every paycheck, and it 
knows that its back pay liability will not extend back more than 2 
years. Reliance on the principle of equitable tolling or the discovery 
rule, by contrast, will mean that an employer can never be certain that 
the limitations period has run until after a court makes a factual 
determination about when the employee knew or should have known of the 
discrimination, and whether the employer took any action to mislead the 
employee about the discrimination. Although equitable tolling and the 
discovery rule would likely ensure that employers would win statute of 
limitations arguments more often than they would under the Fair Pay 
Restoration Act, those principles would give employers less certainty 
and repose, because an employer could never be sure which claims would 
be time-barred. They would also promote wasteful satellite litigation 
over both the employer's and the victim's conduct after the alleged 
discrimination.
---------------------------------------------------------------------------
    \24\ See Statement of U.S. Chamber of Commerce, supra note 17, at 5 
(``The interest in repose is particularly compelling in the employment 
setting.'').
---------------------------------------------------------------------------
    More important, neither equitable tolling nor the discovery rule 
would solve the basic problem: Because of all of the barriers that keep 
an employee from discovering pay disparities, attributing those 
disparities to discrimination, and pursuing an antidiscrimination 
claim, it will be the rare case in which the victim of pay 
discrimination can file a claim within 180 or 300 days of the first 
discriminatory pay decision.
    Just last Term, the Supreme Court emphasized that ``[e]quitable 
tolling is a rare remedy to be applied in unusual circumstances, not a 
cure-all for an entirely common state of affairs.'' \25\ In the 
employment discrimination context specifically, the Court has declared 
that the principle of equitable tolling is ``to be applied sparingly.'' 
\26\ A litigant seeking equitable tolling must show both ``(1) that he 
has been pursuing his rights diligently, and (2) that some 
extraordinary circumstance stood in his way.'' \27\ As I have 
explained, though, the barriers to pursuing pay discrimination claims 
are the ordinary circumstance, not an extraordinary one. The Fair Pay 
Restoration Act takes account of that fact by restoring the paycheck 
accrual rule for pay discrimination cases.
---------------------------------------------------------------------------
    \25\ Wallace v. Kato, 127 S. Ct. 1091, 1100 (2007).
    \26\ Morgan, 536 U.S. at 113.
    \27\ Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005).
---------------------------------------------------------------------------
    The discovery rule is insufficient for similar reasons. Under a 
discovery rule, the statute of limitations typically begins to run on 
the date the plaintiff knows of her injury, even if that is before the 
plaintiff knows the other elements of a legal claim exist.\28\ As I 
have explained, however, the victim of pay discrimination may know that 
she is paid less than co-workers long before she knows or can prove 
that the disparity is the result of discrimination. The typical 
discovery rule will accordingly bar a large percentage of meritorious 
pay discrimination claims. Moreover, by asking when the plaintiff 
reasonably should have known of her injury, the discovery rule 
essentially places the victim's conduct on trial and detracts attention 
from the central issue in the case--whether the employer discriminated. 
Experience with workplace harassment doctrine suggests that courts are 
quite unreliable in determining whether an employee acted 
``reasonably'' in responding to discrimination.\29\
---------------------------------------------------------------------------
    \28\ See Rotella v. Wood, 528 U.S. 549, 555 (2000) (``[I]n applying 
a discovery accrual rule, we have been at pains to explain that 
discovery of the injury, not discovery of the other elements of a 
claim, is what starts the clock.'' ).
    \29\ See David Sherwyn, et al., Don't Train Your Employees and 
Cancel Your ``1-800'' Harassment Hotline: An Empirical Examination and 
Correction of the Flaws in the Affirmative Defense to Sexual Harassment 
Charges, 69 Fordham L. Rev. 1265, 1266-1267 (2001) (finding that 
``courts often find that the complaining employee acted `unreasonably' 
as a matter of law, even when such a determination may merit a more 
thorough review of the facts of the case''); see also Samuel R. 
Bagenstos, The Structural Turn and the Limits of Antidiscrimination 
Law, 94 Cal. L. Rev. 1, 14 n.67 (2006) (collecting studies reaching the 
same conclusion).
---------------------------------------------------------------------------
    The Fair Pay Restoration Act avoids these problems. In place of the 
uncertainties and limitations of the equitable tolling doctrine and the 
discovery rule, the bill adopts a very simple principle: Each and every 
paycheck that is infected by an employer's discriminatory pay decision 
is a new violation of title VII. That is the rule that the overwhelming 
majority of circuits applied before the Supreme Court's decision in 
Ledbetter, and it is a rule that takes account of the dynamics of pay 
discrimination. The alternatives proposed by opponents of the bill 
would bar many meritorious pay discrimination claims, and they would do 
so without meaningfully advancing the employer's interest in repose.
    It bears emphasis that there is nothing in the Supreme Court's 
Ledbetter decision that even purports to address the policy questions 
that are before the committee. In his majority opinion, Justice Alito 
expressly refused to consider whether it makes sense, as a matter of 
policy, to apply a paycheck accrual rule to claims of pay 
discrimination. He explained that the Court was ``not in a position to 
evaluate Ledbetter's policy arguments'' but instead must ``apply the 
statute as written.'' \30\ As Justice Ginsburg's dissent demonstrated, 
there is ample reason to believe that the Court was wrong in its 
interpretation of what ``the statute as written'' said.\31\ But that is 
not the question before this committee. The question before this 
committee is whether the Ledbetter decision is consistent with the 
policy that underlies the legal prohibitions on pay discrimination. For 
the reasons I have explained, it is not. The Ledbetter decision makes 
the prohibitions on pay discrimination exceedingly hard to enforce--not 
just in the sex discrimination context, but also in the contexts of 
race, religion, age, and disability discrimination--and its holding is 
unnecessary to protect employers against stale claims. By adopting the 
paycheck accrual rule, which was the law in most of the country for 
many years before Ledbetter, the Fair Pay Restoration Act properly 
balances the interest in employer repose against the imperative to 
enforce the laws that prohibit pay discrimination.
---------------------------------------------------------------------------
    \30\ Ledbetter, 127 S. Ct. at 2177.
    \31\ See id. at 2178-2188 (Ginsburg, J., dissenting).

    Thank you.
    The Chairman. Thank you very much, Professor.
    Mr. Dreiband.

 STATEMENT OF ERIC S. DREIBAND, AKIN GUMP STRAUSS HAUER & FELD 
                              LLP

    Mr. Dreiband. Good morning, Chairman Kennedy----
    The Chairman. Good morning.
    Mr. Dreiband [continuing]. Senator Isakson, and members of 
the committee. I thank you and the entire committee for 
affording me the privilege of testifying today. My name is Eric 
Dreiband, and I am a partner at the law firm of Akin Gump 
Strauss Hauer & Feld here in Washington, DC.
    I am here today at your invitation, of course, to speak 
about the Fair Pay Restoration Act. I do not believe the bill 
would advance the public interest. Since 1964, when Congress 
created the Equal Employment Opportunity Commission and 
established the requirement that alleged victims file a charge 
of discrimination within precisely defined time limits, 
millions of Americans have participated in the EEOC's process 
and obtained redress for their grievances.
    The charge-filing periods and other similar requirements 
have made it possible for the EEOC to conduct timely 
investigations and for State and local governments, unions, 
employers, and others to take prompt action to investigate and 
respond to charges. The Fair Pay Restoration Act would alter 
this process apparently because the perception that the U.S. 
Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber 
Company departed from long-established legal standards. It did 
not.
    The U.S. Supreme Court first articulated the doctrine that 
led to the Ledbetter decision in 1977, when it decided United 
Airlines v. Evans. In that case, the court explained that a 
discriminatory act which is not made the basis for a timely 
charge has no present legal consequences. The court reaffirmed 
the Evans decision in 1980, 1986, 1989, 2002 and, more 
recently, in 2007, when it decided the Ledbetter case.
    Furthermore, the Fair Pay Restoration Act appears premised 
on the notion that the law sanctions hidden discrimination or 
that somehow the decision in Ledbetter does so. This premise is 
not correct. The law currently provides a remedy for any such 
hidden or concealed discrimination, and the Ledbetter case did 
not change this at all.
    Both the U.S. Supreme Court and the EEOC recognize that the 
statutory time limits may be extended or tolled when a person 
who alleges unlawful discrimination was unaware of the EEO 
process or of important facts that should have led him or her 
to suspect discrimination. This is known as equitable tolling.
    The doctrine of equitable estoppel also permits the charge-
filing period to be extended when, for example, an employer 
conceals or misrepresents facts that would support a charge of 
discrimination. The Congress could codify these standards and 
in so doing would preserve the EEOC's enforcement process and 
establish a clear, congressionally mandated rule for when the 
EEOC's charge-filing period ought to be extended.
    Of course, the court in the Ledbetter case did not extend 
the charge-filing period, and the record in that case 
establishes why. According to the record in the case, in 1982, 
Ms. Ledbetter filed a charge in which she alleged that her 
supervisor had sexually harassed her. Goodyear and Ms. 
Ledbetter promptly settled the dispute.
    More than 15 years later, during the litigation, Ms. 
Ledbetter testified that, ``Different people that I worked for 
along the way had always told me that my pay was extremely 
low.'' She explained that she knew by 1992 that her pay was 
lower than her peers and that she learned about the amount of 
difference about 1994 and 1995.
    She testified that she spoke with her supervisor about this 
in 1995. ``I told him at that time that I knew definitely that 
they were all making $1,000 at least more per month than I was 
and that I would like to get in line.''
    Ms. Ledbetter, however, did not file a charge in 1992, 
1993, 1994, 1995, 1996, or 1997. Instead, she waited until July 
21, 1998, to file a charge. A timely charge would have enabled 
the EEOC and Goodyear to investigate the allegations and to 
resolve the matter promptly. The delay had real consequences. 
Ms. Ledbetter's case dragged on for nearly 10 years, and one of 
the defendant's most important witnesses died before the trial.
    The Fair Pay Restoration Act would also sweep away the 
EEOC's time-tested enforcement scheme because it would remove 
completely any requirement that alleged discrimination be dealt 
with swiftly. By eviscerating the charge-filing period, the 
Fair Pay Restoration Act would require the EEOC to conduct 
investigations into events that happened decades before anyone 
filed a charge despite the absence of records. Witnesses' 
memories will be faded. Some witnesses will be missing. Others, 
as in the Ledbetter case, may be dead.
    The Fair Pay Restoration Act would also require anyone 
accused of discrimination to make a dreadful choice--preserve 
records in perpetuity or lose the ability to mount a defense to 
a charge that challenges decades-old employment decisions. The 
cost of perpetual recordkeeping would be enormous and, in the 
case of public employers, would add to the taxpayers' burden.
    Furthermore, the bill repeatedly invokes the phrase 
discriminatory compensation decision or other practice'' and 
would define an unlawful employment practice to occur any time 
an individual is affected by application of such practice. The 
bill is, therefore, not limited to compensation or anything 
else. It also contains no time limit for any award of 
compensatory and punitive damages.
    The bill likewise contains no time limit for back pay and 
liquidated damages that may be recovered under the Age 
Discrimination in Employment Act. If enacted, then the Fair Pay 
Restoration Act would subject State and local governments, 
unions, employers, and others to potentially unlimited 
compensatory and punitive damages, back pay, and liquidated 
damages.
    Finally, the Fair Pay Restoration Act mentions pension 
benefits, but it does not, however, exclude or exempt pension 
benefits. If enacted, therefore, it may be construed to apply 
to pension benefits, and this may have the effect of exposing 
pension funds to unanticipated and potentially staggering 
liability that could risk the retirement security of many 
Americans.
    I look forward to your questions. Thank you.
    [The prepared statement of Mr. Dreiband follows:]
                 Prepared Statement of Eric S. Dreiband
    Good morning Chairman Kennedy, Ranking Member Enzi, and members of 
the committee. I thank you and the entire committee for affording me 
the privilege of testifying today. My name is Eric Dreiband, and I am a 
partner at the law firm of Akin Gump Strauss Hauer & Feld LLP here in 
Washington, DC.
    Prior to joining Akin Gump in September 2005, I served as the 
General Counsel of the U.S. Equal Employment Opportunity Commission 
(``EEOC'' or ``Commission'' ). As EEOC General Counsel, I directed the 
Federal Government's litigation of the Federal employment 
discrimination laws. I also managed approximately 300 attorneys and a 
national litigation docket of approximately 500 cases.
    Title VII of the Civil Rights Act of 1964 created the EEOC. Title 
VII also made unlawful discrimination in employment on the basis of 
race, color, religion, sex, and national origin. EEOC enforcement 
authority over title VII is plenary, with the exception of litigation 
against public employers. The employment protections of the Americans 
with Disabilities Act incorporate title VII's enforcement scheme, and 
so the EEOC also enforces that act. The EEOC enforces two other 
statutes: the Equal Pay Act, which prohibits sex-based wage 
discrimination, and the Age Discrimination in Employment Act. 
Collectively, then, Congress has vested the EEOC with enforcement 
authority over a broad array of employment discrimination laws, 
including laws that protect American workers against discrimination on 
the basis of race, color, religion, sex, national origin, disability, 
and age.
    During my tenure at the EEOC, the Commission continued its 
tradition of aggressive enforcement. We obtained relief for thousands 
of victims of discrimination, and the EEOC's litigation program 
recovered more money for victims of discrimination than at any other 
time in the Commission's history. The Commission settled thousands of 
charges of discrimination, filed hundreds of lawsuits every year, and 
recovered, literally, hundreds of millions of dollars for victims of 
discrimination.
    I am here today, at your invitation, to speak about the proposed 
Fair Pay Restoration Act. I do not believe that the bill would advance 
the public interest. The bill assumes that the decision by the Supreme 
Court of the United States in Ledbetter v. Goodyear Tire & Rubber 
Company `` impairs statutory protections'' that ``have been bedrock 
principles of American law for decades.'' \1\ This assumption is not 
correct. The Ledbetter decision is entirely consistent with more than 
three decades of Supreme Court decisions. Furthermore, the bill appears 
inspired by the mistaken notion that, after Ledbetter, the law 
currently provides no remedy for concealed discrimination--what the 
bill describes as ``the reality of wage discrimination.'' \2\ Finally, 
the bill is not limited to compensation and, if enacted in its present 
form, will create unanticipated and potentially ruinous liability for 
State and local governments, unions, employers, and others covered by 
the Federal antidiscrimination laws. The bill may also subject pension 
funds to unanticipated liability that may jeopardize the integrity of 
those funds and risk the retirement security of pension fund 
beneficiaries.
---------------------------------------------------------------------------
    \1\ Fair Pay Restoration Act, S. 1843, 110th Cong. Sec. 2 (2007).
    \2\ Id.
---------------------------------------------------------------------------
    As an alternative to the Fair Pay Restoration Act, Congress could 
codify the EEOC's Compliance Manual standard for equitable tolling and 
equitable estoppel. This would preserve the EEOC's enforcement process 
and establish a clear, congressionally mandated rule for when the 
EEOC's charge-filing period ought to be extended.
           i. history and purpose of the charge-filing period
    When Congress enacted title VII in 1964, it determined that 
cooperation and voluntary compliance were the preferred means for 
achieving equal employment opportunities and eliminating unlawful 
discrimination.\3\ To accomplish this legislative goal, Congress 
created the EEOC and established an administrative procedure that 
required the EEOC to settle disputes through conference, conciliation, 
and persuasion. Congress also required that a charge of discrimination 
be filed within a precisely-defined charge-filing period as a 
prerequisite to the EEOC's administrative process and any subsequent 
lawsuit.\4\
---------------------------------------------------------------------------
    \3\ EEOC v. Shell Oil Co., 466 U.S. 54, 77-78 (1984); Occidental 
Life Ins. Co. v. EEOC, 432 U.S. 355, 367-68 (1977) (quoting Alexander 
v. Gardner Denver Co., 415 U.S. 36, 44 (1974)).
    \4\ The legislative history of title VII explains: ``The purpose of 
[this legislation] is to achieve a peaceful and voluntary settlement of 
the persistent problems of racial and religious discrimination or 
segregation[.] . . . In brief, the measure speaks on the problem 
solving level with primary reliance placed on voluntary and local 
solutions. Only when these efforts break down would the residual right 
of enforcement come into play.'' S. Rep. No. 88-872, as reprinted in 
1964 U.S.C.C.A.N. 2355, 2355-56.
---------------------------------------------------------------------------
    In 1972, Congress amended title VII to strengthen the EEOC's 
ability to enforce the law. Congress retained the charge-filing 
requirement and the charge-filing period and added a new requirement: 
Congress required the EEOC to provide those accused of discrimination 
with prompt notice of the charges against them.\5\ Congress authorized 
the EEOC to sue private employers in Federal court, but the Commission 
could do so only if it failed to resolve disputes through informal 
methods of conference, conciliation, and persuasion.\6\
---------------------------------------------------------------------------
    \5\ 42 U.S.C. Sec. 2000e-5(b).
    \6\ Id.; EEOC v. Shell Oil Co., 466 U.S. at 78 (citing Ford Motor 
Co. v. EEOC, 458 U.S. 219, 228 (1982)).
---------------------------------------------------------------------------
    Title VII thus established the multi-step, integrated enforcement 
procedure that survives to present day. In 1967, Congress enacted the 
Age Discrimination in Employment Act, and that law contains the same 
charge-filing period and substantially the same investigation and 
conciliation process as title VII. In 1990, Congress incorporated title 
VII's enforcement scheme into the employment protections of the 
Americans with Disabilities Act.\7\ Accordingly, then, the EEOC 
administers the following four-step process.
---------------------------------------------------------------------------
    \7\ Title VII's ``powers, remedies, and procedures'' apply to the 
employment protections of the Americans with Disabilities Act. 42 
U.S.C. Sec. 12117(a). The Age Discrimination in Employment Act 
similarly adopts the charge-filing requirement, contains the same 180- 
and 300-day charge-filing periods as title VII, obligates the EEOC to 
``make investigations and require the keeping of records,'' to 
eliminate discriminatory practices through ``informal methods of 
conciliation, conference, and persuasion,'' requires prompt notice to 
persons named in charges, and authorizes the Commission to conduct 
litigation. 29 U.S.C. Sec. 626(a)-(d).

    1. The Charge. The EEOC receives charges of discrimination from 
aggrieved individuals, from persons who file charges on behalf of 
aggrieved individuals, and from EEOC Commissioners.\8\ In a State that 
has an agency with the authority to grant or seek relief for an alleged 
unlawful practice, an individual who initially files a charge with that 
agency must file the charge with the EEOC within 300 days of the 
employment practice. In all other States, the charge must be filed 
within 180 days.\9\ A charge places the EEOC on notice that a named 
respondent may have violated the Federal antidiscrimination laws.\10\
---------------------------------------------------------------------------
    \8\ 42 U.S.C. Sec. 2000e-5(b); 29 U.S.C. Sec. 626(d).
    \9\ 42 U.S.C. Sec. 2000e-5(e)(1); 29 U.S.C. Sec. 626(d); National 
Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 109 (2002).
    \10\ EEOC v. Shell Oil Co., 466 U.S. at 68 (1984).
---------------------------------------------------------------------------
    2. Notice Requirement. The Commission must ``serve a notice of the 
charge (including the date, place and circumstances of the alleged 
unlawful employment practice) on [the accused] . . . within 10 days'' 
of the filing of the charge.\11\
---------------------------------------------------------------------------
    \11\ 42 U.S.C. Sec. 2000e-5(b).

          ``[T]he principal objective of [this] provision seems to have 
        been to provide employers fair notice that accusations of 
        discrimination have been leveled against them and that they can 
        soon expect an investigation by the EEOC.'' \12\
---------------------------------------------------------------------------
    \12\ EEOC v. Shell Oil Co., 466 U.S. at 74.

The 10-day notice provision, like the charge-filing period, fosters 
``the importance that the concept of due process plays in the American 
ideal of justice'' and ``insure[s] that fairness and due process are 
part of the enforcement scheme.'' \13\
---------------------------------------------------------------------------
    \13\ S. Rep. No. 92-415, at 25 (1971), quoted in EEOC v. Shell Oil 
Co., 466 U.S. at 75 n.31. See also id. at 75 n.30 (``Thus, the section-
by-section analysis of S. 2515, from which the notice of requirement 
was derived, explained the provision as follows: `In order to accord 
respondents fair notice that charges are pending against them, this 
subsection provides that the Commission must serve a notice of the 
charge on the respondent within 10 days. . . . ' '' (quoting 118 Cong. 
Rec. 4941 (1972))).
---------------------------------------------------------------------------
    3. EEOC Investigation. After the EEOC receives a charge, and 
provides notice to the accused, the EEOC undertakes an investigation 
into the allegations contained in the charge. The Commission may 
inspect and copy ``any evidence of any person being investigated or 
proceeded against that relates to unlawful employment practices covered 
by [title VII] and is relevant to the charge under investigation.'' 
\14\ The Commission may also issue administrative subpoenas and seek 
judicial enforcement of those subpoenas.\15\
---------------------------------------------------------------------------
    \14\ 42 U.S.C. Sec. 2000e-8(a).
    \15\ Id. Sec. 2000e-9.
---------------------------------------------------------------------------
    4. Disposition of a Charge. If the Commission determines that there 
is ``reasonable cause'' to believe that a respondent violated an EEOC-
enforced law, the EEOC may issue a ``probable cause'' finding. The 
Commission then must ``endeavor to eliminate [the] alleged unlawful 
employment practice by informal methods of conference, conciliation, 
and persuasion.'' \16\ The EEOC may file suit only if these efforts 
fail.\17\
---------------------------------------------------------------------------
    \16\ Id. Sec. 2000e-5(b).
    \17\ Id. Sec. 2000e-5(f)(1).

    If the EEOC finds that no ``reasonable cause'' exists, it must 
promptly inform the accused and the person, if any, who claims to be 
aggrieved. The aggrieved person may then file a private action in 
Federal court against the accused.\18\
---------------------------------------------------------------------------
    \18\ Id.
---------------------------------------------------------------------------
    The EEOC's enforcement scheme has served the Nation well. Since 
1964, millions of American workers have participated in the EEOC's 
process and obtained redress for their grievances. The charge-filing 
requirement, charge-filing periods, and notification requirements have 
made it possible for the EEOC to conduct timely investigations, and for 
State and local governments, unions, employers, and others to take 
prompt action to investigate and respond to charges.
  ii. ledbetter v. goodyear tire & rubber company is consistent with 
                three decades of supreme court decisions
    The Supreme Court first articulated the doctrine that led to 
Ledbetter in 1977, when it decided United Air Lines, Inc. v. Evans.\19\ 
In that case, flight attendant Carolyn Evans married in 1968 and lost 
her job because her employer, United Air Lines, did not permit married 
women to work as flight attendants. United later abandoned its no-
marriage rule and, in February 1972, rehired Ms. Evans. Ms. Evans filed 
a charge& discrimination and alleged that United violated title VII 
because it refused to credit her with seniority for any period prior to 
February 1972. The Court acknowledged that the seniority system gave 
``present effect to a past act of discrimination[,] '' but determined 
that there was no discriminatory intent within the charging period.\20\ 
The Court explained:
---------------------------------------------------------------------------
    \19\ 431 U.S. 553 (1977).
    \20\ Id. at 558.

          A discriminatory act which is not made the basis for a timely 
        charge is the legal equivalent of a discriminatory act which 
        occurred before the statute was passed. It may constitute 
        relevant background evidence in a proceeding in which the 
        status of a current practice is at issue, but separately 
        considered, it is merely an unfortunate event in history which 
        has no present legal consequences.\21\
---------------------------------------------------------------------------
    \21\ Id.

    The Court re-affirmed Evans 3 years later, in 1980, when it decided 
Delaware State College v. Ricks.\22\ In that case, Professor Columbus 
Ricks alleged that his employer, Delaware State College, discriminated 
against him because of his national origin when it denied him tenure, 
offered him a 1-year ``terminal'' contract, and terminated his 
employment at the end of that contract. The Court observed that 
``termination of employment at Delaware State is a delayed, but 
inevitable, consequence of the denial of tenure,'' and held that the 
alleged discrimination occurred when the college denied Mr. Ricks 
tenure.\23\ Because Mr. Ricks waited to file his charge until after the 
charge-filing period expired--as measured by the time that lapsed 
between the decision to deny Mr. Ricks tenure and the date of his 
charge--Mr. Ricks's claim was time-barred. The Court rejected his 
argument that the loss of his job should transform his last day of work 
into a discriminatory act.\24\ The Court reasoned:
---------------------------------------------------------------------------
    \22\ 449 U.S. 250 (1980).
    \23\ Id. at 257-58.
    \24\ Id. at 258.

          [T]he only alleged discrimination occurred--and the filing 
        limitations periods therefore commenced--at the time the tenure 
        decision was made and communicated to Ricks. That is so even 
        though one of the effects of the denial of tenure--the eventual 
        loss of a teaching position--did not occur until later[,]. . . 
        . ``The proper focus is upon the time of the discriminatory 
        acts, not upon the time at which the consequences of the acts 
        became most painful.'' \25\
---------------------------------------------------------------------------
    \25\ Id. (quoting Abramson v. Univ. of Haw., 594 F.2d 202, 209 
(1979)).

    The Court in Ricks noted that ``limitations periods, while 
guaranteeing the protection of the civil rights laws to those who 
promptly assert their rights, also protect employers from the burden of 
defending claims arising from employment decisions that are long 
past.'' \26\
---------------------------------------------------------------------------
    \26\ Id. at 256-57.
---------------------------------------------------------------------------
    The Court re-affirmed the Evans line of cases in 1986 when it 
decided Bazemore v. Friday.\27\ In that case, an employer maintained a 
segregated work force and a discriminatory pay structure that pre-dated 
title VII. The defendant did not eliminate the discriminatory pay 
structure after it became covered by title VII. Instead, the defendant 
merged the two race-based ``branches'' of workers, then continued to 
utilize its racist pay structure--that is, it continued intentionally 
to pay black employees less than white employees.\28\ The Court 
concluded that the defendant violated title VII:
---------------------------------------------------------------------------
    \27\ 478 U.S. 385 (1986).
    \28\ Id. at 397.

          A pattern or practice that would have constituted a violation 
        of title VII, but for the fact that the statute had not yet 
        become effective, became a violation upon title VII's effective 
        date, and to the extent an employer continued to engage in that 
        act or practice, it is liable under that statute.\29\
---------------------------------------------------------------------------
    \29\ Id. at 395.

    The Court explained that its decision was entirely consistent with 
Evans and its progeny. The Court reasoned that Evans ``support[ed] the 
result'' in Bazemore because Ms. Evans, unlike the Bazemore plaintiffs, 
``made no allegation that [United's] seniority system itself was 
intentionally designed to discriminate.'' \30\
---------------------------------------------------------------------------
    \30\ Id. at 396 n.6.
---------------------------------------------------------------------------
    More recently, in 2002, the Court decided National Railroad 
Passenger Corporation v. Morgan.\31\ In that case, Abner Morgan, Jr., a 
black male, alleged that his employer subjected him to discrete 
discriminatory and retaliatory acts and a racially hostile work 
environment throughout his employment.
---------------------------------------------------------------------------
    \31\ 536 U.S. 101 (2002).
---------------------------------------------------------------------------
    The Court in Morgan determined that discrete acts that fell outside 
the charging period were time-barred. So-called ``discrete acts,'' the 
Court said, include ``termination, failure to promote, denial of 
transfer, [and] refusal to hire.'' \32\ The Court explained that a 
discrete discriminatory act within the charge-filing period does not 
make timely ``related'' discriminatory acts that fall outside the time 
period.\33\
---------------------------------------------------------------------------
    \32\ Id. at 114.
    \33\ Id. at 113.
---------------------------------------------------------------------------
    The Court distinguished Mr. Morgan's hostile environment claims 
from his ``discrete act'' claims. The Court concluded that if ``an act 
contributing to the claim occurs within the filing period, the entire 
time period of the hostile environment may be considered by a court for 
the purposes of determining liability.'' \34\
---------------------------------------------------------------------------
    \34\ Id. at 117.
---------------------------------------------------------------------------
    Evans, Ricks, Bazemore, and Morgan are entirely consistent with the 
Court's decision in Ledbetter.
    In Ledbetter, the plaintiff, Lilly Ledbetter, worked for Goodyear 
from 1979 until she retired in 1998. Ms. Ledbetter claimed that 
throughout this period, her supervisors gave her poor evaluations 
because of her sex, and that, as a result, her pay did not increase as 
much as it would have if she had been evaluated fairly.\35\
---------------------------------------------------------------------------
    \35\ Ledbetter v. Goodyear Tire & Rubber Co., 127 S.Ct. 2162, 2165-
66 (2007).
---------------------------------------------------------------------------
    Ms. Ledbetter sued Goodyear after she retired, and the U.S. Court 
of Appeals for the Eleventh Circuit reversed a jury verdict in her 
favor.\36\ Ms. Ledbetter appealed and raised the following issue:
---------------------------------------------------------------------------
    \36\ Ledbetter v. Goodyear Tire & Rubber Co., 421 F.3d 1169 (11th 
Cir. 2005).

          Whether and under what circumstances a plaintiff may bring an 
        action under Title VII of the Civil Rights Act of 1964 alleging 
        illegal pay discrimination when the disparate pay is received 
        during the statutory limitations period, but is the result of 
        intentionally discriminatory pay decisions that occurred 
        outside the limitations period.\37\
---------------------------------------------------------------------------
    \37\ Ledbetter, 127 S. Ct. at 2166.

    Ms. Ledbetter did not claim that the relevant Goodyear 
decisionmakers acted with discriminatory intent during the charge-
filing period. Instead, she asserted ``that the paychecks were unlawful 
because they would have been larger if she had been evaluated in a 
nondiscriminatory manner prior to the EEOC charging period.'' \38\
---------------------------------------------------------------------------
    \38\ Id. at 2167 (citing Brief for Petitioner at 22).
---------------------------------------------------------------------------
    The Court applied Evans and its progeny and concluded that Ms. 
Ledbetter's challenge to pay decisions that pre-dated the charge-filing 
period was time-barred. The Court explained that in discrimination 
cases, ``the employer's intent is almost always disputed, and evidence 
relating to intent may fade quickly with time.'' \39\ The Court 
observed that ``Bazemore stands for the proposition that an employer 
violates title VII and triggers a new EEOC charging period whenever the 
employer issues paychecks using a discriminatory pay structure.'' \40\ 
Because Goodyear's pay system was facially nondiscriminatory and 
neutrally applied, a new title VII violation did not occur every time a 
paycheck issued.\41\
---------------------------------------------------------------------------
    \39\ Id. at 2171.
    \40\ Id. at 2174.
    \41\ Id.
---------------------------------------------------------------------------
      iii. discrimination victims may assert claims that pre-date 
                        the charge-filing period
    The proposed Fair Pay Restoration Act appears premised on the 
notion that Ledbetter was wrongly decided and that existing law 
sanctions hidden discrimination. This notion apparently finds its 
inspiration in Justice Ruth Bader Ginsburg's dissent in Ledbetter. 
According to the dissent, wage discrimination is often ``concealed,'' 
and so EEOC charge-filing periods should not apply.\42\
---------------------------------------------------------------------------
    \42\ Id. at 2179, 2182.
---------------------------------------------------------------------------
    But, existing law provides a remedy for any such hidden or 
concealed discrimination. In fact, for decades, both the Supreme Court 
of the United States and the EEOC have recognized that EEOC charge-
filing periods can be extended or ``tolled'' in such circumstances.
    Twenty-five years before Ledbetter, in 1982, the Court decided 
Zipes v. Trans World Airlines, Inc.\43\ In that case, the Court 
explained that ``filing a timely charge of discrimination is not a 
jurisdictional prerequisite to suit in Federal court, but a requirement 
that, like a statute of limitations, is subject to waiver, estoppel, 
and equitable tolling.'' \44\ The Court also explained that ``equitable 
modification for failing to file within the time period will be 
available to plaintiffs under [title VII].'' \45\ Twenty years later, 
in Morgan, the Court reaffirmed Zipes and held that ``[t]he application 
of equitable doctrines . . . may either limit or toll the time period 
within which an employee must file a charge.'' \46\ Ledbetter did not 
change any of this.
---------------------------------------------------------------------------
    \43\ 455 U.S. 385 (1982).
    \44\ Id. at 393.
    \45\ Id. at 395 n.11 (citing legislative history to the 1978 
amendments to the Age Discrimination in Employment Act, H.R. REP. NO. 
95-950, at 12 (1978) (Conf. Rep.), as reprinted in 1978 U.S.C.C.A.N. 
504, 534).
    \46\ National Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 105 
(2002).
---------------------------------------------------------------------------
    Like Zipes and Morgan, the EEOC maintains that the charge-filing 
period ``is subject to equitable tolling, equitable estoppel, and 
waiver. Thus, there are circumstances under which the charge should be 
accepted as timely even though the alleged violation transpired outside 
the limitations period.'' \47\
---------------------------------------------------------------------------
    \47\ EEOC Compliance Manual Sec. 2 Threshold Issues, Number 915.003 
(May 12, 2000) available at http://www.eeoc.gov/policy/docs/
threshold.html.
---------------------------------------------------------------------------
    According to the EEOC's Compliance Manual, and consistent with 
Zipes and Morgan, the statutory time limits may be extended, or 
``tolled,'' for equitable reasons when a person who alleges unlawful 
discrimination ``was understandably unaware of the EEO process or of 
important facts that should have led him or her to suspect 
discrimination.'' \48\
---------------------------------------------------------------------------
    \48\ Id.
---------------------------------------------------------------------------
    Grounds for equitable tolling include: (1) no reason to suspect 
discrimination at the time of the disputed event; (2) mental 
incapacity; (3) misleading information or mishandling of a charge by 
the EEOC or State fair employment practices agency; and (4) timely 
filing in the wrong forum. The EEOC explains:

          Sometimes, a charging party will be unaware of a possible EEO 
        claim at the time of the alleged violation. Under such 
        circumstances, the filing period should be tolled until the 
        individual has, or should have, enough information to support a 
        reasonable suspicion of discrimination.\49\
---------------------------------------------------------------------------
    \49\ Id.

---------------------------------------------------------------------------
    The EEOC Compliance Manual provides the following examples:

    Example 1.--On March 15, 1997, CP, an African-American man, was 
notified by Respondent that he was not hired for an entry-level 
accountant position. In February 1998, more than 300 days later, CP 
learned that the selectee, a white woman, was substantially less 
qualified for the position than CP. CP filed a charge of race and sex 
discrimination on March 15, 1998. The charge would be treated as timely 
because he filed promptly after acquiring information that led him to 
suspect discrimination.
    Example 2.--On March 1, 1997, CP, a 55-year-old woman, learned that 
she was denied a promotion in the Office of Research and Development, 
and that the position was awarded to a 50-year-old man with similar 
qualifications. She subsequently applied for another promotion 
opportunity in the same office, and was notified in January 1998 that 
the position was awarded to a 35-year-old woman with similar 
qualifications. The second rejection prompted CP to suspect that she 
was being discriminated against because she was an older woman, and she 
filed a charge 5 weeks later, in February 1998. Tolling should apply, 
and she can challenge both promotion denials.\50\
---------------------------------------------------------------------------
    \50\ Id.

    Like the doctrine of equitable tolling, the doctrine of equitable 
estoppel also permits the charge-filing period to be extended. This 
doctrine applies when any delay associated with the filing of a charge 
is attributable to active misconduct by an employer, union, or other 
respondent that is intended to prevent timely filing. For example, the 
charge-filing period can be extended when an employer or union conceals 
or misrepresents facts that would support a charge of discrimination. 
The charge-filing period may also be tolled or extended when an 
employer or union lulls the alleged victim ``into not filing a charge 
by giving assurances that relief would be provided through internal 
procedures.'' \51\
---------------------------------------------------------------------------
    \51\ Id.
---------------------------------------------------------------------------
    Additionally, the Federal antidiscrimination laws and EEOC 
regulations require employers to post notices about Federal 
antidiscrimination protections, including the timeframes for filing a 
charge.\52\ According to the EEOC, when an employer fails to post 
notices that explain these protections and processes, and an individual 
who alleges unlawful discrimination was not otherwise aware of his or 
her rights, the charge-filing period can be extended or tolled. The 
EEOC provides the following example:
---------------------------------------------------------------------------
    \52\ 42 U.S.C. Sec. 2000e-10; 29 U.S.C. Sec. 627; 29 CFR 
Sec. 1601.30; 29 CFR Sec. 1627.10.

    Example 3.--CP was sexually harassed by her supervisor, leading to 
her resignation on March 1, 1997. CP contacted Respondent's human 
resources department regarding the alleged violations, and was told 
that Respondent would conduct an internal review. Respondent said that 
appropriate relief would be provided after the completion of the 
investigation and told CP that she did not have to file an EEOC charge 
until the internal investigation was complete. On February 1, 1998, 
Respondent notified CP that the investigation was complete and that it 
had concluded that CP was not sexually harassed. CP was dissatisfied 
with the results of the investigation and filed a charge on March 1, 
1998. Under these circumstances, the timeframe should be extended, and 
CP's charge accepted as timely.\53\
---------------------------------------------------------------------------
    \53\ EEOC Compliance Manual, Sec. 2.
---------------------------------------------------------------------------
    The Federal courts routinely follow the EEOC's approach.\54\
---------------------------------------------------------------------------
    \54\ See, e.g., Frazier v. Delco Electronics Corp., 263 F.3d 663, 
666 (7th Cir. 2001) (``[w]hen . . . the victim of harassment is 
reasonably induced by the defendant or others to believe that the 
situation has been or is in reasonable course of being resolved, the 
statute of limitations is tolled'' ); Currier v. Radio Free Europe/
Radio Liberty, Inc., 159 F.3d 1363, 1368 (D.C. Cir. 1998) (``an 
employer's affirmatively misleading statements that a grievance will be 
resolved in the employee's favor can establish an equitable estoppel'' 
(emphasis in original)); EEOC v. Ky. State Police Dep't, 80 F.3d 1086, 
1096 (6th Cir. 1996) (equitable tolling proper where employer failed to 
post required ADEA notices and employee was unaware of his rights); 
Dring v. McDonnell Douglas Corp., 58 F.3d 1323, 1329 (8th Cir. 1995) 
(equitable estoppel appropriate where employer lulls or tricks 
plaintiff into letting the EEOC discrimination filing deadline pass); 
Anderson v. Unisys Corp., 47 F.3d 302, 307 (8th Cir. 1995) (misleading 
letter from Minnesota Department of Human Resources justified equitable 
tolling); Oshiver v. Levin, Fishbein, Sedran, & Berman, 38 F.3d 1380, 
1387, 1392 (3d Cir. 1994) (automatic extension of length of tolling 
period justified where employer's deceptive conduct caused 
untimeliness); Rhodes v. Guiberson Oil Tools Div., 927 F.2d 876, 880-81 
(5th Cir. 1991) (timeframe should be extended under equitable estoppel 
theory because employer misrepresented facts about discharge by 
indicating that employee was being terminated due to reduction in force 
and would potentially be rehired, and failed to disclose that it was 
replacing him with younger individual at lower salary); Cada v. Baxter 
Healthcare Corp., 920 F.2d 446, 450-51 (7th Cir. 1990) (terminated 
older worker who had no reason to suspect discrimination until younger 
worker replaced him given a reasonable period of time to file charge); 
Felty v. Graves-Humphreys Co., 785 F.2d 516, 520 (4th Cir. 1986) 
(limitations period may be extended because employer's misconduct 
caused employee to delay filing a discrimination complaint); Leake v. 
Univ. of Cincinnati, 605 F.2d 255, 259 (6th Cir. 1979) (filing period 
should be extended because plaintiff and defendant agreed not to use 
time spent to investigate complaint to prejudice complainant with 
respect to time limitations); Jones v. Bernanke, 493 F. Supp. 2d 18, 
25-26 (D.D.C. 2007) (employee's claims not time-barred where employer 
allegedly misled and dissuaded him from contacting the EEOC by falsely 
promising future promotions); Duhart v. Fry, 957 F.Supp. 1478, 1486 
(N.D. Ill. 1997) (African-American employee did not ``discover his 
injury'' for filing period purposes until he learned of promotions of 
allegedly less qualified white employees); Bracey v. Helene Curtis, 
Inc., 780 F. Supp. 568, 570 (N.D. Ill. 1992) (equitable tolling 
appropriate where EEOC letter misstated filing deadline); Sarsha v. 
Sears, Roebuck & Co., 747 F. Supp. 454, 456 (N.D. Ill. 1990) (tolling 
appropriate where State agency improperly rejected charge on 
jurisdictional grounds).

                 iv. tolling did not apply in ledbetter
    The Court in Ledbetter did not consider whether Ms. Ledbetter's 
charge-filing period should be extended, nor did Ms. Ledbetter argue 
that the Court should extend the charge-filing period. The record in 
the case establishes why.
    In 1982, Ms. Ledbetter filed a charge of discrimination in which 
she alleged that her supervisor had sexually harassed her.\55\ Goodyear 
and Ms. Ledbetter settled the dispute without litigation shortly after 
Ms. Ledbetter filed her charge.\56\
---------------------------------------------------------------------------
    \55\ Ledbetter v. Goodyear Tire & Rubber Co., 127 S.Ct. 2162 
(2007), Joint Appendix at 103-09 [hereinafter ``J.A. at__'' ].
    \56\ J.A. at 42-43.
---------------------------------------------------------------------------
    Years later, during litigation, Ms. Ledbetter testified that 
``[d]ifferent people that I worked for along the way had always told me 
that my pay was extremely low.'' \57\ She explained that she knew by 
1992 that her pay was lower than her peers and that she learned about 
the amount of the difference ``probably about 1994 and 1995.'' \58\ In 
1995, she spoke with her supervisor about her pay: ``I told him at that 
time that I knew definitely that they were all making a thousand at 
least more per month than I was and that I would like to get in line.'' 
\59\
---------------------------------------------------------------------------
    \57\ J.A. at 233.
    \58\ J.A. at 233.
    \59\ J.A. at 231-32.
---------------------------------------------------------------------------
    Ms. Ledbetter did not file a charge in 1992, 1993, 1994, 1995, 
1996, or 1997. Instead, she waited until July 21, 1998 to file the 
charge that gave rise to the Supreme Court's decision. Her 1998 charge 
sought to challenge each pay decision that occurred during her 19 years 
of employment at Goodyear.
    Because Ms. Ledbetter ``knew definitely'' that her pay was lower 
than her peers several years before she filed a charge, she could not 
and did not assert that the charge-filing period should be extended. 
The Court therefore declined to consider whether to extend the charge-
filing period.\60\
---------------------------------------------------------------------------
    \60\ Ledbetter, 127 S. Ct. at 2177 n.10.
---------------------------------------------------------------------------
    A timely charge would have enabled the EEOC and Goodyear to 
investigate the allegations and, as occurred when Ms. Ledbetter filed 
her 1982 charge, to resolve the matter promptly. The delay had real 
consequences: Ms. Ledbetter's case dragged on for nearly 10 years, and 
the supervisor accused of sexual harassment in 1982, and who later 
evaluated Ms. Ledbetter's work and affected her pay, was dead by the 
time the case went to trial.\61\
---------------------------------------------------------------------------
    \61\ See Ledbetter, 127 S. Ct. at 2171 n.4 (``Ledbetter's claims of 
sex discrimination turned principally on the misconduct of a single 
Goodyear supervisor, who, Ledbetter testified, retaliated against her 
when she rejected his sexual advances during the early 1980's, and did 
so again in the mid-1990's when he falsified deficiency reports about 
her work. His misconduct, Ledbetter argues, was `a principal basis for 
[her] performance evaluation in 1997.' Brief for Petitioner 6; see also 
id., at 5-6, 8, 11 (stressing the same supervisor's misconduct). Yet, 
by the time of trial, this supervisor had died and therefore could not 
testify. A timely charge might have permitted his evidence to be 
weighed contemporaneously.'' ). Accord J.A. at 39-46, 77-82.
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   v. the proposed fair pay restoration act would not be in the best 
                    interest of the american people
    The Fair Pay Restoration Act would require the EEOC to investigate 
events that happened years or decades before anyone files a charge, 
would force respondents to implement incredibly costly recordkeeping or 
lose the ability to mount a defense, and would create unanticipated and 
potentially limitless monetary penalties for State and local 
governments, unions, employers, and others covered by the Federal 
antidiscrimination laws. The bill may also create unforeseen and 
unanticipated liability for pension funds.

    1. EEOC Process. For more than four decades, the EEOC has used its 
authority to receive and investigate charges of discrimination, and to 
settle disputes through conference, conciliation, and persuasion. The 
EEOC's ability to do so has come about because the charge-filing period 
and notice requirements mandate prompt investigations, prompt 
responses, and prompt resolutions of charges. The Fair Pay Restoration 
Act would sweep away this time-tested enforcement scheme because it 
would remove, completely, any requirement that alleged discrimination 
be dealt with swiftly. By eviscerating the charge-filing period, the 
Fair Pay Restoration Act would require the EEOC to conduct 
investigations into events that happened decades before anyone filed a 
charge, despite the absence of records. Witnesses' memories will be 
faded. Some witnesses may be missing. Others, as in Ledbetter, may be 
dead.
    2. Recordkeeping. EEOC regulations require State and local 
governments, unions, employers, and others to preserve records for up 
to 2 years ``from the date of the making of the record or the personnel 
action involved, whichever occurs later.'' \62\ The Fair Pay 
Restoration Act would require any entity accused of discrimination to 
make a dreadful choice: preserve records in perpetuity or lose the 
ability to defend against a charge that challenges decades-old 
employment decisions. The cost of perpetual recordkeeping would be 
enormous, and, in the case of public employers, would add to the 
taxpayers' burden. The alternative is not better: a decision to forego 
such recordkeeping would render respondents incapable of responding. 
And, even if such records exist, the problem of faded memories and 
missing witnesses would invariably accompany any challenge to long-ago 
personnel decisions.
---------------------------------------------------------------------------
    \62\ 29 CFR Sec. 1602.14. Title VII and Americans with Disabilities 
Act regulations require personnel records to be maintained for 1 to 2 
years. See 29 CFR Sec. Sec. 1602.21 (apprenticeship programs); 1602.28 
(labor organizations); 1602.31 (State and local governments); 1602.40 
(schools); 1602.49 (institutions of higher learning). Other statutes 
enforced by EEOC contain similar recordkeeping and record-preservation 
requirements. See, e.g., 29 CFR Sec. Sec. 1620.32(c) (Equal Pay Act); 
29 CFR Sec. Sec. 1627.3 to 1627.5 (Age Discrimination in Employment 
Act).
---------------------------------------------------------------------------
    3. Limitless monetary penalties. The Fair Pay Restoration Act is 
not limited to pay. Rather, it repeatedly invokes the phrase 
``discriminatory compensation decision or other practice'' and would 
define an ``unlawful employment practice'' to occur anytime an 
``individual is affected by application of '' such a practice.\63\ The 
bill contains no time limit for any award of compensatory and punitive 
damages. The bill likewise contains no time limit for back pay and 
liquidated damages that may be recovered under the Age Discrimination 
in Employment Act.\64\ If enacted, then, the Fair Pay Restoration Act 
would subject State and local governments, unions, employers, and 
others to potentially unlimited compensatory and punitive damages, back 
pay, and liquidated damages.
---------------------------------------------------------------------------
    \63\ Fair Pay Restoration Act, S. 1843, 110th Cong. Sec. 3(a) 
(2007).
    \64\ Id. Sec. 3(b); 42 U.S.C. Sec. 1981a (compensatory and punitive 
damages); 29 U.S.C. Sec. 626(b) (back pay and liquidated damages).
---------------------------------------------------------------------------
    4. Pension benefits. The Fair Pay Restoration Act contains a 
provision about pension benefits: ``Nothing in this Act is intended to 
change the law in effect as of May 28, 2007, concerning the treatment 
of when pension benefits are considered paid.'' \65\ May 28, 2007 is 
the day before the Supreme Court announced its decision in Ledbetter. 
By citing this date, the bill seems to assume that Ledbetter changed 
existing law about pension benefits. But, Ledbetter did not even 
mention pension benefits, and it did not change the law about pension 
benefits or anything else. Furthermore, the remaining sections of the 
bill do not exclude or exempt pension benefits, so the bill may be 
construed to apply to pension benefits. This may have the affect of 
exposing pension funds to unanticipated and potentially staggering 
liability.
---------------------------------------------------------------------------
    \65\ Fair Pay Restoration Act, S. 1843, 110th Cong. Sec. 2(4) 
(2007).

---------------------------------------------------------------------------
    I look forward to your questions. Thank you.

    The Chairman. Thank you very much. Let me start off with 
Mr. Bagenstos. What is your reaction to this perpetual 
bookkeeping, witnesses losing their memories and dying, all of 
the burdens that this is going to place on companies? What is 
your response to that?
    Mr. Bagenstos. I think there are a couple of points there. 
I mean, No. 1, is the point that there are all sorts of reasons 
why even under the discovery rule, which the opponents of this 
bill are suggesting are equitable tolling, equitable estoppel, 
employers would be, as a practical matter, required to keep 
records for a very long time anyway. Because they don't know 
under discovery rule when a claim is going to be brought 
against them. Their recordkeeping requirements under the 
existing decision in Amtrak v. Morgan, the U.S. Supreme Court 
decided in 2002, right, there are various kinds of 
discrimination that form a continuing violation and can sweep 
in earlier acts, which have to be proven. And so, I think that 
the claim is overstated.
    It is also true that if there really is a problem for 
employers here, then in an individual case, they can go to a 
court and say because we were prejudiced by the delay and it 
was the employee's fault in waiting to bring the suit, we can 
get the case dismissed against us. That is the laches defense, 
which has been recognized by the U.S. Supreme Court many times.
    So I think given the absence of any evidence that there was 
a problem for employers under the very, very broad agreement in 
the circuits that the paycheck accrual rule applied before 
Ledbetter, I don't think it is a significant issue.
    The Chairman. Well, my own sense, it is in the interest of 
the person that has been aggrieved to bring the case quickly 
because they don't want to lose all the evidence as well. I 
mean, common sense would seem to me that rather than waiting 
and waiting and waiting to try and see that they may be able to 
recover, common sense would say if they find out that they have 
been aggrieved, they would like to get some resolution of it 
and get it done in a timely way. But I might be wrong.
    Ms. Ledbetter, let me ask you why you have devoted so much 
time and effort and energy to working to pass this legislation. 
Why do you think it is so important?
    Ms. Ledbetter. I believe it is so important to the people 
out there. I first thought that this was just a southern 
problem because I was born and reared in Alabama and never 
lived anywhere else. But I have heard from women and minorities 
from all over the country. And since I have received so much 
publicity about the case, and my picture has been in different 
publications, I have been recognized. And people will reach out 
to me in department stores, grocery stores or wherever I might 
be, begging me to keep after this to try to help get it 
through.
    And as you know, being the Chairman of this committee, this 
will not do me any good. I will not get anything from this. My 
time is over. But it is important for the minorities that are 
out there being treated like this in the workplace today.
    If I might, could I clarify a couple of things that I have 
heard from----
    The Chairman. Sure.
    Ms. Ledbetter. One thing, he referred to the 1982 case. 
That is exactly right. I had to file a case, a charge in 1982 
because I was told by my direct supervisor that if I didn't 
sleep with him, I would not work at Goodyear. Well, at that 
time, I had two children in college. I filed--I called EEOC. I 
got a charge filed, protected my job. The agreement was that 
when I received the right to sue, I didn't want to sue. All I 
wanted was a job and be treated fair. So I took my old job 
back. They separated the two of us, and I went on with my 
career and that was it.
    Then in late 1990s, at the end of my career, the same man 
became the auditor, not a supervisor. He was not my immediate 
supervisor, but he was an auditor in my department, where he 
persistently gave me and my department bad ratings, which were 
not true. And then I retired in 1998, after this case was filed 
with EEOC, and I had started on the way with it.
    Then he retired much later, and he didn't die until about 
just prior to us going to trial. So if Goodyear had been 
interested in getting his information, they knew that I had 
filed a charge in 1998, and they had a copy. They could have 
pursued that at that time. The man dying had nothing to do with 
them not being prepared.
    The Chairman. Let me just--it has been claimed you raised 
the possibility of discrimination early as 1992. Did Goodyear 
stop discriminating against you 1992, 1993, 1994, 1995, 1996, 
1997, or 1998?
    Ms. Ledbetter. No, sir. No, sir, it did not. In fact, and 
how this suspicion came about, we first-line supervisors were 
paid time and a half, double time, triple time. And in a 
factory like the tire plant in Gadsden, AL, we worked 12-hour 
shifts. There were four crews. And if my counterpart had a 
heart attack, that meant that I had to work my shift and his, 
too, or at least half of it. So that meant that I was working 
12 hours, plus 6 hours of his.
    And there were often many, many, many months that I worked 
12-hour shifts, which I was required to be there an hour before 
shift and stay 2 hours or longer afterwards, and work his. And 
there was not much time left. But that is what I did.
    So, when I heard some of my male peers bragging, that was 
splitting a shift of overtime with me, that they made something 
like $20,000, and I am looking at mine and mine is $4,000, I 
know there is something wrong. But I don't have any proof. I 
don't even know if what they are saying is true or not.
    So what the gentleman on the end referred to, the 
suspicions in the early 1990s all the way up, and when I was 
evaluated, I continued to talk to my bosses. ``What do I need 
to do?'' I need to get my pay up because I know that my 
retirement, which is coming in a few years, is based on what I 
earn, as well as the Social Security. ``What do I need to do? 
Where can I improve?'' And I never received a response.
    The last person that I worked for--I have lost my way in 
saying that I felt like I knew the men were making at least 
$1,000. But you can see how far out of the ballpark I was 
because when we started preparing for trial, I learned that 
most of them were making $5,000 a month. And you can imagine 
how much overtime--when it gets involved, and you are making 
that time and a half, double time, and triple time--how much 
money a person can lose.
    The Goodyear retirement is based on what I earned. The 
contributory that I had signed up for was based on what I 
earned. The 401(k), I could put in 10 percent of what I earned 
and they would match it with 6 percent stock. Well, you can see 
how much money I could lose with that. And then when I signed 
up for retirement, Social Security is less.
    But there is no way that I would have ever, ever waited. I 
would have wanted that time and a half and that overtime. And I 
would like to say to this committee, and I am sure these ladies 
recognize this, and many in the room, there is no way anybody 
wants to go through a trial and filing a charge. That is the 
last thing you want.
    The Chairman. Senator Isakson.
    Senator Isakson. Well, thank you, Mr. Chairman. As I said 
in my opening remarks, none of us, especially me, tolerates 
discrimination of any type. And I have great empathy for the 
testimony and the circumstances and the events through which 
Ms. Ledbetter has gone.
    I do think, however, there are important issues in her case 
that ought to be a part of the record. And just in the interest 
of what you are trying to do here, and that is full discovery, 
I would ask unanimous consent that the record of that case and 
its appendices be entered in the record with this testimony.
    The Chairman. So ordered.

    [Editor's Note: Due to the high cost of printing, previously 
published material is not reprinted in the record. It can be found at: 
http://www.supremecourtus.gov/opinions/06pdf/05-1074.pdf. The joint 
appendix can be found at: http://suprem.lp.findlaw. com/supreme_court/
briefs/05-1074/05-1074.mer.joint.app.pdf].

    Senator Isakson. I don't want to get into re-debating that, 
but I have to ask the two attorneys a question. I just love it 
when two attorneys side by side are there. Both of you, by the 
way, did 5 minutes on the spot, just like you had internal 
clocks. I couldn't believe it.
    But let me ask on the discovery rule, equitable tolling, or 
the estoppel--I am not an attorney, but I heard those three 
interchangeable phrases. I will start with you, Mr. Bagenstos. 
Why would that not have applied in the case of Ms. Ledbetter?
    Mr. Bagenstos. Well, there are a couple of reasons why any 
of them might not be an effective way of prosecuting. I am 
sorry. Might not be an effective way of prosecuting pay 
discrimination claims. And so, the different rules have 
different requirements.
    The discovery rule says when you knew or should have known 
of your injury, you had to file a lawsuit. A couple of problems 
with that. One problem with that is, of course, someone might 
know of their injury, but not know that they are being paid 
differently. It might be hard. But they might know they are 
being paid differently, but not know that it is because of 
discrimination. And there are lots of reasons why, with such 
little at stake, you wouldn't want to file a charge against 
your employer if you didn't know it was discriminatory.
    Also if you look--and in my written testimony I have some, 
I cite some studies of this. If you look at the way lower 
courts have dealt with the question of what an employee knew or 
reasonably should have known or did or reasonably should have 
done, there is a great deal of emphasis in the cases on really 
trying the victim and working very hard to see did the victim 
pursue her rights in a very fast way?
    As we see, though, it is just the normal practice. It is 
the normal case in pay discrimination cases that it is hard to 
know. It is hard to pursue quickly. It is hard to know it is 
discrimination. So I don't think that works very well.
    Equitable estoppel, equitable tolling, the basic problems 
there are very similar, right? You have this long discussion of 
the employer's conduct after the alleged discrimination. That 
is taking time. That is taking money. That is taking resources 
away from trying the discrimination claim.
    And I guess the ultimate thing I would say is I understand 
why employers might want a discovery rule or equitable estoppel 
or equitable tolling as opposed to the paycheck accrual rule 
because they might be able to knock out more cases. But it 
seems to me that the employers' legitimate interest here is an 
interest in repose. It is not an interest in knocking out 
meritorious cases, and repose is better served by the 
predictable rule of paycheck accrual.
    Senator Isakson. Mr. Dreiband.
    Mr. Dreiband. Well, I respectfully disagree with Professor 
Bagenstos.
    Senator Isakson. Do it in about a minute, if you can.
    [Laughter.]
    Mr. Dreiband. I will. The reason, if I understood, Senator, 
your question, that equitable tolling or any other discovery 
rule, theory, or anything like that did not apply in Ms. 
Ledbetter's case was because her lawyer said it wouldn't change 
the outcome of the case because the record in the case and the 
record as presented to the U.S. Supreme Court of the United 
States indicated that Ms. Ledbetter knew about the pay 
disparities several years before she filed the charge. And, in 
fact, the way they framed the question presented in the case, 
they assumed that all of the discriminatory decisions were made 
outside of the charge-filing period.
    Senator Isakson. On that point, and this is the question I 
want to ask. And let us remove Ms. Ledbetter's case for a 
second and assume it was a case with the same circumstances 
except that there wasn't a record of prior notice. Would the 
discovery, equitable tolling, or the estoppel rule allow you to 
go beyond the 180 days and file the case?
    Mr. Dreiband. Potentially, yes. The EEOC standard, for 
example, says that any time a person who alleges unlawful 
discrimination ``was understandably unaware of the EEO process 
or of important facts that should have led him or her to 
suspect discrimination, the charge-filing period can be 
extended.'' That is the standard EEOC has endorsed. It is the 
standard that several Federal courts have endorsed that I have 
cited in my written testimony.
    Senator Isakson. Thank you, Mr. Chairman.
    The Chairman. Senator Mikulski.
    Senator Mikulski. Thank you, Mr. Chairman. Ms. Ledbetter, 
and then Ms. Dorfman, the same question. Ms. Ledbetter, you 
have talked about the chronology from filing a case in 1982, 3 
years after you went to work at Goodyear on a sexual harassment 
case at EEOC. And then later on, of course, the now-famous pay 
discrimination.
    Could you tell me what you faced in doing this, just as a 
woman? Here you are, you are married. As you said, you had two 
kids in college. You had gone to work for a national, and even 
a global company. I bet it seemed pretty good in Alabama to 
have a job with Goodyear?
    Ms. Ledbetter. Yes, ma'am.
    Senator Mikulski. There maybe weren't a lot of jobs in your 
area. But when you embarked upon this, what did it take to do 
that? And what did it cost you not only financially, but what 
were the consequences?
    Were you ostracized by your employees? Were you further 
blacklisted? What happened? Because I think when we talk about 
frivolous lawsuits and the like that everybody is going to run 
to do this, could you tell us the cost, including the financial 
one? You were obviously a lady of modest means. You had 
significant family responsibilities. Could you share that with 
us?
    Ms. Ledbetter. Yes, ma'am. I would be grateful to, and I do 
appreciate that opportunity. Because in 1982, the reason I 
filed that charge, and I had--from day one walking into that 
factory, there were lots of sexual discrimination remarks, 
treatment, and I was separated from the peers that I had. But 
in 1982, the boss that I had continually discussed my 
underwear, whether or not I had worn a bra to work that day or 
if we were going down to the motel that afternoon and that I 
would be his next woman.
    Well, I tolerated all of that until he got sort of put out 
with me. And he said, ``When our boss gets back''--he was on a 
trip--``I will get your job.''
    Senator Mikulski. Tell me then, obviously, you were 
subjected to very vulgar----
    Ms. Ledbetter. Oh, yes. Oh, yes.
    Senator Mikulski. And in these situations, I think people 
don't realize when a woman is subjected to this, this is verbal 
violence. This is an assault. It is designed to humiliate and 
degrade.
    Ms. Ledbetter. Right.
    Senator Mikulski. Now having said that, though, you went to 
EEOC. Did you have to hire a lawyer?
    Ms. Ledbetter. Yes, I did. Yes, I did.
    Senator Mikulski. What was the financial cost to you in 
undertaking the claim?
    Ms. Ledbetter. Yes, ma'am, I did. I had to hire an 
attorney. It cost me $6,000 just for the day to go. He went 
with me to EEOC, to the hearing, and Goodyear got found that 
they were in violation of several of the title VII regulations 
during that.
    Senator Mikulski. OK. So it cost you $6,000 to do that?
    Ms. Ledbetter. Yes, ma'am.
    Senator Mikulski. And that came out of your own pocket?
    Ms. Ledbetter. Yes, ma'am.
    Senator Mikulski. So you didn't have a big corporation, a 
legal defense fund, a union----
    Ms. Ledbetter. No. No.
    Senator Mikulski [continuing]. To help you with this. You 
took out of your savings $6,000 because it was so important to 
you.
    Ms. Ledbetter. That's right.
    Senator Mikulski. Six-thousand dollars. And what were you 
making at the time?
    Ms. Ledbetter. At that time, I was making about $1,800 per 
month.
    Senator Mikulski. So how much was that a year?
    Ms. Ledbetter. Well, it depended on the overtime, probably 
roughly in any good year----
    Senator Mikulski. It was under $24,000?
    Ms. Ledbetter. Yes, ma'am. Yes, ma'am.
    Senator Mikulski. So you took 25 percent of your pay to go 
protect your dignity and seek redress under the law. Now when 
you did that, was it then common knowledge at Goodyear that you 
did that?
    Ms. Ledbetter. Absolutely. In fact, the union people that I 
was supervising turned against me because the word had been 
passed on the floor that I had sued Goodyear, which filing a 
charge and suing is two different things. But then what 
happened was the salary people in every area, in quality 
control or scheduling or whatever, they were told do not speak 
to Ledbetter. Do not talk to Ledbetter, and we're going to get 
rid of her as soon as we can.
    And also they were promised--in some instances, some of the 
women were promised promotions to go testify against me when 
the company did the investigation.
    Senator Mikulski. Now is this on pay discrimination or 
sexual harassment?
    Ms. Ledbetter. That was the sexual harassment. That was 
when I was trying to protect my job.
    Senator Mikulski. And did you continue to be subjected to 
these violent, vulgar----
    Ms. Ledbetter. Oh, yes. Yes, yes, the men would cuss----
    Senator Mikulski. Did anybody in that environment 
essentially offer any support to you?
    Ms. Ledbetter. Not very many. Not very many.
    Senator Mikulski. What about other women?
    Ms. Ledbetter. No. No, they were afraid to associate 
themselves with me because it would in some way harm their 
careers. In fact, I had one shift foreman that when he would--I 
worked night shift. When he came in in the morning, he said, 
``Goddamn, Lilly, your department looks like a whorehouse.'' 
Well, what my response was, ``I have never been in one. I don't 
know what one looks like. And what do I need to do to improve 
it?'' Now those are the kind of things that I had to deal with 
day in and day out.
    Senator Mikulski. My gosh.
    Ms. Ledbetter. And I tolerated it.
    Senator Mikulski. I am sure everybody is just going to run 
down and file these lawsuits. Second, so now you have won this 
case. When did you file your pay discrimination case?
    Ms. Ledbetter. Three days after someone left me a note in 
my box.
    Senator Mikulski. What year? What year?
    Ms. Ledbetter. 1998.
    Senator Mikulski. So you survived at Goodyear for 19 years. 
Did you feel blacklisted in terms of promotion and did you 
continue to be punished?
    Ms. Ledbetter. Oh, yes. Yes.
    Senator Mikulski. Then in 1998--may I ask how old you are 
and were then?
    Ms. Ledbetter. Then? I was 60. Sixty-years-old. I'm 69, 
will be 70 in March--excuse me, April. I don't even remember my 
birthday.
    Senator Mikulski. No, believe me, I can appreciate it. Why? 
Because we are both women of a certain age, and we have come 
out of this generation in the workplace. And we have modernized 
our technology, but we have not modernized our thinking. And we 
sure in heck have not modernized our laws. And I think we need 
to be as modern as our technology.
    So having said that, when you filed your case in 1998, 
again, and all the way up to the U.S. Supreme Court, this was a 
pretty expensive undertaking?
    Ms. Ledbetter. Yes, ma'am.
    Senator Mikulski. And you lost it all?
    Ms. Ledbetter. I lost it all.
    Senator Mikulski. So you were awarded $3 million. Then the 
statutory cap against this because, God knows, frivolous 
lawsuits, capped it at $300,000.
    Ms. Ledbetter. That is right.
    Senator Mikulski. Kind of in the same way we have caps on 
medical malpractice.
    Ms. Ledbetter. Right.
    Senator Mikulski. Now again I am going to ask you, do you 
belong to a union?
    Ms. Ledbetter. No, ma'am. I was salaried. We did not have a 
union.
    Senator Mikulski. OK, I understand. Because sometimes women 
who belong to a union get legal advice to be able to move along 
the lawsuit. So you paid this out of your own pocket?
    Ms. Ledbetter. Yes, ma'am. But in this case, I did not have 
any money. So what I did, I found an attorney that would accept 
my case with a----
    Senator Mikulski. Contingent?
    Ms. Ledbetter. That is right. And then, but his firm and I 
both, we have a lot of money out of our pocket, traveling to 
and from, printing costs, a lot of costs. I have had enormous 
cost in this, and I have a cost of being here today. Even 
though I have support from organizations to help me travel, I 
still have money out of my pocket. This is not a freebie for 
me.
    Senator Mikulski. So Goodyear had their firm. Goodyear had 
their expenses. Goodyear had their lawyers. Goodyear had 
everything, including the U.S. Supreme Court, on their side. 
Now when the Goodyear lawyers come, they charge it as an 
expense account, etc.
    Ms. Ledbetter. That is right.
    Senator Mikulski. So, really, the odds are stacked against 
filing a suit.
    Ms. Ledbetter. Yes. Yes.
    Senator Mikulski. Well, I think that is very, very telling, 
and I know my time is up. But I think when we look at this; we 
have to look at it from what it takes to do this--the financial 
cost, first of all. The second, the psychological cost.
    And I'm sure this affected your family----
    Ms. Ledbetter. Yes.
    Senator Mikulski [continuing]. Your children, and so on?
    Ms. Ledbetter. Yes.
    Senator Mikulski. Were they subjected to harassment when 
they went to school, or were they older?
    Ms. Ledbetter. They are older. But my daughter was harassed 
when she was a senior in high school. Her guidance counselor 
told her that she shouldn't be taking pre-med because women 
couldn't make doctors.
    Senator Mikulski. But was she harassed because of what you 
did?
    Ms. Ledbetter. No, I don't think so.
    Senator Mikulski. Because you were in a company town, 
weren't you?
    Ms. Ledbetter. That is right. I was in a different town. 
And she went to school in Jacksonville, AL, and I was in 
Gadsden, 25 miles separate.
    Senator Mikulski. Well, I don't want to probe any more into 
your personal matters. But again, I just want to thank you for 
what you have done. This is not just about helping you.
    Ms. Ledbetter. Right.
    Senator Mikulski. It is about helping the many. And I just 
wanted to outline not only the difficulty in knowing what wages 
and all are, which Ms. Dorfman and our fine dean has done, but 
what it takes to do this. And obviously, you are a woman of 
great grit, and I just want to thank you for being so willing 
to share these details. And we are going to do something about 
this.
    Ms. Ledbetter. Thank you. Thank you. It took a lot of grit 
to go into that factory and work, too. But it was a good job. I 
liked it. I was good at it. And I had hoped to make a really 
good career, and I always believed that like the old westerns, 
that if you continued to do what you were supposed to do, that 
you would be recognized.
    Senator Mikulski. And I appreciate that. We had Goodyear in 
the western part of my State that is very close to Appalachia. 
It was a great place to work.
    Ms. Ledbetter. Oh, it is. It is. A great company.
    Senator Mikulski. You know, in our State, that offered an 
alternative to going down into the coal mine, which was quite 
dangerous. But, you know, you should not have to swallow your 
pride or face ugly discrimination in our country in order to 
have a job. And I want to thank you and look forward to passing 
this bill.
    Ms. Ledbetter. Thank you. I would like to say that I made 
the choice to go to Goodyear because I did a lot of research 
and interviewed with them. But when I went to Goodyear, I was a 
district manager for H&R Block, Inc. in the Anniston area, 
managing 14 locations for them. So it wasn't like, you know, 
this was my only choice. It was a choice that I made based on 
researching the company and going, you know, to the two 
companies and making the decision. And I felt like the future 
was better and brighter going to work for them.
    Senator Mikulski. Thank you.
    The Chairman. Thank you. Senator Harkin. We have been 
joined by Senator Harkin. You have had a great interest in this 
issue and question, and we are glad to have you here.
    Senator Harkin. Thank you, Mr. Chairman. I apologize for 
being here a little late and not getting the testimony, 
although I read them all.
    Well, Ms. Ledbetter, I like you. You appear to me to be a 
person of real grit.
    Ms. Ledbetter. Thank you. Thank you.
    Senator Harkin. And I like that. I think what happened to 
you and this testimony today and the whole case, what it really 
brings back to us is that discrimination based on sex is still 
deeply embedded within the American society, and anyone that 
thinks it is not has got their head in the clouds. It is like 
Justice Ginsburg said, this decision doesn't recognize the real 
world that is happening out there to so many people.
    Now I really only have one question, but it is going to 
lead me into something else. Ms. Ledbetter, let me ask you 
this, would it have made any difference in your case if the pay 
levels of various job categories--not attaching personal data, 
not what everybody makes, but if Goodyear had published, here 
are the job categories for managers in this level, managers in 
that level, and here are the pay levels--if that had been 
provided to you in an open format, would that had made any 
difference? In other words, do you think that the existence of 
such information might have discouraged your employer from 
paying you a vast different salary than your male counterparts?
    Ms. Ledbetter. Yes, sir. It would have made a tremendous 
difference because through the years, when the cost of living 
went up, they would adjust the bottom and the middle and the 
maximum amount. And I continually, in trying to pursue to get 
my income raised before retirement and asking about the money, 
how I stood, where I rated, they never told me. I could not 
even find out what the bottom and the top figures were, or the 
middle. And when my attorney and I were preparing for trial is 
when I saw the shocking news of where I stood.
    Senator Harkin. Mr. Chairman, I just ask that my opening 
statement be made a part of the record.
    But I am going to read just a portion of it, and this is 
why I was getting to this question.
    As Justice Ginsburg said, this decision is totally out of 
touch with the real world and the workplace. In the real world, 
pay scales are kept secret. Employees are in the dark about 
their co-workers' salaries. So lacking such information, it is 
difficult to determine when pay discrimination begins.
    Furthermore, a small pay gap that may not seem significant 
tends to widen over time, as you pointed out, because of cost 
of living adjustments and things like that. They can widen. And 
they only become noticeable when there is a systemic 
discrimination over a long period of years.
    So what this means is that once the 180-day window for 
bringing a lawsuit is past, the discrimination gets 
grandfathered in. This creates, I think, a free harbor for 
employers who have paid female workers less than men over a 
long period of time. Basically, it gives the worst offenders a 
free pass to continue their gender discrimination.
    Ledbetter v. Goodyear was a bad decision. I am pleased we 
are moving forward with this legislation to establish that the 
unlawful employment practice under the Civil Rights Act is the 
payment, not just the setting of a pay level.
    Now, with all deference to my Chairman, this is a good 
start. But I think it is still not enough. As long as pay 
scales are still kept secret, if there is not transparency, how 
can women know if they are being discriminated against? That is 
why we also need to pass the Fair Pay Act, which I re-
introduced last April for the 10th year in a row. Now this is 
not the Paycheck Fairness Act. I am not talking about that. I 
am talking about the Fair Pay Act, which would require that 
employers would provide equal pay for equivalent jobs.
    It also requires disclosure of pay scales and rates for all 
job categories at a given company without disclosing individual 
pay levels. That way, women would have the information they 
need to identify discriminatory pay practices and negotiate 
better for themselves. Which in the end, obviously, would 
reduce the need for litigation.
    So, again, unless and until we make it unlawful to keep 
this secret--now again, I am not saying that you have to tell 
what every single person makes. But categories, every company 
has categories. All we are asking, just publish those out 
there. Then people know where they fit and whether or not they 
are being discriminated against. So, again, I think this has 
been 10 years now we have been trying. We have had a lot of 
support for the Fair Pay Act from a lot of sectors. But people 
get it confused with the Paycheck Fairness Act, quite frankly. 
Those are two separate issues. Two separate issues. The Fair 
Pay Act is just what I said. It is to provide that kind of 
information and disclose those pay things and to require equal 
pay for equivalent jobs.
    I had one example here. I thought I had. Yes. I guess, Ms. 
Dorfman, you have testified either before my committee or 
someplace down here before. But for all of you, here is an 
example that Dr. Philip Cohen, in front of a hearing that I co-
chaired last spring, Dr. Philip Cohen from UNC--I guess that is 
the University of North Carolina--raised the following example.
    There are 1.1 million nurse aides in this country, 2.5 
million truck drivers. The nurse aides have more education on 
average, with 38 percent having at least some college training 
compared with 19 percent of truck drivers. Both groups' average 
age is 43. Both do work that requires ``medium'' amounts of 
strength, and nursing aides require more on-the-job training to 
perform their duties. And yet those nurse aides, 89 percent of 
whom are women, have median earnings of only $20,000 per year. 
That's 57 percent of the median earnings of truck drivers, 97 
percent of whom happen to be male. That is what we are talking 
about.
    This is deeply embedded in our society, very deeply, and it 
is time--through the progress of civil rights and equal rights, 
it is time that we put this one to bed and get over it. 
Segregation, promoting wage inequality, that is what it is. And 
it is time to end it. And I think that your case, Ms. 
Ledbetter, really brought it home to everybody and the decision 
by this wayward court, I think, brought home that fact that we 
have got this kind of discrimination.
    So, again, I think this legislation is necessary. I hope we 
can move it, Mr. Chairman. I hope we can pass it as fast as 
possible. But unless and until women know what those pay 
categories are out there, how are they going to know? And they 
shouldn't have to wait 10 years, 15 years to go back and try to 
recoup something. It ought to be done right away.
    I thank you, Ms. Ledbetter, for your courage, your grit, 
for doing what you did and bringing it home to all Americans 
just what is happening in the real world of the workplace.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Harkin follows:]

                  Prepared Statement of Senator Harkin

    It is astounding to me that, in the 21st century, women are 
paid only 77 cents for every dollar their male counterparts are 
paid. A Government Accountability Office study found that 20 
percent of that wage gap could not be explained by factors 
other than discrimination.
    Of course, the Civil Rights Act outlaws such gender 
discrimination. But, the Supreme Court's 5-4 verdict in the 
case of Ledbetter v. Goodyear Tire & Rubber Co., made it 
extremely difficult for women to go to court to pursue these 
pay discrimination claims--even in cases where the 
discrimination is flagrant.
    I would especially like to thank Ms. Ledbetter for being 
here today. Opponents of fair pay didn't know what they were 
getting into by fighting Lilly Ledbetter. She has become a 
tireless advocate for equal pay since she sued her employer for 
paying her $6,000 less than her lowest-paid male counterpart. 
As we all know, the Supreme Court held that a person who has 
been discriminated against must file a claim within 180 days of 
their pay being set, even if they were not aware at the time 
that their pay was significantly lower than their male 
counterparts. However, Ms. Ledbetter hasn't given up. She's 
determined to make sure that we change the law so no one else 
has to endure what she has.
    As Justice Ginsburg said in her forceful dissent, this is 
totally out of touch with the real world of the workplace. In 
the real world, pay scales are often kept secret, and employees 
are in the dark about their co-workers' salaries. Lacking such 
information, it is difficult to determine when pay 
discrimination begins. Furthermore, a small pay gap tends to 
widen over time, only becoming noticeable when there is 
systemic discrimination over a period of years.
    So what this means is that, once the 180-day window for 
bringing a lawsuit has passed, the discrimination gets 
grandfathered-in. This creates a free harbor for employers who 
have paid female workers less than men over a long period of 
time. Basically, it gives the worst offenders a free pass to 
continue their gender discrimination.
    Ledbetter v. Goodyear was a bad decision, and I am pleased 
we are moving forward on this legislative solution--to 
establish that the ``unlawful employment practice'' under the 
Civil Rights Act is the payment of a discriminatory salary, not 
the setting of the pay level. This is a good start, but it's 
not enough. If pay scales are still kept secret--if there's not 
transparency--how can women know if they are being 
discriminated against?
    That's why we also need to pass my Fair Pay Act, which I 
reintroduced last April. In addition to requiring that 
employers provide equal pay for equivalent jobs, my bill also 
requires disclosure of pay scales and rates for all job 
categories at a given company without disclosing individual pay 
levels. This will give women the information they need to 
identify discriminatory pay practices and negotiate better for 
themselves--which, in the end, could reduce the need for costly 
litigation in the first place.
    I applaud Justice Ginsburg for her powerful dissent in the 
Ledbetter case. But there is a broader issue, here. Justice 
Samuel Alito, who wrote the majority opinion, and Chief Justice 
John Roberts, who sided with him, are taking the court in a 
direction that cramps and limits the interpretation of our 
civil rights laws. This is just what I predicted when I voted 
against these two new members of the Court.
    Moreover, there is something unseemly when narrow 
majorities of five male Supreme Court justices are taking away 
women's reproductive rights and narrowly interpreting women's 
civil rights. This is exactly why we need more diversity on the 
Court--and why we need more justices like Ruth Bader Ginsburg, 
who wrote the dissent, and Justices Stevens, Souter and Breyer 
who also sided with Ms. Ledbetter. They need more colleagues 
who have a genuine passion for justice and fairness, especially 
for those in the shadows of American life.
    The Chairman. Thanks very much, Senator Harkin. I think we 
can certainly tell from your passion about this issue where you 
stand on this question, and I am proud to be a co-sponsor of 
that legislation. I admire you for your perseverance, and we 
will certainly do what we can to try and deal with that issue.
    Let me get back to some, just a few final questions from my 
point of view. I would like to ask Ms. Dorfman. You are here as 
a representative of business owners. We usually think about the 
people hurt most by Ledbetter as workers who are victims of pay 
discrimination. You have talked about how workers aren't the 
only ones hurt by pay discrimination. Can you explain to the 
committee how pay discrimination can harm business owners who 
play by the rules?
    Ms. Dorfman. Absolutely. We do see it as a challenge for 
women business owners and a challenge for women, this U.S. 
Supreme Court ruling. Women like Ms. Ledbetter, who has had to 
go through the processes that she has gone through. And then 
from a woman's business owner perspective, we are those women. 
We left corporate America because of those issues. We started 
off with our own businesses, and when we did that, I noted that 
we were more likely to provide employee benefits than our male 
counterparts. Well, why is that? Because we have been a victim 
at some point, and we believe in fair practice.
    So what has happened is that as we move forward, when you 
look from a competitive nature, we are providing the 
compensation fairly, fair pay, and we are playing fair as well. 
And yet, our competitors who are getting away without paying 
fairly will be able to provide goods and services at a lower 
cost. And so, that will be a challenge for our competitive 
strength.
    Additionally, what we see is that if we don't remedy this 
with legislation, we will end up in courts doing battle more 
often. I believe that the first 6 months people aren't thinking 
about, ``gee, am I being discriminated against?'' But now that 
is going to be at the top of everybody's mind. I better do 
something now because otherwise it won't count. Regardless of 
whether they have done their research or not, they will file 
their claim and they will be doing the follow-up research 
afterwards. And that will also cost the employers or the 
business owners money as well.
    The Chairman. We have heard testimony from the Chamber of 
Commerce that the Fair Pay Restoration Act will increase the 
number of pay discrimination cases. So, in your testimony, you 
shared a different opinion. Can you explain to the committee 
why you believe that this legislation won't increase the number 
of pay discrimination cases and why failing to pass the 
legislation would actually increase the number of cases?
    Ms. Dorfman. Correct. I really see this act as actually 
bringing us back to the day before the U.S. Supreme Court 
ruling. And that was, you know, of course, we don't want to get 
into litigation, and we want to be able to continue business 
and be making money. But we know that there has to be some sort 
of compromise for dealing with these issues. There has to be a 
remedy out there for women, and this will open the doors, to 
minorities, whether it be ageism, or a number of other issues. 
But we have to have a remedy so that we can go in and make the 
claims and make sure that there is fairness in the pay.
    And the original process that we were subject to was very 
fair and a very good compromise. And I think, you know, I go 
back, and Mr. Dreiband, I wonder if we continue without this, 
and you listed a whole number of other issues that we would 
have to continue to address through legislation and that sort 
of thing. And that sounds like it would be more taxpayers' 
money rather than just saying let us go back to the way it was 
working. It was working fine for decades. Everybody was in 
agreement. There was no challenge to this prior to this court 
ruling.
    The Chairman. Just on that point, let me ask Mr. Dreiband, 
from 2003 to 2005, you served as the general counsel for the 
Equal Employment Opportunity Commission, the Federal agency 
that deals with workplace discrimination. When you were at the 
commission, the agency calculated the deadline for filing pay 
discrimination claims from the date of the victim's most recent 
discriminatory paycheck. I believe that was the cornerstone of 
the policy for many years even before you joined the agency.
    Of course, that is precisely what this bill would do. So 
why do you now oppose returning to this rule for filing pay 
discrimination claims when the EEOC found it worked so well for 
so many years?
    Mr. Dreiband. Well, Mr. Chairman, I don't oppose returning 
to a rule. I think that there has not been a correct 
interpretation in this hearing of the way the law stood before 
the Ledbetter decision.
    Let us not forget in the Ledbetter case, the U.S. Court of 
Appeals for the Eleventh Circuit ruled the exact same way in a 
unanimous opinion, as did the U.S. Supreme Court of the United 
States. And there seems to be this notion that the decision in 
the Ledbetter case is some radical departure from both the 
EEOC's standards and from pre-existing U.S. Supreme Court 
decisions. It is not. There is a consistent line of cases, 
beginning in the 1970s with the Evans decision and repeatedly 
reaffirmed by the U.S. Supreme Court of the United States up as 
most recently as 2002, before the Ledbetter case, and again in 
2007, when that decision was issued.
    So it is not that I am opposing some pre-existing rule. 
Rather, what I would say to you and I do say is that the 
decision is entirely consistent with the way the law was before 
the court announced this decision in 2007.
    The Chairman. Well, I just want to point out, as I 
understand that when the Ledbetter case was actually appealed 
to the U.S. Supreme Court, the agency declined to join the 
Justice Department's brief asking the court to overturn the old 
rule.
    Mr. Bagenstos, what is your understanding of what the old 
rule was and what our legislation is?
    Mr. Bagenstos. I think, with respect, I will disagree with 
Mr. Dreiband about what the rule was. The only pay 
discrimination case the U.S. Supreme Court ever decided before 
Ledbetter was Bazemore v. Friday, which explicitly said every 
paycheck that incorporates the past discrimination is a 
violation of title VII. All the other cases which involve 
different settings, not pay discrimination, you know, you can 
make an argument--I think Justice Ginsburg makes a persuasive 
argument that Bazemore is the case that is on point, the only 
pay discrimination case.
    It is also true that the EEOC, we have heard about the 
EEOC's position here, we should adopt the EEOC's view of 
equitable tolling. And Senator Kennedy, you point out the 
EEOC's position, at least prior to the Ledbetter case, had two 
halves. Equitable tolling was part of it, but also the paycheck 
accrual rule, right? And that is the position that the EEOC 
took internally, that the EEOC promulgated, and that the EEOC 
took in litigation prior to the Ledbetter case.
    So, I think if you look at what the U.S. Supreme Court in 
the case on point, what the lower courts did up until Ledbetter 
in the Second, Third, Fourth, Sixth, Seventh, Eighth, Ninth, 
Tenth, and DC Circuits, right, the rule prior to Ledbetter was 
the paycheck accrual rule.
    The Chairman. Finally, Professor Bagenstos, isn't it true 
that as long as an employer issues someone like Ms. Ledbetter a 
smaller paycheck, that employer is continuing to break the law, 
and shouldn't those new violations be actionable regardless of 
who knew what, when?
    Mr. Bagenstos. Oh, absolutely. I think so. Every time the 
employer pays an employee less, a paycheck today that is less 
than it would be without discrimination, that is an act of 
discrimination. That should form the basis for a cause of 
action today.
    The Chairman. Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman. I want to repeat 
what I have said before. Nobody in this room, certainly not 
myself, is in favor of any discrimination. I do want to make a 
point with regard to the Chairman and Mr. Harkin's comments. 
And I guess I will refer to that great--I ran a business for 22 
years, and the law of unintended consequences is the most 
difficult law we deal with in life, and sometimes there are 
unintended consequences. And I will just make two points if I 
can. And this is not criticisms of you or the law or anything 
else, but the reality of the real world.
    No. 1, liability in perpetuity or an open-ended potential 
liability does cause tremendous burdens. I mean, people should 
be held liable. But if the opportunity to make the allegation 
is in perpetuity or extended beyond a reasonable term, it does 
cause--because you practice business defensively, it does cause 
you to practice defensively.
    The second thing, with regard to publishing parameters of 
pay without acknowledging there may be conditions of 
performance tends to have a downward suppressant on the pay 
brackets in which you publish because you, again, are defensive 
as a business in terms of what you are doing. This has nothing 
to do with discrimination, nothing to do with giving you the 
wiggle room to discriminate. But it does have everything to do 
with how you react to the way you run your business.
    Now that is not a reason not to have a law against 
discrimination. It is not a reason not to see that somebody 
isn't treated fairly. But it is a reason to see that there is a 
balance. And when you put the laws in place, that the law of 
unintended consequences doesn't actually, in the end, have a 
suppressing effect either on pay parameters that might be 
published or some other benefit that might be there. That is 
just the only point I wanted to make.
    I do have a question, though, of Ms. Dorfman. You referred 
to the statute in this case. Is that a Federal--the $300,000 
cap, the statutory cap? Is that in all cases? Is that----
    The Chairman. That is the 1991 civil rights bill. That was 
put on as a condition. The caps were put on as a condition in 
order to get that legislation passed, and they are wrong. We 
had to include that in order to get that legislation passed. 
They have been on since that time.
    Ms. Dorfman. And I would just also say that one of the 
things that hasn't been hit on here, but that I have worked in 
corporate America, and those who are working to play fairly and 
pay fairly periodically run reviews on their pay equity to see 
where things are out of kilter and make adjustments 
accordingly. So had Goodyear done something like that along the 
way, they would have discovered these issues. They could have 
changed them, and maybe this never would have gotten to trial.
    The Chairman. That is right. I would point out, I was just 
talking with the staff. I remember the debate on this, 
actually, quite clearly. Senator Mitchell was very much 
involved in it, as a very good both lawyer and majority leader. 
With the ceiling and the capping, it primarily worked against 
women on this, the way it was an amendment to title VII. You 
had similar kind of discrimination for men. There are other 
provisions in the civil rights laws that permit men to get 
damages at higher levels. That was really the consequence of 
that. And that is basically, fundamentally wrong. We have had 
some hearings to try and deal with that at other times. And at 
some time down the road, we should.
    But it is interesting, Ms. Ledbetter, I was listening. When 
I heard you mention the cap, it just struck, and I said, that 
was 1991. I remember when it was put in, and it just reminded 
me that we have additional work to do, Tom Harkin's remark that 
we have got additional work. There is a lot of work to do 
around here. But the hearing this morning has been enormously 
helpful to me in sort of understanding the parameters and the 
challenges that we face, in this underlying issue of fairness, 
that is out there that we do have to address.
    Tom, is there anything further?
    Senator Harkin. Mr. Chairman, the only thing I would just 
add, precedent, all of us who are trained as lawyers, you know, 
we adhere to precedent. But if the precedent is based upon 
discriminatory practices, then it is time to do away with the 
precedent. How many years did we labor under Plessy v. 
Ferguson? That is precedent. But it was based upon inherent 
discrimination. So that is when you do away with precedent.
    And so, to say that somehow we are--either to the professor 
or the attorney over there--that we are somehow changing, there 
is just a little bit of difference there on that, whether the 
EEOC did one thing, that doesn't faze me.
    The fact is the real world out there is just as we know it, 
just as you portrayed it. That is the real world out there. It 
is happening. The U.S. Supreme Court decision was a wake-up 
call to say, ``wait a minute, this precedent, whatever they are 
talking about, is based on inherent discrimination.'' And 
whenever you have precedents like that, it is time to overturn 
it. And that is what this legislation is trying to do. It is 
time to move on.
    Thank you, Mr. Chairman.
    The Chairman. I want to thank all of you. Thank all of our 
witnesses. Thank all of those who have attended the hearing.
    The committee stands in recess.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                   Prepared Statement of Senator Enzi

    Good morning. I want to thank Senator Kennedy for holding 
this hearing on employment discrimination; and the important 
procedural issue of filing limitations. The title VII statute 
of limitations serves an important purpose, and that is 
fairness. The Fair Pay Restoration Act isn't really about 
fairness. It effectively undermines the title VII statute of 
limitations, and congressional intent to fairly and 
expeditiously resolve employment discrimination claims.
    Discrimination in the workplace, or elsewhere, is simply 
not acceptable in a free society. The work of the Congress in 
combating employment discrimination is one of the most notable 
chapters in the long history of this body.
    Among the most important of our workplace discrimination 
statutes is Title VII of the Civil Rights Act of 1964. Title 
VII outlaws employment discrimination based on a number of 
factors, including gender. Since its enactment, Title VII has 
played a vital role in the effort to eradicate gender-based 
discrimination. Over the last 5 years the intake of gender 
discrimination cases at the Equal Employment Opportunity 
Commission has averaged around 25,000 per year. Given this 
volume it should come as little surprise that title VII 
generates a significant volume of litigation every year. Such 
cases invariably entail strongly held views and emotionally 
charged issues. Thus, regardless of their outcome, it is not 
uncommon that they create controversy. The case which has 
prompted this hearing is no exception.
    Last year the U.S. Supreme Court handed down its decision 
in the case of Ledbetter v. Goodyear. The principal issue in 
the case involved the application of title VII's limitations 
period for the filing of claims. Title VII requires that claims 
of employment discrimination be initiated within either 180 or 
300 days, depending upon the State in which the claim arises.
    Virtually all statutes that contemplate the possibility of 
court litigation contain a statute of limitations provision. 
Such provisions serve a variety of very important purposes. 
First, a statute of limitations encourages the prompt and 
vigorous pursuit of important protected rights. This is 
particularly true in the instance of employment discrimination. 
None of us today; and, certainly none of the drafters of title 
VII, wanted discrimination in the workplace to go unaddressed 
one day longer than necessary. Accordingly, the drafters 
adopted a relatively short limitations period to ensure the 
quick eradication of discriminatory workplace practices. 
Statutes of limitation are designed to encourage the prompt 
resolution of contested claims; and, this is particularly 
important in the context of employment discrimination claims. 
An unresolved allegation or suspicion of discrimination is 
particularly corrosive in the workplace where the parties to a 
potential claim are in daily contact, and where the potential 
claim has effect, both direct and indirect, on everyone in the 
workforce. The drafters wisely determined that such matters 
cannot be allowed to fester, and should be addressed promptly 
and resolved as quickly as possible.
    By ensuring that claims are promptly raised, a statute of 
limitations, serves to enhance the likelihood of voluntary 
resolution of claim. Claims that remain unaddressed for 
substantial periods of time can build significant financial 
liabilities that make voluntary resolution of a claim much more 
difficult and in some cases virtually impossible. Title VII was 
carefully crafted to encourage the voluntary resolution of 
discrimination claims and its statute of limitations is an 
integral part of that statutory framework. Further still, a 
statute of limitations serves the vital purpose of preserving a 
fair process for those claims that cannot be resolved, but must 
be adjudicated. If a claim is filed that is based on disputed 
facts that are 10 or 20 years old, the likelihood of finding 
witnesses with clear memories, or even finding witnesses or 
documentary evidence at all, is remote. The undeniable reality 
is that all evidence fades over time, this is particularly true 
in the context of an extremely mobile workforce.
    The decision and drafting of a limitations provision in any 
statute always requires the weighing of often competing 
considerations. The reasons I have just noted favor the 
imposition of short limitation periods. However, that must be 
balanced against the fact that any limitations period also has 
the effect of closing the courthouse door to a claimant that 
may have a meritorious case. There is no question that the 
drafters of title VII carefully considered these and many other 
competing factors in eventually arriving at the 180-300 day 
formulation in the statute.
    Whenever we re-visit legislation enacted by a prior 
Congress, and contemplate changing that legislation because of 
a subsequent court decision, we need to proceed with 
considerable caution. If we are to have stability in our laws; 
and, if our laws are to reflect sound policy and not political 
happenstance, the bar for changing such laws must 
understandably be high. We should be very careful about doing 
so unless we conclude that the enacting Congress was wrong, the 
interpreting court was wrong, or that external circumstances 
have changed in such a way that a change in law is warranted. I 
would hope that today's hearing will focus on whether or not 
these operative criteria have been met.
    Whenever we as a committee hold a hearing with respect to 
the technical aspects of a statute, or the circumstances of a 
particular case, I also believe it is essential that we 
exercise extreme care in accurately representing the important 
facts of such case, and the actual status of the law. 
Exaggeration, hyperbole, and plain old falsity may serve to 
advance political agendas, but it is an inexcusable departure 
from the fundamental responsibilities of this committee. Our 
first responsibility is to get the facts right. Accuracy and 
candor should never be sacrificed to make political hay. There 
are, quite frankly, a number of misconceptions regarding the 
limitations period in title VII and the essential facts of the 
Ledbetter case. I think two are worth noting up front.
    First, proponents of the legislation before us claim that 
the limitations period under title VII is totally inflexible. 
That simply isn't true. For example, we have been told that 
this legislation is necessary because the facts that would 
cause an employee to suspect discrimination, particularly 
regarding pay issues, may be unknown or even hidden from an 
employee. Yet, once the 180 days runs, that employee would lose 
his or her rights. This is a seemingly compelling argument 
except for one thing. It is not an accurate characterization of 
the way the law actually works right now. Under current law, 
the 180-day limitation period is not iron clad. To the contrary 
it is completely flexible, and is frequently, waived, tolled or 
suspended where fairness and circumstances require. It would 
certainly be suspended in the circumstances the proponents of 
the legislation so often cite. To those that continue to argue 
differently, I'd respectfully direct their attention to the 
Equal Employment Opportunity Commission's own Compliance Manual 
regarding the timeliness of claim filing under such 
circumstances. It reads, in relevant part, as follows:

          ``Sometimes, a charging party will be unaware of a possible 
        EEO claim at the time of the alleged violation. Under such 
        circumstances, the filing period should be tolled until the 
        individual has, or should have, enough information to support a 
        reasonable suspicion of discrimination.

           Example 1.--On March 15, 1997, CP, an African-American man, 
        was notified by Respondent that he was not hired for an entry-
        level accountant position. In February 1998, more than 300 days 
        later, CP learned that the selectee, a white woman, was 
        substantially less qualified for the position than CP. CP filed 
        a charge of race and sex discrimination on March 15, 1998. The 
        charge would be treated as timely because he filed promptly 
        after acquiring information that led him to suspect 
        discrimination.
           Example 2.--On March 1, 1997, CP, a 55-year-old woman, 
        learned that she was denied a promotion in the Office of 
        Research and Development, and that the position was awarded to 
        a 50-year-old man with similar qualifications. She subsequently 
        applied for another promotion opportunity in the same office, 
        and was notified in January 1998 that the position was awarded 
        to a 35-year-old woman with similar qualifications. The second 
        rejection prompted CP to suspect that she was being 
        discriminated against because she was an older woman, and she 
        filed a charge 5 weeks later, in February 1998. Tolling should 
        apply, and she can challenge both promotion denials.

         Because an individual's ignorance must be excusable, the 
        failure to act with ``due diligence'' in attempting to obtain 
        vital information will preclude equitable tolling. The filing 
        period is tolled until the individual has enough information to 
        reasonably suspect that s/he has a valid EEO claim. In other 
        words, the filing period begins to run when the individual 
        realizes that s/he may have a claim even if s/he is not certain 
        about the claim.''

    The supposed inflexibility of title VII's limitations 
period is a myth. You don't need legislation to address the 
situations of fairness raised by this bill's proponents since 
it is already the law.
    In the case we are reviewing today, it should be noted that 
the Plaintiff did have access to remedies. She could have 
pursued the claim she initially filed under the Equal Pay Act 
of 1963, which does not apply any statue of limitations. Yet 
this cause of action was inexplicably dropped during District 
court proceedings. The Plaintiff or any other individual who 
was subjected to discriminatory pay on the basis of sex can 
file an EPA claim years after the discrimination occurred.
    Since we are being asked to take the case at hand as 
justification for sweeping changes in the law, I want to urge 
my colleagues who have not had the chance to read the decision 
in full to do so. They will see that part of the court's 
consideration was the Plaintiff 's own admission that she did 
know of the pay discrepancy 6 years before she filed a 
complaint with the EEOC. Therefore, the court had no cause to 
suspend the statute of limitations for delayed discovery of the 
effect of discrimination. In fact, this case would have come 
out far better for all involved if the EEOC action had been 
filed promptly, within the statutory deadline. First, if 
discrimination was confirmed, the Plaintiff would have suffered 
far less harm in the way of lost wages. Also, the employer 
would have had a fuller opportunity to investigate the validity 
of the claim and make any necessary workplace changes to ensure 
no other employees suffered discrimination. Finally, the 
manager in question, who died before Ms. Ledbetter finally did 
file her claim, would have had an opportunity to defend 
himself.
    In the case at hand, all parties would have been more 
fairly treated by the courts had it been honored. If the 
discrimination was not an isolated incident, other Goodyear 
employees would have been better protected, as well. The public 
policy consequences that would come of a wholesale elimination 
of the statute of limitations do not serve goals of employees 
or employers, though it will keep America's trial lawyers and 
employment bar busy. I urge my colleagues to review this 
legislation with all of these factors in mind.

                 Prepared Statement of Senator Clinton

    Thank you to Chairman Kennedy and Ranking Member Enzi for 
holding this hearing, and to the four witnesses who have come 
here today to share their perspectives on equal pay with the 
committee.
    In particular, I would like to extend my gratitude to Lilly 
Ledbetter on her courage and perseverance in taking her fight 
all the way to the Supreme Court, and then to the Congress. I 
have had the great pleasure of meeting Lilly Ledbetter and 
hearing her story first-hand. Lilly is but one of countless 
hard-working people across our country who have played by the 
rules and deserve equal treatment from their employers.
    While I regret that I cannot be here today, I am proud to 
have joined Chairman Kennedy and a bipartisan coalition of 
Senators in introducing the Fair Pay Restoration Act 
legislation that would overturn the Supreme Court's recent 
decision in Ledbetter v. Goodyear Tire & Rubber Company. The 
ruling in Ledbetter created obstacles that have made it far 
more difficult for women such as Lilly Ledbetter and all of the 
other Americans protected by title VII to receive equal pay for 
equal work. Along with our colleagues in the House, we are 
working to remove these obstacles, so that we can fully 
safeguard the rights of employees who have suffered pay 
discrimination based on their race, sex, religion or national 
origin.
    All Americans deserve equal pay for equal work, and it is 
our responsibility to get this right. The Fair Pay Restoration 
Act is a critical step towards this goal. So too is the 
Paycheck Fairness Act, legislation I have introduced that would 
take concrete steps forward to empower women to negotiate for 
equal pay, create better incentives for employers to follow 
existing law, and strengthen Federal outreach and enforcement 
efforts. Senators Kennedy and Harkin have also joined me in 
calling for the Government Accountability Office to investigate 
the role the Federal Government has and can play to remedy pay 
inequities in the workplace.
    I am also pleased to be a cosponsor to the Civil Rights Act 
of 2008, legislation introduced today by Senator Kennedy and 
Representative John Lewis that will reverse a number of other 
judicial decisions that have walked back key civil rights 
protections in recent years. As is true of the legislation 
under consideration at the hearing today, the Civil Rights Act 
of 2008 is a reflection of the historic and fundamental role 
that Congress has and must continue to play as a bulwark of 
individual rights. I urge my colleagues to support this 
important legislation.
    I look forward to continuing to work together to protect 
the civil rights of all employees across America. Thank you.
                                ------                                

                         American Benefits Council,
                                                  February 1, 2008.
Hon. Edward Kennedy, Chairman,
Committee on Health, Education, Labor, and Pensions,
644 Dirksen Senate Office Building,
Washington, DC 20510.

Hon. Michael Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
835 Dirksen Senate Office Building,
Washington, DC 20510.

Re:  The Fair Pay Restoration Act: Ensuring Reasonable Rules in Pay 
Discrimination Cases

    Dear Chairman Kennedy and Ranking Member Enzi: The American 
Benefits Council submits this statement in connection with the hearing 
of the Senate Committee on Health, Education, Labor, and Pensions on 
``The Fair Pay Restoration Act: Ensuring Reasonable Rules in Pay 
Discrimination Cases.'' We respectfully request that this statement be 
included in the record of this hearing.
    The Council is a public policy organization representing 
principally Fortune 500 companies and other organizations that assist 
employers of all sizes in providing benefits to employees. 
Collectively, the Council's members either sponsor directly or provide 
services to retirement and health plans that cover more than 100 
million Americans.
    We wish to express our continued concern regarding proposed 
legislation (S. 1843, The Fair Pay Restoration Act) to overrule the 
Supreme Court's Ledbetter v. Goodyear Tire and Rubber Co.  decision. 
The Council's area of expertise is in the employee benefit area, and 
accordingly we limit our letter to the possible effect of the proposed 
legislation on benefit programs.
    We are writing with regard to S. 1843, as we previously wrote to 
the House Education and Labor Committee with regard to H.R. 2831, 
because the proposed legislation could possibly raise serious 
retirement plan issues. Under both bills, each payment of compensation 
or benefits that is lower because of past discrimination is arguably a 
new act of discrimination and thus an employee could file a charge or 
sue many years after the discrimination actually occurred. We 
appreciate that the findings sections of the House and Senate 
legislation--which does not affect the actual statutory provisions--
each include a finding that the bill is not intended to change the 
current law treatment of when pension distributions are considered 
paid. As we understand it, this finding was intended to clarify that, 
for purposes of the legislation, pension payments are treated as paid 
at an employee's retirement, not as each actual payment is made. Such a 
clarification would help address an important concern, i.e., that an 
individual who has been retired for many years could file a charge or 
sue based on acts that occurred during his or her active service.
    However, in order to be effective, we believe that the finding must 
be reflected in the actual bill language; as currently drafted, the 
finding and bill language appear to conflict.
    Moreover, the underlying significant concern as to how a judgment 
in favor of a plaintiff would affect an employer-sponsored retirement 
plan still remains unaddressed. For example, if a company maintains a 
defined benefit plan that calculates benefits based on an employee's 
final average pay, would the plan need to recalculate the plaintiff 's 
benefit based on the revised pay? What if the lawsuit is a class 
action, so that large numbers of plan participants could be making the 
same claim for much higher benefits? What if this caused the plan to be 
woefully underfunded or resulted in the employer being forced to 
terminate the plan? The retirement security of other participants could 
be severely undermined as a result of a claim now being made for 
discrimination that occurred many years before.
    We continue to be concerned about the possible effect of the 
proposed legislation on 401(k) plans, 403(b) plans (those maintained by 
schools and charities generally), and 457 plans maintained by State and 
local governments. To what extent would such plans have to recalculate 
benefits payable to the plaintiffs? If the employer needs to fund 
enormous additional benefits for the plaintiffs, would the employer 
effectively have to reduce or eliminate contributions for others?
    We urge that this legislation not be considered by the full Senate 
until the possible ramifications of the bill are fully understood. We 
are very mindful of the concerns that led to the drafting of this 
proposed legislation, but we continue to have concerns about its 
application to employer-sponsored retirement plans in its current form. 
It would be very unfortunate to risk the retirement security of large 
numbers of plans participants as a result of failing to address the 
question of how a judgment in favor of a plaintiff affects the 
employer's retirement plans.
    Thank you for the opportunity to share our views.
            Respectfully submitted,
                                            James A. Klein,
                              President, American Benefits Council.

    [Whereupon, at 11:35 p.m. the hearing was adjourned.]

                                    

      
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