[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
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
senate
----------
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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
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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).
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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.
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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.
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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.
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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.'').
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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.
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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.
---------------------------------------------------------------------------
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.]