[Senate Hearing 111-1135]
[From the U.S. Government Publishing Office]







                                                       S. Hrg. 111-1135

     A FAIR SHARE FOR ALL: PAY EQUITY IN THE NEW AMERICAN WORKPLACE

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING PAY EQUITY IN THE NEW AMERICAN WORKPLACE, INCLUDING S. 182, 
TO AMEND THE FAIR LABOR STANDARDS ACT OF 1928 TO PROVIDE MORE EFFECTIVE 
 REMEDIES TO VICTIMS OF DISCRIMINATION IN THE PAYMENT OF WAGES ON THE 
BASIS OF SEX, AND S. 904, TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938 
 TO PROHIBIT DISCRIMINATION IN THE PAYMENT OF WAGES ON ACCOUNT OF SEX, 
                        RACE, OR NATIONAL ORIGIN

                               __________

                             MARCH 11, 2010

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions







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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming
BARBARA A. MIKULSKI, Maryland        JUDD GREGG, New Hampshire
JEFF BINGAMAN, New Mexico            LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington             RICHARD BURR, North Carolina
JACK REED, Rhode Island              JOHNNY ISAKSON, Georgia
BERNARD SANDERS (I), Vermont         JOHN McCAIN, Arizona
SHERROD BROWN, Ohio                  ORRIN G. HATCH, Utah
ROBERT P. CASEY, JR., Pennsylvania   LISA MURKOWSKI, Alaska
KAY R. HAGAN, North Carolina         TOM COBURN, M.D., Oklahoma
JEFF MERKLEY, Oregon                 PAT ROBERTS, Kansas
AL FRANKEN, Minnesota                
MICHAEL F. BENNET, Colorado          


                      Daniel Smith, Staff Director
                  Pamela Smith, Deputy Staff Director
     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)










                            C O N T E N T S

                               __________

                               STATEMENTS

                        THURSDAY, MARCH 11, 2010

                                                                   Page
Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, 
  opening statement..............................................     3
Dodd, Hon. Christopher J., a U.S. Senator from the State of 
  Connecticut....................................................     7
    Prepared statement...........................................     9
DeLauro, Hon. Rosa L., a U.S. Representative from the State of 
  Connecticut....................................................    10
    Prepared statement...........................................    13
Ishimaru, Stuart J., Acting Chairman, Equal Employment 
  Commission, Washington, DC.....................................    15
    Prepared statement...........................................    18
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia...    25
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................    27
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    28
Boushey, Heather, Senior Economist, Center for American Progress, 
  Washington, DC.................................................    39
    Prepared statement...........................................    41
Brake, Deborah L., Professor of Law, University of Pittsburgh, 
  Pittsburgh, PA.................................................    50
    Prepared statement...........................................    52
Frett, Deborah L., Chief Executive Officer, Business and 
  Professional Women's Foundation, Washington, DC................    62
    Prepared statement...........................................    64
McFetridge, Jane M., Esq., Partner, Jackson Lewis LLP, Chicago, 
  IL.............................................................    69
    Prepared statement...........................................    71

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Senator Murray...............................................    89
    Senator Brown................................................    90
    Senator Bennet...............................................    91
    HR Policy association........................................    92
Letters of Opposition:
    Associated Builders and Contractors, Inc.....................   105
    Various Organizations........................................   106
    Organizations representing State and local government 
      employers..................................................   107
Response by Stuart J. Ishimaru to questions of:
    Senator Harkin...............................................   107
    Senator Enzi.................................................   109
    Senator Coburn...............................................   110
Response by Heather Boushey to questions of:
    Senator Enzi.................................................   114
    Senator Coburn...............................................   115
Response by Deborah L. Frett to questions of:
    Senator Enzi.................................................   118
    Senator Coburn...............................................   119
Response by Jane McFetridge to questions of:
    Senator Enzi.................................................   122

                                 (iii)

  

 
     A FAIR SHARE FOR ALL: PAY EQUITY IN THE NEW AMERICAN WORKPLACE

                              ----------                              


                        THURSDAY, MARCH 11, 2010

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:03 a.m. in 
Room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Dodd, Mikulski, Brown, Casey, 
Hagan, Franken, Enzi, and Isakson.
    Also present: Hon. Rosa L. DeLauro, U.S. Representative.

                  Opening Statement of Senator Harkin

    The Chairman. The Committee on Health, Education, Labor, 
and Pensions will come to order.
    We have convened this hearing to examine the issue of fair 
pay for women. Now, again, it is not a new issue. In 1963, 
responding to the fact that 25 million female workers in the 
workforce earned just 60 percent--60 cents of the dollar--of 
the average pay for men, Congress enacted the Equal Pay Act to 
end this unfair discrimination.
    Now, this hearing is about reaffirming the basic promise of 
the Equal Pay Act, that every worker should be judged and 
compensated based on the quality of the work that he or she 
performs, and not based on gender.
    Over the past 47 years, we have made progress toward this 
important goal, but over the last several years, a decade or 
so, that progress has been stalled. It is unacceptable that, 
after all these years, a woman still makes only 77 cents for 
every dollar that a man makes.
    This wage gap exists in every segment of our society. Women 
of every race and national origin earn less than their 
counterparts. An African-American woman earns 69 cents for 
every dollar that a white male earns, while a Latina woman 
earns only 59 cents for every dollar a white man earns. These 
differences add up to real hardships for working women and 
their families.
    Now, again, make no mistake--the wage gap is not just a 
women's issue. It is a family issue. As we will hear today, 
women represent half of all workers. Millions of families rely 
on a woman's paycheck to get by.
    Two-thirds of mothers are bringing home at least a quarter 
of their family's earnings. In many families, the woman is the 
sole breadwinner. And during the latest economic downturn, more 
men have lost jobs than women, making households even more 
dependent than ever on women's earnings.
    Just last night while reading before I went to bed, I read 
a factoid that was in a publication. I forget what magazine it 
was in--Newsweek, something like that. It said that very soon, 
for the first time ever in our national history, more women 
will be working than men, for the first time ever.
    So America's women are working harder than ever, but they 
are not being fairly compensated for their contributions to our 
economy. As a result, their families are struggling to put food 
on the table, pay for child care, deal with rising healthcare 
bills. It isn't fair. It isn't right.
    Now it is true that some of the wage gap is explained by 
how society deals with the realities of working women's lives, 
such as time away from the workforce to have children, care for 
family members. But as we will hear today, the substantial gap 
in earnings between men and women cannot be explained 
completely by differences in work patterns, or even by 
differences in education, experience, or occupation. The 
evidence shows that actual gender discrimination accounts for 
much of the disparity between men and women's pays, and our 
laws have not done enough to prevent this from happening.
    So, I am pleased and proud that the first piece of 
legislation that President Obama signed into law was the Lilly 
Ledbetter Fair Pay Act, but that was only the first step.
    Now, too many women are still not getting paid equally for 
doing the exact same jobs as men. That is, of course, illegal. 
It is unacceptable. But it happens every day, and there are too 
many loopholes.
    That is why I strongly support the Paycheck Fairness Act, 
which Senators Dodd and Mikulski have long championed. This 
critical legislation will strengthen penalties for 
discrimination, help give women the tools they need to identify 
and confront unfair treatment. In January, the House of 
Representatives voted overwhelmingly, on a bipartisan basis, to 
pass the Paycheck Fairness Act, under the great leadership of 
Representative DeLauro. I look forward to working with my 
colleagues in the Senate to pass this bill and send it to the 
President during this Congress.
    I might just add that while strengthening our existing laws 
is the next step toward wage equality, it can't be the last 
one. It is not enough to say that women and men performing the 
same jobs should be paid the same. That is only part of the 
problem. We also must tackle the more subtle discrimination and 
more widespread discrimination that occurs when we 
systematically undervalue the work traditionally done by women, 
particularly women of color.
    Unfortunately, women are making less not only because of 
insidious discrimination, but because we do not value jobs we 
traditionally view as ``women's jobs'' as we value those that 
we think of as ``men's jobs.''
    Today, millions of female-dominated jobs--for example, 
social workers, teachers, child care workers, nurses, long-term 
care workers--are equivalent in skills, effort, responsibility, 
and working conditions to similar jobs dominated by men. But 
the female-dominated jobs pay significantly less. This is 
inexplicable. Why is a housekeeper worth less than a janitor? 
Why is a parking meter reader worth less than an electrical 
meter reader? Why is a social worker worth less than a 
probation officer? Why is a nurse, who still has to lift and 
have manual dexterity and stuff--why is a nurse paid less than 
a truck driver?
    That is why I introduced the Fair Pay Act. My bill, which 
is championed in the House by Eleanor Holmes Norton, requires 
employers to provide equal pay for jobs that are equivalent in 
skill, effort, responsibility, and working conditions. My bill 
would require employers to publicly disclose their job 
categories and their pay scales, without requiring specific 
information on individual employees.
    If we give women information about what their male 
colleagues are earning, they can negotiate a better deal for 
themselves in the workplace. In fact, last year, I asked Lilly 
Ledbetter at a hearing that if my bill, the Fair Pay Act, had 
been law, would she have been still discriminated against? And 
she said, no. She said that with the information that she would 
have had, she would have known right from the beginning that 
she was a victim of discrimination, before it caused a lifelong 
drop in her earnings and she had to go all the way to the 
Supreme Court to try to make things right.
    So while I admire Lilly's strength and determination, I 
would like to say that no American woman ever again should have 
to go through what she went through just to receive a fair 
day's pay for a fair day's work.
    I want to thank my colleague Senator Dodd publicly, as I 
have privately, for his great leadership in this area for so 
many, many years. And I want to thank Senator Enzi as well, as 
all of our witnesses for being here today, and I look forward 
to a great hearing.
    Unfortunately, pay discrimination is a harsh reality in 
today's workplace, but it doesn't have to be that way. And 
hopefully, we can begin to close that gap.
    With that, I would recognize my Ranking Member, Senator 
Enzi.

                       Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    I am confident that there is no member of this committee 
who would tolerate paying a woman less for the same work simply 
because she is a woman. As husbands and fathers and mothers of 
working women, we all recognize the gross inequity of 
discrimination in pay based on gender.
    Congress has put two laws on the books to combat such 
discrimination--Title VII of the Civil Rights Act of 1964 and 
the Equal Pay Act of 1963.
    Undeniably, the last several decades have been 
transformational with regard to women's opportunities. Today, 
more women than men are earning college degrees, and women are 
enrolling in many graduate degree programs in equal numbers. At 
some of the Nation's top law schools today, women students 
outnumber men.
    As women have become commonplace at every level in the 
workplace, so have women's earnings increased in comparison to 
men's. Last month, I noticed several news articles reporting 
that the number of dual-income families where the wife out-
earns the husband has increased from 4 percent in 1970 to 22 
percent in 2009. So times have changed, and certainly, it is 
appropriate for this committee to survey the fairness of the 
American workplace.
    Some argue that a pay gap continues to exist in terms of 
the compensation levels between men and women and that this 
proves current legal protections are not sufficient and must be 
augmented. Many labor specialists note that pay differentials 
are a function of labor market economics, that they reflect the 
choices that individual workers and groups of workers tend to 
make and their underlying skill sets.
    A study released last year found that if you factor in 
observable choices, such as part-time work, seniority, and 
occupational choice, the pay gap stands between 5 to 7 percent. 
I believe the best way to address that gap is by drawing more 
women into higher-earning fields.
    The career choices we all make impact our earnings, and 
data shows that women are more likely to select fields that pay 
less. There are many reasons one might make such a choice, 
including schedule flexibility, job security, and the quality 
of fringe benefits, such as health, retirement, and child care.
    I, for one, would never question the logic of making such a 
tradeoff. In fact, economists have noted that the current 
economic downturn has had a harsher effect in traditionally 
male occupations, and the unemployment rate for men has been a 
full 2 percentage points above that for women throughout the 
recession.
    Yet, to the extent that women may not enter traditionally 
male fields precisely because they have been traditionally 
male, they may not be earning to their full potential. I 
believe the goal of this committee should be to find solutions, 
and I have two solutions to offer for this potential problem. 
One is, improve our national job training programs so all 
Americans, men and women, have access to the skills training 
they need to enter those fields. And two, fix the economy so 
that these higher earning jobs are plentiful and hiring again.
    I have worked in four Congresses to update the Workforce 
Investment Act, which has not been reauthorized since its 
enactment 12 years ago. I am working now with Senators Harkin, 
Murray, and Isakson, and building on the bill that passed the 
full Senate in the 109th Congress. We should reauthorize WIA 
this Congress to ensure workers have access to the education 
and skill training they need to be successful and that 
employers have the skilled workforce they need in order to be 
competitive.
    We need to look no further than my home State of Wyoming to 
find a perfect example of what is happening and what can happen 
to improve the job skills and training for all Americans. 
Wyoming, as some of you may know, is nicknamed ``The Equality 
State.'' It was the first territory and the first State to 
extend the right to vote to women.
    Wyoming was home to our Nation's first woman judge, the 
Nation's first woman Governor, the Nation's first woman elected 
to State-wide office, and a whole slew of other firsts. In 
1920, the town of Jackson, WY, elected the Nation's first all-
woman town government. Of course, with our change in the law, 
we were about 50 years ahead of everybody else.
    Despite Wyoming's long history of gender equality, its pay 
gap is among the highest in all the States. I can assure you 
this is not because Wyoming employers are notoriously 
discriminatory or grossly undervalue their female workers. 
Rather, Wyoming demonstrates that markets, choices, education, 
training, and opportunity all play a role in the establishment 
of wages and wage differentials.
    In Wyoming, important sectors of the economy, such as 
energy, natural resources, and construction, have faced 
significant labor shortages and therefore offer very high-
paying jobs. The reality is that many of these jobs, from heavy 
equipment operators to carpenters, and from welders to coal 
miners, are not positions to which women traditionally 
gravitate.
    In Wyoming, market forces have greatly increased the labor 
rates for those jobs traditionally held by men, which largely 
explains the magnitude of the wage gap. Closing this gap 
requires an increase in training and educational opportunities 
for women.
    The role of education and training is evident in the 
results of one such program. It is called Climb Wyoming. It is 
a not-for-profit program funded through a mix of private and 
public funds. Its mission is to move low-income single mothers 
to higher-paying careers through training and placement 
assistance. The program has enjoyed considerable success, with 
program graduates earning double and even triple their pre-
program income levels.
    In many instances, these gains have been achieved by 
encouraging program participants to consider nontraditional 
work in the energy, natural resources, and construction 
industries, and providing participants with necessary skills 
and placement assistance to make the transition into such 
nontraditional work.
    To date, Climb has trained and placed more than 1,000 
single mothers in such nontraditional careers as short-haul 
truck driving, welding, and construction trades. Now that may 
not sound like a lot, but we only have half a million people 
that live in Wyoming.
    One woman from my home town of Gillette earned a commercial 
driver's license and now works as a short-haul truck driver for 
a construction company, more than doubling her pre-program 
earnings. Another single mother with two children entered the 
program in Cheyenne. Previously, she worked in a fast food 
restaurant and earned $6 an hour. She enrolled in Climb, 
studied integrated systems technology, and is now employed at a 
wind energy generation farm and earning nearly three times her 
pre-program income.
    These are all real examples of women that have, with 
encouragement, training, and education, managed to eliminate 
the pay gap in their own working careers. A coal haul truck is 
35 foot by 35 foot by 35 foot. It is kind of a mountain moving 
around. But it has super power steering. It has 10-foot tires 
that turn easily. The cab is air conditioned, and the special-
fitting driving seats are even anti-vibration.
    Incidentally, these are all-electric trucks. Drivers work 3 
days a week 1 week and 4 days a week the next week, and they 
make $60,000 to $80,000 a year. That is one of the areas that 
women have been moving into with these jobs.
    But as good as the programs like Climb Wyoming are, they 
cannot create jobs in a bad economy. And unfortunately, this 
prolonged downturn has added another hurdle for the women who 
graduate from the program.
    In Gillette, for the first time, the majority of the most 
recent class of graduates has not been able to find employment. 
Women who trained as heavy equipment operators and commercial 
truck drivers are either still waiting for companies to be in a 
position to hire or are working just 1 day a week.
    This brings me to my second solution--fix the economy. As a 
Congress, we should be devoting our time to developing ways to 
encourage private sector job creation. In the energy field, 
which creates many jobs in Wyoming, this means working to get 
permits for energy development on Federal lands processed in a 
timely manner and promoting tax policies that encourage the 
energy industry to hire workers and continue the domestic 
energy development. This means scrapping the plans for a cap 
and trade tax that has created economic fear and uncertainty in 
many energy sectors, which inevitably depresses job growth.
    We must reject proposals that make employers less likely to 
create new positions and fill vacant ones. Legislation that 
makes it more costly to employ someone by adding unfunded 
mandates, increasing litigation burdens, and complicating 
regulation and increasing taxes are taking us in the wrong 
direction. Even when these proposals are not enacted, they have 
a chilling effect on employers who understandably look to 
congressional hearings and debates to figure out what new 
government burdens may be placed on them.
    The legislative process being promoted here today will not 
create jobs, except for trial lawyers. The Paycheck Fairness 
Act will subject employers to more litigation, including far 
larger class action suits, and increase penalties even when 
there is no showing that an employer intended to discriminate 
at all. It will tilt the law so heavily against employers that 
they will be advised to settle such suits instead of defending 
their pay practices.
    The bill adds more of the burdensome government reporting 
requirements that don't just waste hours of employers' time, 
they also cost them money that could be directed toward new 
hires. Further, we must be exceedingly cautious about proposals 
that ultimately seek government-set wage rates and would turn 
our economy down a disastrous road.
    I appreciate the chance to review women's pay in the 
workplace and share the success of Climb Wyoming with my 
colleagues. The real pathway to closing the remaining wage gap 
lies not with increased litigation and government intervention, 
but with increasing opportunities for women to gain lucrative 
skills and choose high-earning occupations.
    We should redouble our efforts to reauthorize the Workforce 
Investment Act and focus on other job growth policies without 
delay.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Enzi.
    I now recognize Senator Dodd for both a statement and 
purposes of introduction.

                       Statement of Senator Dodd

    Senator Dodd. Well, thank you very much, Mr. Chairman. I 
will be brief. I know we have our witnesses here this morning 
and am honored to have them with us.
    First of all, thank you, Mr. Chairman. You have been a 
champion of these issues for as long as we have served 
together, and that is a long time, going back to our years 
together in the House of Representatives and then almost 30 
years we have spent together here in the U.S. Senate. So there 
is no better champion about fairness in terms of compensation 
than Tom Harkin of Iowa. So I am pleased to be with you.
    I want to thank Mike Enzi. I couldn't agree more. We need 
to get our economy back on its feet again. Yesterday, the 
Senate passed a good bill on tax credits to try and increase 
employment opportunities in the private sector, and the more we 
can do on that front is going to be beneficial to everyone. So 
that is important as well.
    I am going to introduce briefly my good friend and 
colleague who is no stranger to this room, by the way. Rosa 
DeLauro was my chief of staff for 7 years and spent a lot of 
time in this room as I became a member of this committee, 
sitting way down at the end in that chair. I think where 
Michael Bennet sits today is the chair I occupied when I first 
was a part of this committee and over the 30 years have crawled 
my way up here.
    I want to let Bob Casey and Sherrod Brown know they can get 
to this chair, Tom Harkin's chair, and hopefully more rapidly 
than I had the opportunity to along the way. But let me thank 
them as well. Both of our new members have strong records and 
background.
    In fact, I was mentioning both of you last night in your 
absence. I spoke to the national child care organization that I 
worked with for years and, having announced my own retirement 
from the Senate come next January, was talking about people 
that I thought would be able to carry on the terrific work on 
children's issues and work on family issues. I mentioned both 
Bob Casey and Sherrod Brown as examples of people coming along 
in the Senate who already are demonstrating a great interest in 
the subject matter.
    So the cause is not going to suffer at all. In fact, I 
argue it will be enhanced by the people who are coming along in 
this area. I thank both of you for your continuing interest in 
this.
    Well, Rosa, you have been a champion, as Tom Harkin has 
been, throughout your career: one of the most vocal and 
successful advocates for women and families for as long as I 
have known you--for 30 years. I am delighted to have you here 
today to be our leadoff witness because, frankly, it is a 
little embarrassing, to put it mildly, to have to be here today 
talking about wage gaps.
    Obviously, getting improved opportunities for women is 
great so they can move up the scale and become lawyers and 
doctors and all these other wonderful occupations. We agree 
with that. The problem is that when you are talking about 
people doing the same jobs, the pay scales are different. That 
is really what we are talking about here.
    For every man out there working, women earn 77 percent of 
what men earn in these areas. So the gap exists. The average 
woman in my State of Connecticut, which has a good record on 
many of these issues, needs a bachelor's degree just to earn 
what a man with a high school diploma earns. So the gap is 
there. So if you can get that further education, it is great, 
but understand when you do so, that the wage comparisons fall 
apart based on educational levels.
    The gap is even larger in the African-American and Hispanic 
communities. It persists across the income spectrum. And 
astonishingly, in some occupations, it is actually getting 
worse with time. Now here we are in the year 2010, well into 
the 21st century. Even when studies control for factors such as 
education, job tenure, choice of industry, the gap remains.
    We will hear from Heather Boushey this morning that labor 
economists have conducted study after study and controlled for 
every measurable variable--job characteristics, union 
membership, ethnic and racial backgrounds, education 
experience, and on and on and on, and still cannot explain 
nearly half of the wage gap. The answer is that women are being 
paid less than men simply because they are women, in my view.
    This isn't just a matter of fairness. It is a matter of 
economic security for millions of families as well. In 2008, 
two out of every five mothers were their family's breadwinners, 
as Tom Harkin has pointed out, either as a single parent or as 
a spouse with higher income. These women are being hurt, and so 
are their families. And the recession is only increasing the 
trend and exacerbating the problem.
    I am proud that the first law that President Obama signed 
into law was one that Rosa championed, the Lilly Ledbetter 
legislation, along with your colleagues and, of course, Barbara 
Mikulski here and other members of this committee. That law 
reverses an awful U.S. Supreme Court decision that barred women 
from the judicial system to fight against pay discrimination. 
Rosa, as I said, was a lead sponsor of that, along with others.
    But as significant achievement as that law was, we still 
need to act to eliminate pay discrimination--again, a point 
that Tom Harkin has made--so that women don't have to fight in 
the first place to get that which they deserve. That is why, 
for the last seven Congresses, I have co-sponsored the Paycheck 
Fairness Act, and that is why I was an original co-sponsor of 
Chairman Harkin's Fair Pay Act as well.
    As we will hear today, the wage gap is an anachronism, a 
relic of discrimination that should be, of course, eliminated. 
It is not just about women's rights. It is about economic 
justice in our country. Rosa has been the lead sponsor of the 
Paycheck Fairness Act in the House year after year after year. 
Tireless in her devotion to this issue, there is no better 
advocate for pay equity--a more compelling person or more 
eloquent--than Rosa is on this issue.
    I note, Mr. Chairman, as well, yesterday, along with many 
of our colleagues--and I am not sure the rest of you were there 
as well--I went to the ceremony in the new visitors center, 
where we gave out gold medals to the women WASPs. The women who 
were pilots--a little over 1,000 women during World War II 
volunteered.
    Twenty-five thousand women applied for those jobs to go out 
and become pilots to ferry the 150,000 aircraft we built in 
those 2 or 3 years, built by women, by the way, in the 
manufacturing facilities in Detroit and elsewhere because men 
were off fighting in the Pacific and the European theaters. 
Over 60 million miles these women flew; 38 of them lost their 
lives in the process.
    But what a tragedy it was in so many ways because they had 
to pay their own way to get to that training facility in Texas, 
paid their own way once they lost their jobs at the end of the 
war, never allowed to put a flag on their caskets, having 
served in the Air Force, because they weren't considered 
members of the armed services.
    One woman told me that her pal died, and her mother put her 
picture in the window in Arizona when her daughter lost her 
life as one of those pilots. And the Air Force made her take 
the picture out of the window because she wasn't considered a 
member of the Air Force.
    Now, the Air Force, obviously, has substantially changed. 
Today, 20 percent of the Air Force personnel are women. Many 
women are combat pilots, and they get the same pay, by the way, 
and same grade in our military forces.
    I know that is a long time ago. It is 60 years ago. But it 
is reflective of where we have been on these issues. And today, 
once again, we are there.
    People I know make all sorts of arguments about these other 
matters. The fact is, we have discriminated on this basis. And 
the sooner we come to the reality of that and get this right 
and equalize this process, there won't be lawsuits. There are 
not going to be people running to court on this. It is just 
seeing to it that if a woman or any person works at the same 
job, they deserve the same pay. This ought not to be 
complicated, in my view.
    So my hope is, in this Congress here, we can get this done 
right and eliminate these barriers that exist between men and 
women when it comes to fair pay.
    With that, Rosa, delighted you are here, and thank you for 
your hard work.
    [The prepared statement of Senator Dodd follows:]

                   Prepared Statement of Senator Dodd

    Thank you, Chairman Harkin. You have long been a champion 
on this issue, and I thank you for calling this important 
hearing I have the privilege of introducing our first witness 
this morning, a good friend of mine and a great public servant 
from Connecticut, Congresswoman Rosa DeLauro. Throughout her 
career, she has been one of the most vocal and successful 
advocates for women and families, and I am delighted that she 
is here to join us today.
    It is, frankly, a little embarrassing that we have to be 
here today talking about the wage gap between men and women. It 
is, after all, 2010. We have made so much progress as a nation 
to eradicate discrimination in all its forms.
    And yet, as we convene this morning, women still earn just 
77 percent of what men earn. The average woman in my State of 
Connecticut needs a bachelor's degree just to earn what a man 
with a high school diploma earns. The gap is larger in the 
African-American and Hispanic communities, it persists across 
the income spectrum, and, astonishingly, in some occupations 
it's actually getting worse with time.
    Even when studies control for factors such as education, 
job tenure, and choice of industry, the gap remains. As we'll 
hear from Heather Boushey (boo-SHAY), labor economists have 
conducted study after study and controlled for every measurable 
variable--job characteristics, union membership, ethnic and 
racial background, educational experience, and on and on--and 
still cannot explain nearly half of the wage gap. The answer is 
that women are being paid less than men simply because they are 
women.
    This isn't just a matter of fairness. It's a matter of 
economic security for millions of American families. In 2008, 
two out of every five mothers were their families' 
breadwinners, either as a single parent or as the spouse with 
the higher income. These women are being hurt, and so are their 
families. And the recession is only increasing this trend.
    I am so proud that the first law President Obama signed was 
the Lilly Ledbetter Fair Pay Act, which reverses an awful 
Supreme Court decision that barred women from the judicial 
system to fight against pay discrimination. And Rosa DeLauro 
was one of the lead people fighting day and night in the House 
of Representatives to get that important legislation over the 
finish line.
    But as significant an achievement as that law was, we still 
need to act to eliminate that pay discrimination so that women 
don't have to fight it in the first place.
    That's why, for the last seven Congresses, I've cosponsored 
the Paycheck Fairness Act. And that's why I was an original 
cosponsor of Chairman Harkin's Fair Pay Act.
    As we'll hear today, the wage gap is an anachronism, a 
relic of discrimination that should be stamped out. It's not 
just about women's rights--it's about economic justice.
    Rosa DeLauro has been the lead sponsor of the Paycheck 
Fairness Act in the House year after year. She is tireless in 
her devotion to the issue. There is no advocate for pay equity 
more compelling and more eloquent than Rosa, and she is a true 
champion for women everywhere. I'm proud to fight with her to 
see this through and thrilled that she's joined us today to 
talk about this important issue.

  STATEMENT OF HON. ROSA L. DeLAURO, U.S. REPRESENTATIVE FOR 
            CONNECTICUT'S 3d DISTRICT, NEW HAVEN, CT

    Ms. DeLauro. Thank you very, very much, Senator. It is 
wonderful to be with all of you this morning and to get a 
chance to speak about and to support this critical legislation.
    I want to say a thank you to the members of the committee, 
particularly Chairman Harkin, to Senator Dodd. And I just would 
say, as we have a long history together, and he has spent so 
much of his professional career in trying to ensure the 
economic security of women and families in this Nation. And he 
is a Senate sponsor of the Paycheck Fairness Act.
    Senator Mikulski, for her outstanding work on this issue, 
Ranking Member Enzi, my colleague--former colleague Senator 
Brown, wonderful to be with you, and Senator Casey, thank you 
for your advocacy.
    I am pleased to be invited here today to testify. Mr. 
Chairman, let me just say to you, as the author of the Fair Pay 
Act and, as you have pointed out, a bill that I have long 
supported, you have been such a long-time champion of pay 
equity for women, and I thank you for your leadership on this 
issue.
    Put simply, the Paycheck Fairness Act is a modest, common-
sense reform that closes numerous longstanding loopholes in the 
Equal Pay Act, and it stiffens penalties for employers who 
discriminate based on gender. In America today, women now make 
up half of the workforce. Two-thirds of women are either the 
sole breadwinner or co-breadwinner in their family.
    Women are also more likely, as been pointed out, than men 
to graduate from college. They run more than 10 million 
businesses, with combined annual sales of $1.1 trillion, and 
they are responsible for making 80 percent of consumer buying 
decisions. And yet, women are still only paid 78 cents on the 
dollar as compared to men.
    As had been pointed out, women of color even worse off. 
African-American women 68 cents on the dollar, compared to the 
highest earners. Hispanic women 57 cents. Unmarried women--and 
unmarried women are single, widowed, divorced, or separated. 
They run the age gamut, and their wages determine, particularly 
for younger women, what their retirement benefits will be. And 
women live longer than men. It is one of the reasons why women 
today over 70 years old are the demographic that has the 
highest level of poverty in this Nation.
    Unmarried women have an average household salary that is 
almost $12,000 lower than unmarried men. They make a paltry 56 
cents on the dollar when compared to married men.
    The National Committee on Pay Equity tells us that these 
pay disparities have a substantial long-term impact on women's 
lifetime earnings, costing anywhere from $400,000 to $2 million 
over a lifetime. And that lack of pay equity translates into 
less income toward calculating pension and in some cases, as I 
have mentioned, Social Security benefits. It is no coincidence 
that 70 percent of older adults living in poverty are women.
    Congress originally passed the Equal Pay Act in 1963. It 
was to end, and I quote, ``serious and endemic problem of 
unequal wages.'' Forty-seven years later, it is clear that the 
act is not quite working as intended in its current form. And 
with more women responsible for their families' economic 
security than ever before, we have an obligation to face this 
continuing pay inequity head-on.
    Very early in this Congress, we passed the Lilly Ledbetter 
Fair Pay Act. It would ensure that women who are discriminated 
against have the right to sue, as long as their discriminatory 
pay continues. But this critical law, which reaffirmed a right 
which had been denied in a short-sighted 2007 U.S. Supreme 
Court decision, brings us back to where we had been all along.
    The Paycheck Fairness Act will represent progress for women 
who fight pay discrimination in the workplace every single day. 
It would clarify that ``any factor other than sex'' defense, so 
that an employer trying to justify paying a man more than a 
woman for the same job must show the disparity is not sex-
based, that it is job-related and necessary for the business.
    It would also prohibit employers from retaliating against 
employees who discuss or disclose salary information with their 
co-workers. Of course, employees such as human resources 
personnel, who have access to payroll information as part of 
their job, would not be protected if they disclose workers' 
salaries of other workers.
    That being said, just ask Lilly Ledbetter how much sooner 
she could have found out that she was being discriminated 
against had this protection been in place. Thanks to a company 
policy that is still not uncommon today, she was prohibited 
from discussing her pay with her co-workers. It was not until 
someone gave her an anonymous note shortly before she retired 
that she was alerted to the pay discrimination she had 
experienced throughout her career.
    The Paycheck Fairness Act would also strengthen the 
remedies available for women to include punitive and 
compensatory damages. In other words, this act brings equal pay 
law into line with other civil rights law, and it provides to 
victims of sex-based discrimination the very same standards for 
lawsuits and options for damages that are already afforded to 
victims of race-based discrimination already in the law.
    It is sometimes suggested that passing this bill would 
result in a torrent of class action lawsuits that employers 
could simply not afford to pay. That is not the pattern we have 
seen for anti-discrimination legislation. Race-based 
discrimination laws have been on the books for years. Employers 
have made adjustments necessary to avoid that circumstance. 
There is no reason to think that applying the same standards to 
sex-based discrimination would alter this equation. And for 
sure, companies are better, more productive, stronger, when 
they send a signal that there is no place for sex-based 
discrimination.
    So, again, this legislation is a common-sense solution to 
the lingering problem of pay equity. It extends simply the 
standards that are already part of our civil rights law to 
include discrimination against women. And by acting now to 
ensure that women get paid the same as men for the same work, 
the Senate can give them, their families, and the entire 
economy the tools to recover and thrive.
    And that is why the Paycheck Fairness Act has been endorsed 
by over 200 organizations, including the U.S. Women's Chamber 
of Commerce, the American Association of University Women, 
Business and Professional Women, the National Women's Law 
Center, and it is why it has passed twice in the House of 
Representatives.
    It is now 13 years after I first introduced this piece of 
legislation. I believe that paycheck fairness is legislation 
whose time has come. I believe we have a moral obligation to 
ensure that one half of the American workforce is treated as 
fairly and equitably as the other half. And on behalf of all of 
America's women, I strongly encourage the Senate to take action 
and at last to make this bill law.
    Let me make one final comment. We men and women who serve 
in this extraordinary institution, whether in the House or in 
the Senate, are blessed to have the opportunity to serve here 
because of the potential of the institution to make a 
difference in people's lives.
    Yes, we are men and women. We come from all over this 
country. We come with different backgrounds, different 
educational backgrounds, different training, different skill 
sets, and yet we are paid the same amount of money for the same 
job.
    Unfortunately, that is not true for most women in this 
Nation. Whether you are a waitress, whether you are a bus 
driver, whether you are a university professor, whether you are 
an engineer, whether you are a news anchor--I hope, Senator 
Enzi, that in the long-haul transport women are being paid the 
same amount of money as their male counterparts are doing.
    We have an opportunity to make sure that what we have by 
virtue of serving in this job, that we have the benefit of the 
same pay as men and women, that we can extend that benefit to 
women across this country.
    Thanks so very, very much for letting me be here this 
morning.
    [The prepared statement of Ms. DeLauro follows:]

               Prepared Statement of Hon. Rosa L. DeLauro

    Thank you. It is good to be with you this morning, and to 
get a chance to support this important legislation.
    I first want to thank the members of the committee, 
particularly Chairman Harkin, Senator Dodd--the Senate sponsor 
of the Paycheck Fairness Act--Senator Mikulski, and Ranking 
Member Enzi for hosting this important hearing today, and for 
inviting me to testify. Mr. Chairman, as the author of the Fair 
Pay Act--a bill I have also long supported--you have been a 
longtime champion of pay equity for women, and I thank you for 
your leadership.
    Put simply, the Paycheck Fairness Act is a modest, common-
sense reform that closes numerous longstanding loopholes in the 
Equal Pay Act and stiffens penalties for employers who 
discriminate based on gender.
    In America today, women now make up half of the workforce, 
and two-thirds of women are either the sole breadwinner or co-
breadwinner in their family. Women are also more likely than 
men to graduate from college. They run more than 10 million 
businesses with combined annual sales of $1.1 trillion, and are 
responsible for making 80 percent of consumer buying decisions.
    And yet, women are still only being paid 78 cents on the 
dollar as compared to men. Women of color are even worse off--
African-American women make 68 cents on the dollar compared to 
the highest earners, while Hispanic women make only 57 cents. 
Unmarried women have an average household salary that is almost 
$12,000 lower than unmarried men, and they make a paltry 56 
cents on the dollar when compared to married men.
    As the National Committee on Pay Equity tells us, these pay 
disparities have a substantial long term impact on women's 
lifetime earnings, costing anywhere from $400,000 to $2 million 
over a lifetime. And that lack of pay equity translates into 
less income toward calculating pension and in some cases Social 
Security benefits. It is no coincidence that 70 percent of 
older adults living in poverty are women.
    Congress originally passed the Equal Pay Act in 1963 to end 
the ``serious and endemic problem'' of unequal wages. Forty-
seven years later, it is clear that the act is not quite 
working as intended in its current form. And with more women 
responsible for their families' economic security than ever 
before, we have an obligation to face this continuing pay 
inequity head-on.
    Very early in this Congress, we passed the Lilly Ledbetter 
Fair Pay Act, ensuring that women who are discriminated against 
have the right to sue as long as their discriminatory pay 
continues. But this critical law--reaffirming a right which had 
been denied in a shortsighted 2007 Supreme Court decision--only 
brings us back to where we had been all along.
    By contrast, the Paycheck Fairness Act will represent real 
progress for women who fight pay discrimination in the work 
place every day. It would clarify the ``any factor other than 
sex'' defense, so that an employer trying to justify paying a 
man more than a woman for the same job must show the disparity 
is not sex-based; that it is job-related and necessary for the 
business.
    It would also prohibit employers from retaliating against 
employees who discuss or disclose salary information with their 
co-workers. Of course, employees such as HR personnel who have 
access to payroll information as part of their job would not be 
protected if they disclose workers' salaries of other workers.
    That being said, just ask Lilly Ledbetter how much sooner 
she could have found out she was being discriminated against 
had this protection been in place. Thanks to a company policy 
that is still not uncommon today, she was prohibited from 
discussing her pay with her co-workers. It was not until 
someone gave her an anonymous note shortly before she retired 
that she was alerted to the pay discrimination she had 
experienced throughout her career.
    The Paycheck Fairness Act would also strengthen the 
remedies available for women to include punitive and 
compensatory damages. In other words, this act brings equal pay 
law into line with other civil rights law, and provides to 
victims of sex-based discrimination the same standards for 
lawsuits and options for damages that are already afforded to 
victims of race-based discrimination.
    It is sometimes suggested that passing this bill would 
result in a torrent of class-action lawsuits that employers 
could simply not afford to pay. But that is not the pattern we 
have seen for anti-discrimination legislation. Race-based 
discrimination laws have been on the books for years, and 
employers have made the adjustments necessary to avoid that. 
There is no reason to think that applying the same standards to 
sex-based discrimination would alter this equation. And for 
sure, companies are better and more productive when they send a 
signal that there is no place for sex-based discrimination.
    So, again, this legislation is a common-sense solution to 
the lingering problem of pay inequity. It simply extends 
standards that are already part of our civil rights law to 
include discrimination against women. And by acting now to 
ensure that women get paid the same as men for the same work, 
the Senate can give them, their families and our entire economy 
the tools to recover and thrive.
    That is why the Paycheck Fairness Act has been endorsed by 
over 200 organizations, including the U.S. Women's Chamber of 
Commerce, the American Association of University Women (AAUW), 
Business and Professional Women (BPW), and the National Women's 
Law Center. And it is why we have passed it twice in the House 
of Representatives.
    Now, 13 years after I first introduced it, I believe that 
Paycheck Fairness is legislation whose time has come. I believe 
we have a moral obligation to ensure that one half of the 
American workforce is treated as fairly and equitably as the 
other half. And on behalf of all of America's women, I strongly 
encourage the Senate to take action and at last make this bill 
law.
    Thank you.

    Senator Dodd. Let us vote.
    [Laughter.]
    Ms. DeLauro. Thank you. Thank you.
    The Chairman. Well, Congresswoman DeLauro, thank you very 
much for a very enlightened and enlightening presentation. And 
thank you for your great leadership on this over all these 
years. It has been a sheer joy to work with you on this and a 
lot of other issues, and thank you for your passion.
    Ms. DeLauro. Thank you. I am honored to be here today. 
Thank you.
    The Chairman. It is not enough just to be intellectually 
good on this, but your passion just comes through. And 
hopefully, we can act on this bill and join you in the House by 
getting it done and, hopefully, sending it to the President, 
hopefully, this Congress.
    Ms. DeLauro. Looking forward to that day, Senator. Thank 
you.
    The Chairman. Thank you very much. I know you are very 
busy, and you have to leave. Thank you very much, Congresswoman 
DeLauro.
    Senator Dodd. Thank you, Rosa.
    The Chairman. Our next panel would be Commissioner Stuart 
Ishimaru. Stuart Ishimaru was appointed to the EEOC in 2003, 
and now serves as acting chairman. He is a graduate of the 
University of California at Berkeley, and received his law 
degree from George Washington University here.
    Mr. Ishimaru spent 7 years as assistant counsel on the 
House Judiciary Committee, Subcommittee on Civil and 
Constitutional Rights and then 2 years with the House Armed 
Services Committee. He has also served as acting staff director 
of the Civil Rights Commission and as Deputy Assistant Attorney 
General in the Civil Rights Division at the Department of 
Justice.
    Mr. Ishimaru, again, welcome. Your statement will be made a 
part of the record in its entirety. And if you could sum it up 
in 5 or so minutes, we would be most appreciative. Welcome.

    STATEMENT OF STUART J. ISHIMARU, ACTING CHAIRMAN, EQUAL 
       EMPLOYMENT OPPORTUNITY COMMISSION, WASHINGTON, DC

    Mr. Ishimaru. Mr. Chairman, thank you very much. Always 
hard to follow Congresswoman DeLauro, but I will do my best.
    So much was raised earlier during the opening statements 
and by her statement, so it lets me finish mine much quicker. 
But you know, the one thing that struck me as we were getting 
ready for this hearing. This is the new American workplace, and 
here we are, 47 years after enactment of the Equal Pay Act, the 
act that was passed before the landmark 1964 Civil Rights Act. 
And here we are with huge problems still remaining in the 
country.
    The pay gap continues to perpetuate, even though with the 
existence of the Equal Pay Act and title VII and the other 
civil rights laws. Obviously, much more work remains to be done 
to deal with this problem.
    Last year, Maria Shriver, the first lady of California, 
working with the Center for American Progress, released a 
ground-breaking report entitled, ``A Woman's Nation Changes 
Everything.'' You will hear later from one of the authors of 
that report, Heather Boushey. So I won't go into detail. But I 
would like to talk about some of the findings that they found 
that we have known for many years at the EEOC.
    First, the gender wage gap persists. As have been mentioned 
by other speakers, it is 77 cents on the dollar that women earn 
versus their male counterparts. It is even less for minority 
women, for women with disabilities, for the undocumented 
workers as well.
    Second, caregiver discrimination results in gender pay 
discrepancies. Women continue to be more likely to bear 
significant responsibility for providing care to children, 
elderly family members, and family members with illness or 
disability.
    Discrimination against caregivers in the workplace based on 
gender stereotypes and presumptions about the competence of 
working mothers and others with significant caregiving 
responsibilities continues to drag down wages for women. This 
is an issue that I have taken a particular interest in at the 
EEOC, and I am proud that the EEOC during the Bush years, as a 
part of a bipartisan unanimous effort, adopted caregiver 
guidance dealing with the issue of gender discrimination. And 
we issued guidance for employers that was well received so they 
would not have problems of gender discrimination in their 
workplace.
    Earlier last year, we issued a guidance of best practices 
that employers were, in fact, doing, which again helps 
employers know how to deal with this issue.
    Third, part-time work leads to lower benefits and pay over 
both the short- and long-term. Women are more than twice as 
likely as men to work part time, and they often make the choice 
to work part time in order to provide care for their children 
and other family members. Part-time work is less likely to come 
with benefits, and it is likely to be paid less as well.
    Fourth and finally, gender-based wage discrimination is 
especially untenable now in this economy, as most families have 
come to rely on the incomes brought in by working women to make 
ends meet.
    I would like to spend a few minutes talking about the role 
that the EEOC plays in enforcing equal pay laws. We enforce 
both the Equal Pay Act, Title VII of the 1964 Civil Rights Act, 
as well as other laws that prohibit pay discrimination.
    Over the past 13 years, from fiscal year 1997 to the year 
2009, the EEOC received 30,000 charges, over 30,000 charges 
alleging sex-based pay discrimination. This may sound like a 
lot, but it was over 13 years. And during that time, we 
received over 1 million charges of discrimination. This 
resulted in roughly 3 percent of charges coming into the EEOC 
that actually alleged pay discrimination.
    Over the past 3 years, we have seen a 30 percent rise in 
cases or in charges coming before us. Again, though, this is 
rising from 1,700 roughly to 2,200. Not a very large number. 
And probably, the largest driver for this is that we just don't 
know. We just don't know whether wage discrimination is going 
on because of the secrecy that surrounds pay information in the 
workplace.
    Many workers operate under strict instructions not to 
discuss their pay with co-workers and fear retaliation if they 
do go against those instructions. We also face broader systemic 
barriers in the private sector due to inadequate data on wages. 
While some data is available in the aggregate, Federal agencies 
have very little in the way of company-specific wage data in 
the private sector, and this hinders our possible enforcement.
    In my written statement, I talk about a number of cases 
that we have brought. I leave that for the written record.
    I want to spend a minute talking about the Federal sector 
because I think that is actually an interesting way to compare 
what is going on.
    In the Federal sector, for Federal employees, there is--we 
get far fewer complaints of wage discrimination. That is 
partially because it is so transparent. People know what people 
make. And I think that may serve as a model for us, that the 
more people know what people are making with a large view, less 
pay discrimination will go on.
    Between 1988 and 2007, the gender gap for women decreased 
from 28 cents to 11 cents on the dollar. So there was real 
progress made in dealing with discrimination in the Federal 
sector.
    So now we look forward, and certainly, there are many 
challenges at the EEOC. I want to thank members of this 
committee for moving our nominees through so we get a quorum 
again at the EEOC and a new chair. We are looking forward to 
having them join us, hopefully soon. But we look forward to 
working with all members of this committee with the Senate and 
members in the House.
    We were pleased with the passage last year of the Paycheck 
Fairness Act in the House, and we are delighted that the Senate 
is holding the hearings today. I want to commend the committee 
for their leadership on this issue and want to note that the 
Paycheck Fairness Act provides essential tools toward realizing 
the promise of equal pay by strengthening provisions to the 
act.
    I would also note that last month, the President announced 
the establishment of the National Equal Pay Enforcement Task 
Force to improve compliance, public education, and enforcement 
of equal pay laws. The EEOC is a key part of this task force, 
actively coordinating with our colleagues at the Department of 
Justice and the Department of Labor and the Office of Personnel 
Management, to ensure that the most rigorous possible 
enforcement happens with our equal pay laws.
    Our work would undoubtedly be strengthened by the passage 
of the Paycheck Fairness Act, a bill that President Obama has 
strongly supported since his tenure here in this body.
    Again, I would like to thank you for the opportunity to 
testify today and look forward to answering any questions 
members may have.
    [The prepared statement of Mr. Ishimaru follows:]
                Prepared Statement of Stuart J. Ishimaru
    Mr. Chairman, and distinguished members of the Committee on Health, 
Education, Labor, and Pensions, thank you for the opportunity to appear 
before you at this important hearing, ``A Fair Share for All: Pay 
Equity in the New American Workplace.''
      the problem of gender inequality in employment compensation
    In 1963, Congress passed the Equal Pay Act, amending the Fair Labor 
Standards Act to address pay inequities based on sex. At that time, 
Congress denounced sex-based wage discrimination as contributing to 
depressed wages, underutilization of the labor force, obstruction of 
commerce, and unfair competition. While the passage of the Equal Pay 
Act and subsequent year's passage of the Civil Rights Act of 1964 have 
done much to equalize pay for men and women in this country, in 2010 
the pay gap continues to perpetuate the very same problems the Equal 
Pay Act and title VII were intended to combat. Much work remains to 
close the gap, to end gender pay inequity, and to deliver on the 
promise of equal pay for equal work.
    In 2009, Maria Shriver, working with the Center for American 
Progress, released a ground breaking report entitled, ``A Woman's 
Nation Changes Everything.'' This sweeping study of the role of women 
in our Nation's economies and the economies of our families today 
provided a wealth of insights into the challenges women still face when 
it comes to earning equal pay for equal work. This report and other 
recent studies confirm what we at the EEOC have recognized for some 
time:

     The gender wage gap persists. The wage gap is alive and 
well in America, with the typical full-time, year-round female worker 
making $.77 for every dollar earned by her male counterpart.\1\ The gap 
is even wider for women of color and people with disabilities, and 
undocumented immigrant workers often don't even manage to earn minimum 
wage. Although some of the pay gap can be explained by differentials in 
experience or as a result of the differences in the occupations men and 
women typically do, the Shriver Report estimates that about 41 percent 
of the pay gap cannot be explained by these factors.\2\
---------------------------------------------------------------------------
    \1\ The Shriver Report: A Woman's Nation Changes Everything 57-58 
(Heather Boushey and Ann O'Leary, eds., 2009).
    \2\ Id. at 58.
---------------------------------------------------------------------------
     Caregiver discrimination results in gender pay 
discrepancies. Women continue to be more likely to bear significant 
responsibility for providing care to children, elderly family members, 
and family members with illnesses or disabilities.\3\ Discrimination 
against caregivers in the workplace based on gender stereotypes and 
presumptions about the competence and commitment of working mothers and 
others with significant caregiving responsibilities continues to drag 
down wages for women.\4\ This is an issue I have taken a particular 
interest in at the EEOC, and I am proud to have been a part of the 
bipartisan effort to address this kind of discrimination through the 
Caregiver Guidance \5\ the Commission issued in 2007, and the Best 
Practices Guide \6\ we issued in 2009.
---------------------------------------------------------------------------
    \3\ See generally Laura T. Kessler, The Attachment Gap: Employment 
Discrimination Law, Women's Cultural Caregiving, and the Limits of 
Economic and Liberal Legal Theory, 34 U. MICH. J.L. REFORM 371, 378-80 
(2001) (discussing women's continued role as primary caregivers in our 
society and citing studies).
    \4\ See generally Shelley J. Correll, Stephen Benard and In Paik, 
Getting a Job: Is There a Motherhood Penalty?, AJS Volume 112 Number 5 
(March 2007): 1297-338.
    \5\ Equal Employment Opportunity Commission Enforcement Guidance, 
Unlawful Disparate Treatment of Workers with Caregiving 
Responsibilities (2007).
    \6\ Equal Employment Opportunity Commission, Employer Best 
Practices for Workers with Caregiving Responsibilities (2009).
---------------------------------------------------------------------------
     Part time work leads to lower benefits and pay over both 
the short term and long term. Women are more than twice as likely as 
men to work part-time, and they often make the choice to work part time 
in order to provide care for their children or other family members. 
According to the Department of Labor Women's Bureau, 24.6 percent of 
employed women worked part time in 2008, the most recent year for which 
data is available, as compared to only 11.1 percent of men.\7\ Part 
time work is less likely to come with benefits such as health insurance 
or paid time off, and by its very nature, tends to pay less than full-
time work. Because so much of the way our earnings increase over time 
is based on raises calculated as a percentage of current salary, the 
fact that women are more likely to work part time causes the pay gap to 
accumulate and widen over time.
---------------------------------------------------------------------------
    \7\ DOL Women's Bureau, Employment Status for Women and Men in 
2008, available at http://www.dol.gov/wb/factsheets/Qf-ESWM08.htm.
---------------------------------------------------------------------------
     Gender-based wage discrimination is especially untenable 
now, as more families come to rely on the income brought in by women 
workers to make ends meet. Recent studies show that the current 
economic downturn is resulting in more women serving as the primary 
breadwinners for their families.\8\ This is because men are losing jobs 
at a much higher rate than women.\9\ You don't have to be a 
mathematician to figure out that where women make 77 cents on the 
dollar versus their male counterparts, where a father's wages are lost, 
an average family can lose over 50 percent of its income. If there ever 
was a time to act to remedy the gender pay gap, it is now.
---------------------------------------------------------------------------
    \8\ Heather Boushey and Ann O'Leary,  Our Working Nation: How 
Working Women Are Reshaping America's Families And What It Means For 
Policymakers (2010).
    \9\ Heather Boushey, Women Breadwinners, Men Unemployed, available 
at http://www.
americanprogress.org/issues/2009/07/breadwin_women.html. (July 20, 
2009).
---------------------------------------------------------------------------
                eeoc's role in enforcing equal pay laws
    The EEOC's role in enforcing the Nation's equal pay laws is a 
central one. EEOC is the primary enforcement agency for both the Equal 
Pay Act and title VII's prohibitions on compensation discrimination. We 
have further jurisdiction to address pay discrimination under the Age 
Discrimination in Employment Act, the Americans with Disabilities Act, 
and the Genetic Information Nondiscrimination Act. The EEOC has issued 
a Compliance Manual Chapter of Compensation Discrimination which 
provides detailed guidance and instructions for investigating and 
analyzing claims of compensation discrimination under each of the 
statutes enforced by the EEOC.
    On January 29, 2009, President Obama signed the Lilly Ledbetter 
Fair Pay Act of 2009 which supersedes the Supreme Court's decision in 
Ledbetter v. Goodyear Tire & Rubber Co., Inc. Ledbetter had required a 
compensation discrimination charge to be filed within 180 days of a 
discriminatory pay-setting decision (or 300 days in jurisdictions that 
have a local or State law prohibiting the same form of compensation 
discrimination), an unrealistic expectation given the secrecy that 
usually surrounds pay decisions.
    The Ledbetter Act restores the pre-Ledbetter position of the EEOC 
that each paycheck that delivers discriminatory compensation is a wrong 
actionable under the Federal EEO statutes, regardless of when the 
discrimination began. As noted in the act, it recognizes the ``reality 
of wage discrimination'' and restores ``bedrock principles of American 
law.''
       recent private sector charge receipt trends and litigation
    Over the past 13 years (from fiscal year 1997 through fiscal year 
2009), the EEOC has received a total of 30,312 charges alleging sex-
based pay discrimination in violation of the EPA and/or title VII. This 
is an average of 2,332 charges per fiscal year (out of an average of 
82,022 total charges per fiscal year over the same period).
    Over the last 3 fiscal years, the EEOC has experienced a 30 percent 
increase in gender-based wage discrimination charges. Most recently, in 
fiscal year 2009, the EEOC received 2,252 sex-based pay discrimination 
charges out of a total of 93,277 total charges. Of those, 944 charges 
alleged violations of the EPA, specifically (roughly 1 percent of total 
receipts). Through our administrative enforcement process alone in 
2009, the EEOC obtained almost $19 million in monetary benefits for 
victims of wage discrimination. Settlements and judgments obtained in 
litigation make this figure even greater. A number of reasons may 
account for the relatively small number of wage claims the EEOC 
receives, but the single biggest challenge the EEOC faces in 
identifying wage discrimination is the secrecy that surrounds pay 
information in the workplace.
    Many workers operate under strict instructions not to discuss their 
pay with their co-workers, and fear retaliation if they go against 
those instructions. For this reason, many people earn less for 
potentially discriminatory reasons for many years without knowing it, 
just as Lilly Ledbetter did until an anonymous co-worker left her a 
note telling her the salaries of some of her male peers. These policies 
that prevent workers from discussing pay create a serious barrier to 
charge filing under our equal pay laws.
    We also face broader systemic barriers in the private sector due to 
inadequate data on wages. While some data is available in the 
aggregate, Federal agencies have very little in the way of company 
specific wage data in the private sector, and this hinders systemic 
enforcement efforts by the Commission in the realm of wage 
discrimination.
    Notwithstanding these challenges the EEOC has litigated and 
resolved a number of important wage discrimination cases in recent 
years. These include:

     EEOC v. Woodward Governor Company (filed 10/4/06)--A title 
VII/EPA lawsuit filed by the EEOC's Chicago District Office alleging, 
among other claims, that defendant discriminated against females, 
blacks, Hispanics and Asians with respect to compensation. This was 
resolved 2/16/07 for $9,674,489.
     EEOC v. Morgan Stanley (filed 9/10/2001)--A title VII 
lawsuit filed by the EEOC's New York office alleging discrimination 
against women in compensation, promotions, and terms and conditions of 
employment. The case was resolved on 
7/12/2004 for $54 million.
     EEOC v. Tavern on the Green (filed 9/24/07)--A title VII 
lawsuit filed by the EEOC's New York District Office alleging, among 
other claims, that defendant discriminated against females, Blacks, and 
Hispanics with respect to wages when they complained of harassment. 
This was resolved on 6/3/08 for $2,200,000.
     EEOC v. New York State Department of Corrections (filed 3/
29/07)--An EPA lawsuit filed by the EEOC's New York District Office 
alleging that defendant discriminatorily transferred at least 13 female 
employees from workers' compensation leave to less lucrative maternity 
leave on or before the birth of their children without determining 
whether the underlying work-related injuries were ongoing. This was 
resolved on 5/20/08 for $971,961.

    The EEOC is currently actively engaged in 14 cases in which wage 
discrimination is alleged. Five of those cases involve EPA claims. 
These include:

     EEOC v. Southeastern Telecom Inc. (filed 9/22/09)--A title 
VII/EPA case filed by the EEOC's Memphis District Office alleging that 
Charging Party, an account executive, was discharged after complaining 
of sex discrimination in commissions in violation of title VII and the 
EPA.
     EEOC v. The Health Management Group (filed 7/29/09)--A 
title VII/EPA case filed by the EEOC's Philadelphia District Office 
alleging that defendant, a weight loss enterprise, failed to pay 
Charging Party and another employee equal wages because of their sex, 
female.
         eeoc's role in enforcing federal sector equal pay laws
    The EEOC plays an important role in enforcing equal pay laws for 
Federal employees through our Federal sector hearings program, our 
Federal sector appeals, program, and our Federal sector training 
programs.
    Federal sector pay discrimination complaints are relatively rare, 
due in part to the transparency of the GS pay scale. There were 44 EPA 
complaints filed against Federal agencies in fiscal year 2008 out of a 
total of 16,752, 40 EPA complaints out of a total of 16,363 in fiscal 
year 2007, and 33 such complaints out of 16,723 total complaints in 
fiscal year 2006. In any given year, approximately .2 percent of all 
complaints filed by Federal employees allege EPA claims.
    Since fiscal year 2006, the EEOC's Office of Federal Operations has 
issued approximately 59 decisions on appeal in which an EPA violation 
was asserted. Of these, only four cases resulted in a finding of 
discrimination based on pay.
    As in the private sector, gender-based compensation discrimination 
claims can also be made under title VII. In fiscal year 2008, there 
were 388 complaints alleging discrimination on the basis of gender 
under title VII that raised pay-related discrimination issues. In 
fiscal year 2007, that number was 366, and in fiscal year 2006, it was 
364. From October 2006 through the end of February 2010, the EEOC 
issued approximately 300 appellate decisions raising wage-related 
discrimination (on the basis of gender and other protected traits) 
under title VII.
    In March 2009, the government Accountability Office issued a Report 
entitled: ``Women's Pay: Gender Pay Gap in the Federal Workforce 
Narrows as Differences in Occupation, Education and Experience 
Diminish.'' This report found that while a pay gap between men and 
women in the Federal workforce still exists, it has narrowed 
considerably since the 1980s. Between 1988 and 2007, the gender pay gap 
declined from 28 cents to 11 cents on the dollar. The GAO also found 
that much of the gap was explained by measurable factors such as 
occupations, experience and education. However, 7 cents of the gap 
could not be accounted for in its study.
    The GAO study suggests several factors that may be contributing to 
the lessening of the gender pay gap in the Federal Government. These 
include the fact that some occupational categories have become better 
integrated by gender, the decline in the clerical workforce, and the 
fact that men and women have increasingly similar levels of education 
and Federal work experience.
    The EEOC is committed to working with Federal agencies to eliminate 
pay discrimination in Federal employment, so the Federal Government can 
truly set the standard for fair pay in this country, and serve as a 
model workplace for others to follow.
                            looking forward
    There remain many challenges on the road ahead, and the EEOC stands 
ready to work with Congress to successfully meet these challenges. I 
was very pleased by the House's passage last year of the Paycheck 
Fairness Act, and I am encouraged that the Senate is holding this 
hearing today in order to bring attention to the important issues 
addressed by this legislation. I would also like to thank this 
committee for their leadership on the issue of pay equity. This hearing 
provides an opportunity to bring attention to the issue, and to the 
legislation in the Senate.
    The Paycheck Fairness Act provides essential tools toward realizing 
the promise of equal pay, and I look forward to working with the Senate 
to strengthen and move forward on this important legislation soon.
    Passage of this legislation would make it easier to establish 
violations of the Equal Pay Act, by clarifying the affirmative defense 
for ``factors other than sex,'' and refining the ``establishment'' 
requirement to comply with commonsense notions of how employers set 
wages.
    The Paycheck Fairness Act would enhance the EEOC's data collection 
capabilities, allowing us to detect violations of the law and more 
readily engage in targeted enforcement of equal pay laws.
    The bill would also enhance remedies to allow for compensatory and 
punitive damages, putting gender-based pay discrimination on a more 
equal footing with pay discrimination on other bases such as race. It 
would further allow class action claims to proceed under the EPA under 
the Federal Rules of Civil Procedure.
    Last month, the President announced the establishment of a National 
Equal Pay Enforcement Task Force ``to improve compliance, public 
education, and enforcement of equal pay laws.'' The EEOC is a key 
participant in this Task Force, actively coordinating with our 
colleagues in the Department of Justice Civil Rights Division, at the 
Department of Labor, and at the Office of Personnel Management to 
ensure the most rigorous possible enforcement of our Federal equal pay 
laws. Our work would undoubtedly be strengthened by the passage of the 
Paycheck Fairness Act, a bill President Obama has strongly supported 
since his tenure in the Senate.
                               conclusion
    I'd like to thank you again for inviting me here today to testify 
on this very important issue. I look forward to your questions.

    The Chairman. Thank you very much, Mr. Ishimaru, and thank 
you for your leadership at EEOC.
    I just have one brief question. Again, a lot of people say, 
``well, you had a lot of success.'' People might argue that you 
have plenty enough tools, that current law is sufficient. 
Again, briefly for the record, what is it in the bill that 
would give you additional tools to better enforce the law?
    Mr. Ishimaru. Well, one would be knowing, having pay data 
about what people are generally making. We do not collect data 
like that, and it is very limited. The Lilly Ledbetter case is 
instructive to us. Nobody would have known that, and she didn't 
know it until somebody slipped her that note.
    Pay data, certainly in the private sector, quite often is 
kept very close. People don't talk about it. They are told not 
to talk about it. We have no real way of knowing what people 
are making so people can make that determination whether they 
want to file a charge with us. That is really a huge driver for 
this, giving us the tools we need to actively take a look, to 
see whether employees are having problems.
    The one thing that I have found, having been a civil rights 
lawyer for many years now and having worked on Capitol Hill and 
going to the EEOC somewhat skeptical about whether employers do 
a good job, what I have learned is that employers want to do a 
good job, generally. They want to know what the law is. They 
want to know what the requirements are. And I have been truly 
pleased to find that many employers and certainly most big 
employers understand this, and they want to do better. They 
want to know what the standards are.
    And that, I think, will cut down on any worries or the big 
worries about litigation and undue action against employers. I 
have found that there has been a lot of progress made.
    The Chairman. Thank you very much, Mr. Ishimaru.
    Senator Enzi.
    Senator Enzi. Thank you.
    One of the things that I note as I go through a lot of 
these hearings is that it all seems so simple as long as we are 
not the ones running the business and looking at the specifics. 
But to get into the questions, the U.S. District Court for the 
Northern District of Iowa recently issued a decision in which 
it dismissed all claims brought by the EEOC against CRST 
Trucking in Cedar Rapids, IA, and ordered the EEOC to pay the 
trucking company some $4.5 million to defray its costs and 
attorneys' fees dollars defending this lawsuit.
    Many observers have characterized the EEOC's conduct in 
this case is one of sue first and ask questions later. They 
also allege that the kind of legal overreaching and slipshod 
investigating that was evident in the trucking case is not 
uncommon and that the only thing uncommon was an employer with 
the wherewithal to fight the agency's legal bullying.
    As you know, in 2010, the omnibus appropriations bill, the 
EEOC was provided with an extra $23 million. Nearly a quarter 
of the extra appropriations have been effectively wasted on a 
single case because of the agency's mishandling of the claim.
    As chairman, what specific steps have you taken to review 
the procedures and decisions of the agency, which culminated in 
the pursuit of this legislation and the eventual ruling in the 
court in Iowa? What steps can and should be taken to be sure 
that the agency doesn't again fail to meet its legal 
obligations and does not again pursue claims without a factual 
legal or procedural basis?
    Mr. Ishimaru. Senator, thank you for the question.
    I will note that that case is still in litigation. So I 
can't talk about the specifics of the case and won't talk about 
the specifics of the case. But I will talk to the broader issue 
of whether our people have their ducks lined up in a row.
    First, I would like to thank Senator Mikulski for her 
leadership and her help in getting us the resources we need to 
rebuild the agency. In recent years, the EEOC budget was 
basically flat, which meant we had a declining budget, given 
all the increases that pop up over time. We lost, over the last 
8 years, approximately 25 percent of our front-line workforce. 
And due to the help of the appropriators and the Congress as a 
whole, we have been able to start to rebuild the agency, start 
to hire people again. We have really brought in a tremendous 
cadre of new people that will help us do our work.
    What I have found, both at the EEOC and having served time 
at the Department of Justice in the 1990s, Federal cases are 
not brought frivolously, or they are not brought without much 
preparation and thought behind it. In every case that comes 
before us and is brought by our Office of General Counsel, as I 
found earlier at the Department of Justice, we pre-litigate 
these cases in memoranda going back and forth before we are 
ready to go. Very seldom do we get in a situation like this 
where a judge has ruled against us.
    I think the quality of our legal work is first rate, and I 
think that is shown over the years. There are times when--rare 
times when we have been in a situation like this where a judge 
has ruled against us, and we believe at the end of the day, we 
will prevail on this case. But this does happen from time to 
time. That is the beauty of our court system that courts can 
rule this way if they see fit. But we believe that we have a 
solid case here, and at the end of the day, we will prevail.
    Senator Enzi. Well, the government has a lot more resources 
and a lot more capability to pursue these things than private 
individuals do. But to shift gears here a little bit because my 
time is limited, from a plaintiff s perspective, one of the 
main differences between filing an Equal Pay Act claim or a 
title VII claim is the requirement to initiate all the title 
VII charges through the EEOC or a State employment agency 
initially.
    What purpose does filing a charge with the EEOC fulfill? 
Why shouldn't the law require Equal Pay Act charges to be 
similarly initiated with your agency?
    Mr. Ishimaru. Well, certainly, when the Equal Pay Act was 
enacted back in 1963, there wasn't an EEOC. There wasn't a 
Title VII of this 1964 Civil Rights Act. And that act, like 
many other civil rights acts, Congress set up an administrative 
mechanism to try to deal with these cases before they went to 
court. And that has worked to a large extent, but there are 
still issues with that. There are ways to make it better, I 
think.
    And as we worked on civil rights legislation over the 
years, there has always been an active debate whether we should 
let people go to court directly or whether they should come to 
the administrative agency. And Congress, in its wisdom, chose 
to go a certain route, and that is why we do what we do at the 
EEOC.
    Senator Enzi. Thank you. My time has expired.
    The Chairman. Senator Dodd.
    Senator Dodd. Well, very quickly--and again, we want to 
thank you for your service and thank your staff and others at 
the EEOC because, for a number of years, they were just gutted. 
There was a concerted effort to just virtually eliminate the 
EEOC, if they could, by strangling it financially and starving 
it. And as a result, you have ended up where you have. So thank 
you for your work. Thank you for those who hung on and stayed 
there to try and make this work as well along the way.
    The Equal Pay Act, I wonder if you might just share or 
discuss how the current language of the Equal Pay Act allows an 
affirmative defense based on ``any factor other than sex'' 
inhibits your department's ability to effectively protect 
victims of pay discrimination under the EPA.
    Mr. Ishimaru. Well, I think that the language in the 
Paycheck Fairness Act tries to adopt the framework used by 
other civil rights acts, which I think will help employers 
understand what the requirements are under the law. Using any 
factor other than sex, we found to be a rather large loophole, 
and we think that the framework laid out in the bill will help 
tighten it. So it is linked to business purposes.
    Senator Dodd. Don't you have some practical examples? What 
are some of the defenses that you hear?
    Mr. Ishimaru. Well, one of the practical examples is that 
someone may say, ``well, that is what you made in your old job, 
and that is why we are paying you less.'' It would perpetuate 
discrimination that has gone on in other places.
    We think that the better approach is to look at how the 
wage scale is dealt with for this job, rather than comparing it 
to something else that may or may not have relevance to that 
job. What you were making in a past job may or may not be 
relevant to what you should be making in this job for these 
tasks.
    Senator Dodd. Would the Paycheck Fairness Act's provision 
prohibiting employers from retaliating against employees who 
share wage information help the EEOC better protect women 
against discrimination?
    Mr. Ishimaru. Oh, it is huge. The fact that people are 
prohibited from talking about their wages in many cases stifles 
the conversation. People have no idea what their colleagues are 
making. They don't know if there is a disparity, whether it is 
based on gender or race or some other factor.
    Having worked for the Federal Government for so long, you 
sort of get used to having your rate of pay as a matter of 
public record. And certainly, in the private sector, that is 
not always so. And for people who were strictly told that they 
cannot do it, it is totally inhibiting that people cannot share 
this information with their colleagues. They have no way of 
knowing. And I think Lilly Ledbetter showed that.
    Senator Dodd. And last, let me ask you, and again, I don't 
know if these numbers are correct or not. You can tell me if 
they are. But I am told that for fiscal year 2009, EEOC 
received 2,250 sex-based pay discrimination charges. But of 
those, only about 900, a little more than 900 charges alleged 
violations of the Equal Pay Act, which is just over 40 percent.
    Why are the Equal Pay Act charges brought so much less 
frequently than under title VII?
    Mr. Ishimaru. Hard to say. It could be based on 
jurisdictional reasons. It could be based because the person 
wants to bring it under one statute versus another. It could be 
based on our need to having to educate our employees more on 
the various parts of the Equal Pay Act.
    As I stated, very few charges come in under the Equal Pay 
Act. The bulk of our work is carried on under title VII of the 
1964 act. People are used to going to title VII as sort of the 
go-to law, and that is quite often the framework that they use.
    Senator Dodd. Very good. Thank you, Mr. Chairman.
    The Chairman. Senator Isakson.

                      Statement of Senator Isakson

    Senator Isakson. Thank you, Mr. Chairman. I appreciate it.
    Thank you very much for being here, Mr. Ishimaru. You 
stated there were 1 million claims over 13 years before the 
EEOC. Is that correct?
    Mr. Ishimaru. Right.
    Senator Isakson. What percentage of those were pay claims, 
equal pay claims?
    Mr. Ishimaru. Equal pay claims was about 3 percent.
    Senator Isakson. OK. And you stated that you were very 
formidable in your victories in court in those cases that were 
litigated, I think?
    Mr. Ishimaru. Right.
    Senator Isakson. What percentage of those were litigated? 
How many do you litigate?
    Mr. Ishimaru. We litigate year-to-year between 300 and 400 
cases a year.
    Senator Isakson. Out of how many?
    Mr. Ishimaru. Out of every year, 80,000 charges come into 
the agency, roughly speaking.
    Senator Isakson. How many of them are dismissed--how many 
of those that you don't litigate are dismissed and how many are 
settled?
    Mr. Ishimaru. I don't know exactly. I am happy to provide 
that for the record.
    Senator Isakson. There is a reason--you know, I ran a 
company for 22 years. And 96 percent of my employees and 100 
percent of my independent contractors were women. I never had a 
sex discrimination for pay case filed against me. I want that 
to go on the record.
    [Laughter.]
    However, the second most-sensitive thing among employees is 
their age, and age discrimination, which is also under EEOC 
jurisdiction. And oftentimes, those are filed because someone 
either was dismissed from their job or felt like they didn't 
get the raise somebody else got. Really, it was because of 
performance, but they would use the age discrimination law as a 
reason to bring the case to EEOC.
    And quite frankly, most all the time, the EEOC 
investigators would suggest settling rather than pursuing a 
defense of the claim. And if you open up liability, tort 
liability, which I understand this does greatly open up 
punitive damages. Is that correct?
    Mr. Ishimaru. The Paycheck Fairness Act provides for 
compensatory and punitive damages. Yes.
    Senator Isakson. I know tort issue is always a big 
Republican and Democrat issue, and I don't want to--I am not 
playing partisan politics. But when you have a case filed 
against you as a business person and there is a potential 
unlimited liability in the court system, there is even more of 
a tendency to settle rather than take the risk of a runaway 
jury, runaway verdict, or what may not always be justice at the 
courthouse.
    The same thing is true--I am all for transparency and 
disclosure, but you know, we have antitrust laws against two 
business people discussing what they charge for a product or 
how they structure it. Yet you publish publicly what is paid 
for performance in the production of that business, and you 
skew in which the way the business operates.
    Now I am not trying to defend discrimination. I am against 
discrimination. And obviously, with the number of women I 
hired, I am all for--women were a lot better workers than men 
were, I will tell you as a matter of fact in my particular--
    But I do know that there is a balance between disclosure 
and worker's privacy, and there is a balance between 
appropriate damages and intimidation for the threat of a 
runaway award. And if you open that up too greatly, you have 
the unintended consequence of lessening pay-for-performance, 
lessening opportunity, and businesses trying to run themselves 
defensively, which runs counterproductive to the free 
enterprise system. So I know that is not a question, and I 
apologize for making a statement.
    But having gone through those types of filings and then 
having had it suggested, well, just settle is cheaper than 
defending yourself, if you open up the liability to be more 
skewed one way or the other, you run the risk of that type of 
intimidation of small businesses, which the end result is not 
good, I don't think, for performance or not good for the 
operation of the business. I would love your comment on that.
    Mr. Ishimaru. If I could comment first about getting the 
pay information, we realize how sensitive this issue can be, 
and I think before we--if the Paycheck Fairness Act was 
enacted, we would take special pains to make sure that we did 
it right. One thing that I have been sensitive to at the agency 
is that when the government collects data, it needs to analyze 
it. It needs to use it.
    We just can't put the burden on businesses to collect and 
not use it. I think we would use this data prudently, and I 
think we would have to figure out ways to make sure that it is 
collected in a fair way that would not have unintended 
consequences.
    Senator Isakson. But you do understand what I am talking 
about in the risk of the pervasive availability of that 
information?
    Mr. Ishimaru. Oh, surely. Surely. And I think we would 
certainly factor that in to make sure that we would not have 
unintended consequences result from it. I think that would 
definitely be on the table, and we would be very sensitive to 
that.
    I think as to the question of settling, those are larger 
questions. I think one of the things that the Congress wanted 
us to do when it created the EEOC in 1964 as part of the act is 
that they wanted to have this alternative mechanism so it 
didn't have to go to court. And we have found, especially with 
our mediation program, that people, if they can, want to 
resolve cases before it results in litigation. And we have 
found that employers who have participated in our mediation 
program have actually found it to be a useful activity. They 
have not felt intimidated. They felt that it was worth their 
while to actually participate.
    So that gives us some hope that the path we are on is 
making sense. There are obviously ways to make it better, and 
we are working to try to make that happen.
    Senator Isakson. Thank you very much for your time.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Thank you. I am here this morning wearing 
two hats--one, the authorizing committee and one of the 
original co-sponsors of the paycheck fairness, but I am also 
the appropriator for the EEOC. My problem has been that the 
EEOC has been leadership starved, revenue deficient, and 
expectations that they have been unable to fulfill, no matter 
what the intent of its civil service is there.
    So let me get right to my questions. First of all, when I 
took over the subcommittee--that is, the appropriations--my 
ranking member, Senator Shelby, and I took a look at the EEOC. 
And on a bipartisan basis, we held the first oversight hearing.
    We were shocked at the backlog, the dysfunction of the call 
centers that gave contradictory information, the administration 
in shambles, etc. That was in an old regime. Now we have this 
regime. Tell me, what is the backlog at the EEOC?
    Mr. Ishimaru. The backlog of the EEOC is approaching 
100,000, I believe.
    Senator Mikulski. One hundred thousand cases. Now, one of 
the arguments against our bill that was being discussed here 
is, enforce the law on the books.
    Mr. Ishimaru. Right.
    Senator Mikulski. That is actually a very good position, to 
enforce the law that is currently on the books where we know 
that. Why is there a backlog? Is it because you don't have the 
commissioners, you don't have the resources? What is the 
problem? That would be in race, gender, age, which was an 
excellent point made by our Georgia colleague? Why do you have 
a 100,000 backlog?
    Mr. Ishimaru. I think a large reason for the backlog is 
that over the last 8 years, we lost 25 percent of our front-
line people. We also created, as you stated, a call center, an 
outsourced call center, which I opposed as a member of the 
commission.
    We have brought that in-house. We are trying to make that 
work better so people can get the information they need from 
EEOC employees. That is a work in progress. I think we are 
making progress.
    But the key factor is, I think, in trying to deal with the 
backlog is that, thanks to the appropriations that we have been 
able to get in 2009 and 2010, we have hired front-line 
employees to bring the level of service up, to actually hire 
investigators, to hire lawyers, to hire clerical staff to do 
the job that needs to be done. Backlog is a tough issue, as I 
have found.
    Senator Mikulski. Well, jumping in, so over--and again, 
this isn't rehashing the last 10 years. What happened there was 
the CEO was a good person, but not a good manager.
    Mr. Ishimaru. Right.
    Senator Mikulski. So that was one problem. The other was 
the contracting out of call centers with no oversight or 
supervision. And then there was a lack of revenue. Is that 
right?
    Mr. Ishimaru. Right.
    Senator Mikulski. So, yes, we should enforce the laws on 
the books, but we need to have--don't you need, No. 1--I mean, 
you are doing a great job as an acting director. But don't we 
need a director? And isn't one of the reasons for the backlog 
is that there are three vacancies on the commission? Can you 
make decisions and make adjudications?
    Mr. Ishimaru. We are certainly empowered and have been 
running the agency. It will be an enormous help to have the 
three other members of the commission confirmed.
    Senator Mikulski. If those members are confirmed, will that 
also provide the leadership to reduce the backlog?
    Mr. Ishimaru. I think it is always helpful to have 
permanent leadership in place. I think having a permanent chair 
will help move the agency toward fulfilling the expectations 
that people have.
    Senator Mikulski. See, I am observing a pattern here, which 
is not only with the EEOC, but a variety of agencies. No. 1, 
don't give good management. So we all have had uneven 
management in our agencies. Shrink the budget. Reduce the 
workforce. Contract it out with no supervision. And then when 
the agency starts to sink, say government is a dud and it can't 
do the job.
    I think you have been given an enormous responsibility. And 
even if this law doesn't pass--which I hope it does--if we give 
you more responsibility, we have to give you more resources. 
But at the same time, you need the resources that you need now, 
and I hope I have on this committee for those who will say 
enforce the laws on the books, that I will have the support to 
do that.
    Mr. Ishimaru. Well, I hope so, too, Senator.
    Senator Mikulski. I do have it from Senator Shelby, and I 
want to be very clear. He has been a very able and an 
enormously helpful ally with me on this issue.
    Mr. Ishimaru. One thing that we have done as a management 
matter over this last year, besides hiring the new people to 
come in, we have actually spent the resources to train people. 
You have to train new people coming in. You have to train the 
people you have onboard to deal with the new laws as well as to 
deal with the current developments in the law. That had not 
happened for many years, and I think it will pay big benefits 
in the upcoming years.
    But I think having a permanent chair at the EEOC, and the 
person who has been nominated is superb, and we look forward to 
having her help lead us to a better level at the EEOC.
    Senator Mikulski. Well, and we look forward to having a 
real appropriations process.
    Thank you.
    Senator Dodd [presiding]. Thank you very much, Senator 
Mikulski.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman.
    Thank you, Mr. Chairman, for your testimony today. In their 
written testimony, today's witnesses really get into the 
details of the various provisions in Federal law and State law 
to help right the injustice of unequal pay. And these are 
provisions in the Equal Pay Act, provisions under title VII, 
and new ones that might be added with the Paycheck Fairness Act 
and the Fair Pay Act.
    We are looking for ways to ensure that victims of 
discrimination have adequate recourse and adequate remedies 
available to them if they can prove discrimination. But this 
entire discussion assumes one thing, that the aggrieved worker 
hasn't signed away all her rights by way of mandatory 
arbitration, a mandatory arbitration provision in her 
employment contract.
    The EEOC is sometimes still able to take action, but the 
individual women, victims of sex discrimination can have all 
their legal remedies made entirely irrelevant if their employer 
forces them into arbitration.
    I understand the EEOC has taken a policy position on this 
issue, which I would like consent to have submitted into the 
record. Is that OK, Mr. Chairman? It is right here.
    [The information referred to follows.]
                              EEOC Notice
    1. SUBJECT: Policy Statement on Mandatory Binding Arbitration of 
Employment Discrimination Disputes as a Condition of Employment.
    2. PURPOSE: This policy statement sets out the Commission's policy 
on the mandatory binding arbitration of employment discrimination 
disputes imposed as a condition of employment.
    3. EFFECTIVE DATE: Upon issuance.
    4. EXPIRATION DATE: As an exception to EEOC Order 205.001, Appendix 
B, Attachment 4,  a(5), this Notice will remain in effect until 
rescinded or superseded.
    5. ORIGINATOR: Coordination and Guidance Programs, Office of Legal 
Counsel.
    6. INSTRUCTIONS: File in Volume II of the EEOC Compliance Manual.
    7. SUBJECT MATTER: The U.S. Equal Employment Opportunity Commission 
(EEOC or Commission), the Federal agency charged with the 
interpretation and enforcement of this Nation's employment 
discrimination laws, has taken the position that agreements that 
mandate binding arbitration of discrimination claims as a condition of 
employment are contrary to the fundamental principles evinced in these 
laws. EEOC Motions on Alternative Dispute Resolution, Motion 4 (adopted 
Apr. 25, 1995), 80 Daily Lab. Rep. (BNA) E-1 (Apr. 26, 1995).\1\ This 
policy statement sets out in further detail the basis for the 
Commission's position.
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    \1\ Although binding arbitration does not, in and of itself, 
undermine the purposes of the laws enforced by the EEOC, the Commission 
believes that this is the result when it is imposed as a term or 
condition of employment.
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                             i. background
    An increasing number of employers are requiring as a condition of 
employment that applicants and employees give up their right to pursue 
employment discrimination claims in court and agree to resolve disputes 
through binding arbitration. These agreements may be presented in the 
form of an employment contract or be included in an employee handbook 
or elsewhere. Some employers have even included such agreements in 
employment applications. The use of these agreements is not limited to 
particular industries, but can be found in various sectors of the 
workforce, including, for example, the securities industry, retail, 
restaurant and hotel chains, health care, broadcasting, and security 
services. Some individuals subject to mandatory arbitration agreements 
have challenged the enforceability of these agreements by bringing 
employment discrimination actions in the courts. The Commission is not 
unmindful of the case law enforcing specific mandatory arbitration 
agreements, in particular, the Supreme Court's decision in Gilmer v. 
Interstate/Johnson Lane Corp., 500 U.S. 33 (1991).\2\ Nonetheless, for 
the reasons stated herein, the Commission believes that such agreements 
are inconsistent with the civil rights laws.
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    \2\ The Gilmer decision is not dispositive of whether employment 
agreements that mandate binding arbitration of discrimination claims 
are enforceable. As explicitly noted by the Court, the arbitration 
agreement at issue in Gilmer was not contained in an employment 
contract. 500 U.S. at 25 n.2. Even if Gilmer had involved an agreement 
with an employer, the issue would remain open given the active role of 
the legislative branch in shaping the development of employment 
discrimination law. See discussion infra at section IV. B.
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 ii. the federal civil rights laws are squarely based in this nation's 
  history and constitutional framework and are of a singular national 
                               importance
    Federal civil rights laws, including the laws prohibiting 
discrimination in employment, play a unique role in American 
jurisprudence. They flow directly from core Constitutional principles, 
and this Nation's history testifies to their necessity and profound 
importance. Any analysis of the mandatory arbitration of rights 
guaranteed by the employment discrimination laws must, at the outset, 
be squarely based in an understanding of the history and purpose of 
these laws.
    Title VII of the historic Civil Rights Act of 1964, 42 U.S.C.  
2000e et seq., was enacted to ensure equal opportunity in employment, 
and to secure the fundamental right to equal protection guaranteed by 
the 14th amendment to the Constitution.\3\ Congress considered this 
national policy against discrimination to be of the ``highest 
priority'' (Newman v. Piggie Park Enters., 390 U.S. 400, 402 (1968)), 
and of ``paramount importance'' (H.R. Rep. No. 88-914, pt. 2 (1963) 
(separate views of Rep. McCulloch et al.)),\4\ reprinted in 1964 Leg. 
Hist. at 2123.\5\ The Civil Rights Act of 1964, 42 U.S.C.  2000a et 
seq., was intended to conform ``[t]he practice of American democracy . 
. . to the spirit which motivated the Founding Fathers of this Nation--
the ideals of freedom, equality, justice, and opportunity.'' H.R. Rep. 
No. 88-914, pt. 2 (1963) (separate views of Rep. McCulloch et al.), 
reprinted in 1964 Leg. Hist. at 2123. President John F. Kennedy, in 
addressing the Nation regarding his intention to introduce a 
comprehensive civil rights bill, stated the issue as follows:

    \3\ See, e.g., H.R. Rep. No. 88-914, pt. 1 (1963), reprinted in 
U.S. Equal Employment Opportunity Commission, Legislative History of 
Title VII and XI of the Civil Rights Act of 1964 (``1964 Leg. Hist.'') 
at 2016 (the Civil Rights Act of 1964 ``designed primarily to protect 
and provide more effective means to enforce . . . civil rights''); H.R. 
Rep. No. 88-914, pt. 2 (1963) (separate views of Rep. McCulloch, et 
al.), reprinted in 1964 Leg. Hist. at 2122 (``[a] key purpose of the 
bill . . . is to secure to all Americans the equal protection of the 
laws of the United States and of the several States''); Charles & 
Barbara Whalen, The Longest Debate: A legislative history of the 1964 
Civil Rights Act 104 (1985) (opening statement of Rep. Celler on House 
debate of H.R. 7152: ``The legislation before you seeks only to honor 
the constitutional guarantees of equality under the law for all. . . . 
[W]hat it does is to place into balance the scales of justice so that 
the living force of our Constitution shall apply to all people . . 
.''); H.R. Rep. No. 92-238 (1971), reprinted in Senate Committee on 
Labor and Public Welfare, Subcommittee on Labor, Legislative History of 
the Equal Employment Opportunity Act of 1972 (``1972 Leg. Hist.'') at 
63 (1972 amendments to title VII are a ``reaffirmation of our national 
policy of equal opportunity in employment'').
    \4\ William McCulloch (R-Ohio) was the ranking Republican of 
Subcommittee No. 5 of the House Judiciary Committee, to which the civil 
rights bill (H.R. 7152) was referred for initial consideration by 
Congress. McCulloch was among the individuals responsible for working 
out a compromise bill that was ultimately substituted by the full 
Judiciary Committee for the bill reported out by Subcommittee No. 5. 
His views, which were Joined by six members of Congress, are thus 
particularly noteworthy.
    \5\ See also Albemarle Paper Co. v. Moody, 422 U.S. 405, 416 (1975) 
(The Civil Rights Act of 1964 is a ``complex' legislative design 
directed at an historic evil of national proportions'').

          We are confronted primarily with a moral issue. It is as old 
        as the Scriptures and it is as clear as the American 
        Constitution.
          The heart of the question is whether all Americans are to be 
        afforded equal rights and equal opportunities, whether we are 
        going to treat our fellow Americans as we want to be treated.

President John F. Kennedy's Radio and Television Report to the American 
People on Civil Rights (June 11, 1963), Pub. Papers 468, 469 (1963).\6\
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    \6\ Commitment to our national policy to eradicate discrimination 
continues today to be of the utmost importance. As President Clinton 
stated in his second inaugural address:

    Our greatest responsibility is to embrace a new spirit of community 
for a new century . . . The challenge of our past remains the challenge 
of our future: Will we be one Nation, one people, with one common 
destiny, or not? Will we all come together, or come apart?
    The divide of race has been America's constant curse. And each new 
wave of immigrants gives new targets to old prejudices . . . These 
forces have nearly destroyed our Nation in the past. They plague us 
still.

    President William J. Clinton's Inaugural Address (Jan. 20, 1997), 
33 Weekly Comp. Pres. Doc. 61 (Jan. 27, 1997).

    Title VII is but one of several Federal employment discrimination 
laws enforced by the Commission which are ``part of a wider statutory 
scheme to protect employees in the workplace nationwide,'' McKennon v. 
Nashville Banner Publ'g Co., 513 U.S. 352, 357 (1995). See the Equal 
Pay Act of 1963 (``EPA''), 29 U.S.C.  206(d);. the Age Discrimination 
in Employment Act of 1967 (``ADEA''), 29 U.S.C.  621 et seq., and the 
Americans with Disabilities Act of 1990 (``ADA''), 42 U.S.C.  12101 
et seq. The ADEA was enacted ``as part of an ongoing congressional 
effort to eradicate discrimination in the workplace'' and ``reflects a 
societal condemnation of invidious bias in employment decisions.'' 
McKennon, 513 U.S. at 357. The ADA explicitly provides that its purpose 
is, in part, to invoke congressional power to enforce the fourteenth 
amendment. 29 U.S.C.  12101(b)(4). Upon signing the ADA, President 
George Bush remarked that ``the American people have once again given 
clear expression to our most basic ideals of freedom and equality.'' 
President George Bush's Statement on Signing the Americans with 
Disabilities Act of 1990 (July 26, 1990), Pub. Papers 1070 (1990 Book 
II).
  iii. the federal government has the primary responsibility for the 
       enforcement of the federal employment discrimination laws
    The Federal employment discrimination laws implement national 
values of the utmost importance through the institution of public and 
uniform standards of equal opportunity in the workplace. See text and 
notes supra in section II. Congress explicitly entrusted the primary 
responsibility for the interpretation, administration, and enforcement 
of these standards, and the public values they embody, to the Federal 
Government. It did so in three principal ways. First, it created the 
Commission, initially giving it authority to investigate and conciliate 
claims of discrimination and to interpret the law, see  706(b) and 
713 of title VII, 42 U.S.C.  2000e-5(b) and 2000e-12, and 
subsequently giving it litigation authority in order to bring cases in 
court that it could not administratively resolve, see  706(f)(1) of 
title VII, 42 U.S.C.  2000e-5(f)(1). Second, Congress granted certain 
enforcement authority to the Department of Justice, principally with 
regard to the litigation of cases involving State and local 
governments. See  706(f)(1) and 707 of title VII, 42 U.S.C.  2000e-
5(f)(1) and 2000e-6. Third, it established a private right of action to 
enable aggrieved individuals to bring their claims directly in the 
Federal courts, after first administratively bringing their claims to 
the Commission. See  706(f)(1) of title VII, 42 U.S.C.  2000e-
5(f)(1).\7\
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    \7\ Section 107 of the ADA specifically incorporates the powers, 
remedies, and procedures set forth in title VII with respect to the 
Commission, the Attorney General, and aggrieved individuals. See 42 
U.S.C.  12117. Similar enforcement provisions are contained in the 
ADEA. See 29 U.S.C.  626 and 628.
---------------------------------------------------------------------------
    While providing the States with an enforcement role, see 42 U.S.C. 
 2000e-5(c) and (d), as well as recognizing the importance of 
voluntary compliance by employers, see 42 U.S.C.  2000e-5(b), Congress 
emphasized that it is the Federal Government that has ultimate 
enforcement responsibility. As Senator Humphrey stated, ``[t]he basic 
rights protected by [title VII] are rights which accrue to citizens of 
the United States; the Federal Government has the clear obligation to 
see that these rights are fully protected.'' 110 Cong. Rec. 12725 
(1964). Cf. General Tel. Co. v. EEOC, 446 U.S. 318, 326 (1980) (in 
bringing enforcement actions under title VII, the EEOC ``Is guided by 
`the overriding public interest in equal employment opportunity . . . 
asserted through direct Federal enforcement' '') (quoting 118 Cong. 
Rec. 4941 (1972)).
    The importance of the Federal Government's role in the enforcement 
of the civil rights laws was reaffirmed by Congress in the ADA, which 
explicitly provides that its purposes include ``ensur[ing] that the 
Federal Government plays a central role in enforcing the standards 
established in [the ADA] on behalf of individuals with disabilities.'' 
42 U.S.C.  12101(b)(3).
  iv. within this framework, the federal courts are charged with the 
     ultimate responsibility for enforcing the discrimination laws
    While the Commission is the primary Federal agency responsible for 
enforcing the employment discrimination laws, the courts have been 
vested with the final responsibility for statutory enforcement through 
the construction and interpretation of the statutes, the adjudication 
of claims, and the issuance of relief.\8\ See, e.g., Kremer v. Chemical 
Constr. Grp., 454 U.S. 461, 479 n.20 (1982) (``Federal courts were 
entrusted with ultimate enforcement responsibility'' of title VII); New 
York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 64 (1980) (``Of course 
the `ultimate authority' to secure compliance with title VII resides in 
the Federal courts'').\9\
---------------------------------------------------------------------------
    \8\ In addition, unlike arbitrators, courts have coercive 
authority, such as the contempt power, which they can use to secure 
compliance.
    \9\ See also H.R. Rep. No. 88-914, pt.2 (1963) (separate views of 
Rep. McCulloch et al.), reprinted in 1964 Leg. Hist. at 2150 
(explaining that EEOC was not given cease-and-desist powers in the 
final House version of the Civil Rights Act of 1964, H.R. 7152, because 
it was ``preferred that the ultimate determination of discrimination 
rest with the Federal judiciary'').
---------------------------------------------------------------------------
A. The Courts Are Responsible for the Development and Interpretation of 
        the Law
    As the Supreme Court emphasized in Alexander v. Gardner-Denver Co., 
415 U.S. 36, 57 (1974), ``the resolution of statutory or constitutional 
issues is a primary responsibility of courts, and judicial construction 
has proved especially necessary with respect to title VII, whose broad 
language frequently can be given meaning only by reference to public 
law concepts.'' This principle applies equally to the other employment 
discrimination statutes.
    While the statutes set out the basic parameters of the law, many of 
the fundamental legal principles in discrimination jurisprudence have 
been developed through judicial interpretations and case law precedent. 
Absent the role of the courts, there might be no discrimination claims 
today based on, for example, the adverse impact of neutral practices 
not justified by business necessity, see Griggs v. Duke Power Co., 401 
U.S. 424 (1974), or sexual harassment, see Harris v. Forklift Sys., 
Inc., 510 U.S. 17 (1993); Meritor Savings Bank, FSB v. Vinson, 477 U.S. 
57 (1986). Yet these two doctrines have proved essential to the effort 
to free the workplace from unlawful discrimination, and are broadly 
accepted today as key elements of civil rights law.
B. The Public Nature of the Judicial Process Enables the Public, Higher 
        Courts, and Congress to Ensure That the Discrimination Laws Are 
        Properly Interpreted and Applied
    Through its public nature--manifested through published decisions--
the exercise of judicial authority is subject to public scrutiny and to 
systemwide checks and balances designed to ensure uniform expression of 
and adherence to statutory principles. When courts fail to interpret or 
apply the antidiscrimination laws in accord with the public values 
underlying them, they are subject to correction by higher level courts 
and by Congress.
    These safeguards are not merely theoretical, but have enabled both 
the Supreme Court and Congress to play an active and continuing role in 
the development of employment discrimination law. Just a few of the 
more recent Supreme Court decisions overruling lower court errors 
include: Robinson v. Shell Oil Co., 117 S. Ct. 843 (1997) (former 
employee may bring a claim for retaliation); O'Connor v. Consolidated 
Coin Caterers, Corp., 116 S. Ct. 1307 (1996) (comparator in age 
discrimination case need not be under 40); McKennon, 513 U.S. 352 
(employer may not use after-acquired evidence to justify 
discrimination); and Harris 510 U.S. 17 (no requirement that sexual 
harassment plaintiffs prove psychological injury to state a claim).
    Congressional action to correct Supreme Court departures from 
congressional intent has included, for example, legislative amendments 
in response to Court rulings that: pregnancy discrimination is not 
necessarily discrimination based on sex (General Elec. Co. v. Gilbert, 
429 U.S. 125 (1978), and Nashville Gas Co. v. Satty, 434 U.S. 136 
(1977), overruled by Pregnancy Discrimination Act of 1978); that an 
employer does not have the burden of persuasion on the business 
necessity of an employment practice that has a disparate impact (Wards 
Cove Packing Co. v. Atonio, 490 U.S. 642 (1989), overruled by  104 
and 105 of the Civil Rights Act of 1991); that an employer avoids 
liability by showing that it would have taken the same action absent 
any discriminatory motive (Price Waterhouse v. Hopkins, 490 U.S. 228 
(1989), overruled, in part, by  107 of the Civil Rights Act of 1991); 
that mandatory retirement pursuant to a benefit plan in effect prior to 
enactment of the ADEA is not prohibited age discrimination (United Air 
Lines, Inc. v. McMann, 434 U.S. 192 (1977), overruled by 1978 ADEA 
amendments); and, that age discrimination in fringe benefits is not 
unlawful (Public Employees Retirement Sys. of Ohio v. Betts, 492 U.S. 
158 (1989), overruled by Older Workers Benefits Protection Act of 
1990).
C. The Courts Play a Crucial Role in Preventing and Deterring 
        Discrimination and in Making Discrimination Victims Whole
    The courts also play a critical role in preventing and deterring 
violations of the law, as well as providing remedies for discrimination 
victims. By establishing precedent, the courts give valuable guidance 
to persons and entities covered by the laws regarding their rights and 
responsibilities, enhancing voluntary compliance with the laws. By 
awarding damages, back pay, and injunctive relief as a matter of public 
record, the courts not only compensate victims of discrimination, but 
provide notice to the community, in a very tangible way, of the costs 
of discrimination. Finally, by issuing public decisions and orders, the 
courts also provide notice of the identity of violators of the law and 
their conduct. As has been illustrated time and again, the risks of 
negative publicity and blemished business reputation can be powerful 
influences on behavior.
D. The Private Right of Action With Its Guarantee of Individual Access 
        to the Courts is Essential to the Statutory Enforcement Scheme
    The private right of access to the judicial forum to adjudicate 
claims is an essential part of the statutory enforcement scheme. See, 
e.g., McKennon, 513 U.S. at 358 (granting a right of action to an 
injured employee is ``a vital element'' of title VII, the ADEA, and the 
EPA). The courts cannot fulfill their enforcement role if individuals 
do not have access to the judicial forum. The Supreme Court has 
cautioned that, ``courts should ever be mindful that Congress . . . 
thought it necessary to provide a judicial forum for the ultimate 
resolution of discriminatory employment claims: It is the duty of 
courts to assure the full availability of this forum.'' Gardiner-
Denver, 415 U.S. at 60 n.21.\10\
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    \10\ See also 118 Cong. Rec. S7168 (March 6, 1972) (section-by-
section analysis of H.R. 1746, the Equal Opportunity Act of 1972, as 
agreed to by the conference committees of each House; analysis of  
706(f)(1) provides that, while it is hoped that most cases will be 
handled through the EEOC with recourse to a private lawsuit as the 
exception, ``as the individual's rights to redress are paramount under 
the provisions of title VII, it is necessary that all avenues be left 
open for quick and effective relief'').
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    Under the enforcement scheme for the Federal employment 
discrimination laws, individual litigants act as ``private attorneys 
general.'' In bringing a claim in court, the civil rights plaintiff 
serves not only her or his private interests, but also serves as ``the 
chosen instrument of Congress to vindicate `a policy that Congress 
considered of the highest priority.' '' Christiansburg Garment Co. v. 
EEOC, 434 U.S. 412, 418 (1978) (quoting Newman v. Piggie Park Enters., 
Inc., 390 U.S. 400, 402 (1968)). See also McKennon, 513 U.S. at 358 
(``[t]he private litigant who seeks redress for his or her injuries 
vindicates both the deterrence and compensation objectives of the 
ADEA'').
    v. mandatory arbitration of employment discrimination disputes 
  ``privatizes'' enforcement of the federal employment discrimination 
         laws, thus undermining public enforcement of the laws
    The imposition of mandatory arbitration agreements as a condition 
of employment substitutes a private dispute resolution system for the 
public justice system intended by Congress to govern the enforcement of 
the employment discrimination laws. The private arbitral system differs 
in critical ways from the public judicial forum and, when imposed as a 
condition of employment, it is structurally biased against applicants 
and employees.
A. Mandatory Arbitration has Limitations That Are Inherent and 
        Therefore Cannot Be Cured By the Improvement of Arbitration 
        Systems
    That arbitration is substantially different from litigation in the 
judicial forum is precisely the reason for its use as a form of ADR. 
Even the fairest of arbitral mechanisms will differ strikingly from the 
judicial forum.
1. The Arbitral Process is Private in Nature and Thus Allows for Little 
                         Public Accountability
    The nature of the arbitral process allows--by design--for minimal, 
if any, public accountability of arbitrators or arbitral 
decisionmaking. Unlike her or his counterparts in the Judiciary, the 
arbitrator answers only to the private parties to the dispute, and not 
to the public at large. As the Supreme Court has explained:

          A proper conception of the arbitrator's function is basic. He 
        is not a public tribunal imposed upon the parties by superior 
        authority which the parties are obliged to accept. He has no 
        general charter to administer justice for a community which 
        transcends the parties. He is rather part of a system of self-
        government created by and confined to the parties. . . .

United Steelworkers of Am. v. Warrior and Gulf Navigation Co., 363 U.S. 
574, 581 (1960) (quoting from Shulman, Reason, Contract and Law in 
Labor Relations, 68 Harv. L. Rev. 999, 1016 (1955)).

    The public plays no role in an arbitrator's selection; s/he is 
hired by the private parties to a dispute. Similarly, the arbitrator's 
authority is defined and conferred, not by public law, but by private 
agreement.\11\ While the courts are charged with giving force to the 
public values reflected in the antidiscrimination laws, the arbitrator 
proceeds from a far narrower perspective: resolution of the immediate 
dispute. As noted by one commentator, [a]djudication is more likely to 
do justice than . . . arbitration . . . precisely because it vests the 
power of the State in officials who act as trustees for the public; who 
are highly visible, and who are committed to reason.'' Owen Fiss, Ou of 
Eden, 94 Yale L.J. 1669, 1673 (1985).
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    \11\ Article III of the Constitution provides Federal judges with 
life tenure and salary protection to safeguard the independence of the 
judiciary. No such safeguards apply to the arbitrator. The importance 
of these safeguards was stressed in the debates on the 1972 amendments 
to title VII. Senator Dominick, in offering an amendment giving the 
EEOC the right to file a civil action in lieu of cease-and-desist 
powers, explained that the purpose of the amendment was to ``vest 
adjudicatory power where it belongs--in impartial judges shielded from 
political winds by life tenure.'' 1972 Leg. Hist. at 549. The amendment 
was later revised in minor respects and adopted by the Senate.
---------------------------------------------------------------------------
    Moreover, because decisions are private, there is little, if any, 
public accountability even for employers who have been determined to 
have violated the law. The lack of public disclosure not only weakens 
deterrence (see discussion supra at 8), but also prevents assessment of 
whether practices of individual employers or particular industries are 
in need of reform. The disclosure through litigation of incidents, or 
practices which violate national policies respecting nondiscrimination 
in the workforce is itself important, for the occurrence of violations 
may disclose patterns of noncompliance resulting from a misappreciation 
of (title VII's) operation or entrenched resistance to its commands, 
either of which can be of industry-wide significance.'' McKennon, 513 
U.S. at 358-59.
 2. Arbitration, By Its Nature, Does Not Allow for the Development of 
                                the law
    Arbitral decisions may not be required to be written or reasoned, 
and are not made public without the consent of the parties. Judicial 
review of arbitral decisions is limited to the narrowest of 
grounds.\12\ As a result, arbitration affords no opportunity to build a 
jurisprudence through precedent.\13\ Moreover, there is virtually no 
opportunity for meaningful scrutiny of arbitral decisionmaking. This 
leaves higher courts and Congress unable to act to correct errors in 
statutory interpretation. The risks for the vigorous enforcement of the 
civil rights laws are profound. See discussion supra at section IV. B.
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    \12\ Under the Federal Arbitration Act, arbitral awards may be 
vacated only for procedural impropriety such as corruption, fraud, or 
misconduct. 9 U.S.C.  10. Judicially created standards of review allow 
an arbitral award to be vacated where it clearly violates a public 
policy that is explicit, well-defined, ``dominant'' and ascertainable 
from the law, see United Paperworkers lnt'I Union v. Misco., Inc., 484 
U.S. 29, 43 (1987), or where it is in ``manifest disregard'' of the 
law, see Wilko v. Swan, 346 U.S. 427, 436-37 (1953). The latter 
standard of review has been described by one commentator as ``a 
virtually insurmountable'' hurdle. See Bret F. Randall, The History, 
Application, and Policy of the Judicially Created Standards of Review 
for Arbitration Awards, 1992 BYU L. Rev. 759, 767. But cf. Cole v. 
Burns Intl Sec. Servs., 105 F.3d 1465, 1486-87 (1997) (in the context 
of mandatory employment arbitration of statutory disputes, the court 
interprets judicial review under the ``manifest disregard'' standard to 
be sufficiently broad to ensure that the law has been properly 
interpreted and applied).
    \13\ Congress has recognized the inappropriateness of ADR where ``a 
definitive or authoritative resolution of the matter is required for 
precedential value, and such a proceeding is not likely to be accepted 
generally as an authoritative precedent,'' see Alternative Dispute 
Resolution Act, 5 U.S.C.  572(b)(1) (providing for use of ADR by 
Federal administrative agencies where the parties agree); or where 
``the case involves complex or novel legal issues,'' see Judicial 
Improvements and Access to Justice Act, 28 U.S.C.  652(c)(2) 
(providing for court-annexed arbitration;  652(b)(1) and (2) also 
require the parties' consent to arbitrate constitutional or statutory 
civil rights claims). Similar findings were made by the U.S. Secretary 
of Labor's Task Force on Excellence in State and Local Government 
Through Labor-Management Cooperation (``Brock Commission''), which was 
charged with examining labor-management cooperation in State and local 
government. The Task Force's report, ``Working Together for Public 
Service'' (1996) (``Brock Report''), recommended ``Quality Standards 
and Key Principles for Effective Alternative Dispute Resolution Systems 
for Rights Guaranteed by Public Law and for Other Workplace Disputes'' 
which include that ``ADR should normally not be used in cases that 
represent tests of significant legal principles or class action.'' 
Brock Report at 82.
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3. Additional Aspects of Arbitration Systems Limit Claimants' Rights in 

                           Important Respects
    Arbitration systems, regardless of how fair they may be, limit the 
rights of injured individuals in other important ways. To begin with, 
the civil rights litigant often has available the choice to have her or 
his case heard by a jury of peers, while in the arbitral forum juries 
are, by definition, unavailable. Discovery is significantly limited 
compared with that available in court and permitted under the Federal 
Rules of Civil Procedure. In addition, arbitration systems are not 
suitable for resolving class or pattern or practice claims of 
discrimination. They may, in fact, protect systemic discriminators by 
forcing claims to be adjudicated one at a time, in isolation, without 
reference to a broader--and more accurate--view of an employer's 
conduct.
B. Mandatory Arbitration Systems Include Structural Biases Against 
        Discrimination Plaintiffs
    In addition to the substantial and inevitable differences between 
the arbitral and judicial forums that have already been discussed, when 
arbitration of employment disputes is imposed as a condition of 
employment, bias inheres against the employee.\14\
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    \14\ A survey of employment discrimination arbitration awards in 
the securities industry, which requires as a condition of employment 
that all brokers resolve employment disputes through arbitration, found 
that ``employers stand a greater chance of success in arbitration than 
in court before a Jury'' and are subjected to ``smaller'' damage 
awards. See Stuart H. Bompey & Andrea H. Stempel, Four Years Later: A 
Look at Compulsory Arbitration of Employment Discrimination Claims 
After Gilmer v. Interstate/Johnson Lane Corp., 21 Empl. Rel. L.J. 21, 
43 (autumn 1995.
---------------------------------------------------------------------------
    First, the employer accrues a valuable structural advantage because 
it is a ``repeat player.'' The employer is a party to arbitration in 
all disputes with its employees. In contrast, the employee is a ``one-
shot player''; s/he is a party to arbitration only in her or his own 
dispute with the employer. As a result, the employee is generally less 
able to make an informed selection of arbitrators than the employer, 
who can better keep track of an arbitrator's record. In addition, 
results cannot but be influenced by the fact that the employer, and not 
the employee, is a potential source of future business for the 
arbitrator.\15\ A recent study of nonunion employment law cases \16\ 
found that the more frequent a user of arbitration an employer is, the 
better the employer fares in arbitration.\17\
---------------------------------------------------------------------------
    \15\ See, e.g., Julius G. Getman, Labor Arbitration and Dispute 
Resolution, 88 Yale L.J. 916, 936 (1979) (``an arbitrator could improve 
his chances of future selection by deciding favorably to institutional 
defendants: as a group, they are more likely to have knowledge about 
past decisions and more likely to be regularly involved in the 
selection process''); Reginald Alleyne, Statutory Discrimination 
Claims: Rights ``Waived'' and Lost in the Arbitration Forum, 13 Hofstra 
Lab. L.J. 381, 428 (Spring 1996) (``statutory discrimination grievances 
relegated to . . . arbitration forums are virtually assured employer-
favored outcomes,'' given ``the manner of selecting, controlling, and 
compensating arbitrators, the privacy of the process and how it 
catalytically arouses an arbitrator's desire to be acceptable to one 
side'').
    \16\ Arbitration of labor disputes pursuant to a collective 
bargaining agreement is less likely to favor the employer as a repeat-
player because the union, as collective bargaining representative, is 
also a repeat-player.
    \17\ See Lisa Bingham, ``Employment Arbitration: The effect of 
repeat-player status, employee category and gender on arbitration 
outcomes,'' (unpublished study on file with the author, an assistant 
professor at Indiana U. School of Public & Environmental Affairs).
---------------------------------------------------------------------------
    In addition, unlike voluntary post-dispute--which must be fair 
enough to be attractive to the employee--the employer imposing 
mandatory arbitration is free to manipulate the arbitral mechanism to 
its benefit. The terms of the private agreement defining the 
arbitrator's authority and the arbitral process are characteristically 
set by the more powerful party, the very party that the public law 
seeks to regulate. We are aware of no examples of employees who insist 
on the mandatory arbitration of future statutory employment disputes as 
a condition of accepting a job offer--the very suggestion seems far-
fetched. Rather, these agreements are imposed by employers because they 
believe them to be in their interest, and they are made possible by the 
employer's superior bargaining power. It is thus not surprising that 
many employer-mandated arbitration systems fall far short of basic 
concepts of fairness. Indeed, the Commission has challenged--by 
litigation, amicus curiae participation, or Commissioner charge--
particular mandatory arbitration agreements that include provisions 
flagrantly eviscerating core rights and remedies that are available 
under the civil rights laws.\18\
---------------------------------------------------------------------------
    \18\  Challenged agreements have included provisions that: (1) 
impose filing deadlines far shorter than those provided by statute; (2) 
limit remedies to ``out-of-pocket'' damages; (3) deny any award of 
attorney's fees to the civil rights claimant, should s/he prevail; (4) 
wholly deny or limit punitive and liquidated damages; (5) limit back 
pay to a time period much shorter than that provided by statute; (6) 
wholly deny or limit front pay to a time period far shorter than that 
ordered by courts; (7) deny any and all discovery; and (8) allow for 
payment by each party of one-half of the costs of arbitration and, 
should the employer prevail, require the claimant, in the arbitrator's 
discretion, to pay the employer's share of arbitration costs as well.
---------------------------------------------------------------------------
    The Commission's conclusions in this regard are consistent with 
those of other analyses of mandatory arbitration. The Commission on the 
Future of Worker-
Management Relations (the ``Dunlop Commission'') was appointed by the 
Secretary of Labor and the Secretary of Commerce to, in part, address 
alternative means to resolve workplace disputes. In its Report and 
Recommendations (Dec. 1994) (``Dunlop Report''), the Dunlop Commission 
found that recent employer experimentation with arbitration has 
produced a range of programs that include ``mechanisms that appear to 
be of dubious merit for enforcing the public values embedded in our 
laws.'' Dunlop Report at 27. In addition, a report by the U.S. General 
Accounting Office, surveying private employers' use of ADR mechanisms, 
found that existing employer arbitration systems vary greatly and that 
``most'' do not conform to standards recommended by the Dunlop 
Commission to ensure fairness. See ``Employment Discrimination: Most 
Private-Sector Employers Use Alternative Dispute Resolution'' at 15, 
HEHS-95-150 (July 1995).
    The Dunlop Commission strongly recommended that binding arbitration 
agreements not be enforceable as a condition of employment:

          The public rights embodied in State and Federal employment 
        law--such as freedom from discrimination in the workplace . . 
        .--are an important part of the social and economic protections 
        of the nation. Employees required to accept binding arbitration 
        of such disputes would face what for many would be an 
        inappropriate choice: give up your right to go to court, or 
        give up your Job.

    Dunlop Report at 32. The Brock Commission (see supra n. 13) agreed 
with the Dunlop Commission's opposition to mandatory arbitration of 
employment disputes and recommended that all employee agreements to 
arbitrate be voluntary and post-dispute. Brock Report at 81-82. In 
addition, the National Academy of Arbitrators recently issued a 
statement opposing mandatory arbitration as a condition of employment 
``when it requires waiver of direct access to either a Judicial or 
administrative forum for the pursuit of statutory rights.'' See 
National Academy of Arbitrators' Statement and Guidelines (adopted May 
21, 1997), 103 Daily Lab. Rep. (BNA) E-1 (May 29, 1997).
C. Mandatory Arbitration Agreements Will Adversely Affect the 
        Commission's Ability to Enforce the Civil Rights Laws
    The trend to impose mandatory arbitration agreements as a condition 
of employment also poses a significant threat to the EEOC's statutory 
responsibility to enforce the Federal employment discrimination laws. 
Effective enforcement by the Commission depends in large part on the 
initiative of individuals to report instances of discrimination to the 
Commission. Although employers may not lawfully deprive individuals of 
their statutory right to file employment discrimination charges with 
the EEOC or otherwise interfere with individuals' protected 
participation in investigations or proceedings under these laws,\19\ 
employees who are bound by mandatory arbitration agreements may be 
unaware that they nonetheless may file an EEOC charge. Moreover, 
individuals are likely to be discouraged from coming to the Commission 
when they know they will be unable to litigate their claims in 
court.\20\ These chilling effects on charge filing undermine the 
Commission's enforcement efforts by decreasing channels of information, 
limiting the agency's awareness of potential violations of law, and 
impeding its ability to investigate possible unlawful actions and 
attempt informal resolution.
---------------------------------------------------------------------------
    \19\ See ``Enforcement Guidance on non-waivable employee rights 
under Equal Employment Opportunity Commission (EEOC) statutes,'' Volt. 
III EEOC Compl. Man. (BNA) at N:2329 (Apr. 10, 1997).
    \20\ The Commission remains able to bring suit despite the 
existence of a mandatory arbitration agreement because it acts ``to 
vindicate the public interest in preventing employment 
discrimination,'' General Tel., 446 U.S. at 326. Cf. S. Rep. No. 101-
263 (1990), reprinted in, Legislative History of The Older Workers 
Benefits Protection Act, at 354 (amendment to ADEA  626(f)(4), which 
provides that ``no waiver agreement may affect the Commission's rights 
and responsibilities to enforce [the ADEA),'' was intended ``as a clear 
statement of support for the principle that the elimination of age 
discrimination in the workplace is a matter of public as well as 
private interest''). As a practical matter, however, the Commission's 
ability to litigate is limited by its available resources.
---------------------------------------------------------------------------
   vi. voluntary, post-dispute agreements to arbitrate appropriately 
 balance the legitimate goals of alternate dispute resolution and the 
  need to preserve the enforcement framework of the civil rights laws
    The Commission is on record in strong support of voluntary 
alternative dispute resolution programs that resolve employment 
discrimination disputes in a fair and credible manner, and are entered 
into after a dispute has arisen. We reaffirm that support here. This 
position is based on the recognition that while even the best arbitral 
systems do not afford the benefits of the judicial system, well-
designed ADR programs, including binding arbitration, can offer in 
particular cases other valuable benefits to civil rights claimants, 
such as relative savings in time and expense.\21\ Moreover, we 
recognize that the judicial system is not, itself, without drawbacks. 
Accordingly, an individual may decide in a particular case to forego 
the judicial forum and resolve the case through arbitration. This is 
consistent with civil rights enforcement as long as the individual's 
decision is freely made after a dispute has arisen.\22\
---------------------------------------------------------------------------
    \21\ Despite conventional wisdom to the contrary, the financial 
costs of arbitration can be significant and may represent no savings 
over litigation in a judicial forum. These costs may include the 
arbitrator's fee and expenses; fees charged by the entity providing 
arbitration services, which may include filing fees and daily 
administrative fees; space rental fees; and court reporter fees.
    \22\ The Dunlop Commission similarly supported voluntary forms of 
ADR, but based its opposition to mandatory arbitration on the premise 
that the avenue of redress for statutory employment rights should be 
chosen by the individual rather than dictated by the employer. Dunlop 
Report at 33.
---------------------------------------------------------------------------
                            vii. conclusion
    The use of unilaterally imposed agreements mandating binding 
arbitration of employment discrimination disputes as a condition of 
employment harms both the individual civil rights claimant and the 
public interest in eradicating discrimination. Those whom the law seeks 
to regulate should not be permitted to exempt themselves from Federal 
enforcement of civil rights laws. Nor should they be permitted to 
deprive civil rights claimants of the choice to vindicate their 
statutory rights in the courts--an avenue of redress determined by 
Congress to be essential to enforcement.
         processing instructions for the field and headquarters
    1. Charges should be taken and processed in conformity with 
priority charge processing procedures regardless of whether the 
charging party has agreed to arbitrate employment disputes. Field 
offices are instructed to closely scrutinize each charge involving an 
arbitration agreement to determine whether the agreement was secured 
under coercive circumstances (e.g., as a condition of employment). The 
Commission will process a charge and bring suit, in appropriate cases, 
notwithstanding the charging party's agreement to arbitrate.
    2. Pursuant to the statement of priorities in the National 
Enforcement Plan, see  B(1)(h), the Commission will continue to 
challenge the legality of specific agreements. That mandate binding 
arbitration of employment discrimination disputes as a condition of 
employment. See, e.g., Briefs of the EEOC as Amicus Curiae in Seus v. 
John Nuveen & Co., No. 96-CV-5971 (E.D. Pa.) (Br. filed Jan. 11, 1997); 
Gibson v. Neighborhood Health Clinics, Inc., No. 96-2652 (7th Cir.) 
(Br. filed Sept. 23, 1996); Johnson v. Hubbard Broadcasting, Inc., No. 
4-96-107 (D. Minn.) (Br. Filed May 17, 1996); Great Western Mortgage 
Corp. v. Peacock, No. 96-5273 (3d Cir.) (Br. filed July 24, 1996).
                                       Gilbert F. Casellas,
                                                          Chairman.

    Senator Franken. And I can read from it. It says,

          ``The EEOC has taken the position that agreements 
        that mandate binding arbitration of discrimination 
        claims as a condition of employment are contrary to the 
        fundamental principles evinced in these laws.''

    Could you tell us about the EEOC's position and its 
relationship to the legislation that we are discussing today?
    Mr. Ishimaru. Well, the EEOC has a longstanding policy 
against mandatory arbitration, as you pointed out, going back 
to 1997. There was talk when I first joined the commission 
about repealing that, and I opposed any sort of repeal of our 
existing policy. I think it is the right thing to do to oppose 
mandatory arbitration.
    Senator Franken. In these kinds of matters? I mean, let us 
make sure certain----
    Mr. Ishimaru. In employment discrimination matters, in 
matters under our jurisdiction.
    Senator Franken. Sure. Yes.
    Mr. Ishimaru. I have opposed that. There was no attempt to 
actually bring that up for a vote. So the policy, the 
continuing policy of the EEOC is that we oppose mandatory 
arbitration, and we stand by the--
    Senator Franken. And this has survived over several 
administrations with bipartisan composition?
    Mr. Ishimaru. Yes.
    Senator Franken. You retain that policy, right?
    Mr. Ishimaru. There was no effort to repeal the 
longstanding policy. Like many of our policies, it will stay on 
the books until repealed.
    Senator Franken. OK. And can you just explain what the 
reasoning behind it is?
    Mr. Ishimaru. Well, I think the reasoning behind it is that 
we, as an entity, believe that persons aggrieved under the 
civil rights laws should have the right to come to the Federal 
agency involved, to make the complaint, to pursue resolution of 
that through either the administrative process or through the 
courts. And they should not be precluded, just as the agency 
itself is not precluded, from enforcing the law when it 
happens.
    As you pointed out----
    Senator Franken. Not just before the agency, but they 
should be able to go before the courts.
    Mr. Ishimaru. Courts. Courts as well.
    Senator Franken. Yes.
    Mr. Ishimaru. And that is why we oppose this. We believe 
civil rights laws stand up on their own and that Congress has 
recognized the need for people to be able to vindicate their 
rights in whatever forum that they choose.
    But you know, as you point out, mandatory arbitration has 
taken on a life of its own in recent years. But it has affected 
the EEOC far less, and we are not bound by the various rulings 
on mandatory arbitration. The courts have been fairly clear on 
that.
    Senator Franken. Thank you.
    And thank you, Mr. Chairman.
    Senator Dodd. Thank you very much, Senator.
    Senator Mikulski, do you have any additional questions? I 
just asked Senator Enzi. He doesn't either.
    We would like to leave the record open, if we could? I 
think there are several members, including Senator Enzi, and 
maybe others who would like to, who were not able to be with us 
this morning, to have you respond to some questions in writing, 
if you would do that for us?
    Mr. Ishimaru. Happy to do that.
    Senator Dodd. But you have been very helpful, and again, I 
think picking up on what Senator Mikulski has said and I have 
said, please extend to your staff and others how much we 
appreciate the job they are doing with the resources and 
personnel you have at your disposal. And we are very grateful 
to you, and Americans need to know how hard people work with 
limited resources, limited personnel.
    So we thank you.
    Mr. Ishimaru. Mr. Chairman, thank you very much. Our staff 
does work extremely hard. And as I have learned, as a former 
staffer, it is really those people who make the trains run on 
time, and I will pass on your kind words back to our staff. 
Thanks very much.
    Senator Enzi. And I would agree with your words, too. Thank 
you very much.
    Senator Dodd. Thank you very much.
    Our next panel I will introduce very briefly. Heather 
Boushey--I hope I pronounced that correctly. Did I pronounce 
that correctly, Heather? Heather Boushey is the senior 
economist at the Center for American Progress, research focus 
on unemployment, social policy, family economic well-being. 
Received her doctorate in economics from the New School for 
Social Research, her Bachelor of Arts degree from Hampshire 
College. Previously served as an economist for the Joint 
Economic Committee, the Center for Economic and Policy 
Research, and the Economic Policy Institute.
    Deborah Brake is a professor of law at the University of 
Pittsburgh. She is a nationally recognized expert on gender 
discrimination. Before joining the faculty at Pittsburgh, 
Professor Brake was senior counsel at the National Women's Law 
Center in Washington. She is a graduate of Stanford University 
and Harvard Law School, and we thank you, Ms. Brake.
    Deborah Frett is the chief executive officer of the 
Business and Professional Women's Foundation, an accomplished 
executive with over 30 years of experience providing strategic 
direction and executive management to associations for profit 
and start-up organizations. Prior to joining BPW, Ms. Frett 
served as executive director of Senior Navigator, an award-
winning, innovative public service program designed to link 
seniors, their families, and caregivers with community-level 
health and aging information.
    Jan McFetridge? Did I pronounce that correctly?
    Ms. McFetridge. Jane.
    Senator Dodd. Excuse me. Jane McFetridge. Jane is the 
managing partner of Jackson Lewis's Chicago office. She has 
broad experience dealing with the Equal Employment Opportunity 
Commission and the U.S. Department of Labor, as well as State 
and local labor and employment agencies throughout the United 
States.
    Ms. McFetridge graduated from the University of Illinois, 
received her law degree from Northwestern University, and we 
welcome you here as well this morning. So thank you for joining 
all of us, and we will begin in the order in which I have 
introduced you.
    Try and take around 5 minutes and all of your statements 
and supporting data and information that you think would be 
constructive for this hearing will be made part of the record. 
Any additional data you want to provide to us later on, I will 
make that unanimous consent as well.
    And so, we welcome you again, and we will begin with you, 
Ms. Boushey.

  STATEMENT OF HEATHER BOUSHEY, SENIOR ECONOMIST, CENTER FOR 
               AMERICAN PROGRESS, WASHINGTON, DC

    Ms. Boushey. Thank you. Thank you, Chairman Dodd, Ranking 
Member Enzi, and Senator Mikulski, for providing me with the 
opportunity to speak to you today.
    I welcome this opportunity to argue in favor of equal pay 
for women in the workforce as a proven means to strengthen 
American families and to grow our middle class.
    Women are now half of the workers on U.S. payrolls. 
Increases in women's workforce participation and their 
increasingly important contributions to their families' income 
have been dramatic across racial and class lines, but they are 
particularly striking among low-income women who are now 
primary breadwinners in two-thirds of their families.
    The gender pay gap is not just a women's issue. It is a 
family issue that affects the millions of young, old, and 
middle-aged Americans who rely on a woman breadwinner or co-
breadwinner for their family.
    The Great Recession has made the issue of pay equity even 
more urgent, as women are increasingly their families' 
breadwinner. Since the Great Recession began, men have 
accounted for 7 out of every 10 jobs lost, and now only two-
thirds of adult men hold a job.
    This gender disparity in unemployment means that in the 
first half of 2009, for example, there were 2 million working 
wives supporting an unemployed husband. If these families are 
typical, they are living on the wife's lower earnings. Making 
sure that every woman earns a fair day's pay is increasingly 
important to family economic well-being.
    To close the gender pay gap, we must address the 
segregation of men and women into different kinds of jobs and 
the inflexibility of the workplace to women's greater 
responsibilities for family care. For every dollar a man earns, 
women earn only 77 cents.
    And for specific groups of women, as been discussed earlier 
this morning--women of color, disabled workers--the gap with 
respect to the wages of white men is larger than for white 
women. And this inequity accumulates over a woman's lifetime. 
Women lose an average of $434,000 in income over a lifetime due 
to the gender pay gap.
    It is also a myth that women choose low-paying jobs because 
they provide more flexibility. In fact, the empirical evidence 
shows that women, and particularly single mothers, are the 
least likely to have on-the-job workplace flexibility.
    Economists find that about half of the total pay gap can be 
explained by differences in the industries and occupations that 
men and women work in. Many of the jobs historically held by 
women are underpaid relative to men's jobs that require similar 
levels of skill. Women's jobs have been undervalued for so 
long, we think it is natural. But in fact, this is an ongoing 
legacy of past discrimination.
    Even if women work in the same jobs as men, however, and 
have the same education and experience levels, the same 
propensity to be in a union, the same racial and ethnic makeup 
as the men they are sitting next to at the workplace, all these 
factors, which we can measure, economists simply cannot explain 
about 40 percent of the gender pay gap. That gap begins the 
moment a woman begins to work and graduates from school.
    The American Association of University Women has examined 
this pay gap between college-educated men and women among 
graduates just a year out of school. They found that even once 
you account for all the measurable factors that we think affect 
pay--the individual's job, whether that job has a flexible 
schedule, the kind of education credentials, including GPA and 
the selectivity of the college--they find a 5 percent 
unexplainable pay gap among college graduates. That gap only 
increases over time.
    The two pieces of legislation before your committee today, 
the Paycheck Fairness Act and the Fair Pay Act, are critical to 
addressing the gender pay gap. In particular, the data 
provisions of the Paycheck Fairness Act will not solve the 
gender pay gap, but they will allow employees to access the 
information they need to understand if their pay is at the 
market rate.
    This will go a long way toward closing that gap and helping 
people understand whether or not their pay is actually at the 
market rate. Combined with the provision to give employees an 
opportunity to improve their salary negotiation skills, this is 
an important step forward toward gender pay equality.
    The Paycheck Fairness Act will also increase training, 
research, and education to identify and respond to wage 
discrimination claims and improve our data collection of pay 
information. Without access to aggregate data, the EEOC has no 
idea whether there are signs that unfair pay practices are 
occurring across firms.
    Finally, as I noted earlier, the largest chunk of the 
gender pay gap is due to the combined effect of the segregation 
of men and women into different industries and occupations. The 
Fair Pay Act will require employers to provide equal pay for 
jobs that are comparable in skills, efforts, responsibility, 
and working conditions.
    In these tough economic times, with millions of women 
supporting their families, with millions as breadwinners, I 
encourage you to do what you can to ensure that they earn a 
fair day's pay.
    Thank you for your important work on this issue, and I look 
forward to your questions.
    [The prepared statement of Ms. Boushey follows:]
                 Prepared Statement of Heather Boushey
      Strengthening the Middle Class: Ensuing Equal Pay for Women
                                summary
    The two pieces of legislation now before your committee, the 
Paycheck Fairness Act and the Fair Pay Act, are critical to making this 
happen. This is important legislation before you today. I cannot stress 
how important the issue of fair pay is to women and to their families. 
In these tough economic times, with millions of women supporting their 
families, I encourage you to do what you can to ensure that they earn a 
fair day's pay.
    A key way to strengthen the middle class is to ensure equal pay for 
women. Most women are in the labor force, yet women continue to earn 
less than men even if they have similar educational levels and work in 
similar kinds of jobs. The typical full-time, full-year working woman 
earns only 77 percent of what her male counterparts make.
    To close the gender pay gap, we must address the root causes of 
women's lower wages, which includes the segregation of men and women 
into different kinds of jobs and the inflexibility of the workplace to 
women's greater responsibilities for family care.
    The gender pay gap is not just a woman's issue, it is a family 
issue. Women are now half of all workers on U.S. payrolls and two-
thirds of mothers bring home at least a quarter of their family's 
earnings.
    Making sure that every woman earns a fair day's pay is increasingly 
important for family economic well-being. In the first 5 months of 
2009, there were 2.0 million working wives with an unemployed husband. 
Families are indeed experiencing an economic hardship directly because 
of the gender pay gap: if these families are typical, then they are 
living on the wife's lower earnings and likely to be without health 
insurance because the family secured that employer-provided benefit 
from his job.
    The data provisions of the Paycheck Fairness Act are of utmost 
importance in enforcing the law already on the books. The act prohibits 
employer from retaliating against employees who share salary 
information. This provision will not solve the gender pay gap, but it 
will allow employees to access the information they need to understand 
if their pay is at the market rate. Combined with the provision to give 
employees an opportunity to improve their salary negotiation skills, 
this could be a powerful step towards greater pay equity, especially 
among men and women in similar jobs within a single firm.
    The Paycheck Fairness Act will also increase training, research, 
and education to help the Equal Employment Opportunity Commission 
identify and respond to wage discrimination claims and improve our data 
collection of pay information. Discrimination is something that's hard 
to prove at the individual level, but often easy to see in the 
aggregate data. Without access to that aggregate data, the EEOC has no 
idea whether there are signs that unfair pay practices are occurring.
    The Fair Pay Act will require employers to provide equal pay for 
jobs that are comparable in skill, efforts, responsibility, and working 
conditions. The largest chunk of the gender pay gap is due to the 
combined effect of the segregation of men and women into different 
industries and occupations. The act delineates a process to evaluate 
jobs within a firm and ascertain the actual skills required then 
ensures that jobs with similar skills are paid the same, even if one is 
predominately held by women and one predominately held by men.
                                 ______
                                 
    Thank you Chairman Harkin and members of the committee for 
providing me with the opportunity to speak to you today.
    My name is Heather Boushey and I am a senior economist at the 
Center for American Progress Action Fund, a non-partisan think tank in 
Washington, DC. My area of expertise is the U.S. labor market, with an 
emphasis on the interconnections between labor and social policy. I 
welcome this opportunity to argue in favor of equal pay for women in 
the workforce as a proven means to strengthen American families and 
grow our middle class. The two pieces of legislation now before your 
committee, the Paycheck Fairness Act and the Fair Pay Act, are critical 
to making this happen.
    To close the gender pay gap, we must address the root causes of 
women's lower wages, which includes the segregation of men and women 
into different kinds of jobs and the inflexibility of the workplace to 
women's greater responsibilities for family care. There could not be a 
more important time to address the issue of gender pay equity. Women 
are now half of all workers on U.S. payrolls and two-thirds of mothers 
are bringing home at least a quarter of their family's earnings. This 
means the gender pay gap is not just a woman's issue, it is a family 
issue that affects the millions of young, old and middle-aged Americans 
who rely on a woman breadwinner or co-breadwinner in their family.
    With the Great Recession leading to many more lay offs among men 
than women, millions of women today are supporting their families 
through these tough economic times. Making sure that every woman earns 
a fair day's pay is increasingly important for family economic well-
being. The Paycheck Fairness Act and the Fair Pay Act address these 
specific issues.
    As an economist, I'll highlight some of the gender pay issues that 
I think are most important with respect to these two pieces of 
legislation and then tell you why there could not be a better time to 
move forward on them.
    women's earnings matter to family well-being now more than ever
    First, I want to lay out the issue of the gender pay gap. When we 
look back over the 20th century to understand what's happened to 
American workers and their families, the movement of women out of the 
home and into paid employment stands out as one of the most important 
social and economic transformations in our Nation's history. Although 
it changed the way we work and live today, our institutions in the 21st 
century have yet to fully adapt.
    A key way to strengthen the middle class is to ensure equal pay for 
women. Most women are in the labor force, yet women continue to earn 
less than men even if they have similar educational levels and work in 
similar kinds of jobs. The typical full-time, full-year working woman 
earns only 77 percent of what her male counterparts make.
    In 2008, 4-in-10 mothers were their family's breadwinner--either as 
a single, working mother or one who brought home as much or more than 
their spouse. This is up from 27.7 percent in 1967.\1\ Women have been 
steadily increasing their labor force participation for decades, rising 
from 43.3 percent in 1970 to 55.8 percent this February (among women 
over age 20). Today, over 70 percent of all mothers work outside the 
home.\2\ This increase in women's workforce participation and 
contribution to the family income has been dramatic across all racial 
and class lines, but is particularly striking among low-income women 
who are now primary breadwinners in two-thirds of their families.
---------------------------------------------------------------------------
    \1\ Heather Boushey, ``The New Breadwinners,'' in The Shriver 
Report: A Woman's Nation Changes Everything, ed. Heather Boushey and 
Ann O'Leary (Washington, DC: Center for American Progress, 2009).
    \2\ Bureau of Labor Statistics, ``Women in the Labor Force: A 
Databook,'' (Washington, DC: U.S. Department of Labor, 2008).
---------------------------------------------------------------------------
    The Great Recession, however, has made pay equity even more urgent 
because women recently became half of all U.S. payroll workers. This 
feat, recorded for the first time in October 2009, sadly was not 
because more women were finding more and better paying jobs. Instead, 
since December 2007 when the Great recession began, men have accounted 
for 7 out of every 10 jobs lost. The reason for this is because half of 
all job losses have been in construction or manufacturing--industries 
that disproportionately employ men.
    These job losses are testament to the current economic malaise. The 
share of adult men with a job has never been lower since the U.S. 
government began recording employment data in 1948. In February 2010, 
it was only 66.6 percent, meaning that only two-thirds of adult men 
have a job. This is a remarkably low figure. Prior to this recession, 
the share of men with a job had never fallen below 70.5 percent.
    This gender disparity in unemployment has real implications for 
family economic well-being. In the first 5 months of 2009, there were 
2.0 million working wives with an unemployed husband.\3\ If these 
families are typical, then they are living on the wife's lower earnings 
and likely to be without health insurance because the family secured 
that employer-provided benefit from his job. The upshot: In the typical 
married-couple family where both spouses work, the wife brings home 
less than half--42.2 percent--of the family's earnings, which means 
families are indeed experiencing an economic hardship directly because 
of the gender pay gap and are dangerously exposed to the financial 
pitfalls of a medical emergency.
---------------------------------------------------------------------------
    \3\ Heather Boushey, ``Women Breadwinners, Men Unemployed,'' 
(Washington, DC: Center for American Progress, 2009).
---------------------------------------------------------------------------
    Nor are women working outside the home a short-term blip in 
response to the recession. It is a long-term trend that shows no signs 
of reversing. The reality is that women support families in greater 
numbers than ever before. We need to do more to ensure pay equity for 
them and for the economic security of their families. The gender pay 
gap is not just a women's issue. This is a pressing family issue for 
working Americans striving to enter or remain in the middle class.
    For many families, having a working wife makes all the difference. 
When we look across income distribution in our country, families in the 
higher income brackets are more likely to have a working wife and she 
puts in more hours than less-well off families. In recent decades, the 
families that were upwardly mobile were those who had a working wife. 
Recent research by economists at the Boston Federal Reserve shows that 
over the 1980s and 1990s, the families that moved up the income ladder 
were those who had a working wife. The shift in women's workforce 
participation is not simply about women wanting to work but also about 
their families' needing them to work.
                       pay equity: where are we?
    Women have not achieved equality in the workplace but they have 
made progress. The gender gap has narrowed over time and women now 
occupy a far wider range of jobs. Further, women are more likely to be 
in positions of power compared to only a few decades ago.
    Yet, even with these accomplishments, the gender pay gap among 
full-time, full-year workers is now at 23 cents, meaning that for every 
dollar a man earns, women earn only 77 cents.\4\ And, for specific 
groups of women--such as women of color or disabled workers--the gap 
with respect to the wages of white men is larger than for white women.
---------------------------------------------------------------------------
    \4\ Census.
---------------------------------------------------------------------------
    There are various ways to measure the gender pay gap, but the 
overall trends are similar. Figure 1 below shows two different 
measures: the gender annual earnings ratio among full-time, full-year 
workers and the gender wage ratio among full-time workers. Over time, 
both measures show the same trend--the gender gap has narrowed but the 
pace of convergence has slowed to a crawl in recent years.\5\
---------------------------------------------------------------------------
    \5\ Francine Blau and Lawrence Kahn, ``Swimming Upstream: Trends in 
the Gender Wage Differential in the 1980s,'' Journal of Labor Economics 
15, no. 1 (1997).
---------------------------------------------------------------------------
    The most significant compression in the gender pay gap appeared 
during the 1980s, but this was because men's wages fell, rather than 
because women's wages rose. This is not an unlikely outcome again in 
future years. Given the current economic conditions, with men losing 
the majority of jobs during the Great Recession, there is potential for 
men's wages to fall relative to women but this is not an acceptable way 
to close the gender pay gap.



    This inequity in pay accumulates over a woman's lifetime. The 
Institute for Women's Policy Research examined worker's employment and 
earnings data and found that over a 15-year period prime-age women 
workers earn 38 percent of what men earn.\6\ My colleague Jessica Arons 
calls the cumulative impact of the gender pay gap over a 40-year period 
the ``career wage gap,'' finding that women lose $434,000 in income, on 
average, due to the career wage gap.
---------------------------------------------------------------------------
    \6\ Heidi Hartmann and Stephen Rose, ``Still a Man's Labor Market: 
The Long-Term Earnings Gap,'' (Washington, DC: Institute for Women's 
Policy Research, 2004).
---------------------------------------------------------------------------
    Women at all education levels lose significant amounts of income 
due to the career wage gap, but women with the most education lose the 
most in earnings. Women with a college degree or higher lose $713,000 
over a 40-year period versus a $270,000 loss for women who did not 
finish high school.\7\ The pay gap accumulates for a variety of 
reasons, but chief among them is that pay raises are typically given as 
a percent of current salary, leaving women further behind each year. 
Because almost all employers ask any job applicant for a salary history 
when determining their starting salary, women's salary gains are 
crimped from the start.
---------------------------------------------------------------------------
    \7\ Jessica Arons, ``Lifetime Losses: The Career Wage Gap,'' 
(Washington, DC: Center for American Progress, 2008).
---------------------------------------------------------------------------
    Research also shows that the gap in pay between men and women is 
only partially attributable to the decisions that men and women make in 
terms of college major, choice of occupation, and work experience. The 
first two of these--college major and choice of occupation--can be 
considered an honest choice. Women now have access to higher education 
and more kinds of jobs than their mothers did. Yet there are many 
aspects of women's employment patterns and pay that cannot reasonably 
be attributed to choices that can reasonably explain the pay gap.
    To better understand the gender pay gap, economists use so-called 
regression-adjusted estimates of pay for men and women, controlling for 
all measurable productivity-related characteristics of workers. This 
method allows us to compare the pay of men and women with similar 
characteristics and determine what factors contribute to the pay gap 
and what the model cannot explain.
    Using regression analysis, labor economists Francine Blau and 
Lawrence Kahn found that educational attainment levels lowered the 
discrepancy in pay between men and women but also that other 
productivity-related factors, such as experience, occupation, and 
industry all widened the gap. Overall, nearly a third of the gender pay 
gap (27.4 percent) can be explained by differences in occupations, one-
fifth (21.9 percent) can be explained by industry, and 10.5 percent can 
be explained by labor force experience.
    This means that if women worked in the same jobs as men and had the 
same educational and experience levels, same propensity to be in a 
union, same racial and ethnic make-up as men--all factors we can 
measure--the gender pay ratio would rise from 80 percent to 91 percent 
of men's pay levels. In other words, most of gender pay inequity can be 
explained by these factors. But, this leaves that final 10 percent gap 
in pay between men and women--nearly half, 41.1 percent of the total 
pay gap--as not explainable by anything we can measure.



    To get at the nub of gender pay inequity, let's first go through 
the things Blau and Kahn's work does seem to explain, then discuss the 
large ``unexplained'' portion of the gender pay gap. As Blau and Kahn 
point out, half (49.3 percent) of the total pay gap can be explained by 
differences in the industries and occupations that men and women work 
in. Men continue to be more likely to hold jobs as managers and 
professionals, transportation or construction workers, or in heavy 
manufacturing.
    In contrast, women are disproportionately represented in nursing, 
teaching, retail sales, and clerical work. While the extent to which 
jobs in the U.S. economy, that are segregated by sex, has fallen since 
the 1950s--more so for workers with a college degree than for other 
workers--there remains a high degree of occupational segregation by 
gender (See chart below).



    But many of these jobs that were historically held by women are 
underpaid, relative to men's jobs that require similar levels of skill. 
Political scientist Ellen Frankel Paul, for example, points out that 
zookeepers--a traditionally male job--earn more than workers caring for 
children--a traditionally female job. It's not that zookeepers have a 
much higher level of skills than child care workers, but that our 
society values these jobs differently and this is a choice we make. In 
her words, ``Are not our children more valuable to society than zoo 
animals?'' \8\ Women's jobs have been systemically undervalued for so 
long, we think it's natural, but in fact this is an ongoing legacy of 
past discrimination.
---------------------------------------------------------------------------
    \8\ Ellen Frankel Paul, Equity and Gender: The Comparable Worth 
Debate (New Brunswick, NJ: Transaction, 1988).
---------------------------------------------------------------------------
    It is also myth that women choose less-paying occupations because 
they provide flexibility to better manage work and family. The 
empirical evidence shows that mothers are actually less likely to be 
employed in jobs that provide greater flexibility. In general, workers 
who hold higher positions and are privileged in general (better 
educated, white, male) have more access to all kinds of workplace 
flexibility. Women are less likely than men to have access to 
flexibility, but parents--especially single mothers--are the least 
likely to have access to workplace flexibility. In fact, parents are 
more likely to have nonstandard shifts and rotating hours, making work/
family balance more difficult to achieve.
Education Narrows the Gap, but Doesn't Close It
    As women have taken their careers more seriously, they have worked 
hard to get more education. That is paying off in terms of narrowing 
the gender pay gap, even if it hasn't fully eliminated it. According to 
Blau and Kahn, women's education choices are narrowing the gap by 6.7 
percent. Women now are more likely than men to graduate from high 
school as well as college. It's worth noting though, that among women 
aged 25 to 45 only a quarter have at least a college degree, while 
nearly two-thirds have a high school degree, but no 4-year college 
degree (and this is similar for men as well).\9\
---------------------------------------------------------------------------
    \9\ Author's analysis of the Center for Economic and Policy 
Research Extracts of the Current Population Survey Outgoing Rotation 
Group Files.
---------------------------------------------------------------------------
    An important research finding that flies in the face of women's 
educational attainment, however, is that the gender pay gap emerges as 
soon as women graduate. The American Association of University Women 
examined the pay gap in pay between college-educated men and women and 
found that even once they accounted for the measurable factors that 
affect pay, such as the individual's job, whether the job boasts a 
flexible schedule, the kind of educational credentials they have 
(including their grade point average and the selectivity of the college 
that they attended),\10\ among graduates just 1 year out of school, a 5 
percent unexplainable pay gap remained.
---------------------------------------------------------------------------
    \10\ It is worth noting their variables: Occupation, Industry, 
Employer sector (e.g., nonprofit), Hours worked per week, Whether 
employee worked multiple jobs, Workplace flexibility, ability to 
telecommute, Months at employer, Educational attainment (bachelor's and 
any graduate, enrollment or completion), Current enrollment status, 
Other license or certification, Work-related training, Undergraduate 
GPA, Undergraduate major, Ever attended less-than-4-year institution, 
Institution sector, Institution selectivity, Gender, Age, Highest 
education of either parent, Race/ethnicity, U.S. citizen, Disabled, 
Region of residence, Marital status, Has children, Volunteered in past 
year.
---------------------------------------------------------------------------
    This means that a woman who goes to the same school, gets the same 
grades, has the same major, takes the same kind of job with similar 
workplace flexibility perks and has the same personal characteristics--
such as marital status, race, and number of children--as her male 
colleague earns 5 percent less the first year out of school. Ten years 
later, even if she keeps pace with the men around her, this research 
found that she'll earn 12 percent less. This is not about the 
``choices'' a woman makes because the model compares men and women who 
have made nearly identical choices.
Work History Matters, but not as Much as Simply Being Female or a 
        Caregiver
    Differences in men's and women's work histories explain a large 
chunk--10.5 percent--of the gender wage gap. But the AAUW study cited 
above shows that the gender pay gap emerges right out of college--at a 
point in their lives when differences in work experience between them 
and their male colleagues do play a large role in determining pay.
    At least some of the wage gap between men and women is attributable 
to women taking on greater parenting responsibilities and working fewer 
hours. Women are more than twice as likely as men to be employed part-
time and since few jobs offer part-time work, the part-time jobs 
available tend to pay less than comparable full-time jobs.\11\ But, the 
reality is that this cannot fully explain the gap in pay.
---------------------------------------------------------------------------
    \11\ Jeffrey B. Wenger, ``The Continuing Problem with Part-Time 
Jobs,'' (Washington, DC: Economic Policy Institute, 2001).
---------------------------------------------------------------------------
    Indeed, differences in work history are treated differently 
depending on whether a woman is a mother or not. In a 2001 paper, 
sociologists Michele Budig and Paula England found that interruptions 
from work, working part-time, and decreased seniority/experience 
explain no more than about one-third of the gap in pay between women 
with and without children, and that ``mother-friendly'' job 
characteristics explained very little of the gap. They conclude that 
two-thirds of the wage gap between mothers and non-mothers must be 
either because employed mothers are less productive at work or because 
of discrimination against mothers.
    A body of new research focuses on the role of the ``maternal wall'' 
in accounting for at least some--if not most--of the unexplained pay 
gap. In groundbreaking work, Cornell University sociologists Shelley 
Correll, Stephen Benard, and In Paik used a laboratory experiment to 
find out whether being a mother simply means being paid less, all else 
equal. They had study participants evaluate application materials for a 
pair of job candidates that were designed specifically to be equally 
qualified, but one person was identified as a parent and the other was 
not.\12\ The two candidates had equal levels of education and work 
experience at similarly ranked schools.
---------------------------------------------------------------------------
    \12\ The differences were that one resume listed the applicant as 
``Parent-Teacher Association coordinator'' and included phrase 
``Mother/father to Tom and Emily. Married to John/Karen,'' while the 
other listed fundraiser for his/her neighborhood association and 
``Married to John/Karen.''
---------------------------------------------------------------------------
    Their findings were simply astonishing. The job candidates 
identified as mothers were perceived to be less competent, less 
promotable, less likely to be recommended for management, less likely 
to be recommended for hire, and had lower recommended starting salaries 
even though their actual credentials were no different from those of 
the non-mothers. The job candidates identified as fathers were not 
penalized in the same way, and often saw a boost. Study participants 
also held mothers to higher standards than non-mothers (both women 
without children and men with or without children) by requiring a 
higher score on a management exam and significantly fewer times of 
being late to work before being considered hirable or promotable.
The Unexplainable Wage Gap
    Women make decisions that have an impact on how much they earn. 
They get an education, which raises their pay (but does not close the 
gap) and many work part-time or take extended time off to care for 
children. What kinds of jobs women seek and what kinds of educational 
credentials they acquire affect future earnings: one study found that 
95 percent of the gender differential in starting salaries can be 
explained by differences in college majors.\13\ Even so, within 
occupations, women are typically paid less than their male 
colleagues.\14\
---------------------------------------------------------------------------
    \13\ Judith A. McDonald and Robert J. Thornton, ``Do New Male and 
Female College Graduates Receive Unequal Pay?'', Journal of Human 
Resources XLII, no. 1 (2007).; L.A. Morgan, ``Major Matters: A 
Comparison of the within-Major Gender Pay Gap across College Majors for 
Early-Career Graduates,'' Industrial Relations 47, no. 4 (2008).
    \14\ McDonald and Thornton, ``Do New Male and Female College 
Graduates Receive Unequal Pay?''. Morgan, ``Major Matters: A Comparison 
of the within-Major Gender Pay Gap across College Majors for Early-
Career Graduates.''
---------------------------------------------------------------------------
    If time away from employment for caregiving is important to 
explaining the gender pay gap, separate from its affect on work 
history, then how do we as a society intend to deal with the new 
reality of working women? As more women work, more families do not have 
a stay-at-home caretaker, which means that both men and women workers 
are now more likely to balance a job with care responsibilities--either 
for a child or for an elderly or ill family member--and more are 
concerned about caregiver discrimination.
    Recent polling confirms that these are challenges for both men and 
women. The 2008 National Survey Changing Workforce reports that the 
majority of fathers (59 percent) in dual-earner families report 
experiencing ``some or a lot'' of work/family conflict, as do 45 
percent of mothers.\15\ Clearly, we need to find a new way of 
addressing how families provide care.
---------------------------------------------------------------------------
    \15\ Ellen Galinsky, Kerstin Aumann, and James T. Bond, ``NSCW 
2008: Times Are Changing: Gender and Generation at Work and Home,'' in 
National Study of the Changing Workforce (New York, NY: Families and 
Work Institute, 2009).
---------------------------------------------------------------------------
                            recommendations
    I have a few comments to make on why I think that the Paycheck 
Fairness Act and the Fair Pay Act make for good economic policy. First, 
as I said at the outset, this is probably the most important time for 
families to ensure equal pay for all workers, men and women, including 
caregivers. Women are increasingly breadwinners and ensuring they are 
paid fairly is good for them and our economy.
The Paycheck Fairness Act
    Markets only work when all the participants have full information. 
If I don't know how much other economists are paid, I cannot know if my 
salary is at the market wage. The Paycheck Fairness Act prohibits 
employer from retaliating against employees who share salary 
information. This provision will not solve the gender pay gap, but it 
will allow employees to access the information they need to understand 
if their pay is at the market rate. Combined with the provision to give 
employees an opportunity to improve their salary negotiation skills, 
this could be a powerful step towards greater pay equity, especially 
among men and women in similar jobs within a single firm.
    The Paycheck Fairness Act will also increase training, research, 
and education to help the Equal Employment Opportunity Commission 
identify and respond to wage discrimination claims and improve our data 
collection of pay information. Discrimination is something that's hard 
to prove at the individual level, but often easy to see in the 
aggregate data. If a firm employs a thousand men and a thousand women, 
but men are systemically promoted or are paid more in similar jobs, 
then this indicates a gender disparity that should be investigated. 
Without access to that kind of data, the EEOC has no idea whether there 
are signs that unfair pay practices are occurring. The data provisions 
of the Paycheck Fairness Act are of utmost importance in enforcing the 
law already on the books.
The Fair Pay Act
    The Fair Pay Act will require employers to provide equal pay for 
jobs that are comparable in skill, efforts, responsibility, and working 
conditions. The largest chunk of the gender pay gap is due to the 
combined effect of the segregation of men and women into different 
industries and occupations.
    One of the challenges of our current economy is that many of the 
new jobs being created are replacing the work women historically did 
inside the home for free and these jobs are clearly undervalued. Child 
care workers, for example, are paid much less than school teachers, 
even though we are learning more every day about the importance of this 
development stage and the key role of the skills of these providers in 
nurturing young minds. The Fair Pay Act delineates a process to 
evaluate jobs within a firm and ascertain the actual skills required 
then ensures that jobs with similar skills are paid the same, even if 
one is predominately held by women and one predominately held by men.
    This is important legislation before you today. I cannot stress how 
important the issue of fair pay is to women and to their families. In 
these tough economic times, with millions of women supporting their 
families, I encourage you to do what you can to ensure that they earn a 
fair day's pay.
    Thank you.
                               References
Arons, Jessica. ``Lifetime Losses: The Career Wage Gap.'' Washington, 
    DC: Center for American Progress, 2008.
Blau, Francine D., and Lawrence M. Kahn. ``The Gender Pay Gap: Have 
    Women Gone as Far as They Can?'' Academy of Management Perspectives 
    (2007).
Blau, Francine, and Lawrence Kahn. ``Swimming Upstream: Trends in the 
    Gender Wage Differential in the 1980s.'' Journal of Labor Economics 
    15, no. 1 (1997): 1-42.
Boushey, Heather. ``The New Breadwinners.'' In The Shriver Report: A 
    Woman's Nation Changes Everything, edited by Heather Boushey and 
    Ann O'Leary. Washington, DC: Center for American Progress, 2009.
__.``Tag-Team Parenting.'' Washington, DC: Center for Economic and 
    Policy Research, 2006.
__``Women Breadwinners, Men Unemployed.'' Washington, DC: Center for 
    American Progress, 2009.
Bradbury, Katherine, and Jane Katz. ``Wive's Work and Family Income 
    Mobility.'' Boston, MA: Federal Reserve Bank of Boston, 2004.
Bureau of Labor Statistics. ``Women in the Labor Force: A Databook.'' 
    Washington, DC: U.S. Department of Labor, 2008.
Dey, Judy Goldber, and Catherine Hill. ``Behind the Pay Gap.'' 
    Washington, DC: AAUW Foundation, 2007.
England, Paula. ``Gender Inequality in Labor Markets: The Role of 
    Motherhood and Segregation.'' Social Politics: International 
    Studies in Gender, State and Society 12, no. 2 (2005): 264-88.
Galinsky, Ellen, Kerstin Aumann, and James T. Bond. ``NSCW 2008: Times 
    Are Changing: Gender and Generation at Work and Home.'' In National 
    Study of the Changing Workforce. New York, NY: Families and Work 
    Institute, 2009.
Golden, Lonnie. ``Flexible Work Schedules: Which Workers Get Them?'' 
    American Behavioral Scientist 44, no. 7 (2001): 1157-78.
Golden, Lonnie, and Barbara Wiens-Tuers. ``Overtime Work and Worker 
    Well-Being at Work and at Home.'' Paper presented at the Allied 
    Social Science Association Meetings, Boston, MA, January 2006.
Hartmann, Heidi, and Stephen Rose. ``Still a Man's Labor Market: The 
    Long-Term Earnings Gap.'' Washington, DC: Institute for Women's 
    Policy Research, 2004.
McCrate, Elaine. ``Flexible Hours, Workplace Authority, and 
    Compensating Wage Differentials in the U.S.'' Feminist Economics 
    11, no. 1 (2005): 11-39.
McDonald, Judith A., and Robert J. Thornton. ``Do New Male and Female 
    College Graduates Receive Unequal Pay?'' Journal of Human Resources 
    XLII, no. 1 (2007): 32-48.
Morgan, L.A. ``Major Matters: A Comparison of the within-Major Gender 
    Pay Gap across College Majors for Early-Career Graduates.'' 
    Industrial Relations 47, no. 4 (2008): 625-50.
Paul, Ellen Frankel. Equity and Gender: The Comparable Worth Debate. 
    New Brunswick, NJ: Transaction, 1988.
Presser, Harriet B. Working in a 24/7 Economy: Challenges for American 
    Families. New York: Russell Sage Foundation, 2003.
Wenger, Jeffrey B. ``The Continuing Problem with Part-Time Jobs.'' 
    Washington, DC: Economic Policy Institute, 2001.

    Senator Dodd. Thank you, Ms. Boushey. Thank you very much.
    Ms. Brake.

STATEMENT OF DEBORAH L. BRAKE, PROFESSOR OF LAW, UNIVERSITY OF 
                   PITTSBURGH, PITTSBURGH, PA

    Ms. Brake. Senator Dodd and members of the committee, I 
appreciate the opportunity to discuss the need for stronger 
discrimination laws to close the longstanding gender wage gap. 
This gap exists at every level of earnings, from teacher's 
assistants to physicians. Even when all other factors are 
accounted for, a substantial portion of the gap remains 
attributable to sex.
    In considering these issues, it is important to keep in 
mind just how high a bar the Equal Pay Act sets for employees 
to prove discrimination. A claimant must prove she is paid less 
for equal work on jobs the performance of which requires equal 
skill, effort, and responsibility, and which are performed 
under similar working conditions.
    Courts have interpreted this standard strictly. To give 
just one example, female vice presidents have failed in court 
under this standard because they are responsible for different 
aspects of the company's operations than higher-paid male vice 
presidents, even when their responsibilities were equally 
challenging and the jobs were classified at the same level.
    Indeed, it appears that a plaintiff can even lose an Equal 
Pay Act case due because she has more responsibility than 
higher-paid male peers. The fact of the matter is, it is 
extremely difficult to prove that jobs are substantially equal 
when we are dealing with nonstandardized, noncommodity jobs, 
the kinds of jobs common in the modern economy.
    In discussing the strictness of proof required to prove 
equal work, I do not mean to endorse this State of the law. In 
my view, many of the cases cited in my written testimony take 
too narrow an approach. But in considering legislation in this 
area, it is important to keep in mind that proving a case under 
the Equal Pay Act is no easy matter.
    Once an employee proves unequal pay for equal work, the 
employer will still prevail if it can prove one of four 
affirmative defenses. In recent years, the fourth defense, a 
factor other than sex, has become the exception that swallows 
the rule.
    An early U.S. Supreme Court decision admonished that market 
forces--the fact that women's labor brings a lower wage in the 
open market--are not a ``factor other than sex.'' But some 
lower courts have allowed virtually any nominally gender-
neutral reason to justify unequal pay for equal work.
    For example, courts have allowed a man's higher prior 
salary to justify paying him more than an equally qualified 
woman to do the same work. Courts have also applied the defense 
where the man negotiated for his higher pay. Yet such factors 
can perpetuate the very discrimination the act was supposed to 
combat. Prior salary can reflect unjustified pay gaps in 
employee salary history, and differences in negotiation are not 
necessarily gender neutral, nor related to job performance.
    For complex reasons, men and women tend to differ in their 
approach to salary negotiations, and employers respond 
differently to them. Recent research has shown significant 
gender differences in negotiating salaries. One study found 
that among Carnegie Mellon University graduates, 57 percent of 
the men, but only 7 percent of the women, negotiated for a 
higher starting salary. And those who negotiated received 
salaries an average of 7.4 percent higher than those who did 
not.
    It turns out that women have good reason for not 
negotiating. In a follow-up to her acclaimed book, ``Women 
Don't Ask,'' Linda Babcock and her fellow researchers found 
that sometimes it does hurt to ask. Their research showed that 
part of the reason why women don't negotiate is that they 
accurately perceive a risk from doing so, a risk that is both 
gender specific to women and all too real.
    Yet courts blithely accept negotiation as a factor other 
than sex, even in cases where women were told their pay was 
nonnegotiable. Some courts and the EEOC have taken a more 
searching approach, scrutinizing the business reasons and job 
relatedness of the factors put forward. The Paycheck Fairness 
Act would take sides in this dispute, drawing on the same 
standard Congress used when it amended title VII in 1991 and 
which courts have applied to other claims since 1971. This 
would ensure that women are not paid less for doing the same 
job unless there is a job-related reason for doing so.
    No Federal law now provides full remedies to victims of 
sex-based employment discrimination. The Equal Pay Act provides 
only back pay and an equal amount in liquidated damages. Title 
VII damages are capped at modest levels, depending on the size 
of the employer. However, race discrimination claims under a 
separate statute, 42 U.S.C., section 1981, allow for the full 
range of remedies, including compensatory and punitive damages 
without caps.
    This statute has been in place since the reconstruction 
era, and we have not seen financial ruin of businesses, nor 
out-of-control jury verdicts. In fact, the U.S. Supreme Court 
has set a high bar for recovering punitive damages, requiring 
egregious misconduct and bad faith. Courts are well-equipped to 
limit excessive damage awards with the uniform rules that apply 
to civil cases generally. What we have under current law is a 
special rule for sex discrimination and a policy judgment that 
sex discrimination is not as bad as other kinds of 
discrimination.
    The Paycheck Fairness Act would fill other holes in the 
equal pay laws as well. It would ameliorate the strict same 
establishment rule to proving equal pay cases. It would provide 
for better access to the information needed to enforce the pay 
laws. It would strengthen protections from retaliation, and it 
would extend the same class action rules that apply to other 
civil lawsuits.
    And finally, to the Fair Pay Act, just three short 
sentences. Neither title VII nor the Equal Pay Act addresses 
the problem of the devaluation of female-dominated jobs that 
are equivalent to male-dominated jobs in skill, effort, 
responsibility, and work conditions. But research examining pay 
scales in cases where such practices have been challenged has 
shown that far from deriving from neutral market-based 
criteria, the under payment of traditionally female jobs 
reflects institutional gender bias.
    In other words, predominantly female jobs were paid below 
their actual worth precisely because they were held by women. 
The Fair Pay Act would bring much-needed scrutiny to these 
practices.
    Thank you.
    [The prepared statement of Ms. Brake follows:]
                 Prepared Statement of Deborah L. Brake
                                summary
    The gender wage gap continues to suppress the wages of American 
women; it is not explained by non-sex based factors; and it is not on a 
trajectory that makes it likely to close any time soon.
    The standard for proving a violation of the Equal Pay Act is a 
burdensome one; to establish a prima facie case under the act, 
employees must show that they are paid less than an employee of the 
opposite sex for performing substantially equal work, a standard courts 
have applied strictly.
    The requirement of proving unequal work in the ``same 
establishment'' poses a further, unjustified hurdle in Equal Pay Act 
claims; the Paycheck Fairness Act takes a more commonsense approach to 
this requirement.
    The ``factor other than sex'' defense to Equal Pay Act claims has 
been given too broad a sweep by some courts, opening the door to pay 
differences based on factors such as prior salary or differences in 
negotiation that are not tied to the employer's business needs or the 
requirements of the job in question, and which can operate to 
perpetuate sex-based differences in pay.
    Federal employment discrimination laws create a hierarchy of 
remedies depending on the type of discrimination involved; racially 
based pay discrimination is remediable by make-whole relief, including 
uncapped damages, while sex-based pay discrimination is not. Both the 
Paycheck Fairness Act and the Fair Pay Act would finally treat sex-
based pay discrimination with the seriousness it deserves, amending the 
Equal Pay Act to provide for compensatory and punitive damages.
    Neither the Equal Pay Act nor title VII addresses that portion of 
the gender-wage gap that is due to occupational segregation and the 
devaluation of predominantly female jobs. The Fair Pay Act would 
address this problem.
                                 ______
                                 
    Chairman Harkin and members of the Senate Committee on Health, 
Education, Labor, and Pensions, I appreciate the opportunity to come 
before you today to discuss the inadequacy of existing employment 
discrimination laws to close the longstanding gender wage gap that 
continues to undermine the ability of women to support their families. 
Today more than ever, American women need and deserve strong legal 
protections from pay discrimination.
    We now have abundant evidence that the gender wage gap persists and 
is not on track to close any time soon.\1\ This gap exists at every 
level of earnings, from teacher's assistants, where the female median 
salary of $15,000 is 75 percent of the male median salary of $20,000, 
to physicians, where the female median salary, $88,000, is 63 percent 
of the male median salary, $140,000.\2\ As economists debate how much 
of the gender wage gap is explained by discrimination, one 
incontrovertible truth emerges: even when non sex-based factors are 
accounted for--factors such as age, education, years of work, hours 
worked, job tenure, occupation and jobs held--a substantial portion of 
the gender wage gap remains and is only explainable by sex.\3\ The 
bills now under consideration, the Paycheck Fairness Act and the Fair 
Pay Act, would help strengthen the ability of our existing employment 
discrimination laws to more effectively address the gender wage gap.
---------------------------------------------------------------------------
    \1\ See Bureau of Labor Statistics, U.S. Dep't of Labor, Highlights 
of Women's Earnings in 2003, at 29 tbl. 12, 31 tbl. 14 (Sept. 2004) 
(women's median weekly earnings were 79.5 percent of men's in 2003, and 
73.6 percent for college graduates); Michael Selmi, Family Leave and 
the Gender Wage Gap, 78 N.C. L. Rev. 707, 715 (2000) (explaining that 
most of the progress in narrowing the wage gap since 1970, when it was 
59 cents on the dollar, was made in the 1980s, and studies show little 
additional progress since 1990).
    \2\ See Daniel H. Weinberg, U.S. Dep't of Commerce, Census 2000 
Special Reports, Evidence from Census 2000 About Earnings by Detailed 
Occupation for Men and Women 7, 12 tbl.5, 13 tbl. 6 (May 2004).
    \3\ See, e.g., U.S. Gen. Acct. Office, Women's Earnings: Work 
Patterns Partially Explain Difference Between Men's and Women's 
Earnings, GAO-04-35 at 2 (Oct. 2003) (examining nationally 
representative longitudinal data set and concluding that women in 2000 
earned only 80 percent of what men earned after accounting for 
education, occupation, hours worked, and time away from the workplace 
because of family care responsibilities); Weinberg, supra, at 21 
(``There is a substantial gap in median earnings between men and women 
that is unexplained, even after controlling for work experience--
education, and occupation.''); Council of Econ. Advisers, Explaining 
Trends in the Gender Wage Gap 11 (1998) (concluding that women do not 
earn equal pay even when controlling for occupation, age, experience, 
and education); Michelle J. Budig, Male Advantage and the Gender 
Composition of Jobs: Who Rides the Glass Escalator, 49 Soc. Prob. 258, 
269-70 (2002) (explaining that men are advantaged, net of control 
factors, in both pay levels and wage growth regardless of the gender 
composition of jobs); Selmi, supra, at 719-43 (concurring, reviewing 
data); Stephen J. Rose & Heidi I. Hartmann, Inst. for Women's Pol'y 
Res., Still a Man's Labor Market: The Long-Term Earnings Gap 9-10 
(2004) (differences in men's and women's labor force attachment do not 
explain the gap); Bureau of Labor Statistics, supra, at 2, 25 tbl. 9, 
26 tbl. 10, 35-36 tbl. 15, 37-36 tbl. 16 (differences in hours worked 
do not explain the gap).
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 background: the equal pay act sets a very high burden on employees to 
                    prove unequal pay for equal work
    Both the Paycheck Fairness Act and the Fair Pay Act would make 
changes to the Equal Pay Act of 1963.\4\ In considering these bills, it 
is important to understand how the Equal Pay Act applies. Employees 
must meet a strict standard to establish a prima facie case of unequal 
pay under the act. The Equal Pay Act applies only to unequal pay for 
``equal work on jobs the performance of which requires equal skill, 
effort, and responsibility, and which are performed under similar 
working conditions.'' This turns out to pose a high hurdle for 
employees invoking the act. In order to establish a violation, an 
employee must first identify a higher-paid comparator of the opposite 
sex who performs substantially the same job, as measured by skill, 
effort, responsibility and working conditions.\5\ This standard has 
been construed strictly, in ways that make it difficult for employees 
to identify comparators doing substantially equal work.\6\
---------------------------------------------------------------------------
    \4\ 29 U.S.C.  206(d)(1).
    \5\ See Corning Glass Works v. Brennan, 417 U.S. 188 (1974); see 
generally Harold S. Lewis, Jr., and Elizabeth J. Norman, Employment 
Discrimination Law and Practice  7.3 (2d ed. 2004).
    \6\ See, e.g., Houck v. Virginia Polytechnic Institute, 10 F.3d 
204, 206 (4th Cir. 1993) (requiring plaintiff to compare her pay to 
that of an actual male comparator, not a hypothetical male or a 
composite of male colleagues, and jobs must be equal on a ``factor by 
factor'' basis); Miranda v. B&B Cash Grocery Story, Inc., 975 F.2d 
1518, 1526 (11th Cir. 1992) (describing the burden on employees to show 
``substantially similar work'' as ``a fairly strict standard'').
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    For example in one representative case, the plaintiff, a senior 
vice-president of finance, failed to establish a prima facie case under 
the Equal Pay Act in comparing her pay to that of the company's other 
senior vice-presidents.\7\ The courts' analysis left little room for 
meeting the ``substantially equal'' requirement for jobs that are 
managerial or executive in nature. The court described the Equal Pay 
Act as having greater applicability to ``lower-level workers'' who 
perform ``commodity-like work'' than to higher level jobs which are 
necessarily more unique.\8\ Likewise, a different court found the jobs 
of an insurance company's male vice-presidents different in substance 
from the company's only female vice-president, who was paid less than 
all of the company's male vice-presidents.\9\ The court ruled that the 
jobs involved different responsibilities, even though they shared ``a 
common core of substantially similar tasks'' in managing divisions, the 
plaintiff managed the largest division, and the company's official 
salary administration program ranked all of the vice-presidents 
equally.\10\ In fact, it seems a plaintiff can even lose an Equal Pay 
Act case due to job differences that give her more responsibility than 
her higher-paid male colleagues.\11\
---------------------------------------------------------------------------
    \7\ Georgen-Saad v. Texas Mutual Ins. Co., 195 F. Supp.2d 853 (W.D. 
Tex. 2002). The comparators were senior vice presidents over other 
aspects of the employer's business.
    \8\ Id. at 857.
    \9\ Stopka v. Alliance of American Insurers, 141 F.3d 681 (7th Cir. 
1998).
    \10\ Id. at 685-86.
    \11\ See Pajic v. Cigna Corp., 56 Fair Empl. Prac. Cas. (BNA) 1624, 
1990 U.S. Dist. LEXIS 11588 (E.D. Pa. 1990) (even though male co-
workers were paid more for doing less than the female managers, their 
jobs were not similar enough to allow for an EPA claim).
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    The degree of similarity required by courts makes it difficult for 
women to identify comparators even in jobs that seem very similar.\12\ 
The strictness with which courts approach the equal work requirement 
has led one legal scholar, who conducted an empirical review of all 
reported Federal appellate cases decided under the act, to conclude 
that the Equal Pay Act as interpreted by the courts is not broad enough 
to reach ``non-standardized jobs'' in the modern economy.\13\
---------------------------------------------------------------------------
    \12\ See, e.g., Howard v. Lear Corp. EEDS and Interiors, 234 F.3d 
1002 (7th Cir. 2000) (female human resources coordinator's job was not 
substantially similar to men's human resources jobs where the men's 
jobs were in unionized plants with a mix of salaried and hourly workers 
and plaintiff 's job was in a nonunionized plant with only salaried 
workers); EEOC v. Madison Community Unit School Dist. No. 12, 818 F.2d 
577 (7th Cir. 1987) (male and female coaching jobs at the high school 
and junior high level were not substantially similar where the jobs 
involved coaching different sports with different rules).
    \13\ See Deborah Thompson Eisenberg, Shattering the Equal Pay Act's 
Glass Ceiling, University of Maryland Legal Studies Research Paper No. 
2009-54, 63 S.M.U. L. Rev. 101 (forthcoming, 2010), available at http:/
/ssrn.com/abstract=1521172. This failing is particularly unfortunate 
because the gender wage gap for managerial and professional employees 
is even greater than it is for employees generally, and the improvement 
in this sector has been especially slow. Id. at 108-113; see also Ruben 
Bolivar Pagan, Defending the ``Acceptable Business Reason'' Requirement 
of the Equal Pay Act: A Response to the Challenges of Wernsing v. 
Department of Human Services, 33 J. Corp. Law 1007 (2008) (noting that 
the gender wage gap in managerial, professional, and related 
occupations has improved by only about 10 percent since the 1960s, and 
citing 2007 Department of Labor report finding that in management, 
professional, and related occupations, women earn only 73 percent as 
much as men).
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    In discussing the strictness of how courts approach Equal Pay Act 
claims, I do not mean to endorse the cases cited or the overly narrow 
approach to job similarity taken--indeed, in my view, many of these 
cases are wrongly decided. However, it is important for Congress to 
understand a key aspect of the legal background in this area: 
establishing a prima facie case under the Equal Pay Act is no easy 
matter. It is very difficult for employees to establish a violation of 
the act, and the plaintiff who does so has proven that her employer has 
paid her less than a man for performing a job that is the same in 
virtually all respects.
1. The ``Same Establishment'' Requirement of the Equal Pay Act Further 
        Narrows the Ability of Employees to Prove Pay Discrimination
    Not only must the employee show that the employer paid her less for 
performing substantially the same work as a male employee; she and her 
male comparator must also work in the ``same establishment.'' \14\ This 
can be an obstacle for an employee who seeks to compare her job to a 
male employee who does the same work in a different physical 
location.\15\ The term ``same establishment'' is not defined in the 
Fair Labor Standards Act, but the Supreme Court has interpreted it to 
mean ``a distinct physical place of business.'' \16\ In order for 
different physical sites to be counted as part of the same 
establishment, thereby allowing the use of comparators at different 
physical locations, the plaintiff must prove ``unusual circumstances,'' 
such as the exercise of centralized control in one location over 
important aspects of running the entire business.\17\
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    \14\ 29 U.S.C. 206(d).
    \15\ See, e.g., Thompson v. City of Albuquerque, 950 F. Supp. 1098, 
1102 (D. N.M. 1996) (holding that veterinarians at city's animal 
services division and zoo did not work at the ``same establishment'' 
where they are under different city departments); Winther v. City of 
Portland, Civ. No. 91-1232-JU, 1992 WL 696529 at *5 (D. Or. July 10, 
1992) (holding that although the Portland Fire Bureau and Bureau of 
Emergency Communications were integrated with respect to a 911 system, 
they were separate establishments because they were administratively 
separate and had separate management); EEOC v. State of Del. Dept. of 
Health and Social Services, Civ. A. No. 83-412-JRR., 1986 WL 15944 at 
*2 (D. Del. Nov. 7, 1986) (holding ``same establishment'' to constitute 
only individual medical clinics and not entire system of clinics); 
Davis v. Western Elec. Co., No. C-78-65-WS, 1979 WL 15383 (M.D.N.C. 
July 6, 1979) (justifying a holding of separate establishments because 
of different management, separate personnel system and no rotation 
between plants); Gerlach v. Michigan Bell Tel. Co., 448 F.Supp. 1168, 
1172 (D. Mich. 1978) (holding the local office to be the relevant 
establishment because although Engineering Layout Clerks occasionally 
transfer or are loaned to other offices, they are primarily supervised 
at local offices); Shultz v. Corning Glass Works, 319 F. Supp. 1161, 
1164 (W.D.N.Y. 1970) (finding that two plants that were physically 
connected constituted the ``same establishment,'' but a third plant 
from which employees do not transfer back and forth did not constitute 
the ``same establishment'').
    \16\ A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 496 (1945).
    \17\ 29 CFR 1620.9(a).
---------------------------------------------------------------------------
    This showing of unusual circumstances requires proof that the 
employer maintains centralized control over decisions such as hiring 
employees, setting salaries, and assigning employees to various work 
sites.\18\ While a plaintiff who works in a branch office of a company 
with one central administration may be able to meet this standard and 
identify comparators at other branch offices, many companies are 
organized so that different branches exercise control over important 
elements of the job relationship at that site, such as hiring, setting 
salaries, and job assignments.\19\ As more employers move to a 
decentralized structure, this standard is likely to become increasingly 
difficult to meet.\20\
---------------------------------------------------------------------------
    \18\ 29 CFR 1620.9(b).
    \19\ Cf. Mulhall, 19 F.3d at 591 (separate locations were part of 
``same establishment'' where plaintiff demonstrated ``centralized 
control of job descriptions, salary administration and job 
assignments'' and project managers at different locations reported to 
supervisor in central office); Meeks v. Computer Assocs., Int'l, 15 
F.3d 1013, 1017 (11th Cir. 1994) (different physical locations were not 
part of the same establishment where local offices made their own 
hiring decisions and set specific employee salaries, albeit within a 
range defined by central administration); Foster v. Arcata Assocs., 
Inc., 772 F.2d 1453, 1464 (9th Cir. 1985) (physically separate offices 
of defense contractor were not part of ``same establishment'' where 
offices maintained independent management of projects for different 
customers, had separate budgets, and had delegated authority to make 
personnel decisions).
    \20\ Cf. Katherine V.W. Stone, From Widgets to Digits: Employment 
Regulation for the Changing Workplace 165 (2004) (discussing the 
decentralization of authority and flattening of hierarchy in the modern 
workplace).
---------------------------------------------------------------------------
    While it makes sense to have different pay scales for employees in 
different parts of the country where there are different costs of 
living, the current ``same establishment'' requirement goes well beyond 
accommodating such regional differences. The Paycheck Fairness Act 
would alleviate this problem by allowing the use of comparators who 
work for the same employer at different physical locations in the same 
county or similar political subdivision of a State, taking a more 
commonsense approach to pay inequality among persons who do equal work 
for the same employer.
2. The ``Factor Other than Sex'' Defense Excuses Far Too Much Pay 
        Inequality
    Once an employee proves that she was paid less for performing a job 
equal to that of a male comparator in the same establishment, the 
employer may avoid liability by establishing one of four affirmative 
defenses: that the wage disparity is based on (1) a seniority system; 
(2) a merit system; (3) a system which measures earnings by quantity or 
quality of production; or (4) any factor other than sex. It is the 
fourth defense that has become increasingly problematic.
    Early in the act's history, the Supreme Court took a searching 
approach to this defense, admonishing that a disparity based on market 
forces--e.g., the fact that women's labor brings a lower wage in the 
open market--was not a ``factor other than sex'' under the act.\21\ In 
that case, the Court rejected the employer's defense that male 
nightshift workers were paid more because they demanded more money than 
the female day shift workers to perform substantially the same 
work.\22\ The Court was on firm ground in doing so, since the Equal Pay 
Act was enacted precisely to address biases in the market that valued 
women's labor less than men's labor.\23\ Despite this auspicious 
beginning, lower courts have increasingly opened the door to a broader 
``factor other than sex'' defense that accepts virtually any 
superficially gender-neutral explanation for paying women less.
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    \21\ Corning Glass Works v. Brennan, 417 U.S. 188 (1974). Cf. City 
of Los Angeles Dept. of Water & Power v. Manhart, 435 U.S. 702 (1978) 
(indicating that the relative average greater costs of employing one 
sex would not qualify as a factor other than sex); County of Washington 
v. Gunther, 452 U.S. 161, 170-71 (1981) (in pay discrimination claim 
under title VII, which incorporates ``factor other sex'' defense, 
describing the fourth defense as applying to ``bona fide'' factors 
other than sex).
    \22\ The Court allowed that working a nightshift as opposed to a 
dayshift might be a factor other than sex that justified a difference 
in pay, but in that case the employer had already paid a premium for 
all nightshift workers; the difference between the male nightshift 
inspectors and female dayshift inspectors had been superimposed on the 
existing difference in base pay for night and day workers because of 
the company's belief that the male workers would demand more pay.
    \23\ Cf. Deborah Thompson Eisenberg, Shattering the Equal Pay Act's 
Glass Ceiling, University of Maryland Legal Studies Research Paper No. 
2009-54, 63 S.M.U. L. Rev. 101, 138-19 (forthcoming, 2010), available 
at http://ssrn.com/abstract=1521172 (employers asserting a market 
defense to Equal Pay Act claims usually do not have actual market 
supporting their position and instead rely on their own subjective 
belief about what the market requires; there is ``no one magic market 
rate'' for any particular job; instead, ``[t]here are many human agency 
factors that can affect the structure and outcome of market 
compensation analysis that can allow subjective judgments and 
unconscious biases to affect the results'').
---------------------------------------------------------------------------
    Over the years, stark differences have emerged in how lower courts 
interpret the factor other than sex defense. The courts most skeptical 
of equal pay claims have allowed employers to justify pay disparities 
based on anything other than explicitly sex-based criteria or 
intentional discrimination against women, even if the purportedly 
gender-neutral reason is lacking in a solid business justification. For 
example, the Seventh Circuit has refused flat-out to undertake any 
inquiry into whether there is a business justification or legitimate 
business reason for the employer's explanation for the disparity under 
the ``factor other than sex'' defense.\24\ That court has described the 
defense as ``embrac[ing] an almost limitless number of factors, so long 
as they do not involve sex,'' even if they are not `` `related to the 
requirements of the particular position in question,' nor . .  even . . 
. business-related.' '' \25\ Likewise, the Eighth Circuit has pointedly 
refused to require an acceptable business reason underlying the 
employer's assertion of a factor other than sex.\26\ Contrary to this 
view, several circuit courts and the EEOC have taken a more searching 
approach to the factor other than sex defense, limiting it to factors 
based on legitimate business reasons.\27\ Other courts have yet to take 
a clear stand on the question.\28\
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    \24\ Wernsing v. Dept. of Human Servs., 427 F.3d 466, 470 (7th Cir. 
2005) (``The disagreement between this circuit (plus the Eighth) and 
those that require an `acceptable business reason' is established, and 
we are not even slightly tempted to change sides''); id. at 468 (``The 
statute asks whether the employer has a reason other than sex--not 
whether it has a `good' reason.''); see also Fallon v. State of Ill., 
882 F.2d 1206 (7th Cir. 1989) (there is no requirement that a ``factor 
other than sex'' be ``related to the requirements of a particular 
position in question, nor that it be a `business-related' reason.'') 
(citation omitted); see also Boriss v. Addison Farmers Ins. Co., 1993 
WL 284331 (N.D. Ill. 1993) (male employees' different qualifications 
could be a ``factor other than sex'' even if those qualifications were 
not related to the job at issue).
    \25\ Dey v. Colt Constr. & Dev. Co., 28 F.3d 1446, 1462 (7th Cir. 
1994); see also Fallon v. State of Ill.,  882 F.2d 1206, 1211 (7th Cir. 
1989) (suggesting that even a practice with a discriminatory effect 
might qualify as a ``factor other than sex'').
    \26\ Taylor v. White, 321 F.3d 710 (8th Cir. 2003) (stating that 
``the wisdom or reasonableness'' of the factor other than sex is 
irrelevant). The Court of Federal Claims has also aligned itself with 
the Seventh and Eighth Circuits on this question. Behm v. United 
States, 68 Fed. Cl. 395, 400 (Fed. Cl. 2005).
    \27\ See Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 526 
(2d Cir. 1992) (requiring a ``bona fide business-related reason''); 
EEOC v. J.C. Penney Co., 843 F.2d 249, 253 (6th Cir. 1992) (stating 
that the defense ``does not include literally any other factor, but a 
factor that, at a minimum, was adopted for a legitimate business 
reason''); Kouba v. Allstate Ins. Co., 691 F.2d 873, 876 (9th Cir. 
1982) (factor must be based on ``an acceptable business reason''); 
Glenn v. General Motors Corp., 841 F.2d 1567, 1571 (factor other than 
sex defense applies ``when the disparity results from the unique 
characteristics of the same job; from an individual's experience, 
training, or ability; or from special exigent circumstances connected 
with the business''). See also EEOC Compliance Manual,  10-IV(F)(2), 
Dec. 5, 2000 available at http://www.eeoc.gov/policy/docs/
compensation.html (requiring employer to ``show that the factor is 
related to job requirements or otherwise is beneficial to the 
employer's business'' and that it is ``used reasonably in light of the 
employer's stated business purpose as well as its other practices.'').
    \28\ Ruben Bolivar Pagan, Defending the ``Acceptable Business 
Reason'' Requirement of the Equal Pay Act: A Response to the Challenges 
of Wernsing v. Department of Human Services, 33 Journal of Corporate 
Law 1007 (Summer 2008) (identifying the First, Third, Fourth, Fifth, 
Tenth and D.C. Circuits as ``yet to consider whether the EPA's `factor 
other than sex' exception contains an implicit `acceptable business 
reason' requirement'' and recommending that all circuits join majority 
view to require an acceptable business reason).
---------------------------------------------------------------------------
    The allowance of any non-sex-based factor to justify a wage 
disparity, however unconnected to the job at issue or unrelated to the 
needs of the business, has the potential to eviscerate the protections 
of the Equal Pay Act. As the Second Circuit recognized, ``[w]ithout a 
job-relatedness requirement, the factor-other-than-sex defense would 
provide a gaping loophole in the statute through which many pretexts 
for discrimination would be sanctioned.'' \29\ It would allow employers 
to rely on factors that are sex-linked and perpetuate the suppression 
of women's wages, without regard to the responsibilities of the jobs or 
the qualifications of the employees who fill them.\30\
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    \29\ Aldrich, 963 F.2d at 525.
    \30\ Cf. Engelman v. Nat'l Broadcasting Co., Inc., 1996 WL 76107, 
at *7 (SDNY Feb. 22, 1996)) (warning that without a legitimate business 
justification required for the ``factor other than sex'' defense, an 
employer could rely on sex-linked factors such as height and weight 
even if those qualities were unrelated to the job in question).
---------------------------------------------------------------------------
    One area in which this dispute over the scope of the defense plays 
out is the question of whether employees' prior salaries may be used to 
justify a current pay disparity for employees doing equal work. Some 
courts allow this as a ``factor other than sex'' without further 
scrutiny. For example, the Seventh Circuit allows employers to base pay 
differentials on prior salary without any further justification.\31\ 
Some courts even in those circuits that do require an acceptable 
business reason have expressed blanket approval of the use of prior 
salary without any inquiry into whether that differential is related to 
the skills and responsibilities needed to do the present job, or 
whether prior salaries reflect any differences in the skills and 
qualifications of the employees in those jobs.\32\ Other courts have 
been more circumspect about reliance on prior salary to justify a 
present salary differential, requiring the employer to show that its 
reliance on prior salary was justified by sufficient business 
reasons.\33\ These courts have recognized that reliance on prior salary 
to set current pay risks perpetuating ongoing pay discrimination 
against women, since women on average earn less than men.
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    \31\ Wernsing v. Dept. of Human Servs., 427 F.3d 466 (7th Cir. 
2005). See also Brinkley v. Harbour Recreation Club, 180 F.3d 598, 617 
& n.14 (4th Cir. 1999) (stating that salary history can be a ``factor 
other than sex,'' and declining to decide whether to super-impose a 
``job-relatedness requirement'' on this defense, while noting a split 
in the circuits over whether to do so).
    \32\ See, e.g., Sparrock v. NYP Holdings, Inc., 2008 WL 744733, *15 
(S.D.N.Y. Mar. 4, 2008) (``matching an employee's former salary has 
been found to be a factor other than sex justifying wage 
differential''); Drury v. Waterfront Media, Inc., 2007 WL 737486, *4 
(S.D.N.Y. Mar. 8, 2007) (paying male employee hiring salary to lure him 
away from prior employer was a factor other than sex); Engelmann v. 
National Broadcasting Co., Inc., 1996 WL 76107, *10 (S.N.D.Y. Feb. 22, 
1996) (also approving salary-matching of employee's salary with a 
previous employer as a factor other than sex).
    \33\ See, e.g., Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995) 
(rejecting reliance on prior salary alone; prior salary must be 
connected to experience to justify a present salary disparity); Glenn 
v. General Motors Corp., 841 F.2d 1567 (11th Cir. 1988) (rejecting as a 
``factor other than sex'' employer's decision to pay male clerks more 
because they transferred from higher paying positions); cf. Kouba v. 
Allstate, 691 F.2d 873, 878 (9th Cir. 1982) (employer must show 
reliance on prior salary justified by business reasons particular to 
the employer's business). The EEOC also places a higher burden on 
employers relying on prior salary to justify a pay differential. See 
EEOC Compliance Manual,  10-IV(F)(2)(g), Dec. 5, 2000, available at 
http://www.eeoc.gov/policy/docs/compensation.html (stating that 
``[p]rior salary cannot, by itself, justify a compensation disparity,'' 
and requiring employer to ``prove that sex was not a factor in its 
consideration of prior salary, and that other factors were also 
considered,'' for example, by showing employer ``(1) determined that 
the prior salary accurately reflected the employee's ability based on 
his or her job-related qualifications; and (2) considered the prior 
salary, but did not rely solely on it in setting the employee's current 
salary'').
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    The Paycheck Fairness Act would take sides in this dispute, 
ensuring that gender gaps in pay are not simply perpetuated by 
employers who set starting salaries based on employees' prior pay. 
Employers would have to prove that the differential in prior salary was 
not itself sex-based, and was job-related for the job in question and 
consistent with business necessity. This is an eminently fair standard 
and necessary to the vitality of the Equal Pay Act. Employers should 
not reflexively incorporate differences in prior salary when they hire 
male and female employees with similar experience and qualifications to 
do the same job. Otherwise, the Equal Pay Act will become little more 
than a rubber-stamp of the very wage disparities it was enacted to 
address.\34\
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    \34\ Indeed, because of historic wage patterns and male wage 
earners' continuing comparative strength in the market, adopting 
salary-matching or differences in prior salary as ``a factor other than 
sex'' is practically a recipe for perpetuating the gender wage gap 
indefinitely. See Jeffrey Lax, Do Employer Requests for Salary History 
Discriminate Against Women? 58 Labor Law Journal 47 (2007) (employers 
frequently use prior salary to set the wages of new employees, a 
practice which perpetuates women's lower earnings relative to men; 
therefore, urging Congress to close the loophole that allows employers 
to invoke such a reason as a factor other than sex); Jeanne M. Hamburg, 
When Prior Pay Isn't Equal Pay: A Proposed Standard for the 
Identification of ``Factors Other Than Sex'' Under the Equal Pay Act, 
89 Colum. L. Rev. 1085 (1989) (arguing for judicial skepticism toward 
use prior salary as a factor other than sex).
---------------------------------------------------------------------------
    Another issue on which the dispute over the scope of the defense 
has emerged is the role of salary negotiations in justifying a pay 
differential under the ``factor other than sex'' defense. Courts 
generally have allowed employers to rely on differences in how 
employees negotiate their salary to support pay disparities under the 
defense.\35\ However, a wealth of recent research suggests cause for 
concern about interpreting the defense so broadly.
---------------------------------------------------------------------------
    \35\ See Christine Elzer, Wheeling, Dealing, and the Glass Ceiling: 
Why the Gender Difference in Salary Negotiations is Not a ``Factor 
Other Than Sex'' Under the Equal Pay Act, 10 Geo. J. Gender & Law 1, 
10-12 (2009) (stating that of the eight published decisions that 
address negotiation as a factor other than sex, only one, Futran v. 
Ring Radio Co., 501 F. Supp. 734 (N.D. Ga. 1980), has rejected it as a 
factor other than sex, and that case also involved direct evidence of 
discriminatory intent); id. at 10, 13-19 (citing and discussing the 
cases that have permitted employers to consider salary negotiation as a 
factor other than sex). See also Day v. Bethlehem Center Sch. Dist., 
No. 07-159, 2008 WL 2036903 (W.D. Pa. May 9, 2008) (``Although 
Plaintiffs present a compelling argument as to why the Defendant's 
factor other than sex, i.e., negotiation, fails as a matter of law, 
they do not cite any cases directly on point that support their 
position.'').
---------------------------------------------------------------------------
    For complex reasons, men and women tend to differ in their approach 
to salary negotiations, and, importantly, employers tend to differ in 
how they respond to the men and women who do attempt to negotiate their 
salary. Behavioral researchers Linda Babcock and Sara Laschever, widely 
recognized experts in the field of gender differences in negotiation, 
found that among Carnegie Mellon University graduates, 57 percent of 
the men, but only 7 percent of the women, negotiated for a higher 
starting salary.\36\ The applicants who negotiated received salaries 
that were an average of 7.4 percent higher than those who did not 
negotiate--a difference that corresponded almost exactly to the gap in 
the male and female graduates' starting salaries. Their subsequent 
research replicated these findings, and corroborated other research 
finding that men are significantly more likely than women to negotiate 
higher salaries.\37\
---------------------------------------------------------------------------
    \36\ Linda Babcock & Sara Laschever, Women Don't Ask: Negotiation 
and the Gender Divide 1-2 (2003).
    \37\ Id.; Elzer, 10 Geo. J. Gender & L. at 4-9 (describing social 
science research on the gender divide in negotiations).
---------------------------------------------------------------------------
    These findings must be evaluated in light of complementary research 
suggesting that women face a greater likelihood of being penalized by 
employers when they do attempt to negotiate salary. As Babcock and her 
fellow researchers found, ``sometimes it hurts to ask.'' \38\ In a 
series of experiments, they found that men and women triggered 
different reactions when they attempted to negotiate for more money. 
Women who used identical ``scripts'' as men to ask for more money were 
penalized by male evaluators, who were then less inclined to work with 
the women who had asked for more money. Their research suggests that 
women are less likely to negotiate salary at least in part because they 
accurately perceive a risk from negotiating, a risk that is both 
gender-specific and all too real.\39\
---------------------------------------------------------------------------
    \38\ Hannah Riley Bowles, Linda Babcock, & Lei Lai, Social 
Incentives for Gender Differences in the Propensity to Initiate 
Negotiations: Sometimes It Does Hurt to Ask, 103 Organizational Behav. 
& Hum. Decision Processes 84 (2007).
    \39\ Id. at 88-100; see also M.E. Wade, Women and Salary 
Negotiation: The Costs of Self-Advocacy, 25 Psychology of Women Q. 65 
(2001); Elzer, 10 Geo. J. Gender & L. at 7-9 (describing this research 
in greater detail).
---------------------------------------------------------------------------
    Given this reality, an employer who uses differences in negotiation 
to justify a disparity in paying men and women for equal work should 
have the burden to prove that this difference is not itself based on 
sex. In several of the cases in which courts have allowed employers to 
rely on negotiation to justify a pay disparity, the employer reacted 
differently to the men and women who tried to negotiate, rewarding men 
for negotiating while treating women's salaries as non-negotiable.\40\ 
Moreover, employers should shoulder a substantial burden to justify pay 
disparities stemming from differences in salary negotiation by male and 
female employees who have similar qualifications and are hired to do 
equal work.\41\ At a minimum, employers should have to demonstrate that 
the difference is related to the job in question and consistent with 
business necessity.
---------------------------------------------------------------------------
    \40\ See Elzer, 10 Geo. J. Gender & L. at 20 (citing cases).
    \41\ Cf. Charles B. Craver, ``If Women Don't Ask: Implications for 
Bargaining Encounters, the Equal Pay Act, and title VII, 102 Mich. L. 
Rev. 1104, 1116 (2004) (arguing that an employer who succumbs to a male 
applicant's entreaties for more money than it pays a woman to do 
substantially equal work presents ``the exact situation the enactment 
was designed to proscribe--the willingness of females to work for less 
based upon the `outmoded belief that a man . . . should be paid more 
than a woman, even though his duties are the same.' '') (citation 
omitted).
---------------------------------------------------------------------------
    The Paycheck Fairness Act would help close what has become a gaping 
loophole in the Equal Pay Act's promise of a nondiscriminatory wage. 
The bill would limit the ``factor other than sex'' defense to ensure 
that an employer's reason for paying women less is a bona fide one, 
such as differences in education, training or experience, that it is 
not based upon or derived from a sex-based differential in 
compensation, and that it is job-related and consistent with business 
necessity. This language is borrowed from title VII's disparate impact 
framework, under which facially neutral practices that disadvantage 
workers based on sex, race, color, religion or national origin must be 
shown to be job-related and consistent with business necessity. This 
standard has been the law in title VII cases since 1971, when Griggs v. 
Duke Power Co. was decided, and was later codified in the Civil Rights 
Act of 1991, and courts have a wealth of experience applying this 
standard in a way that is fair to both employees and employers. The 
other three existing defenses to Equal Pay Act claims would continue to 
apply unchanged, excusing pay differentials that are based on merit, 
seniority, or quantity or quality of production.
3. Existing Federal Laws Provide Inadequate Remedies for Gender-Based 
        Pay Discrimination
    Currently, employment discrimination law sets up a hierarchy of 
remedies for employees who experience different kinds of pay 
discrimination. Although full and uncapped remedies are available to 
victims of pay discrimination on the basis of race, no Federal statute 
provides complete remedies to women who are paid less because of their 
sex. Under the Equal Pay Act, an employee may recover only the amount 
of her unlawfully withheld wages (up to 2 years' back pay, or 3 years' 
back pay for ``willful'' violations) and an equal amount in 
``liquidated damages.'' \42\ Title VII of the Civil Rights Act of 1964 
also prohibits discrimination in compensation, and a woman who wins a 
title VII pay discrimination claim may obtain somewhat better relief 
under that statute, since title VII authorizes compensatory and 
punitive damages. However, here too her relief will be cut short. Title 
VII caps damages at very modest levels. For example, in Lilly 
Ledbetter's case against Goodyear, the jury awarded over $3.5 million 
for Goodyear's egregious discrimination. However, the trial court was 
forced to cap Ms. Ledbetter's damages at $300,000, the statutory limit 
for combined compensatory and punitive damages applicable to large 
employers such as Goodyear.\43\ As a result, the jury's award was 
reduced to $360,000, the maximum allowable combined compensatory and 
punitive damages, plus an award of $60,000 in back pay--a relatively 
small sum considering the seriousness of Goodyear's misconduct, the 
deterrent value of such an award against a company like Goodyear, and 
the longstanding harm of the pay discrimination that continues to this 
day to follow Ms. Ledbetter into her retirement in the form of a lower 
pension.
---------------------------------------------------------------------------
    \42\ 29 U.S.C.  216.
    \43\ The limit for smaller employers is even lower, set at $50,000 
for employers with fewer than 100 employees, $100,000 for employers 
with 101-200 employees, $200,000 for employers with 200-500 employees, 
and $300,000 for all employers with more than 500 employees.
---------------------------------------------------------------------------
    In contrast, a claim for pay discrimination on the basis of race is 
actionable under a different statute, 42 U.S.C.  1981, which bars race 
discrimination in the making and enforcement of contracts, including 
employment contracts. A successful pay discrimination claimant under 
section  1981 receives the full panoply of legal remedies, including 
uncapped compensatory and punitive damages.
    This inequity in remedies, for discrimination Congress has declared 
unlawful, is not justified by any principle of fairness or justice. 
Moreover, it puts employees in a position of having to finely parse 
their claims into either sex- or race-based claims, with significant 
consequences for how the claim is categorized. Women of color face a 
particular bind. A woman of color who is underpaid compared to white 
male employees would be better off categorizing her claim as one based 
on race rather than sex, even though the discrimination may combine 
elements of both, or fit better as a gender claim. The employer, on the 
other hand, may be able to limit its remedies if it can convincingly 
argue that she was paid less because of her gender and not because of 
her race, thereby restricting her to the much more limited remedies 
available under the Equal Pay Act and title VII. The law should not 
take such a rigid approach to these categories, nor should it place a 
lower priority on eradicating pay discrimination based on gender.
    I am aware that some opponents of amending the Equal Pay Act to 
authorize compensatory and punitive damages have called the law a 
``strict liability'' statute, not deserving of a damages remedy. I 
strongly take issue with this characterization. The Equal Pay Act is 
not a ``strict liability'' law in any legally correct sense of that 
term. Strict liability was developed in tort law to allocate 
responsibility for harm in certain instances notwithstanding the 
absence of a breach of the duty of care owed by the defendant. The idea 
behind it is that some endeavors (such as harboring wild animals or 
working with extremely hazardous materials) are so inherently dangerous 
that defendants should be responsible for any harm they cause even if 
they are not negligent or otherwise at fault.
    The liability scheme established by the Equal Pay Act could not be 
further from a no-fault, strict liability rule. As explained above, an 
employer is liable under the act only if the plaintiff succeeds in 
establishing the very difficult burden of proving that she was paid 
less than a man for performing substantially the same work, and then 
only if the defendant fails to prove that the pay disparity was 
justified by one of four affirmative defenses, including a factor other 
than sex. In other words, the plaintiff who wins an Equal Pay Act claim 
has been paid less for doing substantially the same job as a man 
because of her sex. Critics of the Paycheck Fairness Act who call the 
Equal Pay Act a ``strict liability'' law base their claim on the 
argument that the Equal Pay Act, unlike title VII, does not require 
proof of intentional discrimination. However, they make far too much of 
this difference. Both statutes are asking the same fundamental question 
in such claims, whether an employee was paid less because of her sex, 
and proof of an Equal Pay Act violation almost always establishes a 
title VII violation as well, without any additional evidence of 
discriminatory motive.\44\ When a plaintiff wins a claim under the 
Equal Pay Act, she has proven that she is paid less than a man for 
performing substantially similar work and the employer has failed to 
show a sufficient justification for the disparity. This is anything but 
a ``no fault'' liability scheme, and the employee who proves such 
discrimination should be entitled to a complete remedy under the law.
---------------------------------------------------------------------------
    \44\ In many courts, proof of an Equal Pay Act violation also 
establishes a title VII violation per se because proof that the 
plaintiff was paid less for substantially equal work also proves that 
she was paid less because of sex in violation of title VII. Other 
courts apply title VII's distinct proof model to pay discrimination 
claims, with the ultimate inquiry being whether the plaintiff 
established intentional discrimination. See Lewis & Norman,  7.15. 
Even in this latter set of courts, however, the same evidence that 
establishes an Equal Pay Act violation will also generally establish a 
title VII violation; however, it is possible, in theory, that a 
plaintiff bringing both claims in such a court might win under the 
Equal Pay Act, but lose under title VII because of the different 
allocations of the burden of proof on the question of whether the lower 
pay was because of sex. See Fallon v. Illinois, 882 F.2d 1206, 1217 
(7th Cir. 1989) (``It is possible that a plaintiff could fail to meet 
its burden of proving a title VII violation, and at the same time the 
employer could fail to carry its burden of proving an affirmative 
defense under the Equal Pay Act.'').
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4. The Existence of Title VII Does Not Alleviate the Need for a 
        Strengthened Equal Pay Act
    Although there is a fair amount of overlap between title VII and 
the Equal Pay Act, as discussed above, the existence of title VII in no 
way alleviates the need for a strengthened Equal Pay Act. As an initial 
matter, some employees will only have access to the Equal Pay Act and 
not to title VII due to differences in the scope and procedures of the 
two statutes.\45\ Moreover, even if an employee proceeded under title 
VII instead of the Equal Pay Act, the same defenses that apply to the 
Equal Pay Act, including the ``factor other than sex'' defense, also 
apply to title VII under the so-called ``Bennett Amendment.'' \46\ 
Accordingly, title VII incorporates the same problems discussed above 
with respect to the ``factor other than sex'' defense. Finally, as 
discussed above, title VII also provides inadequate remedies to victims 
of discrimination because of its cap on damages.
---------------------------------------------------------------------------
    \45\ See generally Harold S. Lewis, Jr., and Elizabeth J. Norman, 
Employment Discrimination Law and Practice,  7.2 (2d ed. 2004) 
(explaining that, unlike title VII, the Equal Pay Act is triggered by 
an employer's connection to commerce, with limited exceptions for a few 
very specific industries, and not by the number of employees); id. at  
7.21 (explaining that the EPA has a longer statute of limitations--2 
years, or 3 years for a violation that is willful--as compared to title 
VII's much shorter limitations period).
    \46\ 42 U.S.C. 2000e-2(h).
---------------------------------------------------------------------------
5. Better Access to Salary Information is Crucial to the Effective 
        Enforcement of the Equal Pay Laws
    Access to salary information is crucial for both individual 
employees and government enforcement agencies in order to effectively 
enforce the guarantees of the equal pay laws. Without salary 
information, employees have no way of knowing if they are paid a 
discriminatory wage. Employers rarely disclose workers' salaries and 
workplace norms often discourage frank and open conversations among 
employees about salaries. Lilly Ledbetter's case is typical in this 
respect. She worked for Goodyear for many years, unaware that she was 
paid less than the lowest-paid male manager until she received an 
anonymous note disclosing her colleagues' pay. Goodyear's policy of pay 
secrecy was calculated to keep her and other employees in the dark. 
Many employers have similar policies and informal practices 
discouraging the sharing of such information.\47\ Currently, both 
employees and the relevant Federal enforcement agencies lack access to 
the salary information they need to effectively enforce Federal pay 
discrimination laws. Both the Paycheck Fairness Act and the Fair Pay 
Act would improve access to the pay information that is necessary for 
both individual and government enforcement of the laws.
---------------------------------------------------------------------------
    \47\ See Leonard Bierman & Rafael Gely, Love, Sex and Politics? 
Sure. Salary? No Way: Workplace Social Norms and the Law, 25 Berkeley 
J. Emp. & Labor L. 167, 168, 171 (2004) (noting that one-third of U.S. 
private sector employers have policies prohibiting employees from 
discussing salaries and that many more communicate informally an 
expectation of confidentiality with respect to employee salaries).
---------------------------------------------------------------------------
6. The Fair Pay Act is Needed to Address an Aspect of the Gender Wage 
        Gap Left Out of Both Title VII and the Equal Pay Act: The 
        Effects of Occupational Segregation and the Devaluation of 
        Women's Labor
    The Fair Pay Act would address an aspect of the gender wage gap 
that existing law does not: the devaluation of jobs predominantly held 
by women. Neither title VII nor the Equal Pay Act meaningfully 
addresses this problem. As noted above, occupational segregation does 
not fully explain the gap in men's and women's earnings; a substantial 
wage gap exists even controlling for occupation and job held. But some 
portion of the gap is attributable to the lower levels of pay drawn by 
workers in female-dominated occupations compared to workers in 
predominantly male occupations performing of work of equivalent skill, 
effort and responsibility. Because the Equal Pay Act applies only if 
male and female employees are paid differently to do substantially the 
same jobs, it has no application in this setting. While title VII 
encompasses a broader set of claims than the Equal Pay Act, it too has 
a very limited applicability to the suppression of women's wages due to 
occupational segregation.
    In theory, title VII provides a remedy for employees whose wages 
are suppressed because they work in jobs predominantly filled by women. 
To succeed on such a claim, however, the plaintiffs must prove that the 
employer paid those jobs less precisely because they were held by 
women, that is, because of intentional discrimination. The leading case 
is County of Washington v. Gunther,\48\ in which female prison guards 
(who guarded female prisoners) claimed pay discrimination because they 
were paid less than male prison guards (who guarded male prisoners), 
even though the lower court had found these jobs not to be similar 
enough for the Equal Pay Act. The plaintiffs argued that the 
underpayment of the women violated title VII, and relied on a pay 
equity study commissioned by the county which had thoroughly analyzed 
the jobs and recommended that the women guards earn 95 percent of what 
the male guards earned. The county did not implement this 
recommendation and continued to pay the women guards substantially 
less, a decision that the plaintiffs attributed to discriminatory 
intent. The Supreme Court allowed the plaintiffs to proceed on this 
claim under title VII, but reiterated the requirement that they prove 
intentional discrimination underlying the decision to pay them less.
---------------------------------------------------------------------------
    \48\ County of Washington v. Gunther, 452 U.S. 161 (1981).
---------------------------------------------------------------------------
    In practice, this is a nearly insurmountable hurdle.\49\ For 
example, in one of the more well-known, large-scale pay discrimination 
challenges to be brought under title VII, AFSCME v. Washington 
State,\50\ female State employees lost their title VII challenge to the 
State's practice of paying substantially lower salaries for jobs 
predominantly held by women. The plaintiffs failed to show that the 
State's failure to implement the recommendations of a pay equity study 
it had commissioned amounted to a discriminatory intent.
---------------------------------------------------------------------------
    \49\ See, e.g., E.E.O.C. v. Sears Roebuck & Co., 839 F.2d 302, 340-
42 (7th Cir. 1988) (stressing the ``limited scope'' of Gunther and 
holding that only ``clear and straightforward'' evidence of 
discriminatory intent would suffice to make out a title VII pay 
discrimination claim not based on equal work); Plemer v. Parsons-
Gilbane, 713 F.2d 1127, 1133 (5th Cir. 1983) (in a title VII claim for 
pay discrimination not involving equal work, plaintiffs must show a 
``transparently sex-
biased system for wage determination'' or ``direct evidence'' of 
discriminatory intent).
    \50\ 770 F.2d 1401 (9th Cir. 1985).
---------------------------------------------------------------------------
    And yet, the absence of a demonstrable discriminatory intent in 
these and similar cases should not be taken to mean that pay 
differentials between male-dominated and female-dominated jobs 
involving equivalent work are based on gender-neutral, unbiased market 
criteria. An analysis of the underlying data in the AFSCME case by two 
sociologists who study large organizations found that the State's pay 
scales did not passively reflect market wages, but stemmed from a 
discretionary and subtle sex-stereotyping of jobs that linked the pay 
of certain women's jobs to benchmarks comprised of other women's jobs, 
instead of comparing them to more highly paid and more objectively 
similar male-dominated jobs. The resulting pay differential reflected a 
sex-stereotyping of jobs and the lesser political clout of women 
workers in the State's very political and subjective pay-setting 
process.\51\
---------------------------------------------------------------------------
    \51\ See Martha Chamallas, The Market Excuse, 68 U. Chicago L. Rev. 
579 (2001) (reviewing Robert L. Nelson and William P. Bridges, 
Legalizing Gender Inequality: Courts, Markets and Unequal Pay for Women 
in America (1999)).
---------------------------------------------------------------------------
    In a similar case, female clerical workers lost their title VII 
case against a public university because the court found that the lower 
pay for those jobs compared to male-dominated jobs requiring a similar 
level of skill was not based on a demonstrable discriminatory 
intent.\52\ However, the same organizational sociologists cited above 
found, after scouring the records in the case, that the university had 
rejected a consulting firm's recommendations to close this pay gap 
because of institutional bias favoring the male workers. In particular, 
the male workers were more confrontational in their dealings with the 
university while the clerical workers were more patient and 
cooperative. As a result, organizational politics and institutional 
bias led the university to ``give selective attention to the demands of 
workers in predominantly male jobs,'' resulting in their higher 
pay.\53\ Current law does not reach this kind of institutionalized 
gender bias. The Fair Pay Act would bring much-needed scrutiny to these 
kinds of discriminatory practices.
---------------------------------------------------------------------------
    \52\ Christensen v. Iowa, 563 F.2d 353 (8th Cir. 1977).
    \53\ Chamallas at 587 (quoting Nelson and Bridges at 166).
---------------------------------------------------------------------------
    In conclusion, it is heartening to see this committee turn its 
attention to the important issue of pay equity. Both the Paycheck 
Fairness Act and the Fair Pay Act would go a long way toward 
strengthening the ability of existing Federal discrimination laws to 
ensure that all American workers are paid a nondiscriminatory wage 
without regard to gender, race, national origin or religion.

    Senator Dodd. Thank you very much, Ms. Brake.
    Ms. Frett.

    STATEMENT OF DEBORAH L. FRETT, CHIEF EXECUTIVE OFFICER, 
  BUSINESS AND PROFESSIONAL WOMEN'S FOUNDATION, WASHINGTON, DC

    Ms. Frett. Chairman Dodd, Ranking Member Enzi, 
distinguished members of the committee, and my fellow 
panelists, thank you for this opportunity to testify today on 
behalf of the Business and Professional Women's Foundation in 
support of equal pay for women and the Paycheck Fairness Act.
    Business and Professional Women's Foundation partners with 
women, employers, and policymakers to create successful 
workplaces that practice and embrace diversity, equity, and 
work-life balance. We have a network of supporters, which 
includes both employers and employees across the country. And 
both our employee and employer members support pay equity 
because they know it is good for business and workers.
    We submitted written remarks for you, which you all have. 
Today, I would just like to highlight a few key points.
    One of the most significant trends of the past 50 years has 
been the movement of women into the paid labor force and the 
growth of women-owned businesses. Women now make up half of the 
U.S. workforce, and women-owned firms represent 30 percent of 
all U.S. businesses. But despite all these gains, the Census 
Bureau reports that, on average, full-time working women only 
earn 77 cents to every dollar earned by men.
    And things are even worse for African-American and Latino 
women who earn an average of 10 to 20 percent less than their 
Caucasian female colleagues. This wage gap is not simply a 
result of women's education levels or personal choices and 
hurts working women, their families, employers, and the economy 
now and in the future.
    According to a World Economic Forum study released this 
week, the gender gap is costing companies profits and the 
Nation a significant amount in economic growth. Additionally, 
wage discrimination lowers a woman's total lifetime earnings 
and reduces benefits from Social Security and retirement plans, 
inhibiting the ability to save not only for retirement, but for 
other lifetime goals, such as buying a home and paying for a 
college education.
    The Paycheck Fairness Act will empower women to negotiate 
for equal pay, create incentives for employers to follow the 
law, and strengthen Federal outreach, training, and enforcement 
efforts. Investing in policies that attract women is simply 
good for business. Companies that hire and retain more women 
gain a competitive edge, show stronger financial performance, 
and are able to access a larger pool of talent.
    Simply put, equitable pay practices improve the bottom line 
and result in improved employee retention, positive human 
capital outcomes, and a much more productive workforce. In 
fact, the World Economic Forum's research estimates that 
closing the employment gender gap could increase the U.S. gross 
domestic product by up to 9 percent.
    Women business owners know that hiring women and paying 
them equally is good for business. A quest for fair pay is 
often the reason women leave an employer to start their own 
company. Business owners like Debra Ruh support the Paycheck 
Fairness Act. Ms. Ruh owns TecAccess in Rockville, VA. She told 
BPW Foundation it would never occur to her to pay a woman less 
than a man. It would be short-sighted and bad for business 
because she would lose out on a creative, innovative, and loyal 
workforce.
    It is supremely unfair to business owners like Debra Ruh, 
who are doing right by their employees, to have to compete on 
an unfair playing field against companies that discriminate and 
pay their women workers less. The current system creates a 
competitive advantage for discriminatory employers, and that is 
just not fair.
    Now, businesses have nothing to fear from this bill. Under 
the Paycheck Fairness Act, businesses will still be allowed to 
pay their employees differently based on merit, quantity or 
quality of production, seniority, education, training, 
experience, or cost-of-living.
    The clarification of the establishment requirement for 
comparing wages will help businesses because it will be more 
clear and consistent. There is funding for education programs, 
technical assistance for employers, and negotiation training to 
educate and empower women and girls. Employers that do right by 
their employees will be recognized by the Department of Labor.
    The premise that this bill will bankrupt employers through 
an explosion of litigation and damages awards is just not true. 
As long as employers are paying equal pay for equal work, they 
have nothing to fear. And employers will not have to pay 
damages if the pay disparity was unintentional.
    Businesses with written policies and a transparent 
evaluation process will find compliance easy and litigation 
less. The Paycheck Fairness Act's approach would ensure that 
women can obtain the same remedies as those subject to 
discrimination on the basis of race or national origin. 
Businesses already operate under these regulations. So there is 
nothing new for them to understand or learn.
    In conclusion, BPW Foundation believes in a three-pronged 
approach to creating a successful workplace. Legislation, like 
the Paycheck Fairness Act and Fair Pay Act, partnering with 
businesses to proactively implement and update their own 
workplaces.
    As Senator Dodd pointed out, the military is a business 
with clear pay equity policies. Military pay is published 
annually in a table available for all to see. BPW Foundation 
has conducted ground-breaking research on this unique cohort of 
women as they transition from active duty to the civilian 
workforce.
    What we have found out is that among the women veterans we 
surveyed, 72.3 percent said the one thing that was very 
important to them in a civilian job was fair compensation. 
Isn't it noteworthy and a rather sad commentary that women 
veterans start to experience unequal pay practices when they 
transition to the civilian workforce?
    We also believe in the final prong being empowering women 
through education. In fact, BPW Foundation's Red to Green 
Project, which trains women in jobs for the green economy, has 
Climb Wyoming as one of the benefactors. We must ensure that 
all careers can be pursued equally by all genders.
    Pay equity is important to Business and Professional 
Women's Foundation because it is important to the well-being of 
working women, their families, and workplaces. The Paycheck 
Fairness Act will help to rebuild the workforce and transform 
workplaces into those that work for women, their families, and 
employers.
    Thank you.
    [The prepared statement of Ms. Frett follows:]
                 Prepared Statement of Deborah L. Frett
       Pay Equity is Good for Business and Good for Working Women
                                summary
    Business and Professional Women's Foundation partners with women, 
employers and policymakers to create successful workplaces that 
practice and embrace diversity, equity and work-life balance. We have a 
network of supporters which includes both employers and employees 
across the country and both our employee and employer members support 
pay equity because they know it's good for business and workers.
    One of the most significant trends of the past 50 years has been 
the movement of women into the paid labor force and the growth of 
women-owned businesses. Women now make up half of the U.S. workforce 
and women-owned firms represent 30 percent of all U.S. businesses. But 
despite all these gains, the Census Bureau reports that, on average, 
full-time working women earn only 77 cents to every dollar earned by 
men. This wage gap is not simply a result of women's education levels 
or personal choices and hurts working women and employers today and in 
the future.
    The Paycheck Fairness Act and the Fair Pay Act will empower women 
to negotiate for equal pay, create incentives for employers to follow 
the law, and strengthen federal outreach, training and enforcement 
efforts.
    Investing in policies that attract women is simply good for 
business. Companies that hire and retain more women gain a competitive 
edge, show stronger financial performance and are able to access a 
larger pool of talent. Equitable pay practices result in improved 
employee retention, positive human capital outcomes and a more 
productive workforce. Women business owners know that hiring women and 
paying them equally is good for business. The current system is unfair 
to those employers who treat their employees fairly because it creates 
a competitive advantage for discriminatory employers.
    Business has nothing to fear from the Paycheck Fairness Act.

     Under the Paycheck Fairness Act, businesses will still be 
allowed to pay their employees differently based on merit, quantity or 
quality of production, seniority, education, training, experience or 
cost of living.
     The clarification of the ``establishment'' requirement for 
comparing wages will help businesses because it is clear and 
consistent.
     There is funding for education programs, technical 
assistance for employers and negotiation training to educate and 
empower women and girls.
     Employers that do right by their employees will be 
recognized by Department and Labor.

    As long as employers are paying equal pay for equal work, they have 
nothing to fear. Businesses with clearly written policies and practices 
which are implemented as well as a proactive review of the wages of 
existing employees will find compliance easy.
    BPW Foundation believes in a three-pronged approach to creating a 
successful workplace.

    1. Legislation like the Paycheck Fairness Act and the Fair Pay Act;
    2. Partnering with businesses to proactively implement and update 
their own workplace policies; and
    3. Empowering women through education.

    Pay equity is important to Business and Professional Women's 
Foundation because it is important to the well-being of working women, 
their families and workplaces. The Paycheck Fairness Act and the Fair 
Pay Act will help to rebuild the workforce and transform workplaces 
into those that ``work'' for women, their families and employers.
                                 ______
                                 
                              introduction
    Chairman Harkin, Ranking Member Enzi and distinguished members of 
the committee, thank you for this opportunity to testify today on 
behalf of Business and Professional Women's Foundation in support of 
equal pay for women and the Paycheck Fairness Act (S. 182) and the Fair 
Pay Act (S. 904).
    Business and Professional Women's Foundation (BPW Foundation) 
partners with women, employers and policymakers to create successful 
workplaces that practice and embrace diversity, equity and work-life 
balance. Through our groundbreaking research and our unique role as a 
convener of employers and employees, BPW Foundation leads the way in 
developing and advocating for policies and programs that ``work'' for 
both women and businesses. A successful workplace is one where women 
can succeed and businesses can profit.
    BPW Foundation has a network of supporters that includes both 
employers and employees in every community across the country. Both our 
employee and employer members support pay equity because they know it's 
good for business and workers.
                   seventy-seven cents on the dollar
    Forty-seven years after President John F. Kennedy signed the Equal 
Pay Act ensuring ``equal pay for equal work,'' the Census Bureau 
reports that in 2008, on average, full-time working women earn 77 cents 
to every dollar earned by men annually. At the time of the Equal Pay 
Act's passage in 1963, women earned 59 cents to every dollar earned by 
men, but progress has slowed and the gender wage gap closed by less 
than a penny between 2007 and 2008. Things are even worse for women of 
color. In 2009, the ratio of women's to men's weekly earnings was 80.2 
percent, but African-American women on average only earned 68.9 percent 
for every dollar earned by a white male per week, and Hispanic/Latina 
women only 60.2 cents.\1\
---------------------------------------------------------------------------
    \1\ Institute for Women's Policy Research Fact Sheet. The Gender 
Wage Gap: 2009. March 2010. http://www.iwpr.org/pdf/C350.pdf. Annual 
data for 2009 is not yet available.
---------------------------------------------------------------------------
    This wage gap is not simply a result of women's education levels or 
personal choices.\2\ A 2003 Government Accountability Office study 
concluded that even after accounting for ``choices'' such as work 
patterns and education, women earn an average of 80 cents for every 
dollar that men earn.\3\ Moreover, the Government Accountability Office 
has found that women with children earn about 2.5 percent less than 
women without children, while men with children enjoy an earnings boost 
of 2.1 percent, compared with men without children. So mothers pay a 
penalty for their choices while fathers receive a bonus.
---------------------------------------------------------------------------
    \2\ U.S. Department of Education, National Center for Education 
Statistics, Baccalaureate and Beyond Longitudinal Study, 1993/2003; 
Bureau of Labor Statistics, Employment Status of Women by Presence and 
Age of Youngest Child, Marital Status, Race, and Hispanic of Latino 
Ethnicity, 2004, http://www.bls.gov/cps/wlf-table6-2005.pdf.
    \3\ General Accounting Office, Women's Earnings: Works Patterns 
Partially Explain Difference Between Men's and Women's Wages, GAO-04-
35, October 2003, http://www.gao.gov/new.items/d0435.pdf.
---------------------------------------------------------------------------
    This persistent wage gap not only impacts the current economic 
security of women and their families; it directly affects the future 
financial security of many U.S. families. Women lose an average of 
$434,000 in income over a 40-year career due to the gender wage gap.\4\ 
Wage discrimination lowers total lifetime earnings, reducing women's 
benefits from Social Security and pension plans and inhibiting their 
ability to save not only for retirement but for other lifetime goals 
such as buying a home and paying for a college education.
---------------------------------------------------------------------------
    \4\ Jessica Arons, Lifetime Losses: The Career Wage Gap, Center for 
American Progress Action Fund, December 2008, http://
www.americanprogressaction.org/issues/2008/pdf/equal_pay
.pdf.
---------------------------------------------------------------------------
    Although enforcement of the Equal Pay Act as well as other civil 
rights laws has helped to narrow the wage gap, significant disparities 
remain and need to be addressed. Senators, although the gap has 
narrowed, it is now time for you to weigh in with your votes to help to 
continue to close the gap. This issue is still vital to both the growth 
and economic health of businesses but also the growth and economic 
health of individual women. The Paycheck Fairness Act (S. 182) and the 
Fair Pay Act (S. 904) will strengthen the Equal Pay Act in ways 
necessary to guarantee that women workers are not shortchanged solely 
because of their gender.
    The Lilly Ledbetter Fair Pay Act, signed into law on January 23, 
2009, ensured that victims of discrimination have fair access to the 
courts. Passage of the Lilly Ledbetter Fair Pay Act in the first days 
of the 111th Congress was clear recognition that wage discrimination is 
still a very real problem in the United States, but additional changes 
are still needed to close the persistent gap between men's and women's 
wages.
                    pay equity is good for business
    One of the most significant trends of the past 50 years has been 
the movement of women into the paid labor force and the growth of 
women-owned businesses. Women now make up half of the U.S. workforce 
and are projected to account for 49 percent of the increase in total 
labor force growth between 2006 and 2016.\5\ Women-owned firms 
represent 30 percent of all U.S. businesses and between 1997 and 2004 
the number of women-owned firms increased by 17 percent nationwide--
twice the rate of all firms.\6\
---------------------------------------------------------------------------
    \5\ U.S. Department of Labor, Bureau of Labor Statistics, 
Employment and Earnings, 2008 Annual Averages and the Monthly Labor 
Review, November 2007.
    \6\ Ibid.
---------------------------------------------------------------------------
    Investing in policies that attract women is simply good for 
business. Companies that hire and retain more women gain a competitive 
edge. These companies show stronger financial performance and are able 
to draw from a broader pool of talent in an era of talent shortages.
    The jobs of the future are going to call for more education, more 
critical thinking and more compassion--all skills women have in 
abundance. Research shows a correlation between high numbers of female 
senior executives and stronger financial performance. According to 
McKinsey and Company research, companies worldwide with the highest 
scores on nine key dimensions of organization--from leadership and 
direction to accountability and motivation--are likely to have higher 
operating margins than their lower ranked counterparts. Among the 
companies for which information on the gender of senior managers was 
available, those with three or more women on their senior-management 
teams scored higher on all nine organizational criteria than did 
companies with no senior-level women.\7\ Companies that have moved 
successfully to increase the hiring, retention and promotion of female 
executives tend to perform better financially.
---------------------------------------------------------------------------
    \7\ Ibid.
---------------------------------------------------------------------------
    Pay equity is good for business and will result in improved 
employee retention, positive human capital outcomes, and a more 
productive work force. In addition to talent, acquisition gender 
diversity helps companies meet business goals. One European Commission 
study showed that 58 percent of companies with diversity programs 
reported higher productivity as a result of improved employee 
motivation and efficiency, and 62 percent said that the programs helped 
attract and retain highly talented people.\8\
---------------------------------------------------------------------------
    \8\ Ibid.
---------------------------------------------------------------------------
    Women business owners know that hiring women and paying them 
equally is good for business. A quest for fair pay is often the reason 
highly skilled women leave an employer to start their own companies. 
Business owners like Debra Ruh support the Paycheck Fairness Act. Ms. 
Ruh owns TecAccess in Rockville, VA. TecAccess is a consulting firm 
that helps companies update their web and information technology 
systems in order to reach and better serve people with disabilities. 
Like many women business owners, Ms. Ruh struck out on her own so that 
she could run a business her way. She told BPW Foundation it would 
never occur to her to pay a woman less than a man; it would be short-
sighted and bad for business--she would lose out on a creative, 
innovative and loyal workforce. It would be supremely unfair to 
business owners like Debra Ruh who are doing right by their employees 
to have to compete on an unfair playing field against companies that 
discriminate and pay their women workers less.
    Ms. Ruh could not be here today because she is busy running her 
business, but she wanted me to tell her story.

          ``I created my business because people with disabilities do 
        not have equal access to employment. It is sad that after so 
        many years in the workforce, women still do not get paid the 
        same as their male counterparts. If we can't pay women equal 
        pay, it causes all other minority groups to become more and 
        more disenfranchised. It is hard to believe that today, women 
        are not paid fair and equal wages compared to their male peers. 
        Many countries look to the United States to lead the way with 
        civil rights and it is time to pay women what they deserve. 
        Please support the Paycheck Fairness Act.''

    Many employers recognize that eliminating pay differentials makes 
good business sense and can help with competitiveness, worker retention 
and productivity. Another such employer is business owner Heather 
Jernberg, a partner at Boreas Group, a management consulting firm that 
specializes in technology planning for utility companies in Denver, CO. 
The Boreas Group is 7-years old and nets over $1 million a year. Ms. 
Jernberg supports the Paycheck Fairness Act.

          ``I believe that all workers have a right to know what their 
        peers are earning, in order to negotiate the best possible 
        salary for themselves. By prohibiting employer retaliation, 
        women and men will be able to research wages without fear of 
        recrimination at their company. I have worked for organizations 
        where my salary was published in the local paper and companies 
        where I risked being fired for discussing my paycheck with co-
        workers. I prefer full disclosure of wage information.''
                     paycheck fairness act (s. 182)
    The Paycheck Fairness Act will update and strengthen the Equal Pay 
Act, closing loop holes and improving the law's effectiveness. The 
Equal Pay Act of 1963 has not lived up to its promise to provide 
``equal pay for equal work.'' The Paycheck Fairness Act would take 
meaningful steps to empower women to negotiate for equal pay, create 
incentives for employers to follow the law and strengthen Federal 
outreach and enforcement efforts. BPW Foundation has been fighting for 
equal pay for women for over 90 years and supports the Paycheck 
Fairness Act because it is a common-sense approach to closing the gap 
between men's and women's wages.
    The Paycheck Fairness Act will:

     clarify the justifiable reasons for wage disparities and 
what ``establishment'' means when comparing wages;
     prohibit retaliation for disclosing wages;
     increase training, data collection and education on the 
gender wage gap; and
     develop voluntary guidelines for employers and recognize 
model employers.

    Under the Paycheck Fairness Act, businesses will still be allowed 
to reward employees with merit and performance-related increases. Wage 
differentials based on merit, quantity or quality of production, 
seniority, education, training or experience are still allowed under 
the law. However, if a business wants to pay men and women doing the 
same job differently, there must be a business reason for doing so. 
Discrimination based on factors that are used as substitutes for gender 
such as a male worker's stronger salary negotiation skills or an 
assumption that women will work for less would not be allowed.
    The clarification of the ``establishment'' requirement will help 
businesses. Currently, courts in different jurisdictions have 
interpreted the establishment requirement in the Equal Pay Act 
differently which has led to unpredictability. Some courts have defined 
the term ``establishment'' narrowly to mean only employees in the same 
building. The Paycheck Fairness Act clarifies that a comparison between 
employees to determine fair wages need not be between employees in the 
same physical place of business. The Paycheck Fairness Act allows 
plaintiffs to compare their pay to individuals doing the same job at a 
location within the same county, parish or similar geographic 
jurisdiction.
    The Paycheck Fairness Act addresses the causes of the wage gap 
along with the results. This legislation would provide funding for 
education programs, employer guidelines and technical assistance as 
well as recognition of good practices by employers. In addition, there 
is a competitive grant program to develop salary negotiation training 
for women and girls. The Paycheck Fairness Act also recognizes that 
there are many employers doing right by their employees and establishes 
a recognition program through the Department of Labor for those 
employers.
    Employers in violation of the Equal Pay Act receive an unfair 
advantage. The current system is unfair to those employers who treat 
their employees fairly because it creates a competitive advantage for 
discriminatory employers. Currently, it is worthwhile for some 
businesses to pay a woman less than her male counterparts, and gamble 
that she won't sue for back wages in the future. If she doesn't sue, 
the employer keeps the ``savings''; if she does, the employer only has 
to pay 2 years of back pay. This encourages discriminatory pay.
    Employers will NOT have to pay damages if the pay disparity was 
unintentional. Punitive damages are only awarded if the plaintiff can 
demonstrate that the employer acted with malice or reckless 
indifference.
    Employers are allowed to pay workers at some work sites more 
because the cost of living is higher in that location. Under the 
Paycheck Fairness Act, employers can justify wage disparity based on 
objective and identifiable differences in the cost of living. The 
Paycheck Fairness Act clarifies that a plaintiff can only compare her 
pay to that of an individual doing the same job at a location within 
the same county.
    The Paycheck Fairness Act does not impose onerous data collection. 
The Paycheck Fairness Act would require the Equal Employment 
Opportunity Commission to develop regulations directing employers to 
collect gender wage data which they already collect for race and 
national origin in compliance with title VII.
                      business has nothing to fear
    The Paycheck Fairness Act will not bankrupt employers through an 
explosion of court cases, class-action lawsuits and damages awards as 
long as they are paying equal pay for equal work. Businesses which have 
clearly written policies and practices and proactively review the wages 
of existing employees will find compliance with the Paycheck Fairness 
Act easy. Development and adoption of formal, written pay equity 
policies are crucial to addressing the gender wage gap. Such policies 
lay the groundwork for unbiased compensation systems and provide 
metrics for analyzing salaries to identify disparities.
    The Paycheck Fairness Act would ensure that women can obtain the 
same remedies as those subject to discrimination on the basis of race 
or national origin. The Paycheck Fairness Act extends to victims of 
sex-based discrimination the same standards for class action lawsuits 
and the same options for damages that are currently available in cases 
of race-based or national origin discrimination. The Equal Pay Act does 
not currently allow the award of compensatory or punitive damages. 
Currently, women who have been unfairly paid less than their male 
counterparts are only entitled to recover 2 years of their unpaid 
wages. Those subject to race and national origin discrimination are 
eligible for compensatory or punitive damages and are not subject to 
damages caps. Women and men who endure sex-based wage discrimination 
should be entitled to the same remedies as those available in race and 
national origin cases. These are regulations familiar to business and 
with which they are already complying.
    There are protections for business in existing law. There are 
limits on improperly high verdicts. Punitive damages are only awarded 
if the employer intentionally discriminated and acted with ``malice or 
reckless indifference to the plaintiff 's federally protected rights.'' 
In addition, there are protections for business against excessive 
damages awards in the legal process. If a judge feels a jury award is 
excessive, the judge can reduce or vacate the amount. Finally, there 
are constitutional limitations on the amount of punitive damages that a 
plaintiff can receive.
                         fair pay act (s. 904)
    The persistent gap between men's and women's wages requires a many 
pronged approach. That is why BPW Foundation also supports the Fair Pay 
Act (S. 904). The Fair Pay Act would require equal pay for equivalent 
jobs--jobs that are comparable in skill, effort, responsibility and 
working conditions. This ``equivalent'' requirement is not present in 
the Paycheck Fairness Act. The Paycheck Fairness Act does not address 
``comparable worth'' or apply any such guidelines to employers.
    The Fair Pay Act would also require employers to disclose pay 
scales and pay rates, but not individual salary information, for all 
job categories at a given company. Providing information will prevent 
costly litigation and encourage informed pay discussions between 
employees and employers. Right now, women who suspect pay 
discrimination must file a lawsuit and go into a drawn out legal 
discovery process to find out whether they make less than the man 
beside them. With pay statistics readily available, this expensive 
process could be avoided. The number of lawsuits would surely decrease 
if employees could see up front that they were being treated fairly.
     eliminating the wage gap is good for families and for business
    Making the workplace a level ``paying'' field is good for women, 
their families and business. If the wage gap were eliminated, annual 
family income would increase by $4,000. Single mothers would take home 
an average of 17 percent more; single women, 13.4 percent; and married 
women, 6 percent in income if they were paid fairly.\9\ Additionally, 
society loses out on tax revenue and purchasing power from women who 
are not paid a fair wage.
---------------------------------------------------------------------------
    \9\ AFL-CIO & Institute for Women's Policy Research, Equal Pay for 
Working Families: National and State Data on Pay Gap and its Costs, 
1999. http://www.iwpr.org/pdf/C343.pdf.
---------------------------------------------------------------------------
    BPW Foundation believes in a three-pronged approach to creating a 
successful workplace.

    1. Legislation like the Paycheck Fairness Act and the Fair Pay Act;
    2. Working with businesses to proactively implement and update 
their own workplace policies; and
    3. Empowering women through education.

    Pay equity is important to BPW Foundation because it is important 
to the well-being of working women, their families and workplaces. The 
Paycheck Fairness Act will move us along the road toward successful 
workplaces for employers and employees.
    Thank you.

    Senator Dodd. Thank you very, very much. Appreciate it.
    Ms. McFetridge, thank you.

 STATEMENT OF JANE M. McFETRIDGE, ESQ., PARTNER, JACKSON LEWIS 
                        LLP, CHICAGO, IL

    Ms. McFetridge. Mr. Chairman and members of the committee, 
thank you for this opportunity to testify here today.
    I represent employers in claims of employment 
discrimination. My firm represents thousands of employers who 
will be severely impacted should the Paycheck Fairness Act 
become law.
    For the last 30 years, I have been an active member of the 
U.S. workforce, and for more than 20 of those years, I have 
represented companies in labor and employment disputes. I am an 
employer myself. I am also a working mother of two daughters, 
one of whom is in college and, hopefully, will be joining the 
workforce herself in the near future.
    The Paycheck Fairness Act is theoretically designed to help 
people like me and to lay a better foundation for my daughters 
and women of their generation. If I thought for a moment that 
the act would help women generally or, more specifically, my 
daughters and their peers, I would not be here testifying 
today.
    The Paycheck Fairness Act will very negatively impact 
businesses in this country and the people who comprise them, 
including women, for a number of reasons. First, the act would 
provide unlimited punitive and compensatory damages for any 
size business. In effect, the act proposes a legal and 
regulatory schematic akin to what is currently in effect in 
California, pursuant to that State's laws, which provide for 
unlimited damages in discrimination cases.
    One does not need to be a practitioner of labor and 
employment law, or even a lawyer, to take note of the problems 
this has caused in California. California has many, many times 
more litigation of this nature than any other State in the 
country. And the cost of doing business there is significantly 
higher than in other locations.
    Indeed, I have clients who have made the affirmative 
decision not to do business in California for this very reason, 
even though the State has large markets that would otherwise 
readily lend themselves to their business models.
    The act also provides for opt-out class actions. When 
coupled with unlimited damages, there would be a watershed of 
this type of extraordinarily oppressive and expensive 
litigation. Historically, damages caps have been effective to 
both deter frivolous lawsuits and to protect employers, 
especially small businesses, from financial ruin as a result of 
unusually large awards. The pending legislation has no such 
constraints and thus has the potential to cripple companies, 
particularly smaller businesses.
    The result is untenable in light of President Obama's 
recent statements about small businesses being one of the 
biggest drivers of employment that we have, as well as recent 
efforts by Congress to spur job creation through a variety of 
record-setting costly stimulus and job creation initiatives. In 
the midst of this financial crisis, we should be encouraging 
small businesses to expand, not making it more difficult for 
them to operate and survive.
    Second, the act proposes extraordinarily complex changes to 
affirmative defenses available to employers in claims of this 
nature. It will take years of costly litigation to sort out 
what is meant by these new affirmative defenses with our courts 
serving as super human resources departments, a role they have 
long decried.
    In the meantime, employers are left with little guidance as 
to how to conduct their businesses under this new paradigm. 
Small businesses may not have a human resources professional, 
let alone a compensation expert or an in-house counsel. Such 
businesses are not going to be in a position to determine if 
their pay practices comply with the new affirmative defense 
parameters.
    As a practical matter, there is simply no way an employer 
will be able to demonstrate that each and every pay 
determination it makes is consistent with business necessity. 
There may be dozens or hundreds of factors that go into 
determining an employee's compensation--some objective and some 
subjective, and all of which are legitimate nondiscriminatory 
bases.
    Consider, for example, jobs that require personal 
interaction, like a waitress or a salesperson. Under title VII, 
employers may consider unquantifiable qualities, such as a 
friendly disposition or positive attitude. This is also true 
currently under the Equal Pay Act. Under the Paycheck Fairness 
Act, however, pay differentials based upon such immeasurable 
qualities may be impermissible.
    Consider also a company, for instance, a retail 
establishment, that has made the decision to give hiring 
preferential for entry-level sales positions to applicants with 
college degrees, even though a salesperson probably doesn't 
need a college degree to do that particular job.
    Under the proposed legislation, the company's 
nondiscriminatory preference for college graduates could be 
challenged as not consistent with business necessity. In this 
scenario, it is the government and not the business owner who 
would be making decisions about how businesses should run.
    The fact that there is an unexplained gender wage gap, 
which, by many calculations, is as little as 5 percent, does 
not mean that the differential is attributable to 
discrimination, as proponents of the Paycheck Fairness Act 
suggest. Rather, it means only what it states, that there is an 
unexplained differential.
    The pay differential has steadily improved over the last 40 
years, and there is no reason to believe that the current legal 
landscape, which has ushered in this change, will not continue 
to address the issues that remain, particularly with robust 
diversity initiatives and training programs, such as that 
discussed by Senator Enzi, that enable women to assume higher-
paying nontraditional positions.
    A review of EEOC statistics further demonstrates the point. 
In 2009, the EEOC found reasonable cause in only 4.6 percent of 
the EPA charges and 5 percent of the title VII sex 
discrimination charges that it received, demonstrating the vast 
majority of employees who filed charges do not have valid 
claims. Moreover, in claims where the EEOC found a basis to 
proceed, successful parties received over $126 million in 
compensation, proof positive that the EEOC is already 
identifying and compensating the true victims of pay 
discrimination.
    The Paycheck Fairness Act would not only discourage 
employers from creating new jobs. It may force them to 
eliminate existing jobs if large components of their operating 
budgets are diverted from payroll to defending unnecessary 
litigation prompted by the passage of this legislation.
    I have heard proponents of this suggest that baseless 
claims would be readily dismissed. Anyone suggesting that has 
not personally been involved with litigation of this nature. I 
know firsthand that baseless claims can take years to resolve, 
years during which companies spend thousands and thousands of 
dollars responding to discovery, diverting personnel to assist 
the lawyers with the litigation, and paying their outside 
counsel.
    And I should also note that many of the people involved 
with that litigation are women themselves, either in managerial 
roles or as witnesses. Many companies just throw in the towel 
early on to avoid these protracted costs and disruptions. 
Creating greater incentives for baseless litigation will only 
increase the problem.
    At its core, the Paycheck Fairness Act will cause confusion 
in the workplace and in the courts. It will take years of 
expensive litigation to understand and define its terms. The 
plaintiffs' bar will benefit. My firm, and me personally, may 
well benefit. My daughters and working women across the 
country, however, will not.
    Though we are not quite at the finish line, our existing 
legal framework, including title VII and the EPA and the Lilly 
Ledbetter Act, has proven successful in narrowing the wage gap. 
It would be ill-advised to disrupt this framework with 
legislation that will do nothing but impede the ability of 
American companies to compete in the global marketplace.
    Thank you.
    [The prepared statement of Ms. McFetridge follows:]
             Prepared Statement of Jane M. McFetridge, Esq.
    Mr. Chairman and members of the committee, thank you for this 
opportunity to testify on S. 182, the Paycheck Fairness Act. My name is 
Jane McFetridge. I am a Partner at Jackson Lewis LLP, where I manage 
the firm's Chicago office.\1\ Jackson Lewis is a national law firm of 
over 600 lawyers in 45 offices, all of whom are dedicated exclusively 
to the practice of labor and employment law. For over 20 years, I have 
represented employers in all types of employment discrimination 
litigation, including class actions, collective actions, and multi-
plaintiff lawsuits brought both by private parties and by the Equal 
Employment Opportunity Commission. I also routinely counsel businesses, 
from very small to extremely large, on a wide variety of human 
resources and employment law-related issues and concerns, and have 
spoken and written frequently on employment law topics in this subject 
area. I have extensive experience dealing with the Equal Employment 
Opportunity Commission and the U.S. Department of Labor, as well as 
State and local labor and employment agencies throughout the United 
States.
---------------------------------------------------------------------------
    \1\ The views expressed herein are my own.
---------------------------------------------------------------------------
    You have asked me to speak about the Paycheck Fairness Act. As you 
might expect, given my background and my area of practice, I have some 
strong opinions on this topic. Those opinions are informed not just by 
experience as an employment litigator, but as a working mother who has 
been an active participant in the U.S. workforce for the last 30 years. 
I am the mother of two daughters. One is in college now and will 
hopefully join the workforce soon, and the other is a few years behind. 
If I believed the Paycheck Fairness Act would advance the goal of 
eradicating gender discrimination in the workplace, I would ardently 
support the measure--not just for myself and others like me, but for my 
two daughters and women of their generation. However, based upon my own 
personal experience, as well as my legal work representing employers, 
it is my unequivocal belief that passage of the Paycheck Fairness Act 
is not the solution.
    The Paycheck Fairness Act would preclude employers from making 
market-based pay determinations, encourage frivolous litigation, and 
expose companies to financial ruin by way of uncapped punitive damages 
and massive class action litigation. Rather than eliminating 
discrimination, the legislation, if passed, would provide a windfall to 
attorneys who litigate employment discrimination cases, but result in 
no meaningful change in the extant wage differential. Furthermore, the 
Paycheck Fairness Act would levy enormous cost on companies and 
employers already reeling from the worst economic crisis we have seen 
in most of our lives.
    Numerous studies demonstrate that women have made vast strides in 
the workforce since enactment of the Equal Pay Act of 1963 and Title 
VII of the Civil Rights Act of 1964.
    Though we are not quite at the finish line, the existing legal 
framework has proven successful in narrowing the wage gap and 
compensating victims of unlawful discrimination. It would be ill 
advised to disrupt that framework with onerous legislation that will do 
nothing but impede the ability of American companies to compete in the 
global marketplace, and serve no real ameliorative or beneficial 
purpose, other than to increase financial opportunities for both the 
plaintiffs' and defense bar.
      current protections against gender-based pay discrimination
    While women have not always enjoyed the same wages for the same 
work as men, great inroads have been made over the past 45 years to 
bring about pay equality between the sexes. Most notably, Congress has 
passed two comprehensive pieces of legislation--the Equal Pay Act of 
1963 (``EPA'') and Title VII of the Civil Rights Act of 1964 (``title 
VII'')--which strike at the heart of gender-based pay discrimination. 
In addition to the EPA and title VII, which will be discussed in more 
detail below, many States also have their own laws that prohibit 
employers from discriminating against women. For instance, my home 
State of Illinois has passed both the Illinois Equal Pay Act and the 
Illinois Human Rights Act, both of which prohibit Illinois employers--
many of whom are not covered by the Federal EPA or title VII--from 
discriminating on the basis of sex with respect to compensation. 
Additionally, Executive Order 11246, enforced by the Office of Federal 
Contract Compliance Programs (``OFCCP''), prohibits Federal contractors 
and subcontractors from discriminating in employment decisions on the 
basis of sex. This legislative and executive framework, when taken in 
conjunction with voluntarily-implemented diversity initiatives and 
training programs, provides sufficient assurances that we as a country 
are well on our way to addressing any remaining pay disparity that may 
exist between the sexes as a result of unlawful discrimination.
    Mechanics of the EPA.--Enacted by Congress in 1963, the EPA 
provides that no employer may pay a female employee less than a male 
employee for ``substantially equal'' work. To present a prima facie 
case of discrimination under the EPA, a plaintiff must show that an 
employer pays workers of one sex more than workers of the opposite sex 
for jobs substantially equal in skill, effort, and responsibility, 
assuming those jobs are performed under similar working conditions 
within the same establishment. Where this is the case, an employer will 
be held liable unless it can demonstrate that the differential results 
from: (i) a seniority system; (ii) a merit system; (iii) a system which 
measures earnings by quantity or quality of production; or (iv) any 
factor other than sex.\2\ Critically, there is no requirement that a 
plaintiff prove any discriminatory intent or animus on the part of her 
employer in order to recover.\3\
---------------------------------------------------------------------------
    \2\ 29 U.S.C.  206(d)(1).
    \3\ See 29 U.S.C. 206(d)(1) (making clear that the only relevant 
inquiry is whether the alleged pay disparity resulted from ``any factor 
other than sex''); Mickelson v. New York Life Ins. Co., 460 F.3d 1304, 
1310-11 (10th Cir. 2006).
---------------------------------------------------------------------------
    Successful plaintiffs may recover back pay, front pay (if unlawful 
retaliation is proven), prejudgment interest, attorneys' fees and 
costs.\4\ Moreover, where willfulness is shown, an additional amount 
equal to the back pay found to be due and owing may be awarded as 
liquidated damages, and the defendant may also be fined up to $10,000 
and imprisoned for up to 6 months.\5\
---------------------------------------------------------------------------
    \4\ 29 U.S.C.  216(b).
    \5\ Id.; 29 U.S.C. 216(a).
---------------------------------------------------------------------------
    Since 1979, the EPA has been enforced by the Equal Employment 
Opportunity Commission (the ``EEOC''), which may bring its own suits to 
enforce the law.\6\
---------------------------------------------------------------------------
    \6\ In 1986, the EEOC issued detailed regulations entitled ``EEOC's 
Interpretations of the Equal Pay Act,'' 29 CFR  1620, as amended. In 
2006, additional regulations were issued, 29 CFR  1621, as amended.
---------------------------------------------------------------------------
    Mechanics of Title VII.--Similarly, title VII also prohibits 
compensation discrimination on the basis of enumerated protected 
characteristics--including sex.\7\ An employee may assert a claim for 
gender-based pay discrimination by filing a charge of discrimination 
with the EEOC and later bringing a lawsuit in Federal court upon 
receipt of her notice of right to sue (regardless of whether the EEOC 
finds ``cause'' for concluding that discrimination occurred). Employees 
need not be represented by counsel to participate in the EEOC 
processes, including the investigation of their charge. Indeed, as the 
U.S. Supreme Court has reiterated, title VII ``sets up a `remedial 
scheme in which lay persons, rather than lawyers, are expected to 
initiate the process.' '' \8\ An attorney may also not be necessary at 
the litigation stage should the EEOC determine to file suit on the 
employee's behalf.
---------------------------------------------------------------------------
    \7\ 42 U. S. C.  2000e-2(a).
    \8\ Federal Express Corp. v. Holowecki, 128 S. Ct. 1147, 1158 (Feb. 
27, 2008).
---------------------------------------------------------------------------
    Plaintiffs alleging gender-based pay discrimination in violation of 
title VII may do so by either showing disparate treatment or disparate 
impact. Generally, in a disparate treatment case, the McDonnell Douglas 
burden-shifting analysis applies. A plaintiff must first establish a 
prima facie case of pay discrimination. The burden then shifts to the 
employer to offer evidence of a legitimate, non-discriminatory reason 
for the pay differential. If the defendant meets this burden of 
production, the burden then shifts back to the plaintiff to prove by a 
preponderance of the evidence that the employer's explanation is a 
pretext for unlawful sex discrimination.
    In contrast, in a typical title VII disparate impact case, a 
plaintiff must first identify a specific policy or practice with a 
statistically significant adverse impact on women; the plaintiff need 
not allege any discriminatory intent. Once the plaintiff has made this 
showing, the burden then shifts to the employer to produce evidence 
that the policy or action was ``job-related for the position in 
question and consistent with business necessity.'' \9\ Ultimately, the 
plaintiff may still prevail if she can prove that the employer refused 
to adopt ``an available alternative employment practice that has less 
disparate impact and serves the employer's legitimate needs.'' \10\
---------------------------------------------------------------------------
    \9\ 42 U. S. C.  2000e-2(k)(1)(A)(i).
    \10\ Ricci v. DeStefano, 129 S. Ct. 2658, 2673 (June 29, 2009) 
(referencing 42 U.S.C.  2000e-2(k)(1)(A)(ii) and (C)).
---------------------------------------------------------------------------
    Historically, an employer found guilty of pay discrimination under 
title VII was subject to injunctive relief, as well as back and front 
pay. When Congress passed the Civil Rights Act of 1991, however, it 
made compensatory and punitive relief available in cases involving 
unlawful intentional discrimination.\11\ To receive punitive damages, 
which are subject to a statutory cap, the complaining party must show 
that ``the respondent engaged in a discriminatory practice . . . with 
malice or with reckless indifference to the federally protected rights 
of an aggrieved individual.'' \12\
---------------------------------------------------------------------------
    \11\ 42 U.S.C.  1981a(a)(1).
    \12\ 42 U.S.C.  1981a(b)(1).
---------------------------------------------------------------------------
 the existing legal framework is working and there is no evidence the 
   wage gap today, such as it is, stems from employer discrimination
    Proponents of S. 182 oft-cite that, despite the existing legal 
framework, women continue to make only 77 percent of men's wages. Not 
only is this figure overly simplistic in that it is based on the median 
earnings of men and women as compiled by the U.S. Census Bureau, but 
the statistic is bandied about as if it were an automatic indication of 
employers' discrimination against women. This is simply not the case.
    During the past three decades, women have made notable gains in the 
workforce and in pay equity, including significant gains in real 
earnings, increased labor force participation, advances in educational 
attainment, and employment growth in higher paying occupations. Indeed, 
the U.S. Department of Labor (``DOL'') has recognized that while the 
median usual weekly earnings for women working full-time in 1970 was 
only 62.1 percent of those for men, the raw wage gap had shrunk from 
37.9 percent to just 21.5 percent by 2007.\13\
---------------------------------------------------------------------------
    \13\ U.S. Department of Labor, Foreword to Consad Research 
Corporation, An Analysis Of Reasons For The Disparity In Wages Between 
Men And Women, at 1 (Jan. 12, 2009).
---------------------------------------------------------------------------
    Moreover, there are observable differences in the workforce 
attributes of men and women that account for much of the remaining wage 
gap. According to a January 2009 report prepared for the DOL by CONSAD 
Research Corp., these variables include:

     A greater percentage of women than men work part-time, 
which tends to pay less than full-time work.
     A greater percentage of women than men tend to leave the 
labor force for child birth, or to care for their children or elderly 
relatives. Part of the wage gap is explained by the percentage of women 
who were not in the labor force during previous years, the number of 
children in the home, and the age of women.
     Women, especially working mothers, tend to value ``family 
friendly'' employment policies more than men, and are often willing to 
accept a lower paying job in return for such policies. Part of the wage 
gap is therefore explained by industry and occupation, particularly, 
the percentage of women who work in a particular industry and 
occupation.\14\
---------------------------------------------------------------------------
    \14\ Id. at -1-2.

    After adjusting for these non-discriminatory variables, the 
adjusted gender wage gap is between 4.8 and 7.1 percent, and some, or 
all, of the remaining differential may be explained by factors not 
included in the CONSAD study due to data limitations.\15\ For instance, 
the CONSAD study focused on wages rather than total compensation.\16\ 
Research indicates that women may value non-wage benefits more than men 
do, and consequently choose to take a greater part of their 
compensation in fringe benefits, such as health insurance.\17\ 
Furthermore, the fact that there is an unexplained gender wage gap does 
not mean that the differential is attributable to discrimination, as 
proponents of the Paycheck Fairness Act suggest. Rather it means only 
what it states--that there is an unexplained differential.
---------------------------------------------------------------------------
    \15\ Id. at 1.
    \16\ Id. at 2.
    \17\ Id.
---------------------------------------------------------------------------
    Similarly, according to a study of the Federal workforce conducted 
by the U.S. Government Accountability Office (the ``GAO''), ``all but 
about 7 cents of the [wage] gap can be explained by differences in 
measurable factors such as the occupations of men and women and, to a 
lesser extent, other factors such as education levels and years of 
Federal experience.'' \18\ ``[F]actors for which we lacked data or are 
difficult to measure, such as experience outside the Federal 
Government, may account for some or all of the remaining pay gap.'' 
\19\ Even looking at the ``raw'' data, the wage gap in the Federal 
workforce declined from 28 percent in 1988 to 11 percent in 2007.\20\
---------------------------------------------------------------------------
    \18\ United States Government Accountability Office, Women's Pay: 
Converging Characteristics of Men And Women in the Federal Workforce 
Help Explain the Narrowing Pay Gap, at 2 (Apr. 28, 2009) (Statement of 
Andrew Sherrill, Director, Education, Workforce, and Income Security 
Issues, Before the Joint Economic Committee, U.S. Congress).
    \19\ Id.
    \20\ Id.
---------------------------------------------------------------------------
    It is my firm belief that any wage gap between men and women is 
unacceptable. However, it is important that we talk about real numbers 
and not the misleading ``raw wage gap'' proponents of the Paycheck 
Fairness Act repeatedly point to. Employers cannot control their 
employees' educational and career choices. Nor can employers interfere 
with an employee's choice to enter or leave the workforce, or work a 
part or flex-time schedule, in order to care for her family. All an 
employer can do is pay two similarly-situated employees the same salary 
regardless of gender. That is what the law requires. Based on the 
results of the CONSAD and GAO studies, this is also what most employers 
appear to be doing. As the DOL stated in its Foreword to the CONSAD 
report, ``[T]he raw wage gap should not be used as the basis to justify 
corrective action. Indeed, there may be nothing to correct. The 
differences in raw wages may be almost entirely the result of 
individual choices being made by both male and female workers.'' \21\
---------------------------------------------------------------------------
    \21\ U.S. Department of Labor, supra note 13, at 2.
---------------------------------------------------------------------------
      the existing legal framework protects victims of unfair pay 
                             discrimination
    This is not to say that employers do not occasionally, 
intentionally or otherwise, make discriminatory pay decisions based on 
gender. When this occurs, both the EPA and title VII, as well as 
commensurate State and local laws, provide multiple avenues for women 
to pursue claims of unequal pay for equal work, including directly 
bringing a lawsuit on their own behalf, filing a charge with the EEOC, 
having the EEOC bring a lawsuit on their behalf, or bringing a 
collective action or class action on behalf of similarly-situated 
employees.
    Multiple forms of redress are available to plaintiffs.--From an 
employee's perspective, the EPA may be the most favorable and lenient 
of the statutes with respect to both the ease of pursuing a claim 
against an employer (without the need to first exhaust administrative 
remedies) and the relatively low standard for establishing liability 
(what amounts to strict liability). However, an employee may also 
choose to bring a title VII claim in order to recover punitive and 
compensatory damages (as opposed to back pay and liquidated damages) or 
in order to institute an opt-out class action. Indeed, it is not 
uncommon for women alleging pay discrimination to bring parallel claims 
under both the EPA and title VII, as well as under State and local 
antidiscrimination laws, to ensure that they receive the fullest 
protection of the law. When parallel claims are brought, plaintiffs may 
recover under both statutes for the same period of time provided they 
do not receive duplicative recovery for the same ``injury.'' As such, 
they may recover back pay, front pay, compensatory damages, liquidated 
damage, punitive damages, and injunctive relief. As more fully 
illustrated in the chart attached as Appendix 1, the passage of the 
Paycheck Fairness Act will not increase the protections afforded to 
women allegedly suffering pay discrimination.
    Plaintiffs are taking advantage of existing statutes.--Proponents 
of the Paycheck Fairness Act may point to EEOC and employment 
litigation statistics to demonstrate that women are still victims of 
unlawful compensation discrimination. What these statistics prove to 
me, however, is that the average employee is well aware of her right to 
be free of discrimination in the workforce, and readily seeks redress 
when she feels her rights have been violated.\22\ Indeed, according to 
the Statistical Abstract of the United States 2010, there were 13,036 
employment cases commenced and 15,452 cases pending in U.S. District 
Courts in 2008.\23\ There are thousands more pending in State courts 
throughout the country.
---------------------------------------------------------------------------
    \22\ Kevin M. Clermont & Stuart J. Schwab, How Employment 
Discrimination Plaintiffs Fare in Federal Court, Journal Of Empirical 
Legal Studies 429 (2004); See United States Courts Judicial Facts And 
Figures, available at http://www.uscourts.gov/judicial
factsfigures/2008/all2008judicialfactsfigures.pdf (last visited Mar. 4, 
2010).
    \23\ U.S. District Courts--Civil Cases Commenced and Pending: 2000 
to 2008, available at http://www.census.gov/compendia/statab/2010/
tables/10s0323.pdf (last visited Mar. 3, 2010).
---------------------------------------------------------------------------
    At the administrative level, charge receipt statistics also remain 
strong. In 2009, the EEOC received a total of 942 charges under the 
EPA.\24\ The EEOC found ``reasonable cause'' in only 4.6 percent of the 
charges, and successful parties received approximately $4.8 million in 
compensation.\25\ In addition to EPA charges, in 2009, the EEOC 
received 28,028 title VII sex discrimination charges generally, but 
found ``reasonable cause'' in only 5 percent of the charges, with 
successful parties receiving $121.5 million in compensation.\26\ These 
statistics demonstrate that the EEOC identifies and obtains 
compensation for true victims of pay discrimination. The statistics 
also demonstrate, however, that the vast majority of charges lack 
merit, as shown in the statistically small number of cause findings 
made by the EEOC after they have thoroughly investigated and evaluated 
the charging party's allegations of discrimination. Passage of the 
Paycheck Fairness Act would only encourage additional frivolous 
charges.
---------------------------------------------------------------------------
    \24\ EEOC Equal Pay Act Charges, available at http://www.eeoc.gov/
eeoc/statistics/enforcement/epa.cfm (last visited Mar. 5, 2010).
    \25\ Id.
    \26\ EEOC Sex-Based Charges, available at http://
www.eeoc.govieeocistatistics/enforcement/sex.cfm (last visited Mar. 5, 
2010).
---------------------------------------------------------------------------
    Moreover, class-actions continue to serve as an aggressive 
mechanism for both vindicating the rights of victims of pay 
discrimination and incentivizing employers to root out any vestiges of 
such discrimination. For example:

     In 2004, Boeing Co. agreed to pay up to $72.5 million to 
settle a sex-discrimination lawsuit filed on behalf of 29,000 current 
and former female employees at its Seattle area facilities. Under the 
settlement, Boeing also agreed to monitor salaries and overtime 
assignments, and to conduct annual performance reviews, in an effort to 
hold managers responsible for how they make salary and overtime 
decisions. The settlement affected non-executive salaried and hourly 
female workers, from janitors to first-level managers.\27\
---------------------------------------------------------------------------
    \27\ Beck v. Boeing, 2004 U.S. Dist. LEXIS 27622 (W.D. Wash. April 
4, 2004).
---------------------------------------------------------------------------
     In July 2007, a Federal district court in New York 
certified a class of female sales employees at Novartis Pharmaceuticals 
in a $200 million lawsuit against the company. Among other evidence 
presented to the court, statistical evidence revealed that female 
employees were paid approximately $75 per month less than their male 
counterparts.\28\
---------------------------------------------------------------------------
    \28\ Velez v. Novartis Pharms. Corp., 244 F.R.D. 243 (S.D.N.Y. July 
31, 2007).
---------------------------------------------------------------------------
     In July 2009, a Federal district court in Texas 
preliminarily approved a $9.1 million settlement of a sex 
discrimination class action against Dell Inc. alleging that the company 
systematically discriminated against female employees in pay, 
promotions, terminations, and other terms and conditions of employment. 
In addition to the monetary award, the settlement agreement requires 
Dell to hire a labor economist to analyze existing compensation 
practices and recommend pay equity adjustments for current female 
employees. Dell is also required to hire an industrial psychologist to 
assist in policy formation regarding compensation, performance 
evaluations, hiring, promotions, and assignments.\29\
---------------------------------------------------------------------------
    \29\ Hubley et al. v. Dell Inc., No. 08-cv-00804 (W.D. Tex.).
---------------------------------------------------------------------------
      In the historic Wal-Mart v. Dukes gender discrimination 
class action, the U.S. Court of Appeals for the Ninth Circuit affirmed 
a lower court's decision to certify a class of over 1.5 million past 
and present employees spread across 3,400 stores and positions 
throughout the country.\30\ In February 2009, the Ninth Circuit agreed 
to an en banc rehearing. Several days before oral argument, on March 
19, 2009, the EEOC submitted an amicus curiae brief to the Ninth 
Circuit, taking the position that class-wide punitive damages can be 
determined by a jury in title VII pattern or practice cases and back 
pay determinations may be made without individualized hearings when 
appropriate. The EEOC's decision to file an amicus brief in the Wal-
Mart case is no doubt connected to its aggressive pursuit of potential 
systemic discrimination cases.
---------------------------------------------------------------------------
    \30\ Dukes v. Wal-Mart, Inc., 509 F.3d 1168 (9th Cir. Dec. 11, 
2007).

    Given the media attention paid to such lawsuits, employers fully 
understand the seriousness of pay discrimination, and are keenly aware 
that any failure to take steps to eliminate unjustified pay disparities 
between men and women may lead to a tarnished reputation, significant 
financial expense in the form of legal fees and awards, the loss of 
valued employees, and the potential for judicial intervention in their 
business practices. The passage of the Paycheck Fairness Act will 
contribute nothing to employers' existing commitment to gender pay 
parity. What it will do, however, is place further stress on an already 
struggling business community, which is suffering through the worst 
economic crisis since the Great Depression.
rather than amend the epa, the paycheck fairness act would create a new 
   law more burdensome than all existing federal anti-discrimination 
                              legislation
    By eliminating the EPA's ``any factor other than sex'' defense, the 
Paycheck Fairness Act would fundamentally change the EPA, contradict 
existing title VII precedent, and place an enormous drain on judicial 
resources.--The Paycheck Fairness Act seeks to replace the EPA's any 
factor other than sex'' defense with a much more demanding ``business 
necessity'' requirement. Eliminating the EPA's ``any factor other than 
sex'' defense could essentially prohibit companies from making the 
kinds of individual pay decisions that are currently permissible under 
both the EPA and title VII, such as determinations based upon prior 
education and experience. As a result, employers could lose their 
ability to attract and retain the best talent by way of market-based 
incentives, and judges and courts across the country could be called 
upon to serve as ``super-human resource departments,'' scrutinizing the 
reasoning behind pay decisions that have nothing to do with gender. 
Courts routinely denounce this role for good reason.
    Under the EPA, employers are prohibited from paying women less than 
men for performing the same or ``substantially equal'' work in the same 
``establishment'' unless the differential results from: ``(i) a 
seniority system; (ii) a merit system; (iii) a system which measures 
earnings by quantity or quality of production; or (iv) . . . any . . . 
factor other than sex.'' \31\ If passed, the Paycheck Fairness Act 
would essentially eliminate the EPA's long-standing ``any . . . factor 
other than sex'' defense. Instead, employers would have to demonstrate 
that any pay differential is based on a ``bona fide factor other than 
sex, such as education, training, or experience'' and, among other 
requirements, is ``consistent with business necessity.'' The defense 
would be inapplicable if the plaintiff demonstrates that ``an 
alternative employment practice exists that would serve the same 
business purpose.'' If the employer fails to meet its evidentiary 
burden, it would be strictly liable for the pay disparity without any 
showing of intentional discrimination.
---------------------------------------------------------------------------
    \31\ 29 U.S.C.  206(d)(1).
---------------------------------------------------------------------------
    To understand the significance of this change, consider a common 
``factor other than sex'': mergers and acquisitions. When one company 
acquires another, it absorbs differing pay scales, often times 
resulting in pay disparities that are wholly unconnected to sex. 
However, under the Paycheck Fairness Act's ``business necessity'' 
requirement, employers would arguably have to undertake a prompt review 
of these differing pay scales upon consolidation and normalize the 
disparities by elevating the lower salaries to the higher-paid salary 
(as the EPA does not allow employers to reduce salaries in response to 
a pay disparity).
    Consider another, more routine example: a male store manager at a 
supermarket is paid more than a female store manager because he holds a 
college degree. Such a disparity could be illegal under the Paycheck 
Fairness Act if a court finds that enhanced compensation for 
supermarket managers with college degrees is not ``consistent with 
business necessity.'' \32\ Further, the female manager could argue that 
a program instituted by the supermarket where store managers without 
college degrees are taught the same skills they would have learned in 
college would serve the same business purpose. Even if the supermarket 
could ultimately prevail in a lawsuit, it may eliminate the ``college 
degree incentive'' and equalize pay just to avoid costly litigation.
---------------------------------------------------------------------------
    \32\ If the Paycheck Fairness Act is enacted, litigation 
interpreting the legislation's ``business necessity'' requirement will 
likely ensue. Courts will be forced to assess ``business necessity''--
finally being forced to assume the mantle of a ``super human resources 
department'' they have so long and consistently decried.
---------------------------------------------------------------------------
    The Paycheck Fairness Act could jettison an existing body of case 
law in which courts have said that, under title VII, employers can 
consider subjective factors in employment decisions so long as they are 
not discriminatory. Consider, for example, jobs that require frequent 
personal interaction. Under title VII, employers may consider 
unquantifiable qualities like a friendly disposition or positive 
attitude. As the U.S. Court of Appeals for the Eleventh Circuit has 
explained, ``It is inconceivable that Congress intended anti-
discrimination statutes to deprive an employer of the ability to rely 
on important criteria in its employment decisions merely because those 
criteria are only capable of subjective evaluation.'' \33\ 
``[S]ubjective reasons,'' the Court said, ``are not the red-headed 
stepchildren of proffered nondiscriminatory explanations for employment 
decisions.'' \34\ ``Traits such as `common sense, good judgment, 
originality, ambition, loyalty, and tact,' often must be assessed 
primarily in a subjective fashion.'' . . . \35\ Under the Paycheck 
Fairness Act, however, pay differentials based upon such immeasurable 
qualities may not be deemed ``consistent with business necessity.''
---------------------------------------------------------------------------
    \33\ Chapman v. A.I. Transport, 229 F.3d 1012, 1034 (11th Cir. 
2000) (en banc). See also Sengupta v. Morrison-Knudsen Co., 804 F.2d 
1072, 1075 (9th Cir. 1986).
    \34\ Id.
    \35\ Id.
---------------------------------------------------------------------------
    In addition to challenging subjective determinations, the Paycheck 
Fairness Act could even be interpreted as prohibiting employers from 
considering factors such as educational and professional experience in 
occupations that may not strictly require a degree or prior experience. 
Without the ability to make pay decisions based on such factors, U.S. 
companies would be forced to standardize compensation to the detriment 
of both male and female employees. The inevitable result may be a 
gradual decline toward mediocrity as prospective employees have no 
incentive to make the types of investments that would otherwise allow 
them to excel at a particular job, and advance within an organization 
or their chosen field.
    Further, replacing the EPA's ``any factor other than sex'' defense 
with a ``business necessity'' requirement would place an enormous drain 
on judicial resources, turning courts into ``super-human resource 
departments''--a role they consistently eschew.\36\ Unlike the ``any 
factor other than sex'' defense, the ``business necessity'' test could 
result in drawn out litigation regarding what is and is not consistent 
with business necessity and whether there is an alternative employment 
practice that would serve the same business purpose. It would be much 
more difficult for employers to prevail on summary judgment as almost 
every case will involve a factual dispute regarding the business 
necessity behind any pay differential.
---------------------------------------------------------------------------
    \36\ See, e.g., Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 
93, 106 (2d Cir. Mar. 15, 2001) (``we are not a super-personnel 
department''); Pinkerton v. Colo. DOT, 563 F.3d 1052, 1066 (10th Cir. 
Apr. 16, 2009) (``court should not `act as a super personnel department 
that second guesses employers' business judgments' '' (internal 
citations omitted)); Rojas v. Florida, 285 F.3d 1339, 1342 (11th Cir. 
Mar. 22, 2002) (refusing to determine ``whether a business decision is 
wise or nice or accurate''); Lewis v. Two's Comp., 2008 U.S. Dist. 
LEXIS 109030, at *14 (S.D.N.Y. Mar. 16, 2008)[I]t is not the province 
of the Court to sit as a super-human resources department; a company is 
legally entitled to make bad [nondiscriminatory] employment 
decisions''); Framularo v. Bd. of Educ., 549 F. Supp. 2d 181, 187 (D. 
Conn. Apr. 30, 2008) (same); Smith v. Home Depot U.S.A., Inc., 1999 
U.S. Dist. LEXIS 22207, at *17 (N.D. Ga. Mar. 3, 1999) (``it is not the 
court's province `to second guess an employer's business judgment' 
'')(internal citations omitted); Tutman v. WBBM-TV/CBS Inc., 1999 U.S. 
Dist. LEXIS 5103, at *31 (N.D. III. Mar. 30, 1999) (``[t]he Court is 
not here to second guess [the company's] hiring and firing 
decisions'').
---------------------------------------------------------------------------
    Ultimately, courts will be responsible for making the very type of 
business judgments that they have denounced time and time again. As one 
Federal court explained, ``[t]he Court is not here to second guess [a 
company's] hiring and firing decisions.'' \37\ Passing legislation that 
would divert judicial resources for the purpose of scrutinizing market-
based pay determinations that have nothing to do with sex 
discrimination is not only bad law, it is also bad policy.
---------------------------------------------------------------------------
    \37\ Tutman, 1999 U.S. Dist. LEXIS 5103, at *31.
---------------------------------------------------------------------------
    The Paycheck Fairness Act would expand the EPA's definition of 
``same establishment,'' imposing an unfair burden on employers with 
operations in certain counties.--The proposed legislation would amend 
the EPA to define ``establishment'' as ``workplaces located in the same 
county or similar political subdivision of a State.'' Because the EPA 
requires equal pay for men and women who perform ``substantially 
equal'' work in the same ``establishment,'' the Paycheck Fairness Act 
would require some employers to look beyond individual worksites and 
ensure that employees who perform similar work in different locations 
are paid the same. Though this change may have little effect on 
employers with operations in counties--such as New York County--
comprised entirely of an urban population (or a suburban population), 
it would have an enormous effect on employers with operations in 
counties encompassing both urban and suburban communities.
    My hometown of Chicago, for example, is located in Cook County. The 
population of Cook County is larger than 29 individual States \38\ and 
encompasses both the city of Chicago and collar communities up to an 
hour and a half outside city limits, and even further from Chicago's 
central business area (the ``Loop''). The cost of living is 
significantly higher in Chicago than in the surrounding suburbs; so, 
too, is the average salary. If the Paycheck Fairness Act were to become 
law, employers with operations in Cook County would be required to pay 
similar employees the same salary regardless of whether they worked in 
the Loop or in a remote collar community.
---------------------------------------------------------------------------
    \38\ Wikipedia, Cook County, IL, http://en.wikipedia.org/wiki/
Cook_County_Illinois (last visited Feb. 26, 2010).
---------------------------------------------------------------------------
    Expanding the EPA's definition of ``establishment'' could also lead 
to unnecessary litigation involving employers with their main corporate 
headquarters located within the same county as non-corporate 
facilities. For instance, a company with its main corporate 
headquarters in midtown Manhattan and a remote distribution site 
elsewhere may pay employees who work at the corporate headquarters 
higher salaries because those positions are more demanding and integral 
to the company. Although a court may ultimately determine that the 
corporate positions are not ``substantially equal'' to the non-
corporate positions, this is one more issue employers will have to 
address in litigation. Consider also a company that wants to 
incentivize or reward employees who agree to work in less desirable 
neighborhoods or work less desirable shifts--for instance, a bank 
teller working in an area with a greater history of hold ups, or a data 
entry clerk working the ``graveyard'' shift. The EPA could eliminate a 
company's ability to make such decisions. For all these reasons, EPA 
claims should be limited to the ``same establishment.''
    The Paycheck Fairness Act would add unlimited compensatory and 
punitive damages to an employer's exposure, despite congressional 
efforts to limit such damages in title VII cases.--Whereas the EPA 
currently provides for equitable relief, such as back pay awards, the 
Paycheck Fairness Act seeks to add compensatory and punitive damages to 
the types of recovery available to EPA litigants. Though S. 182 (unlike 
former versions of the Paycheck Fairness Act) would require a showing 
of ``malice or reckless indifference'' before subjecting employers to 
punitive damages, the proposed legislation--which places no limit on 
compensatory and punitive damages--would still expose employers to 
frivolous lawsuits and enormous verdicts. And, unlike title VII, it 
makes no attempt to ameliorate the size of available damages for 
smaller employers, who are arguably less capable of surviving such an 
award, or the cost of the litigation itself. In addition, employers 
could still be liable for compensatory damages without any showing of 
intentional discrimination.
    When Congress added compensatory and punitive damages to the relief 
available in title VII disparate treatment cases through passage of the 
Civil Rights Act of 1991, it was careful to include a statutory cap on 
such damages.\39\ That cap is set at $50,000 to $300,000 total for 
compensatory and punitive damages, depending on the employer's size. As 
the U.S. Court of Appeals for the Second Circuit has pointed out, a 
review of the act's legislative history reveals that ``the purpose of 
the cap is to deter frivolous lawsuits and protect employers from 
financial ruin as a result of unusually large awards.'' \40\ Without 
such a cap, the Paycheck Fairness Act will be a bonanza for plaintiffs' 
attorneys, and will subject small businesses to much greater 
comparative risk. This result is untenable in light of President 
Obama's recent statements that small businesses are ``one of the 
biggest drivers of employment that we have,'' as well as recent efforts 
by Congress to spur job creation via a $15 billion jobs bill.\41\ In 
the midst of this financial crisis, we should be encouraging small 
businesses to expand, not making it more difficult for them to operate 
and survive.
---------------------------------------------------------------------------
    \39\ Congress did not make compensatory and punitive damages 
available in title VII disparate impact cases, in which employers are 
held to a ``business necessity'' defense similar to that proposed by 
the Paycheck Fairness Act.
    \40\ Luciano v. Olsten Corp., 110 F.3d 210, 221 (2d Cir. Mar. 21, 
1997) (referencing 137 Cong. Rec. S15472 (1991) (statement of Sen. 
Dole); 137 Cong. Rec. S15478-79 (1991) (statement of Sen. Bumpers)).
    \41\ Obama Vows to Help Small Businesses, CNN Politics.com, Mar. 
16, 2009, available at http://www.cnn.com/2009/POLITICS/03/16/
obama.small.business/index.html (last visited Mar. 7, 2010); Hiring 
Incentives to Restore Employment Act, H.R. 2847, 111th Cong. (2010); 
Carl Hulse, Senate Approves $15 Billion Job Bills, N.Y. Times, Feb. 24, 
2010, available at http://www.nytimes.com/2010/02/25/us/politics/
25jobs.html (last visited Mar. 7, 2010).
---------------------------------------------------------------------------
    The Paycheck Fairness Act would impose title II's class action 
mechanism on the EPA, which has always been governed by the FLSA's 
procedural rules.--The Paycheck Fairness Act would specifically allow 
for ``opt-out'' class actions under Rule 23 of the Federal Rules of 
Civil Procedure--a right already provided to women who sue their 
employers for pay discrimination under title VII. Unlike title VII, the 
EPA is governed by the FLSA's procedural rules, which require 
plaintiffs to ``opt-in'' to a class action by giving consent in 
writing. The distinction between the two provisions is important, as 
class size is likely to be much larger with an opt-out certification 
where employees need not affirmatively decide to join the case.
    Title VII cases--which provide for ``opt-out'' class actions--are 
procedurally different from EPA cases precisely because they have 
different pleading requirements. The EPA is and always has been part of 
the FLSA, which, unlike title VII, specifically provides for ``opt-in'' 
class actions. Allowing ``opt-out'' class actions under a law that 
makes it very difficult for employers to defend legitimate decisions 
while exposing them to unlimited punitive damages serves only one 
purpose: it encourages plaintiffs' attorneys to bring class action 
lawsuits against employers who may be forced to settle even when they 
did nothing wrong, or face financial ruin from the extraordinary costs 
associated with litigation of this nature.
    The Paycheck Fairness Act would not require the OFCCP to use 
multiple regression analysis when investigating potential 
discrimination.--The proposed legislation would direct the EEOC to 
collect pay information from employers and impose obligations on the 
OFCCP for performing compensation discrimination analyses. Among other 
things, the OFCCP would be directed to use the ``full range of 
investigatory tools'' to determine the presence of potential 
discrimination in Federal contractors' compensation systems. This would 
include the ``pay grade methodology,'' which the OFCCP rejected in 
2006, likening that approach to the discredited legal theory of 
comparable worth. Among other problems, the pay grade methodology 
assumes all individuals in the same pay ``band'' are similarly 
situated. Instead, the OFCCP has been using multiple regression 
analyses--which generally allows the OFCCP to consider the impact of 
variables, such as years of work experience, education, and past 
performance--to determine the presence of potential discrimination.
    Under the Paycheck Fairness Act, the OFCCP would no longer need to 
perform multiple regression analysis to identify potential compensation 
discrimination and could instead rely on the flawed pay grade 
methodology. As a result, the OFCCP would likely bring more actions 
against employers based on inadequate and faulty data. Despite the fact 
that the data is inaccurate, employers would be forced to spend money 
defending themselves while the OFCCP wastes its own resources pursuing 
employers that have done nothing wrong. Given the OFCCP's own 
recognition that multiple regression analysis is a superior method for 
identifying discrimination, Congress should not force the agency to use 
an inferior--and discredited--method.
    The Paycheck Fairness Act would also reintroduce another 
discredited tool: the OFCCP equal opportunity survey. Again, requiring 
the OFCCP to use a method it has rejected will impose an unnecessary 
burden on both the OFCCP and Federal contractors, many of whom are 
small businesses who lack formal human resource departments, while 
doing nothing to reduce discrimination.

    The Paycheck Fairness Act would require the EEOC to collect 
employer wage data information, raising confidentiality issues that 
will need to be resolved.--As drafted, the Paycheck Fairness Act would 
require the EEOC to issue regulations providing for collection of pay 
information data from employers ``as described by the sex, race, and 
national origin of employees.'' Though S. 182 directs the EEOC to 
``consider factors including the imposition of burdens on employers, 
the frequency of required data collection reports (including which 
employers should be required to prepare reports), [and] appropriate 
protections for maintaining data confidentiality . . . '' nothing in 
the proposed legislation prohibits the EEOC from disclosing such data, 
including to competitors and trial lawyers. If the Paycheck Fairness 
Act becomes law, private employers may be required to provide extensive 
information to the EEOC with little assurance that the information will 
be protected from disclosure to the public, or to competitors.

    The Paycheck Fairness Act would encourage frivolous litigation by 
prohibiting employers from retaliating against employees who share 
salary information.--Although the National Labor Relations Act already 
protects employees who share salary information with co-workers, the 
Paycheck Fairness Act would provide broader protection. Employers and 
courts are already besieged by retaliation claims that often lack 
merit; adding another cause of action to rectify a problem that does 
not exist will only lead to unnecessary litigation and additional 
wasted resources.
    In all of my 20-plus years of employment law experience, I have 
never encountered a situation where an employer terminated--or even 
disciplined--an employee for communicating with co-workers regarding 
his or her salary. That is not to say that it does not happen but, in 
my experience, it would be extremely rare. And there is nothing in the 
extant laws that would keep someone penalized in this fashion from 
raising that theory under the current statutory structure. If the 
Paycheck Fairness Act becomes law, however, every employee who has 
previously communicated with co-workers regarding his or her pay and is 
later disciplined or terminated for a completely unrelated reason will 
consider pursuing a retaliation claim. Though most employers would 
ultimately prevail by demonstrating that the employment decision was 
unrelated to the employee's sharing salary information, companies will 
be forced to spend money and devote resources to defending these 
frivolous lawsuits.
    Our Nation's courts are already inundated with retaliation claims, 
which often go hand in hand with employment discrimination claims. In 
2009, the EEOC received 28,948 retaliation charges filed under title 
VII alone, encompassing over 31 percent of all charges filed with the 
EEOC.\42\ Just 10 years earlier, title VII retaliation charges 
accounted for only 23.1 percent of all charges filed with the EEOC.\43\ 
Creating a new retaliation cause of action for something that hardly 
ever happens will only further burden courts with needless litigation.
---------------------------------------------------------------------------
    \42\ EEOC Charge Statistics FY 1997 Through FY 2009, available at 
http://www.eeoc.gov/eeoc/ statistics/enforcement/charges.cfm  (last 
visited Mar. 8, 2010).
    \43\ Id.
---------------------------------------------------------------------------
                        the fair pay act of 2009
    The Fair Pay Act would amend the EPA by extending its coverage to 
claims of race and national origin discrimination and broaden the 
statute's requirement that the plaintiff show different pay for equal 
work and instead require only ``equivalent'' work. Similar to the 
Paycheck Fairness Act, the Fair Pay Act would expose employers to 
punitive and compensatory damages. It would also require all employers 
to keep records of the methods they use to set employee wages and 
provide yearly reports to the EEOC describing their workforce by 
position and salary, as well as gender, race, and ethnicity. The Fair 
Pay Act is unnecessary and harmful for many of the same reasons that 
the Paycheck Fairness Act is unnecessary and harmful. In addition, the 
Fair Pay Act--which is premised on the rejected theory of ``comparable 
worth''--would require employers to provide the same pay for very 
different jobs. Comparable worth legislation will impose massive 
recordkeeping and reporting costs on employers, while doing nothing to 
deter discrimination.
                               conclusion
    Discrimination on the basis of sex is abhorrent. Pay differentials 
stemming from discriminatory practices clearly must be remedied, but 
our existing legal framework adequately provides protection.
    My firm represents thousands of employers. Our 600-plus attorneys 
counsel our clients about how to ensure a workplace free of 
discrimination. Our clients affirmatively want that advice and embrace 
it for many positive reasons, among them the fact that effective human 
resources policies are a key competitive factor in the success of any 
organization.
    The legislation before you will cause confusion in the workplace, 
and in the courts. It will take years and years of expensive litigation 
to understand and define its terms. The plaintiffs' bar will benefit. 
My firm may benefit as well.
    But the U.S. workforce will not benefit. Passing a law which upends 
the current employment discrimination paradigm, and creates costly 
uncertainty in the marketplace, will do nothing to help this country 
emerge from its current economic crisis. The proposed legislation will 
certainly not bring down our unemployment rate, nor will it remedy 
gender-based discrimination, especially since the vast majority of 
employers today embrace equal employment as an essential component of 
their core values. The small rate of EEOC for cause findings certainly 
supports this conclusion.
    Women have come a long way in the workplace. I am but one of 
millions of examples of that fact. And I am confident my daughters will 
prosper and make even more progress during their lives. They do not 
need this legislation to help them achieve their goals and dreams. Let 
them be evaluated based on what they do and not who they are. We ask 
for no more and should demand no less. Our laws today provide us with 
that dignity.
                               Appendix 1


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Exhaustion of
                                   Employees        Statute of      administrative     Compensatory        Punitive      Class  actions    Affirmative
                                    covered         limitations        remedies           damages          damages          allowed          defenses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title VII....................  15 or more......  300 days to file  Required........  Capped*.........  Capped*........  Opt-out........  Disparate
                                                  administrative                                                                          Treatment:
                                                  charge with the                                                                         Legitimate,
                                                  EEOC.                                                                                   nondiscriminat
                                                                                                                                          ory reason for
                                                                                                                                          pay
                                                                                                                                          differential;
                                                                                                                                         Disparate
                                                                                                                                          Impact: Job-
                                                                                                                                          related and
                                                                                                                                          consistent
                                                                                                                                          with business
                                                                                                                                          necessity and
                                                                                                                                          no alternative
                                                                                                                                          employment
                                                                                                                                          practice
                                                                                                                                          exists.
EPA..........................  2 or more.......  2 years; 3 years  Not required....  Back Pay........  Liquidated       Opt-in.........  Seniority
                                                  if willful/                                           Damages (equal                    system; merit
                                                  intentional.                                          to back pay)                      system;
                                                                                                        if willful                        measure
                                                                                                        violation.                        earnings by
                                                                                                                                          quantity or
                                                                                                                                          quality of
                                                                                                                                          production; a
                                                                                                                                          differential
                                                                                                                                          based on any
                                                                                                                                          factor other
                                                                                                                                          than sex.
PFA..........................  2 or more.......  2 years; 3 years  Not required....  Uncapped........  Uncapped.......  Opt-out........  Seniority
                                                  if willful/                                                                             system; merit
                                                  intentional.                                                                            system;
                                                                                                                                          measure
                                                                                                                                          earnings by
                                                                                                                                          quantity or
                                                                                                                                          quality of
                                                                                                                                          production;
                                                                                                                                          bona fide
                                                                                                                                          factor other
                                                                                                                                          than sex if
                                                                                                                                          business
                                                                                                                                          necessity
                                                                                                                                          demands it and
                                                                                                                                          no alternative
                                                                                                                                          employment
                                                                                                                                          practice
                                                                                                                                          exists.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Title VII limits damage awards based on the number of employees the employer had during the current or preceding calendar year. The sum amount of
  compensatory and punitive damages that may be awarded is dependent on the number of employees as shown below:



------------------------------------------------------------------------
                    No. of Employees                        Damage Cap
------------------------------------------------------------------------
15-100.................................................          $50,000
101-200................................................         $100,000
201-500................................................         $200,000
500-plus...............................................         $300,000
------------------------------------------------------------------------


    Senator Dodd. Thank you very much.
    Did you support the Lilly Ledbetter legislation?
    Ms. McFetridge. Did I support it?
    Senator Dodd. Yes.
    Ms. McFetridge. That is a good question. I supported 
components of it.
    Senator Dodd. Everybody supported components of it. Did you 
support the bill?
    Ms. McFetridge. No, I did not.
    Senator Dodd. OK. Let me jump back here and just--because 
one of the questions raised and one of the points that has been 
raised is the notion of the cumulative effect, and it struck me 
as well. I mean, it begins sort of a self-fulfilling prophecy, 
as I am trying to understand this, where you start at a certain 
level and there is a discrimination at that, at the earliest 
level, then it has a way of carrying forward based on previous 
jobs. At least that is the point, Ms. Boushey, I thought--I 
think several of you made that.
    I wonder if you might sort of expand that a little bit. You 
talk about the cumulative effects of the wage gap on women over 
the course of a career or retirement. Congresswoman DeLauro 
talked about women over the age of 70 are the poorest sector of 
our society. Again, some reflection, I think, of over the years 
of the discrimination that has occurred in wages and salaries. 
But you might want to address that a little more thoroughly and 
fully, if you would?
    Ms. Boushey. Certainly. I think that that is one of the 
critical issues, that the pay gap not only starts the moment a 
woman graduates from school and enters the labor market, but 
that it is aggravated over time and accumulates over time.
    To throw a few numbers at you, first off, I think that the 
study that we have seen many economists do, but in particular a 
very recent one that the American Association of University 
Women did, economists have worked very hard to look at all the 
things that we can measure--the kind of job you have, the kind 
of education you have, where you got your degree. And once you 
take all of that into account, it is very hard to not notice 
that there still is a pay gap.
    And this 5 percentage point gap that occurs among men and 
women fresh out of college from similar schools and all of that 
really does sort of--that is the starting point. But then as 
some of my colleagues up here on the panel have talked about 
this morning, one of the things that happens as a woman goes 
through her career is that you are asked at every job, ``Well, 
how much did you make at your last job?'' And then that 
exacerbates the pay gap.
    So if women start off at a lower level, even if they switch 
jobs, which is one of the ways that young people especially 
experience the biggest jumps in pay is when they switch jobs, 
and they are asked what their salary history is, if a firm 
doesn't want to equalize that internally but uses that to 
perpetuate inequality, then women are stuck on a lower path 
moving forward.
    Research at the Center for American Progress has found that 
that leads to a career pay gap of about $434,000 in income on 
average. But that this gap is larger for women with the most 
education. So for women with a college degree or more, they 
lose over $700,000 over a lifetime.
    And I want to stress this isn't just about women and their 
purchasing power. This is about families. Four in ten mothers 
in America right now are their family's primary breadwinner. 
This gap is affecting their family's well-being. And this 
accumulation over time affects their retirement security. It 
affects their ability to save to put their kid through college 
and all the other things that we think are important for 
families.
    Senator Dodd. Let me ask you, Ms. Brake, if I can, Ms. 
McFetridge raised a couple of points. And if I don't State this 
accurately, Ms. McFetridge, you can re-frame the question, if 
you want. But her point, I think, was, well, look, you have 
Title VII of the Civil Rights Act. We have the Equal Pay Act. 
These are working pretty well. They are not perfect yet, but we 
are moving along. Things are getting better.
    If you take some of the proposals that I supported when I 
was here that Mike Enzi has talked about in terms of these 
workforce issues, combine that, getting our economy moving 
again, these seem all to be getting us in the right direction. 
Why don't we just let well enough alone and allow these acts to 
continue to work? What is the problem with these two laws in 
terms of not being able to close this gap that she has 
suggested?
    Right? Is that a fair question?
    Ms. Brake. Thank you. That is a very good question.
    I guess I would disagree with the basic premise that they 
are working so well. The pay gap has not been closing at a 
steady level such that we can see it close, like a window over 
time. In fact, the majority of progress since the 1970s was 
made in the 1980s, very little since the 1990s.
    And I think that the reason you see so few claims filed 
under the Equal Pay Act, as Mr. Ishimaru had noted, a small 
percentage, is because the Equal Pay Act is not such a great 
vehicle for remedying pay discrimination. As I mention in my 
testimony, it is extremely hard to prove the equal work 
requirement period. But even if you get past that, the factor 
other than sex defense is enormously broad. The courts are 
applying it as the exception that swallows the rule. And again, 
I can't emphasize this enough. You have very limited remedies 
under the Equal Pay Act.
    Unlike most legal claims, you are limited to the wrongfully 
withheld wages, plus an equal amount in so-called liquidated 
damages. And not only does that not fully remedy the victims of 
pay discrimination who have these costs throughout the course 
of their working lives once they start, it also doesn't put a 
sufficient incentive on employers to really look at these 
things.
    And so, you have a case with an employer like Goodyear in 
the Lilly Ledbetter case who, for years and years and years, 
allowed her to be the lowest-paid manager, earning lower than 
any of the lowest-paid male managers, even when she had more 
seniority and higher job performance. And unfortunately, that 
goes on far too often.
    I would say that the remedies need to be strengthened 
certainly in the Equal Pay Act, and title VII is no panacea 
either. So I am delighted that this committee is looking at 
these things to make these laws more effective.
    Senator Dodd. Some have pointed out that in the 1980s we 
saw the gap really begin to close and, therefore, further 
evidence that, actually, existing laws are beginning to work. 
And yet it seems to me that during the 1980s, what we saw and 
since then is, of course, the men's wages declined as well or 
didn't increase at all. Is that a fair description of what 
occurred, or is it a better reflection, in fact, that the wage 
gap has been closing?
    Ms. Brake. Well, I would defer to Ms. Boushey on the 
particulars of that. I know that it hasn't been closing since 
the 1990s.
    Ms. Boushey. Certainly. And when it did close the sharpest, 
it was during the 1980s, when men's wages were falling. So 
while we had the Equal Pay Act and there were these legal 
remedies, a large piece of closing of the gap was because of 
the decline in male wages that made it look like there was 
progress for women when, in fact, it was men sort of falling 
behind.
    I think, looking forward, this is something that I, as an 
economist, am very concerned about. With men losing so many 
jobs in this recession, we may see some movement forward in the 
gender pay gap. But that is illusive because it well may be 
because men's wages are again falling rather women are actually 
catching up.
    Senator Dodd. Let me just ask one question of Deborah 
Frett, and then I want to give you, Ms. McFetridge, a chance to 
respond. And then I will jump to Mike on this thing.
    One of the arguments in opposition to the bill is that the 
Paycheck Fairness Act would unduly block businesses from making 
salary decisions based on market forces. What is your view on 
that?
    Ms. Frett. I disagree with that. I think that the Paycheck 
Fairness Act will not impede businesses being able to use a 
variety of mechanisms in order to evaluate their salaries. We 
have been working with a number of employers in a number of 
industry groups, and one of them in particular being the women 
in cable television.
    They have had a program for about 7 years now where they 
are focusing on pay equity and making sure that they are 
disclosing the salaries so everybody in the companies are aware 
of, in various programming or operators and such, what each one 
is being paid. But they are also doing market analysis with 
that in terms of the bands for those salaries and looking at 
other markets and comparing.
    So I think you can have both in terms of that. But the 
Paycheck Fairness Act will not prohibit businesses from taking 
into consideration market factors.
    Senator Dodd. Ms. McFetridge, do you want to answer? Having 
raised your name here, I will give you a chance to respond.
    Ms. McFetridge. Yes. I obviously disagree. I have a 
completely different point of view. The proposed affirmative 
defenses are very, very complicated. And having lived in this 
area of law for the last 20 years and represented employers, I 
can tell you that over that period of time, the McDonnell 
Douglas burden-shifting analysis, for instance, has developed, 
but it has taken a long time for people to understand and be 
able to apply that effectively.
    And if you look at the types of changes to the affirmative 
defenses that we are talking about here, these are not easy 
concepts to grasp. Most employers in this country are not 
Goodyears. Most employers--and I hearken back to what the 
acting chair of the EEOC said about most employers wanting to 
do the right thing. Most employers do want to do the right 
thing, but most employers are relatively small. They don't have 
the resources to make this sort of analytical assessment.
    Let us look for a second at what is being discussed here. 
They want to change ``any factor other than sex'' to ``a bona 
fide factor other than sex.'' Well, what is ``bona fide?'' OK. 
I mean, I think most of us in this room might have some idea of 
what that means in sort of general lay terms, but what does it 
mean in a legal sense? It will take years to ferret that out.
    Furthermore, business necessity. What is business 
necessity? Do we want the government deciding what is business 
necessity? Isn't that for the business owner to decide?
    And then the employers themselves cannot use the 
affirmative defense unless they can show that it is--if the 
plaintiff demonstrates that this goal, whatever it is that they 
are trying to achieve, could have been achieved--they could 
have achieved the same purpose without gender differential. 
These are very complicated things, and they aren't easy to 
apply, and it will affect how employers set pay decisions.
    There are many, many different factors that go into a pay 
decision. I gave the example of a salesperson. I mean, there 
are intangible things that people look at when they hire 
people.
    Senator Dodd. Well, I appreciate that, and I thank you. I 
wanted to give you the chance to respond to all this.
    Let me just say respectfully that, having been around here 
over the last 35 years, and where a lot of these documents are 
based both on issues involving disabilities, other areas of 
discrimination in our country, many of the same arguments have 
been made in the past. How these things are subjective tests 
and hard to apply and open up to a lot of litigation.
    And had we lived with those over the years, I think we 
would be a very different country today. So, my concern would 
be while I don't underestimate your point here, and we need to 
deal with that as legislators as we write language here, too 
often those are the arguments raised as barriers to achieving 
that fairness in terms of equal opportunity. And so, I 
appreciate your point.
    Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman.
    In listening to this, it has occurred to me that having 
been in business, that there are a lot of questions that you 
can't ask somebody who is a potential employee. Maybe we ought 
to add to that list that you can't ask them what they made on 
their previous job.
    I am still convinced that a lot of the gap is due to 
occupational segregation that exists, not due to an employer, 
but the decisions that are made by an employee and often while 
they are still a student. They make a lot of decisions that are 
heavily influenced by their teachers, their school environment, 
family environment, peers, experiences that they have had. And 
I think it leads them into some directions where they are going 
to make less money.
    Ms. Boushey, in your testimony, you cite research 
acknowledging that one-third of the pay gap can be explained by 
occupational choice, one-fifth by industry, and a tenth by 
career experience, which leaves I think you said a 10 percent 
gap. Am I correct to assume that this research would compare, 
for example, a man and a woman who graduated from medical 
school in the same year, began working as doctors, and didn't 
take any breaks in their career?
    Ms. Boushey. Well, the particular numbers you are citing 
were from one study that wouldn't have looked at that level of 
detail, but there is a lot of research that looks at that level 
of detail, and some of it is cited here, where economists have 
looked at people graduating from similar kinds of schools, 
making similar decisions.
    I mean, I think your point about the decisions that men and 
women make is very important. We all make decisions about our 
career paths, and we know that women have not made the same 
kinds of decisions in terms of sciences that certainly does 
play a role in the overall gender gap in our society.
    But when economists look at the pay gap, we try to account 
for those differences in decisions, and you still see a 
difference. Women and men making the same choices, you are 
still seeing a pay gap between those people that are making 
similar kinds of choices. And that is where the problem is.
    Senator Enzi. So you are saying that some of those 
categories would make a difference if one became a radiologist 
and one became a family practitioner, and if one worked in a 
large practice and one worked in a small practice, or one 
worked in a city practice or one worked in a rural practice? Is 
it possible that the portion of the pay gap that is not 
explained by occupation or tenure is attributed to different 
specialties and where they work, how urban/rural it is?
    Ms. Boushey. Certainly, some of it would be, but not nearly 
the majority of it. So you can take it down as fine as you 
want, but even when you take it down to as fine as we can 
measure, you still see unexplainable gaps in men's and women's 
pay.
    But the second issue is the differences between a 
radiologist and a family practitioner. Men and women tend to go 
into different kinds of fields, and there is a question about 
how we value those different fields, which is really more about 
the Fair Pay Act than issues that the Paycheck Fairness Act is 
looking at.
    Senator Enzi. Thank you.
    When I first got married, my wife and I started a shoe 
store in Gillette, WY. And a few years later, I got elected 
mayor. It was supposed to be a part-time job. It turned out to 
be a full-time job. So my wife ran the store. She not only ran 
the store, she added two more stores. And it was going very 
well. When I finished being mayor, I told her I was ready to 
come back to work, and she said, ``Why?''
    [Laughter.]
    And she had a real good point. So that is when my 
accounting career began.
    So I know the talent that women have. They are more 
organized. They are better schedulers. So there shouldn't be 
that gap, and it is no surprise to me that there are more 
women's businesses that are being started and that the men are 
the ones being laid off when we have a decrease in employment.
    Ms. Frett, you mentioned the phenomenal growth for women-
owned firms in recent years, and I am pleased with that. Do you 
believe that women-owned firms are less likely to be sued for 
discriminatory pay disparities?
    Ms. Frett. Based on what we hear and the research that we 
have done related to our members, all of our members are 
talking about making sure that they have disclosure on their 
pay policies. And so, I would think, based on hearing that from 
them in terms of their kinds of practices around equal pay and 
disclosure and transparency, that there would be a reduction in 
terms of legislation risk.
    Senator Enzi. OK. Ms. McFetridge, some of today's witnesses 
have argued that should the Paycheck Fairness Act become law, 
meritless lawsuits would not be a concern for employers because 
they would be easily dismissed by the courts. Given your 20 
years of experience defending against claims, do you think that 
is a true assertion?
    Ms. McFetridge. Perhaps more than anything I have said here 
today, I couldn't disagree with that more. I have lived this 
for 20 years, over 20 years now, and I will tell you that while 
there are some lawsuits that certainly have valid basis, and we 
typically counsel our clients in those situations to settle the 
case and address the issues that gave rise to the lawsuit, many 
of these claims are specious to begin with.
    That is not to say that discrimination doesn't exist and 
that there isn't a societal cost associated with it. But what 
it does mean is that businesses lose otherwise good employees 
when that happens and they move on to alternative, different 
jobs.
    What you do see happening, the cost associated with 
litigation of this nature is directly--first of all, the 
quantity of litigation is directly related to the available 
remedies. The higher the remedies, the more likely you are to 
get litigation. That is demonstrated by what has happened in 
California, and it is certainly demonstrated by what has been 
happening with wage and hour class actions across the country.
    So the greater the available remedy, the more likely you 
are to get litigation. And the costs associated with this are 
astronomical in both financial and human terms. It is 
devastating to the people that are involved with the defense of 
these lawsuits, many of whom--I would say that in at least 90 
to 95 percent of my lawsuits, I have company representatives, 
people who are actively involved in the litigation that are 
women themselves. People are distracted from their business 
purpose. They are personally upset. They are invested in the 
litigation itself, and it costs them thousands and thousands of 
dollars.
    Frequently--there were questions earlier to the acting 
director of the EEOC about whether the threat of litigation 
will force people, whether it is intimidating. It would force 
people to settle cases that they wouldn't otherwise settle. I 
can't tell you how many times that people have just thrown in 
the towel when they have a very defensible case just to avoid 
incurring additional legal costs, disruption to their business, 
and that sort of thing.
    It is absolutely without a doubt--I am absolutely positive 
it will increase litigation. It will benefit me because I am 
involved with that litigation, but it won't benefit women.
    Senator Enzi. Thank you. It reminds me of the old West, 
where when one attorney came to town, they starved to death. 
When there were two, they did pretty well.
    I will go back to Ms. Frett because I appreciate your 
testimony on the growth of women-owned firms and encourage that 
entrepreneurship and know that that has some significant 
advantages for women.
    You noted a number of studies showing that companies with 
women executives and diversity programs in place are more 
productive, efficient, and generally successful. Given this, 
isn't it in business's best interest to take those steps? Do 
most businesses do what is in their best interest?
    Ms. Frett. I think we are finding that a lot of employers 
are doing the right thing. They see a lot of advantages in 
terms of making sure that their employees are paid equally for 
equal work and a lot of the work-life balance issues, and they 
know this because they want to continue to recruit and retain 
employees.
    If you look at the women becoming more and more of that 
workforce or that pool of talent that they are going to be 
looking at, they need to be doing that. Their bottom line is 
going to improve because of that.
    The other thing we need to be aware of is to make sure we 
understand that the primary purchaser of goods and services or 
decisionmakers in terms of goods and services are primarily 
women. So that customer loyalty is a big factor in terms of how 
successful a business is going to be.
    So that is why the Business and Professional Women's 
Foundation looks at it as a three-pronged approach. It is 
legislation, but it is also education in terms of employers and 
education in terms of women.
    Senator Enzi. Thank you.
    I want to thank all of you for your testimony. It has been 
very helpful. I have more than used my time here, but I have a 
lot of questions left. So I hope that you will allow me to 
submit some written questions to you so I can get more answers 
for doing it right?
    Ms. Frett. Absolutely.
    Senator Enzi. Thank you.
    Senator Dodd. We will certainly do that, Mike.
    And we will leave the record open for 10 days. I believe 
that is adequate, but if you need more time, we will make more 
time available.
    It was very, very helpful and just excellent testimony as 
well. I think you witnessed earlier on, we had a lot of members 
showing up. But the way these committee hearings go with other 
schedules and the busyness around here, people can't stay for 
as much as they would like. But that should not be any 
reflection of lack of interest in the subject matter that 
exists.
    So we thank all of you for coming here this morning, and we 
will ask you to respond to the questions when they are 
submitted as quickly as you possibly can for the record. Thank 
you all for being here.
    The committee will stand adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                  Prepared Statement of Senator Murray

    Thank you, Chairman Harkin for holding this important 
hearing.
    As families across the country continue to struggle in 
these tough economic conditions, I am working hard to support 
programs that will get our economy moving again and get our 
workers back on the job. We still have a long way to go, but I 
am confident that the steps we have taken have begun to move us 
down the path to recovery. But as we work to create jobs, we 
must also remain committed to ensuring that all of our workers 
benefit equally from equal work.
    Despite years of progress, our country has still not yet 
completely eliminated discrimination and unfairness in the 
workplace. There have been improvements, but we are still not 
yet at the point where our daughters can expect to earn the 
same amount over their lifetime as our sons. And that has got 
to change.
    On average, women earn just 78 cents for every dollar paid 
to their male co-workers. This pay discrimination has real and 
harmful impacts on families and for our Nation as a whole. It 
hurts an individual's ability to earn a living and save for 
retirement, care for her children, and contribute fully to 
society.
    Yet it's so deeply ingrained in our society that many jobs 
dominated by women pay less than jobs dominated by men--even 
when the work they do is almost the same.
    That's why I was such a strong supporter of the Lily 
Ledbetter Fair Pay Act that restored a worker's ability to 
fight for her rights in court. The law reversed the extremely 
damaging 2007 U.S. Supreme Court decision, Ledbetter v. 
Goodyear, and clarifies that each time an employee is paid less 
than her co-workers for doing the same job, that unfair 
paycheck is a violation of the law that can then be challenged 
in court.
    This was a great step forward for economic equality. But 
it's not enough. We need to keep fighting against 
discrimination in the workplace.
    I co-sponsored S. 182, the Paycheck Fairness Act, which 
gives America's working women additional support to fight for 
equal pay. It takes critical steps to empower women to 
negotiate for equal pay, closes loopholes that courts have 
created in the law, creates strong incentives for employers to 
obey the laws that are in place, and strengthens Federal 
outreach and enforcement efforts.
    I also co-sponsored S. 904, the Fair Pay Act. This bill 
requires employers to provide equal pay for jobs that are 
comparable in skill, effort, responsibility, and working 
conditions. It will give workers the information they need to 
determine whether female-dominated jobs are being under-valued, 
and it provides a remedy for workers who are victims of such 
systemic discrimination.
    Now that we have passed the Lily Ledbetter Fair Pay Act 
that gives women the ability to challenge discrimination in 
court, we need to give them more tools to understand and fight 
for equal pay for equal work.
    The Paycheck Fairness Act and the Fair Pay Act will not end 
discrimination in America. And they will not fix the wage gap 
immediately. But they are steps in the right direction, and I 
am committed to pushing hard for their passage.

                  Prepared Statement of Senator Brown

    Mr. Chairman, thank you for holding this important hearing.
    And thank you, as well as Congresswoman DeLauro and 
Commissioner Ishimaru, for your service and dedication to 
social and economic justice.
    I want to also thank our expert witnesses for their 
testimony today.
    Some people in Washington never want to talk about issues 
like the minimum wage, or workplace safety, or pay equity.
    And, during an economic crisis like the one we are in, they 
especially try to distract policymakers from examining these 
issues so important to our Nation's middle class.
    They insist that now, when we're focused on economic 
recovery, is not the time to talk about fair pay.
    And you can bet your bottom dollar that when our economy is 
fully recovered, they will again insist it's the wrong time to 
talk about pay equity, because any change in wages could rock 
the boat.
    So when is the right time to talk about pay equity?
    The answer is that as long as there are unfair disparities 
in pay, it is always the right time to talk about pay equity. 
And as a matter of fact, no time is better than the present.
    That's because the negative effects of unjustifiable pay 
disparities amplify the economic hardship for struggling 
Americans.
    If you look at the foreclosure crisis, you know that women 
are disproportionately at risk, since women are 32 percent more 
likely than men to have subprime mortgages.
    Existing pay disparities for women exacerbate the economic 
strain on women and on households run by women, since women 
earn only 77 cents for every dollar earned by men.
    Women have significantly fewer savings to fall back on 
during times of economic hardship. Non-married women have a net 
worth 48 percent lower than non-married men, and women are less 
likely than men to participate in employer-sponsored retirement 
savings programs.
    That's disturbing, but not surprising, given that they 
typically don't receive the same pay for the same work. You 
can't squeeze blood from a stone, and you can't squeeze savings 
from wages that barely cover your month-to-month expenses.
    Women are less likely than men to participate in employer-
sponsored retirement savings programs, largely because their 
lower pay levels make it far harder to put money aside for 
retirement.
    While the Equal Pay Act established that women should be 
paid equally for doing the exact same jobs as men, we still see 
widespread discrimination when comparing the pay scales of jobs 
traditionally held by men vs. jobs traditionally held by women.
    We need to stop and ask why a parking meter reader is worth 
less than an electrical meter reader, or why a child care 
worker is worth less than a maintenance worker.
    It's not hard to find excuses for ignoring difficult social 
issues like pay inequity . . . it's not hard to point to our 
economic challenges and say the timing is wrong.
    But our job is not to take the easy way out. It's to 
promote the best interests of Americans, women and men alike.
    I want to again thank our witnesses and Chairman Harkin for 
holding this very timely hearing. And I look forward to our 
discussion.

                  Prepared Statement of Senator Bennet

    I would like to thank Chairman Harkin and Ranking Member 
Enzi for holding this important hearing. The persistent pay gap 
between male and female workers is unacceptable. Through this 
forum, we can convene various stakeholders and figure out what 
policy solutions are fair to American workers.
    According to the U.S. Census Bureau, women who work full-
time earn, on average, only $0.78 for every dollar men earn. In 
Colorado, women are paid $0.80 for every dollar men earn. This 
is $0.02 above the national average. This wage gap persists at 
all levels of education. Women in Colorado with a high school 
diploma earned only 67 percent of what men with a high school 
diploma earned and only 64 percent of the amount that men with 
a bachelor's degree were paid. On average, the Census reports 
that women have lower earnings than men ($24,146 compared to 
$35,875 in 2007) and are more likely to live in poverty (12 
percent of Colorado women compared to 9 percent of men living 
in poverty in 2007).
    Correcting these wage disparities is even more important as 
women have taken a greater role in our economy and in many 
cases are the main source of income for families. From 1980 to 
2006, women's income as a share of total family income rose 
from 26.7 percent to 35.6 percent. As the role of women in the 
workforce has changed and women take on new financial 
responsibilities in providing for their homes in the current 
recession, these disparities will directly impact the pace and 
ability of our economy to recover.
    There is no doubt that the current recession is 
exacerbating the effect of these wage disparities. 
Traditionally male-dominated industries such as construction 
have struggled to maintain their workforce, while traditionally 
female-dominated industries, such as health care and education, 
have remained steady. As more and more households become 
dependent on female wages in the current recession, these 
disparities will slow the ability of the economy to recover. 
Women will have less money to spend and even fewer dollars to 
save for the long-term. These trends will affect our ability to 
recover economically, and they will also shape what our 
economy, once recovered, will look like.
    While the Lily Ledbetter Fair Pay Act, which I was a proud 
cosponsor of and supported when it passed this Congress, sought 
to preserve the rights of victims of pay discrimination to 
challenge their wrongful termination, it mostly marked a return 
to the status quo prior to an adverse Supreme Court 2007 
decision. It did not fundamentally address the continued 
disparity in wages.
    I am a cosponsor of the Paycheck Fairness Act because I 
believe we need to do more to address gender wage disparity. We 
need publicly accessible explanations for wage gaps between 
male and female workers doing the same work, and there needs to 
be a means to remedy discriminatory wage gaps. We also need to 
find ways to empower women to be able to better negotiate their 
wages.
    I look forward to listening to today's panelists dissect 
the problem and look forward to hearing their ideas on how to 
address wage disparities. This is an important conversation, 
and I thank the Chairman for convening it.
    Thank you.
              Prepared Statement of HR Policy Association
    Mr. Chairman and distinguished members of the committee: Thank you 
for this opportunity to present HR Policy Association's views on the 
Paycheck Fairness Act (H.R. 12/S. 182). HR Policy Association 
represents the chief human resource officers of 300 of the largest 
corporations in the United States, collectively employing over 12 
million employees in the United States, and over 18 million worldwide. 
One of HR Policy's principal missions is to ensure that laws and 
policies affecting employment relations are sound, practical, and 
responsive to the realities of the workplace.
    S. 182, the Paycheck Fairness Act (PFA), would significantly amend 
the Equal Pay Act (EPA) by allowing unlimited compensatory and punitive 
damages, in addition to make whole remedies and liquidated damages, now 
authorized for equal pay violations. Furthermore, the proposed 
legislation would:

     ease restrictions on commencing equal pay class action 
lawsuits by requiring participants to ``opt-out'' if they do not wish 
to be part of the class;
     prohibit payroll confidentiality policies;
     mandate the collection of wage data from employers for 
disclosure to the general public;
     limit legitimate nondiscriminatory defenses an employer 
could raise to justify wage differentials in equal pay claims;
     permit plaintiffs to bring equal pay claims based on wage 
differentials with employees located in different geographic locations 
(present law limits comparisons to employees located in the same 
establishment); and
     allow applicants, as well as employees, to make Equal Pay 
Act claims.

    Moreover, the bill retains its fundamental flaw of imposing new 
mandated costs on employers at a time when the economic recovery is 
uncertain at best. In addition, it would impose significant new 
administrative burdens on employers. This statement provides a detailed 
analysis of the HFA and examines some of the concerns employers would 
have in seeking to implement it.
    The following HR Policy Association analysis discusses in detail 
the proposed legislation.
          i. introduction to the paycheck fairness act debate
    In his January 2010 State of the Union Address, President Obama 
declared that ensuring ``equal pay for an equal day's work'' was a 
priority for his Administration.\1\ Some have interpreted this as a 
call to move forward with the Paycheck Fairness Act. The President's 
words are redundant to those who have been following equal pay issues. 
After all, the second piece of legislation President Obama signed in 
January 2009 was the ``Lilly Ledbetter Fair Pay Restoration Act,'' \2\ 
which in his words ``guaranteed equal pay for equal work.'' \3\ 
Considering that President Obama guaranteed that the Ledbetter Act 
solved the equal pay for equal work issue, it begs the question of the 
need to proceed with the PFA.
---------------------------------------------------------------------------
    \1\ The White House, Office of the Press Secretary, Remarks By The 
President In The State of the Union Address, Jan. 27, 2010, at http://
www.whitehouse.gov/the-press-office/remarks-president-state-union-
address.
    \2\ Pub. L. 111-2 (2009).
    \3\ The White House, Office of the Press Secretary, Remarks By The 
President At AFL-CIO Labor Day Picnic, Sept. 7, 2009, at http://
www.whitehouse.gov/the_press_office/Remarks-by-the-President-at-AFL-
CIO-Labor-Day-Picnic/.
---------------------------------------------------------------------------
    Moving forward with the PFA has been questioned on all sides. For 
example, The Washington Post called for the Senate to ``rethink'' the 
PFA legislation.\4\ While the Post supported the passage of the 
Ledbetter Fair Pay Restoration Act it warned that passage of the PFA 
``risks tilting the scales too far against employers and would remove, 
rather than restore, a sense of balance.'' \5\
---------------------------------------------------------------------------
    \4\ Two Sides of Fair Pay, The Washington Post, Jan. 15, 2009, A-
18.
    \5\ Id.
---------------------------------------------------------------------------
    Even so, PFA advocates tout the legislation as a way to give the 
Equal Pay Act ``new teeth.'' \6\ Such a statement would lead one to 
believe that there is currently little to no protection against wage 
discrimination on the basis of gender under Federal law. To the 
contrary, both the EPA and Title VII of the Civil Rights Act of 1964 
already contain blanket provisions prohibiting gender-based pay 
discrimination in the workplace. The EPA provides back pay, plus that 
amount doubled, injunctive relief and attorney's fees if an employee 
simply shows a wage disparity between themselves and a person of the 
opposite gender (intentional or unintentional) so long as the employer 
cannot provide a legitimate nondiscriminatory reason for the wage 
disparity. Title VII also provides an even broader array of remedies 
including compensatory and punitive damages, front pay, back pay, and 
attorney's fees and costs if an employee can demonstrate that he or she 
is receiving lower wages on the basis of gender because of the 
employer's intentional discrimination. In addition, title VII also 
provides a more limited array of damages if a plaintiff successfully 
demonstrates that an employer's pay practice, decisions or systems are 
fair in form but discriminatory in operation (i.e., unintentional 
discrimination) under a disparate impact theory of discrimination. Such 
remedies include back pay, injunctive relief and attorney's fees and 
costs. Indeed, both statutes already provide the plaintiff a broad 
array of remedies and damages in challenging an employer's pay 
practices, systems or decisions under both intentional and 
unintentional theories of discrimination. Thus, the two statutes 
provide robust mechanisms for both the government and private 
plaintiffs to challenge wage disparities or wage discrimination.
---------------------------------------------------------------------------
    \6\ Press Release, U.S. Senator Barbara Mikulski, Mikulski, Dodd 
Urge Support for the Paycheck Fairness Act, June 16, 2009, http://
mikulski.senate.gov/Newsroom/PressReleases/record.cfm?id=314516.
---------------------------------------------------------------------------
    But, in fact, the underlying motivation for proposing the PFA goes 
beyond the legal parameters of discrimination against a protected class 
(i.e., gender) and into determining the rate of compensation a company 
should pay an individual for the performance of their job based on 
theoretical understanding of ``fairness'' which is nearly impossible to 
agree upon, much less legislate. The purpose of the legislation is to 
provide the courts and plaintiffs, including the Equal Employment 
Opportunity Commission (EEOC), the ability to second guess an 
employer's pay systems, practices or decision. This would include such 
decisions that are based on legitimate nondiscriminatory reasons 
causing a wage disparity. In other words, under the PFA it would not 
matter if a wage disparity is based on a legitimate nondiscriminatory 
reason or factor, if the plaintiff can show that the factor was not 
job-related or not necessary for the operation of the business, the 
employer loses. Such an intrusion on legitimate management functions is 
unprecedented.
    Supporters often cite a simplistic raw gender wage gap statistic as 
proof that pay discrimination exists today in the American workplace on 
a large scale and that the PFA is necessary. For example, this past 
June, Senator Barbara Mikulski (D-MD) said in support of the PFA that 
women ``still just earn 78 cents for every dollar our male counterpart 
makes.'' \7\ However, a recent study commissioned by the Department of 
Labor (DOL) casts significant doubt on the accuracy of the 78 cents for 
every dollar ``gender wage gap'' statistic.\8\ In fact, the study 
determined that ``it can be confidently concluded that, collectively,'' 
the numerous explanatory factors discussed in the report ``account for 
a major portion and, possibly, almost all of the raw gender wage gap.'' 
\9\
---------------------------------------------------------------------------
    \7\ Id. The statistics cited by Sen. Mikulski in the statement 
comes from a general study conducted by the DOL's Bureau of Labor 
Statistics.
    \8\ The DOL Study was conducted by CONSAD Research Corporation and 
is entitled, ``An Analysis of Reasons for the Disparity in Wages 
Between Men and Women,'' prepared for the U.S. Department of Labor 
Office Employment Standards Administration (January 2009).
    \9\ Charles E. James, Sr., Forward by the U.S. Department of Labor 
to ``An Analysis of Reasons for the Disparity in Wages Between Men and 
Women,'' prepared for the U.S. Department of Labor Office Employment 
Standards Administration (January 2009), 1 (emphasis added). The 
complete report can be accessed at http://www.hrpolicy.org/downloads/
2009/Gender%20Wage
%20Gap%20Final%20Report.pdf.
---------------------------------------------------------------------------
    This analysis begins with discussing the protections against pay 
discrimination under current law and then discusses the flaws in the 
PFA. Furthermore, this memorandum demonstrates how current 
nondiscrimination law is more than sufficient in preventing gender 
compensation discrimination in the workplace.

    Note: The Equal Pay Act and Title VII of the Civil Rights Act of 
1964 are preexisting laws which work together to prevent discriminatory 
practices in the workplace, including gender-based pay discrimination. 
These laws render the Paycheck Fairness Act redundant and unnecessary.
       ii. existing federal laws adequately address gender-based 
                          wage discrimination
    Currently, two Federal laws protect employees from gender-based 
wage discrimination: the Equal Pay Act and Title VII of the Civil 
Rights Act of 1964. The Federal agency responsible for enforcement of 
these two laws is the EEOC. Under these laws, women cannot be:

     denied equal pay for equal work;
     paid differently than men because of their gender;
     discriminated against in initial job assignments;
     intentionally segregated into ``women's'' jobs;
     denied the right to apply for any job, particularly higher 
paying jobs dominated by males;
     denied training, transfers, promotions, or any other job 
opportunities because of their gender; or
     subjected to intentional job evaluation manipulations that 
downgrade women's pay because of their gender.

    As explained in more detail below, Congress has already created 
statutory provisions that prohibit all forms of gender-based wage 
discrimination and provided effective remedies.
A. The Equal Pay Act
    The EPA was originally passed in 1963 as an amendment to the Fair 
Labor Standards Act (FLSA) to prohibit gender-based wage 
discrimination.\10\
---------------------------------------------------------------------------
    \10\ 29 U.S.C.  206(d) (2008).
---------------------------------------------------------------------------
                        Elements of an EPA Case
    The EPA requires ``equal pay for equal work.'' In order to 
establish a prima-facie case discriminatory pay ``an employee must 
prove an employer paid different wages to men and women performing 
equal work,'' \11\ which is demonstrated by demonstrating the 
following:
---------------------------------------------------------------------------
    \11\ Drum v. Leeson Electric Corp., 565 F.3d 1071, 1072 (8th Cir. 
2009).

     the work performed by an employee must be ``substantially 
equal'' to the work performed by another employee of the opposite sex;
     the work must be performed at the same establishment; and
     the employee's pay rate must be less than that of an 
employee of the opposite sex who performed the same work.

    ``Substantially equal'' work is proven by showing that the jobs 
being compared require equal skill, effort, and responsibility, and 
that they are performed under similar working conditions.\12\ The 
``same establishment'' requirement has generally been interpreted to 
mean the same ``distinct physical place of business'' or ``physically 
separate place of business.'' \13\
---------------------------------------------------------------------------
    \12\ Lavin-McEleney v. Marist College, 239 F.3d 476, 480 (2d Cir. 
2001); Virginia v. Tufenkian Import-Export Ventures, 2008 U.S. Dist. 
LEXIS 72139 *26 (S.D. N.Y. 2008).
    \13\ 29 CFR  1620.9 (1998).
---------------------------------------------------------------------------
    This framework essentially requires a plaintiff to establish only 
the mere existence of disparate pay for the performance of equal work, 
leaving the defendant with the burden to establish that any 
demonstrated pay differential is not due to the aggrieved employee's 
sex.'' \14\ Importantly, a plaintiff asserting an EPA claim does not 
need to prove the existence of ``intentional discrimination.'' \15\ In 
fact, ``the [EPA] prescribes a form of strict liability: Once the 
disparity in pay between substantially similar jobs is demonstrated, 
the burden shifts to the defendant to prove that a `factor other than 
sex' is responsible for the differential. If the defendant fails, the 
plaintiff wins.'' \16\
---------------------------------------------------------------------------
    \14\ Vereen v. Woodland Hills School Dist., 2008 U.S. Dist. LEXIS 
23075 *63 (W.D. Pa. 2008) (citation omitted).
    \15\ Ledbetter v. Goodyear Tire, 550 U.S. 618, 639 (2009).
    \16\ Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1532 
(11th Cir. 1992).
---------------------------------------------------------------------------
                                Defenses
    After the employee proves each of the above elements, the burden 
shifts to the employer to show, by a preponderance of the evidence, 
that the wage differential is justified by one of four affirmative 
defenses set forth in the EPA.\17\ The four affirmative defenses are 
whether wages are set according to:
---------------------------------------------------------------------------
    \17\ Corning Glass Works v. Brennan, 417 U.S. 188, 196 (1974) 
(``Again, while the Act is silent on this question, its structure and 
history also suggest that once the Secretary has carried his burden of 
showing that the employer pays workers of one sex more than workers of 
the opposite sex for equal work, the burden shifts to the employer to 
show that the differential is justified under one of the Act's four 
exceptions.'').

     (i) a seniority system;
     (ii) a merit system;
     (iii) a system that measures earnings by the quantity or 
quality of production; or
     (iv) a differential based on any other factor other than 
sex.

    If the employer is unable to meet its burden of proving one of the 
four defenses, it has violated the EPA. The fourth affirmative defense 
is used by employers in the great majority of EPA cases to show that 
any wage disparity is the result of legitimate nondiscriminatory 
business factors. The PFA, however, would completely eviscerate this 
defense. The burden of proving that a factor other than gender is a 
reason for a wage differential under the EPA ``is a heavy one'' \18\ 
and employers must establish that gender was ``no part of the basis'' 
of the alleged wage disparity.\19\ Courts have permitted employers to 
raise the fourth defense successfully for many nondiscriminatory 
reasons such as when wage differentials exist as a result of temporary 
reassignments, training programs, prior salary history, prior 
experience, education, shift differentials, and ``red circle'' 
rates.\20\
---------------------------------------------------------------------------
    \18\ Beck-Wilson v. Principi, 441 F.3d 353, 365 (6th Cir. 2006); 
Mahan v. Peake, 2009 U.S. Dist. LEXIS, at * 23 (E.D. Mich. 2009).
    \19\ Mahan v. Peake, 2009 U.S. Dist. LEXIS, at *23 (E.D. Mich. 
2009) (emphasis in original).
    \20\ ``Red circles rate'' has been defined to mean ``certain 
unusual, higher than normal, wage rates which are maintained for many 
reasons'' unrelated to gender. Gosa v. Bryce Hosp., 780 F.2d 917, 918 
(11th Cir. 1986).
---------------------------------------------------------------------------
                                Damages
    Available remedies to a successful EPA plaintiff include back pay 
for 2 or 3 years and liquidated damages (i.e., double back pay).\21\ 
Back pay may be awarded for up to 3 years, rather than 2, if the 
employer's actions are found to have been willful.\22\ Liquidated 
damages (an amount equal to back pay) are generally awarded to a 
prevailing plaintiff unless the employer demonstrates that its actions 
were in ``good faith'' and that it had ``objectively reasonable grounds 
for believing'' that its actions did not violate Federal law.\23\ While 
attorneys' fees may be awarded, expert fees are not recoverable.
---------------------------------------------------------------------------
    \21\ 29 U.S.C.  216(b) (2008).
    \22\ 29 U.S.C.  255(a) (2008). ``Willful'' is only applicable for 
the period of recovery (i.e. 2 or 3 years) and not whether liquidated 
damages should be awarded. See Brown v. Fred's Inc., 494 F.3d 736, 744 
(8th Cir. 2007) (``A different statute provides that if the employee 
shows a willful violation, then the statute of limitations is extended 
from 2 to 3 years, but this is not the standard for liquidated 
damages.'').
    \23\ 29 U.S.C.  260 (2008); Brown v. Fred's Inc., 494 F.3d 736, 
743-44 (8th Cir. 2007).
---------------------------------------------------------------------------
B. Title VII of the Civil Rights Act
    Employees may also bring gender-based wage discrimination claims 
under Title VII of the Civil Rights Act of 1964.\24\ Indeed, many pay 
discrimination plaintiffs allege violations of both statutes. Under 
title VII, there are two theories by which a plaintiff can pursue a pay 
discrimination claim: (1) disparate treatment and (2) disparate 
impact.\25\ Disparate treatment occurs when a plaintiff is 
intentionally treated less favorably than others because of gender.\26\ 
Disparate impact, on the other hand, exists where a neutral employment 
practice has a disproportionately impact on the plaintiff 's gender 
\27\ in such a manner that the practice is ``fair in form but 
discriminatory in operation.'' \28\ In other words, proof of 
discriminatory motive is not required under the disparate impact theory 
of discrimination whereas disparate treatment discrimination requires a 
showing of intentional discrimination.\29\ Understanding the difference 
between these two theories of discrimination is important as different 
remedies and damages are available under each.
---------------------------------------------------------------------------
    \24\ 42 U.S.C.  2000e-2(a) (2008).
    \25\ Moore v. The Boeing Co., 2004 U.S. Dist. LEXIS 5959 (E.D. Mo. 
2004) (``Plaintiffs seek class certification on their salary claims, 
both under a disparate treatment theory and under a theory of disparate 
impact.'').
    \26\ International Brotherhood of Teamsters v. U.S., 431 U.S. 324, 
335 n.15 (1977).
    \27\ Id.
    \28\ Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971).
    \29\  International Brotherhood of Teamsters v. U.S., 431 U.S. at 
335 n.15.
---------------------------------------------------------------------------
                            Broader Than EPA
    Title VII is broader than the EPA in several ways. First, unlike 
the EPA, which is limited to wage discrimination, title VII prohibits 
gender discrimination in areas that have an impact on wages and have 
compensation-related consequences such as hiring, firing, assigning, 
promotion, and transfers. Indeed, courts have recognized that the 
burden on employers is ``meaningfully'' different than under title VII. 
One court noted, ``this standard differs meaningfully from the standard 
applicable under title VII. In a title VII case, the plaintiff . . . 
must establish that the employer discriminated against [him or her] 
with respect to the terms of her compensation because of her sex. In 
contrast, in an Equal Pay Act case, the defendant employer relying on 
the [EPA's fourth affirmative] defense must establish that an aggrieved 
employee . . . is not being paid less because of her sex.'' \30\
---------------------------------------------------------------------------
    \30\  Vereen v. Woodland Hills School Dist., 2008 U.S. Dist. LEXIS 
23075 *71 (W.D. Pa. 2008) (emphasis in orginal).
---------------------------------------------------------------------------
    Moreover, under title VII, plaintiffs are not required to 
demonstrate that the jobs are ``substantially'' equal as long as the 
plaintiff can prove that the wage disparity is due to intentional 
discrimination.\31\ Title VII also allows for recovery without the 
comparison of wages with another employee of the opposite gender.\32\ 
For example, if an employer intentionally lowered an individual's pay 
on account of gender ``even if there were no employees of the opposite 
sex doing equal work for higher pay.'' \33\
---------------------------------------------------------------------------
    \31\ Sims-Fingers v. City of Indianapolis, 2007 U.S. App. LEXIS 
15253 *8 (7th Cir. 2007).
    \32\ County of Washington v. Gunther, 452 U.S. 159, 178-80 (1981); 
Drury v. Waterfront Media, Inc., 2007 U.S. Dist. LEXIS 18435 at *15 
(S.D. N.Y. Mar. 7, 2007).
    \33\ Drury v. Waterfront Media, Inc., 2007 U.S. Dist. LEXIS 18435 
at *15 (S.D. N.Y. Mar. 7, 2007); Brennan v. City of White Plains, 1998 
U.S. Dist. LEXIS 1931 at *9 (S.D.N.Y. 1998).
---------------------------------------------------------------------------
                                Defenses
    As to defenses, the same four affirmative defenses available under 
the EPA are also available under title VII.\34\ The defenses include 
wages that are set according to a seniority system, a merit system, a 
system that measures earnings by the quantity or quality of production, 
or any other factor other than gender.
---------------------------------------------------------------------------
    \34\ Gunther, 452 U.S. at 170-71.
---------------------------------------------------------------------------
                                Damages
    Title VII and the EPA differ in the area of available remedies. 
There is no provision for liquidated damages under title VII. However, 
under title VII, in addition to receiving back pay for 2 years, 
disparate treatment (i.e., intentional discrimination) plaintiffs may 
also recover injunctive relief, front pay, capped compensatory and 
punitive damages and attorney's fees and costs. Depending on the number 
of employees of the employer, compensatory and punitive damage awards 
may range from $50,000 to $300,000.\35\ However, under a disparate 
impact theory of discrimination (i.e., unintentional discrimination), a 
successful plaintiff may only recover injunctive relief, back pay and 
attorney's fees and costs. The remedies available for plaintiffs suing 
a disparate impact theory of discrimination are limited because there 
is no requirement to prove the employer acted with discriminatory 
motive whereas remedies available for disparate treatment 
discrimination are much more expansive but there must be a showing of 
intentional discrimination.
---------------------------------------------------------------------------
    \35\ 42 U.S.C.  1981a(b)(3) (2008) (employers of 15-100 employees, 
$50,000 cap; employers of 101-200 employees, a $100,000 cap; employers 
of 201-500 employees, a $200,000 cap; employers of over 500 employees, 
a $300,000 cap).
---------------------------------------------------------------------------
    Admittedly, pay discrimination does occur in some cases. But the 
pertinent question at hand is whether these occurrences can be 
adequately addressed by the robust nondiscrimination protections 
currently in the law or whether a drastic change in current law is 
needed that the PFA represents. The ramifications of the PFA are 
discussed below.
                     iii. the paycheck fairness act
    The PFA has very little to do with punishing and deterring pay 
discrimination thus ensuring equal pay for equal work, which since 1963 
has been required by the EPA. Representative George Miller (D-CA), 
Chairman of the House Education and Labor Committee, has gone on the 
record admitting that the issue is not really gender discrimination, 
but instead, about how employers compensate their employees, even in 
cases where unlawful discrimination is decidedly absent. Rep. Miller 
stated:

          Currently, an employer can refute a pay discrimination claim 
        if he or she provides the difference of pay is based upon any 
        factor other than gender, even factors unrelated to the job. 
        That is just unacceptable. An excuse for equal pay that is not 
        related to the job is no excuse at all.\36\
---------------------------------------------------------------------------
    \36\ 155 Cong. Rec. H127 (daily ed. Jan. 9, 2009) (statement of 
Rep. Miller).

    It is important to note that Rep. Miller does not distinguish 
between differences in pay that are the result of discriminatory motive 
or one that is nondiscriminatory. Indeed, other proponents of the PFA 
have noted that the legislation would require employers to show that 
pay disparities are not only nondiscriminatory (i.e., not based on 
gender), but also that such disparities are job-related and necessary 
to the operation of the business, which is a very high standard once a 
practice, system or decision has already been deemed nondiscriminatory. 
---------------------------------------------------------------------------
Proponents noted the following:

          Permitting an employer to assert an affirmative defense in an 
        EPA action, only where the pay differential between men and 
        women is not related to gender, is related to job performance, 
        and is consistent with business necessity.\37\
---------------------------------------------------------------------------
    \37\ Commission on Women in the Profession, Report to the House of 
Delegates ABA, 1.
---------------------------------------------------------------------------
   Effectively Eliminates Legitimate Nondiscriminatory Reasons as an 
          Adequate Legal Justification for Wage Differentials
    The PFA substantially changes the affirmative defenses available 
under the EPA. In particular, the bill would revamp the fourth 
affirmative defense (i.e., any factor other than sex). An employer 
demonstrating that a wage differential is the result of a legitimate 
nondiscriminatory factor, by itself, would no longer be sufficient to 
prevail against allegations of wage discrimination. As described above, 
this defense has been successfully raised by employers when wage 
differentials exist for several reasons including, but not limited to, 
education, experience, training, prior salary history, profitability 
and revenue production. The PFA would create a confusing scheme 
requiring the employer to go beyond showing that a nondiscriminatory 
reason is the basis for the wage difference. The employer would then be 
required to prove that such legitimate nondiscriminatory factors are 
job-related and consistent with business necessity. The PFA would 
invoke a fundamental change in Federal nondiscrimination law by going 
beyond the question of discrimination (i.e., whether the employment 
action or pay disparity was based on a protected classification such as 
gender). The legislation would require a business to establish that its 
pay structure, systems or decisions were necessary to the operation of 
the business or consistent with an overriding business objective.
    A Bona Fide Factor. The first step in this scheme would require an 
employer attempting to assert this defense to prove, first, that the 
factor causing the wage disparity is ``bona fide.'' ``Bona fide'' could 
be interpreted to require an employer to prove that this factor is part 
of a ``systematic, formal system guided by objective, written 
standards.'' \38\ Moreover, although not expressly making them 
exclusive, the bill identifies three factors as examples of ``bona 
fide'' factors, namely, education, training, and experience. If such 
factors are considered non-exclusive, this step closes mirrors, the 
current fourth affirmative defense, which considers whether the wage 
disparity is based on a factor other than gender (i.e., not based on 
gender--not discriminatory).
---------------------------------------------------------------------------
    \38\ See Brennan v. Victoria Bank & Trust Co., 493 F.2d 896, 901 
(5th Cir. 1974).
---------------------------------------------------------------------------
    Job-Related & Consistent With Business Necessity Standard. Yet 
under the PFA, whether a wage disparity is discriminatory does not end 
the inquiry. Indeed, after the employer demonstrates that the factor is 
``bona fide,'' the second step in the new scheme would be to require an 
employer to prove that the factor is both ``job-related'' and 
``consistent with business necessity.'' This very high burden is 
reserved for unique situations arising in Federal employment law.
    In fact, there are two unique situations where the courts apply the 
job-related and business necessity standard. The first is under title 
VII where a plaintiff establishes that an employer's practice is fair 
in form but has a disproportionate impact on a particular protected 
classification (i.e., disparate impact).\39\ The second scenario under 
which the job-related and business necessity standard is used is under 
the ADA where an individual challenges an employer test or standard 
that screens out disabled individuals.
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    \39\ In a disparate impact action, ``a plaintiff establishes a 
prima facie violation by showing that an employer uses `a particular 
employment practice' that causes a disparate impact on the basis of 
race, color, religion, sex, or national origin.'' An employer defends 
against liability by demonstrating that the contested practice is 
``job-related for the position in question and consistent with business 
necessity.'' Even if the ``employer carries that substantial burden, 
the [plaintiff] may respond by identifying `an alternative employment 
practice' which the employer `refuses to adopt.' '' Ricci v. Destefano, 
129 S. Ct 2658, 2673 (2009) (quotations omitted).
---------------------------------------------------------------------------
    In order to show ``job-relatedness'' an employer ``must demonstrate 
that the qualification standard fairly and accurately measures the 
individual's actual ability to perform the essential functions of the 
job.'' \40\ To establish that the disputed employment practice such as 
a pay structure is consistent with ``business necessity,'' the employer 
``must show that it substantially promotes the business's needs.'' \41\ 
Indeed, ``the `business necessity' standard is quite high, and is not 
to be confused with mere expediency.'' \42\
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    \40\ Bates v. United Parcel Service, Inc., 511 F.3d 974, 996 (9th 
Cir. 2007) (citations omitted).
    \41\ Bates v. United Parcel Service, Inc., 511 F.3d 974, 996 (9th 
Cir. 2007) (citations omitted). See also, EEOC v. Dial Corp., 475 F.3d 
735, 743 (8th Cir. 2006) (``part of the employer's burden to establish 
business necessity is to demonstrate the need for the challenged 
procedure'')
    \42\ Bates v. United Parcel Service, Inc., 511 F.3d 974, 996 (9th 
Cir. 2007) (citations omitted).
---------------------------------------------------------------------------
    In referring to the test for showing ``business necessity'' under 
title VII's disparate impact theory of discrimination, Justice Ginsburg 
explained that otherwise neutral employment practices which had a 
disproportionate impact on a particular protected group ``could be 
maintained only upon an employer's showing of `an overriding and 
compelling business purpose.' '' \43\ Moreover, she noted ``that a 
practice served ``legitimate management functions did not . . . suffice 
to establish business necessity.'' \44\ Ginsburg cited a series of 
cases setting forth the high standard of the business necessity defense 
including the following:
---------------------------------------------------------------------------
    \43\ Ricci v. Destefano, 129 S. Ct 2658, 2697 (2009) (dissenting, 
Ginsburg) quoting Chrisner v. Complete Auto Transit, Inc., 645 F.2d 
1251, 1261 n.9 (6th Cir. 1981).
    \44\ Ricci v. Destefano, 129 S. Ct 2658, 2697-2698 (2009) 
(dissenting, Ginsburg) quoting Williams v. Colorado Springs, 641 F.2d 
835, 840-41 (10th Cir. 1981).

     ``a discriminatory employment practice must be shown to be 
necessary to safe and efficient job performance'' \45\;
---------------------------------------------------------------------------
    \45\ Dothard v. Rawlinson, 433 U.S. 321, 332 n. 14 (1977).
---------------------------------------------------------------------------
     ``the term `necessity' connotes that the exclusionary 
practice must be shown to be of great importance to job performance'' 
\46\;
---------------------------------------------------------------------------
    \46\ Williams v. Colorado Springs, 641 F.2d 835, 840-41 (10th Cir. 
1981).
---------------------------------------------------------------------------
     ``the proper standard for determining whether `business 
necessity' justifies a practice which has a racially discriminatory 
result is not whether it is justified by routine business 
considerations but whether there is a compelling need for the employer 
to maintain that practice and whether the employer can prove there is 
no alternative to the challenged practice'' \47\;
---------------------------------------------------------------------------
    \47\ Kirby v. Colony Furniture Co., 613 F.2d 696, 705 n.6 (8th Cir. 
1980).
---------------------------------------------------------------------------
     ``this doctrine of business necessity . . . connotes an 
irresistible demand'' \48\;
---------------------------------------------------------------------------
    \48\ Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 244 n.87 
(5th Cir. 1974).
---------------------------------------------------------------------------
     ``an exclusionary practice must not only directly foster 
safety and efficiency of a plant, but also be essential to those 
goals'' \49\;
---------------------------------------------------------------------------
    \49\ U.S. v. Bethlehem Steel Corp., 446 F.2d 652, 662 (2d Cir. 
1971).

    In fact, the business necessity defense demands that there is no 
other less impactful way to achieve the employer's compelling need. 
Justice Stevens, noted in comparing the business necessity standard to 
the ``reasonable factor other than age'' defense under the ADEA, that 
``unlike the business necessity test, which asks whether there are 
other ways for the employer to achieve its goals that do not result in 
a disparate impact on a protected class, the reasonableness inquiry 
includes no such requirement.'' \50\ As noted above, it would not be 
enough that a pay practice, system or decision is a legitimate 
nondiscriminatory management decision or even reasonable. Such 
decisions would still have to run the gauntlet of job relatedness and 
business necessity. If such practices failed to pass the scrutiny of a 
judge or jury--regardless of whether it was not based on gender--an 
employer would be subject to the full range of damages under Federal 
law.
---------------------------------------------------------------------------
    \50\ Smith v. City of Jackson, 544 U.S. 228, 243 (2005).
---------------------------------------------------------------------------
    No Other Means to Accomplish the Business Goal or Purpose. Under 
the PFA, if the employer establishes that a wage difference is based on 
a bona fide factor and if the employer is also able to satisfy the very 
high burden of showing that the factor is job-related and consistent 
with business necessity, the employee would then be given an 
opportunity to defeat the employer's use of this defense altogether by 
showing that an alternative means to achieve the legitimate business 
purpose exists without resulting in a wage differential. If the 
employee is able to make that showing, the employer would lose. In 
other words, the plaintiff would be given the final opportunity to 
defeat the employer's use of this so-called ``bona fide factor'' 
defense. Indeed, the deck is heavily stacked against the employer 
simply because an employee can show that a wage disparity exists.
                    Unprecedented Penalty Provisions
    The PFA would establish penalties for equal pay violations that are 
unprecedented in Federal equal employment opportunity (EEO) law. The 
bill would provide plaintiffs with unlimited monetary remedies, 
including back pay, liquidated damages, unlimited compensatory and 
punitive damages, attorneys' fees, costs of the action, and expert 
fees.\51\ No other Federal EEO law provides such a wide array of 
monetary relief to successful plaintiffs. (See Table 1).
---------------------------------------------------------------------------
    \51\ The expert fee provision of the PFA is not limited to equal 
pay claims but also would amend the ADEA and FLSA to permit the award 
of such fees under those statutes as well.


    For example, Title VII of the Civil Rights Act, which prohibits 
discrimination based on race, gender, religion, and national origin, 
provides for recovery of back pay, attorney and expert fees, and awards 
of compensatory and punitive damages.\52\ Unlike the PFA, however, 
liquidated damages are not available under title VII, and compensatory 
and punitive damages (collectively) are capped at $300,000 depending on 
the size of the employer.\53\ The Americans with Disabilities Act 
(ADA), which prohibits discrimination against qualified individuals 
with disabilities, provides a remedial scheme identical to that of 
title VII.\54\
---------------------------------------------------------------------------
    \52\ 42 U.S.C.  2000e-5 (g), (k) (2008).
    \53\ Like title VII, the Civil Rights Act of 1866, 42 U.S.C  1981, 
also prohibits discrimination in employment based on race. Under this 
section, successful plaintiffs may recover back pay, compensatory and 
punitive damages, and attorneys' fees. Patterson v. McLean Credit 
Union, 491 U.S. 164, 182 n. 4 (1989). Liquidated damages and expert 
fees, however, may not be awarded under the 1866 Act.
    \54\ 42 U.S.C.  12,117 (2008); 42 U.S.C.  1981a (a) (2), (b) (3) 
(2008); Luciano v. Olsten Corp., 110 F.3d 210, 221 (2d Cir. 1997).
---------------------------------------------------------------------------
    The Age Discrimination in Employment Act (ADEA), on the other hand, 
provides back pay and liquidated damages remedies, but does not permit 
recovery of compensatory and punitive damages or expert fees. 
Furthermore, under the ADEA, liquidated damages are capped at an amount 
equal to the sum recovered in back pay.\55\
---------------------------------------------------------------------------
    \55\ 29 U.S.C.  626 (b) (2008).
---------------------------------------------------------------------------
    The outlier is the Civil Rights Act of 1866, which is also known as 
Section 1981. This law was originally enacted to enforce the 13th, 
14th, and 15th amendments to the U.S. Constitution following the Civil 
War. The act prohibits race discrimination in making and enforcing 
contracts. The courts determined that the act's prohibition applied to 
the employer-employee relationship. Section 1981 only applies to race 
and national origin discrimination.\56\ It allows uncapped compensatory 
and punitive damages \57\ but does not provide for liquidated damages 
as under the EPA.
---------------------------------------------------------------------------
    \56\ Civil Rights Act of 1866, 14 Stat. 27.
    \57\ 42 U.S.C.  1981 (2008).
---------------------------------------------------------------------------
    Thus, unlike every other nondiscrimination law, under the PFA a 
plaintiff is eligible to recover every remedy available under all other 
Federal nondiscrimination laws combined. Clearly, such an expansive 
measure exceeds the scope of the relief available under any existing 
Federal EEO law.
                       Minimal Proof Requirements
    No Proof of Intent Required. A troubling aspect of the PFA remedial 
scheme is the lack of proof that is required under the bill to recover 
the full panoply of damages. As noted above, the current standard for 
proving an EPA violation is a form of strict liability and there is no 
requirement that an individual be subjected to intentional 
discrimination (though the damages are increased for bad-faith 
violations).\58\ Whether a wage differential results accidentally, or 
from an explicit intent on the part of the employer to discriminate 
based on gender, makes no difference. The PFA in no way changes this 
standard, but nonetheless provides for unlimited compensatory and 
punitive damages under the act. The low standard established by the PFA 
for recovery of compensatory and punitive damages is contrary to long 
established Federal EEO policy unprecedented in Federal law. For 
example, to recover such damages under title VII and ADA, plaintiffs 
must prove that the employer intentionally discriminated against them 
because of their race, gender, religion, national origin or 
disability.\59\ Moreover, even where intent is proven under these laws, 
damages are limited to no more than $300,000. The 1866 Civil Rights Act 
also requires proof of intentional discrimination in order to recover 
damages. Even the ADEA, which provides limited liquidated damages, 
requires some demonstration of intent. Under that statute, an employer 
is liable for damages only where the discrimination was willful--that 
is, where the employer ``knew or showed reckless disregard for the 
matter of whether its conduct was prohibited by the ADEA.'' \60\ 
However, as noted above, when a plaintiff advances a disparate impact 
(i.e., unintentional discrimination) theory of discrimination the 
plaintiff 's remedies are limited to back pay, injunctive relief and 
attorney's fees.
---------------------------------------------------------------------------
    \58\ Beck-Wilson v. Principi, 441 F.3d 353, 360 (6th Cir. 2006) 
(stating that ``unlike the showing required under title VII's disparate 
treatment theory, proof of discriminatory intent is not required to 
establish a prima facie case under the Equal Pay Act.''); Fallon v. 
Illinois, 882 F.2d 1206, 1213 (7th Cir. 1989); Brewster v. Barnes, 788 
F.2d 985, 993 n.12 (4th Cir. 1986) (discriminatory intent is not an 
element of a claim under the EPA); Tidwell v. Fort Howard Corp., 989 
F.2d 406, 410 (10th Cir. 1993) (same).
    \59\ 42 U.S.C.  1981a(a)(1) (2008).
    \60\ Trans World Airlines v. Thurston, 469 U.S. 111 (1985).
---------------------------------------------------------------------------
    Employer Defenses Restricted. Finally, unlike the EPA, the PFA will 
penalize employers even when they acted with a reasonable belief that 
their pay policies were lawful. Because of the complexity of wage 
cases, Congress long ago recognized a defense to liquidated damages 
awards under the FLSA and EPA where an employer acted in ``good faith'' 
and with ``reasonable grounds for believing'' its conduct was 
lawful.\61\ In such cases, the court is authorized to limit or deny 
liquidated damages. In the past, this has been a just and important 
defense for employers, limiting their liability in cases where they had 
acted in reliance on advice from their lawyers,\62\ on opinions of the 
EEOC,\63\ or upon reasonable, but ultimately incorrect, wage comparison 
data.\64\ While this defense remains available under the PFA for 
liquidated damages, it would not affect awards for compensatory and 
punitive damages. Given the factual and legal complexities associated 
with EPA compliance, the absence of a good faith defense to 
compensatory and punitive damages in the PFA could pose significant 
problems for employers.
---------------------------------------------------------------------------
    \61\ 29 U.S.C.  260 (2008).
    \62\ E.g., Hill v. J.C. Penney Co., 688 F.2d 370, 375 (5th Cir. 
1982).
    \63\ E.g., EEOC v. Tree of Life Christian Sch., 751 F. Supp. 700, 
707 (S.D. Ohio 1990).
    \64\ E.g., Clymore v. Far-Mar-Co., 709 F.2d 499, 505 (8th Cir. 
1983).
---------------------------------------------------------------------------
        Dubious Policy for Confronting Workplace Discrimination
    PFA Will Increase Litigation. As one can see from its remedial 
scheme, the PFA adopts what has become an all-too-familiar policy for 
confronting societal problems--expanding civil monetary penalties 
against employers. History demonstrates that an expansion of civil 
monetary remedies will only encourage the filing of meritless charges 
and lawsuits.
    A case in point is the Civil Rights Act of 1991. That statute was 
designed to help deter workplace discrimination by drastically 
increasing--in the form of compensatory and punitive damages--the 
penalties for such discrimination. Federal charge and caseload data 
indicate, however, that the 1991 Act has served more to encourage the 
filing of frivolous charges and lawsuits, thereby imposing its own 
costs on society.
    Even the courts themselves have begun to take notice of the 
proliferation of meritless employment claims. For example, one district 
court stated:

          This Court has observed too many cases where an individual 
        who has been rejected for a job or who has been fired from a 
        position will make totally unsupported claims of 
        discrimination. Indeed, some persons make multiple, non-
        substantiated claims, i.e., race, religion, gender, age, in the 
        same case in the hope that maybe one of the claims will 
        ``stick.'' \65\
---------------------------------------------------------------------------
    \65\ Bray v. Georgetown Univ., 917 F. Supp. 55, 60 (D.D.C. 1996), 
aff 'd without op., 116 F.3d 941 (D.C. Cir. 1997).

---------------------------------------------------------------------------
    And another district court said:

          This case is yet another entrant in a tiresome parade of 
        meritless discrimination cases. Again and again, the Court's 
        resources are sapped by such matters, instigated by implacable 
        parties and prosecuted with questionable judgment by their 
        counsel. It is high time for this to stop.\66\
---------------------------------------------------------------------------
    \66\ Keegan v. Dalton, 899 F. Supp. 1503, 1515 (E.D. Va. 1995).

    As former Justice O'Conner prudently observed over 20 years ago, 
the value of any increase in the availability of monetary relief must 
be evaluated by weighing the likely increase in deterrent effect 
against the additional incentive for meritless litigation.\67\ 
Statistics have shown that the addition of limited damages under the 
1991 Act failed this test. It appears likely that the unlimited damages 
provisions of the PFA are destined to repeat that mistake.
---------------------------------------------------------------------------
    \67\ Smith v. Wade, 461 U.S. at 93-94 (O'Connor, J. dissenting).
---------------------------------------------------------------------------
            Class Action Changes: ``Opt-In'' to ``Opt-Out''
    The PFA would also change the procedural requirements for bringing 
class action claims under the EPA from ``opt-in'' class actions to 
``opt-out'' actions. This is an especially troubling aspect of the new 
bill, as it would dramatically increase the magnitude of class actions 
brought under the EPA.
    Under existing law, equal pay claims are subject to the class 
action provisions contained in 29 U.S.C.  216(b). This section--which 
also applies to actions brought under the FLSA and ADEA--permits 
individual employees to bring ``collective'' or ``class'' lawsuits on 
behalf of ``similarly situated'' employees against the employer. 
Section 216(b) specifically states, however, that ``no employee shall 
be a party plaintiff to any . . . action [under this section] unless he 
gives his consent in writing to become such a party and such consent is 
filed with the court in which such action is brought.'' Thus, 
presently, employees who desire to participate in an equal pay class 
action must take affirmative steps to join the class. This kind of 
class action device often is referred to as an ``opt-in'' class action.
    The PFA, however, amends the EPA to exclude equal pay claims from 
Section 216(b) coverage. Under the proposed legislation, EPA class 
actions instead would be subject to the requirements of Federal Rule of 
Civil Procedure (Rule 23), the procedural rule that governs all other 
class action cases in Federal court. This change is significant because 
Rule 23 uses an ``opt-out'' procedure. That is, in a Rule 23 class 
action all similarly situated employees automatically become members of 
the class unless they take affirmative steps to withdraw from the 
class.\68\ Since most individuals, when notified that a class action is 
pending, do nothing at all, the magnitude of ``opt-out'' class actions 
is invariably larger than ``opt-in'' actions.\69\ This is particularly 
concerning because many individuals would remain (or not opt-out) as 
part of a putative class even though they do not believe they have been 
the subject of discrimination, which will waste judicial resources, 
simply serve to drive up litigation or settlement costs and result in 
significantly higher attorney's fees awards for the plaintiffs' 
attorneys.
---------------------------------------------------------------------------
    \68\ Fed. R. Civ. P. 23(c)(2) (2008).
    \69\ Rule 23 also permits a court to certify class actions without 
the opt-out right. Fed. R. Civ. P. 23(b)(1), (2). Under 23(b)(1) and 
(2) cases, all potential class members are included in the action 
regardless of their desires. Fed. R. Civ. P. 23(c)(3). Obviously, 
classes certified under these provisions generate class sizes at least 
as large as those certified with the opt-out provision. In the past, 
employment discrimination cases commonly had been certified under 
either approach. Thus, it is at least theoretically possible that PFA 
claims likewise could be certified without an opt-out right. However, 
many courts now question whether claims involving compensatory and 
punitive damages, such as those that would arise under the PFA, can be 
certified without affording potential class members the opportunity to 
opt-out. See, e.g., Ticor Title Ins. Co. v. Brown, 114 U.S. 1359, 1361 
(1994).
---------------------------------------------------------------------------
    One Federal court of appeals has noted that these large opt-out 
damages cases create insurmountable pressure on defendants to settle 
regardless of the merits of the case. ``The risk of facing an all-or-
nothing verdict presents too high a risk, even when the probability of 
an adverse judgment is low.'' \70\ Other Federal courts have referred 
to these kinds of cases as ``judicial blackmail.'' \71\
---------------------------------------------------------------------------
    \70\ Castano v. American Tobacco Co., 84 F.3d 734, 746 (1996).
    \71\ See, e.g. Id. at 746; In re Rhone-Poulenc Rorer, Inc., 51 F.3d 
1293 (7th Cir.), cert. denied, 116 U.S. 767 (1995).
---------------------------------------------------------------------------
    Indeed, the real benefit goes to the lawyers who will bring suits 
under the PFA. A PFA proponent admitted that one reason for adding 
compensatory and punitive damages is to entice the plaintiffs' bar. 
Representative Rob Andrews (D-NJ) stated:

          Now, the problem with the Equal Pay Act is its remedies are 
        limited so much to just twice what your salary is that the 
        damages are never high enough to justify legal representation. 
        This is about getting lawyers for people who have a valid claim 
        who cannot afford the thousands of dollars it would be.\72\
---------------------------------------------------------------------------
    \72\ 153 Cong. Rec. H128 (daily ed. Jan. 9, 2009) (statement of Rob 
Andrews).

    A key element that Rep. Andrews does not address, however, is that 
both the EPA and title VII currently provide attorney's fees to the 
prevailing party. Representative Tom Price (R-GA), concerned that the 
plaintiffs' bar would aggressively use the PFA to attack employers' pay 
systems, practice and decisions on a grand scale in order to achieve 
high dollar settlements, offered an amendment in a House Committee 
hearing that would have limited an award of ``reasonable attorney's 
fees'' in PFA cases to $2,000 per hour.\73\ The proponents of the PFA, 
however, rejected the amendment because it would unduly interfere with 
the plaintiffs' bar pay.\74\ Indeed, the PFA provides every incentive 
for the plaintiffs' bar to challenge employers pay systems, practices 
or decisions regardless of whether a pay disparity is the result of 
discrimination.
---------------------------------------------------------------------------
    \73\ H.R. Rep. No. 110-783, at 53 (2008).
    \74\ Notes of the legislative debate during the mark-up of the bill 
in the House Education and Labor Committee between Reps. Price (R-GA), 
McKeon (R-CA) and Andrews (D-NJ) on file with the author.
---------------------------------------------------------------------------
    Wage Differentials Based on Work Location No Longer Permissible
    As part of a plaintiff 's initial or prima facie EPA case, he or 
she must also show that the show a wage disparity compared with another 
employee working in the same establishment.\75\ EEOC regulations define 
``establishment'' as follows:
---------------------------------------------------------------------------
    \75\ 29 U.S.C.  206(d) (2008).

          It refers to a distinct physical place of business rather 
        than to an entire business or enterprise which may include 
        several separate places of business. Accordingly, each 
        physically separate place of business is ordinarily considered 
        a separate establishment.\76\
---------------------------------------------------------------------------
    \76\ 29 CFR  1620.9 (a).

    This requirement recognizes real business and economic differences 
that may exist from facility to facility and serves to prevent an 
employee from comparing wages with other employees in separate plants, 
or geographical regions.\77\ The regulations, however, recognize 
exceptions to the rule in ``unusual circumstances.'' \78\
---------------------------------------------------------------------------
    \77\ Collins v. Landmark Military Newspapers, 2007 U.S. Dist. LEXIS 
57572 at **46-47 (E.D. Va. 2007) (holding that a plaintiff located in 
Norfolk, VA, could not adequately be compared with employees of the 
opposite gender in North Carolina because the EPA precludes 
``comparison of jobs across establishments'' and the plaintiff failed 
to set forth any ``unusual circumstances'' justifying consideration of 
employees outside her establishment).
    \78\ 29 CFR  1620.9 (b).
---------------------------------------------------------------------------
    The PFA would expand ``establishment'' to mean any of the 
employer's facility within the same county or similar political 
subdivision. Importantly, however, the PFA would invite the EEOC to 
draft new regulations on the meaning of ``establishment.''
            Applicants Eligible to Make Equal Pay Act Claims
    Presently, only employees are able to present Equal Pay Act claims. 
Job applicants are not ``employees'' for purposes of the Equal Pay 
Act.\79\ Under the revised PFA, applicants (who would be employees if 
employed by the employer) would now be able to make Equal Pay Act 
claims. Under this revision, an individual who was offered a job but 
declined it could potentially make an EPA claim. Claims of pay 
discrimination (i.e., wage disparity) brought by, or on behalf of, 
individuals who have never worked for the employer is simply illogical 
as the case would have to be constructed on hypothetical assertion 
after hypothetical assertion. Indeed, the real purpose of such a 
provision would be to significantly expand the scope of eligible 
plaintiffs in class actions, which, as noted above, would simply serve 
to drive up litigation costs (pushing employers to settle) and increase 
the return to plaintiff attorneys on behalf of individuals who could 
bring these claims. In the end, there is no rational justification for 
this expansion of the EPA.
---------------------------------------------------------------------------
    \79\ Torres v. Action for Boston Community Dev., Inc., 32 FEP 1516, 
1519 (D. Mass. 1983).
---------------------------------------------------------------------------
              Nonretaliation Provision for Wage Disclosure
    Under Section 3 of the PFA, it would be illegal for an employer to 
discharge or discipline an employee who ``has inquired about, 
discussed, or otherwise disclosed the wages of the employee or another 
employee.'' This provision would prevent employers from enforcing 
company policies concerning the privacy and confidentiality of employee 
payroll and wage information.
    The National Labor Relations Board in its enforcement of the 
National Labor Relations Act (NLRA) has similarly protected employees 
who have shared or disclosed pay information. However, the PFA language 
is even broader in terms of which employees would be protected. Under 
the NLRA, supervisors and managerial employees are not covered 
employees and, therefore, are not afforded this protection from being 
disciplined or discharged. Under the PFA, supervisors and managerial 
employees would be protected from discipline or discharged if they 
disclose wage-
related information. Importantly, it is supervisors and managerial 
employees who have far greater access to pay data.
        Mandatory and Public Wage Data Collection and Reporting
    Section 8 of the bill does not amend the EPA, but instead, creates 
a new enforcement mechanism by enabling the EEOC to collect pay and 
compensation data from all covered employers. The PFA directs the EEOC 
to determine what wage data information would be helpful in 
strengthening the enforcement of wage discrimination laws. The EEOC 
would then issue regulations regarding how and what type of information 
it would require from employers. Although the bill provides that, in 
promulgating such regulations, the EEOC must consider the burden on 
employers, the frequency of reporting, and protections to maintain pay 
data confidentiality, the EEOC would be given virtually unlimited 
discretion in determining what wage data employers must report. Nothing 
in the bill prevents the wage data from being publicly disclosed by the 
EEOC. Employers would be required to report the wage data by the 
gender, race and national origin of their employees. In the end, it is 
highly likely that the EEOC would require all employers to file 
something very similar to the Equal Opportunity Survey (discussed 
below), which was ultimately rescinded by the DOL in 2006 because of 
its ineffectiveness. The PFA would essentially permit the EEOC to 
mandate that employers provide more information than Federal 
contractors currently provide to the Department of Labor's Office of 
Federal Contract Compliance Programs (OFCCP).
                 Reinstatement of the Flawed EO Survey
    Like the previous section, Section 9 of the PFA has nothing to do 
with the EPA, but instead establishes a new enforcement regime for the 
Department of Labor's OFCCP. The OFFCP is responsible for administering 
and enforcing certain nondiscrimination and affirmative action 
obligations which are applicable only to covered Federal contracts and 
subcontracts.\80\
---------------------------------------------------------------------------
    \80\ See Exec. Order No. 11246 (1965); Section 503 of the 
Rehabilitation Act of 1973, 29 U.S.C.  793;  402 (2008) of the 
Vietnam Era Veterans Readjustment Assistance Act of 1972, 38 U.S.C.  
4211-4212 (2008).
---------------------------------------------------------------------------
    The Flawed Equal Opportunity Survey. On September 8, 2006, the 
OFCCP rescinded its regulation requiring it to conduct an Equal 
Opportunity Survey (EO Survey) every year. Originally adopted in 2000, 
primarily for the purpose of effectively targeting OFCCP compliance 
review resources, the EO Survey gathered detailed information 
concerning personnel hiring, compensation practices, and worker tenure 
from Federal contractors.\81\
---------------------------------------------------------------------------
    \81\ ``Affirmative Action and Nondiscrimination Obligations of 
Contractors and Subcontractors; Equal Opportunity Survey,'' 71 Federal 
Register 174 (8 September 2006), 53032.
---------------------------------------------------------------------------
    Although the initial objectives of the EO Survey were laudable,\82\ 
the survey was severely flawed as a targeting tool; largely duplicative 
of other information OFCCP collects; and provided no information to 
contractors that would encourage self-evaluations. In fact, its 
usefulness and integrity came under question as early as April 2000, 
when Bendick and Eagan Economic Consultants Inc. provided a report to 
OFCCP highlighting serious problems with the pilot EO Survey and 
recommending that the usefulness of the survey be validated before it 
was fully implemented.\83\ Such a validation study was not conducted 
before the EO Survey was implemented and the final rule published on 
November 13, 2000. In 2002, the OFCCP contracted with Abt Associates, 
Inc. to evaluate and validate the reliability and usefulness of the EO 
Survey methodology.
---------------------------------------------------------------------------
    \82\ Id. The hope was that the survey would: (1) increase 
compliance with equal opportunity requirements by improving contractor 
self-awareness and encouraging self-evaluations; (2) improve the 
deployment of Federal Government resources toward contracts most likely 
to be out of compliance; and (3) increase agency efficiency by building 
on the tiered-review process already authorized by OFCCP's regulatory 
reform efforts.
    \83\ Abt Associates Inc., An Evaluation of OFCCP's Equal 
Opportunity Survey, (Cambridge, MA: Feb. 2005), 1.
---------------------------------------------------------------------------
    The Abt report, ``An Evaluation of OFCCP's Equal Opportunity 
Survey,'' was highly critical of the ability of EO survey data to be 
used as an effective targeting tool for OFCCP's compliance reviews. 
According to the report, the EO Survey had, on many occasions, 
mistakenly identified discrimination where the OFCCP determined there 
was none.\84\ Specifically, the Abt report found that the EO Survey 
model lacked in basic predictive power and yielded a very high number--
93 percent--of ``false positives'' or instances where the model 
predicted systemic discrimination but where none existed.
---------------------------------------------------------------------------
    \84\ Id. at 10-11.

    Note: The Abt report concluded that the accuracy of the methodology 
of the EO Survey was little better than chance. Consequently, the OFCCP 
concluded that there are better ways to target its enforcement 
resources and rescinded the EO Survey requirement . . . The PFA, 
however, rejects [the Abt report] and reinstates the flawed EO Survey 
---------------------------------------------------------------------------
by statue . . .''

    The Abt report concluded that the accuracy of the methodology of 
the EO Survey was little better than chance. Consequently, the OFCCP 
concluded that there are better ways to target its enforcement 
resources and rescinded the EO Survey requirement.
    Supporters of the EO Survey argue that it is the only reliable way 
to collect compensation data. However, in response to this objection 
the OFCCP reaffirmed its belief that ``remedying compensation 
discrimination is important to [the OFCCP] mission,'' and determined 
that using proven tools for determining discrimination, such as 
multiple regression analysis and anecdotal evidence, is more effective 
than the EO Survey's categorical failure in targeting systemic 
discrimination.\85\
---------------------------------------------------------------------------
    \85\ 71 Fed. Reg. 174, 53038.
---------------------------------------------------------------------------
    The PFA, however, rejects out of hand two credible Department of 
Labor studies and re-instates the flawed EO Survey by statute before 
any additional research is conducted on the efficacy of using any at 
all survey. There is simply no justification to reinstate such a 
duplicative data collection.
    Real Indicators of Discrimination Not Required. Not only would the 
PFA reinstate the EO Survey and require the OFCCP to use the widely 
discredited ``pay grade methodology'' in attempting to locate 
discrimination, the bill would also prohibit OFCCP from requiring 
``multiple regression analysis or anecdotal evidence for a compensation 
discrimination case.'' \86\ Indeed, the OFCCP's 2006 standards for 
evaluating compensation practices provided contractors with the first 
definitive guidance on the subject and resolved previous conflicts 
between the rules applied by OFCCP and the courts.
---------------------------------------------------------------------------
    \86\ Paycheck Fairness Act, S. 182, 111th Cong. 9(b)(1)(A)-(C) 
(2009).
---------------------------------------------------------------------------
    Multiple regression analysis and anecdotal evidence are widely 
accepted as important evidentiary tools used to ferret out and defend 
against claims of systematic pay discrimination. In fact, Justice 
Brennan explained that ``it is clear that a regression analysis . . . 
may serve to prove a plaintiff 's case'' of a pattern or practice of 
pay discrimination, if the regression incorporates the major factors 
influencing compensation under the employer's pay system.\87\ 
Similarly, Justice Ruth Bader Ginsburg, then a judge on the D.C. 
Circuit, noted that, ``in Title VII class actions, statistical proof is 
a prominent part of the prima facie case.'' \88\ Justice Ginsburg also 
noted in that case that, ``generally, as part of their prima facie 
case, class action plaintiffs offer a combination of statistical proof 
and individual testimony of specific instances of discrimination.'' 
\89\ Indeed, it is generally accepted by the courts that the parties 
will use multiple regression analysis and anecdotal evidence to 
prevail.\90\ In light of the wide acceptance of multiple regression 
analysis and anecdotal evidence in support of and defense of systemic 
pay discrimination claims, it is unclear what policy objective could be 
achieved by legislation that precludes OFCCP from requiring its 
investigators to use these types of evidentiary tools.
---------------------------------------------------------------------------
    \87\ Bazemore v. Friday, 478 U.S. 385, 400 (1986).
    \88\ Valentino v. U.S. Postal Service, 674 F.2d 56, 68 (D.C. Cir. 
1982).
    \89\ Id.
    \90\ See, e.g., Dukes v. Wal-Mart Stores, Inc., 509 F.3d 1182 (9th 
Cir. 2007) (``anecdotal evidence of discrimination is commonly used in 
title VII `pattern and practice' cases to bolster statistical proof by 
bringing `the cold numbers' convincingly to life.''); Segar v. Smith, 
738 F.2d 1249, 1261 (D.C. Cir. 1984) (``Multiple regression is a form 
of statistical analysis used increasingly in title VII actions that 
measures the discrete influence independent variables have on a 
dependent variable such as salary levels.'').
---------------------------------------------------------------------------
    Moreover, OFCCP will use the pay grade analysis and its 
conciliation process to pressure employers to voluntarily settle 
allegations of discrimination where none exists. Only those employers 
who decide to incur substantial legal expenses will dispute the 
allegations. In fact, those employers who make remedial pay adjustments 
to female or minority employees based on the pay grade analysis may be 
subject to reverse discrimination claims under title VII or State law, 
as pay adjustments to female or minority employees that are unsupported 
by adequate multiple regression analyses may result in employer 
liability.\91\
---------------------------------------------------------------------------
    \91\ See e.g., Maitland v. Univ. of Minn., 155 F.3d 1013, 1016-18 
(8th Cir. 1998) (reversing district court's grant of summary judgment 
to employer on reverse discrimination claim and ruling that ``the fact 
that the affirmative action salary plan was implemented pursuant to a 
consent decree does not bolster the District Court's conclusion at the 
summary judgment stage of this case that there was a manifest imbalance 
in faculty salaries.''); Smith v. Virginia Commonwealth Univ., 84 F.3d 
672, 676-77 (4th Cir. 1996) (reverse discrimination claim based on 
inadequate multiple regression analysis).
---------------------------------------------------------------------------
                             iv. conclusion
    The PFA would unjustifiably expand the EPA to provide a remedy 
scheme unlike any other Federal nondiscrimination law. Moreover, it 
would increase litigation by permitting uncapped damages and making it 
easier to bring class actions, which will ultimately benefit the 
plaintiffs' bar. In addition, the bill would permit the EEOC to gather 
large amounts of information in an unprecedented manner from all 
employers with 15 or more employees. Similarly, the bill would 
reinstate the fundamentally flawed pay grade methodology and EO Survey, 
which was recently rejected by the OFCCP. In sum, there are simply no 
good policy reasons for such provisions.
                                 ______
                                 
                         Letters of Opposition
         Associated Builders and Contractors, Inc.,
                                       Arlington, VA 22203,
                                                    March 10, 2010.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.
    Dear Chairman Harkin and Ranking Member Enzi: On behalf of 
Associated Builders and Contractors (ABC), a national association with 
77 chapters representing 25,000 merit shop construction and 
construction-related firms with 2 million employees, I am writing to 
express our strong opposition to S. 182, the ``Paycheck Fairness Act,'' 
scheduled for a hearing in the Senate Committee on Health, Education, 
Labor, and Pensions tomorrow.
    ABC is adamantly opposed to discrimination of any kind and is 
strongly committed to equal employment, but believes current laws 
already in place properly address problems with wage disparities and 
discrimination in the workplace. We are concerned with many provisions 
contained in this legislation, specifically:

     S. 182 would make unlimited punitive and compensatory 
damages available for violations of the Equal Pay Act (EPA), even when 
a disparity in pay was unintentional. It is one thing to require 
employers to correct improper wage differentials, but quite another to 
impose unlimited punitive damages for unintentional conduct. 
Appropriate remedies for intentional discrimination, including punitive 
and compensatory damages, are available under Title VII of the Civil 
Rights Act of 1964.
     S. 182 includes changes to the EPA that would make it 
easier to file large class actions against employers and to make it 
more difficult for employers to justify legitimate pay disparities, 
promoting costly litigation against well-intentioned employers.
     S. 182 would allow for employees to have their pay 
compared between jobs, in different labor markets with different market 
wages and costs of living, for purposes of litigation.
     S. 182 would force the Department of Labor to return to 
debunked statistical models and inaccurate survey tools in an effort to 
enforce civil rights laws among Federal contractors.

    The impact of passage of S. 182, the ``Paycheck Fairness Act'' 
would be significant from both a compliance and litigation standpoint. 
Given the broad and overreaching aspects of this legislation, ABC 
strongly urges you to oppose this legislation.

            Sincerely,
                                             Geoffrey Burr,
                                Vice President, Government Affairs.
                                 ______
                                 
                                                    March 11, 2010.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.
Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

    Dear Chairman Harkin and Ranking Member Enzi: We write on behalf of 
the undersigned organizations in opposition to S. 182, the ``Paycheck 
Fairness Act.'' While our organizations and members are committed to 
ensuring equal employment opportunities and abhor unlawful 
discrimination, we vigorously oppose S. 182.
    S 182 would impose unprecedented government control over how 
employees are paid at even the Nation's smallest businesses. The flawed 
legislation could outlaw many legitimate practices that employers 
currently use to set employee pay rates, even where there is no 
evidence of intentional discrimination. Common practices that a court 
could find unlawful under S. 182 include premium pay for professional 
experience, education, shift differentials or hazardous work, as well 
as pay differentials based on local labor market rates or an 
organization's profitability.
    Furthermore, S. 182 would:

     threaten employee bonus or incentive pay that, by 
definition, provides some employees a higher wage than others;
     prohibit employees from negotiating higher pay either 
before being hired or during employment;
     allow employees' wages to be disclosed to peers, friends, 
family and competitors;
     require employers to submit pay data on their employees to 
the Federal Government;
     force the Labor Department to reinstate a flawed and 
duplicative pay grade survey that has proven ineffective at enforcing 
civil rights laws among Federal contractors;
     make it easier for trial lawyers to file large class 
actions against employers; and
     establish unlimited punitive and compensatory liability 
under the Equal Pay Act against employers of every size.

    In sum, S. 182 would jeopardize employee incentive pay and employee 
privacy, and promote costly litigation against even well-intentioned 
employers--all while doing little to prevent actual wage 
discrimination. As you know, two Federal laws already protect employees 
from being paid lower wages on the basis of sex: the Lilly Ledbetter 
Fair Pay Act--amended Civil Rights Act of 1964 and the Equal Pay Act of 
1963. Both statutes prohibit unequal pay based on sex and both make 
available substantial remedies to employees for gender-based pay 
differentials. But as the Washington Post editorial board stated, 
adding S. 182 to these existing laws ``risks tilting the scales too far 
against employers and would remove, rather than restore, a sense of 
balance.''
    For these reasons, we urge you to oppose S. 182.
            Sincerely,

   American Bakers Association; American Hotel and Lodging 
 Association; Associated Builders and Contractors; College 
         and University Professional Association for Human 
Resources; Food Marketing Institute; HR Policy Association; 
         Independent Electrical Contractors; International 
       Foodservice Distributors Association; International 
    Franchise Association; International Public Management 
  Association for Human Resources; National Association of 
         Manufacturers; National Association of Wholesaler-
  Distributors; National Council of Textile Organizations; 
     National Federation of Independent Business; National 
     Public Employer Labor Relations Association; National 
           Retail Federation; National Roofing Contractors 
   Association; Retail Industry Leaders Association; Small 
    Business & Entrepreneurship Council; Society for Human 
             Resource Management; U.S. Chamber of Commerce.
                                 ______
                                 
                                                    March 23, 2010.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

    Dear Chairman Harkin and Ranking Member Enzi: The undersigned 
organizations represent State and local government employers. We are 
writing to draw your attention to a particularly troubling aspect of S. 
182, the ``Paycheck Fairness Act.'' The enhanced penalties section 
allows for unlimited punitive damages and exempts only the Federal 
Government from this provision.
    As you are aware, State and local governments are exempt from 
punitive damages under Title VII of the Civil Rights Act. States and 
localities faced with large punitive damage awards would be forced to 
raise taxes or cut services. Ultimately, the burden of paying a large 
damages award would fall on the citizens of the State or locality. We 
believe allowing punitive damages would be detrimental under any 
circumstances but would be devastating to State and local budgets in 
the current economy.
    We urge you to add State and local governments in the exemption 
provision along with the Federal Government in S. 182.

            Sincerely,

     International Public Management Association for Human 
                                                 Resources;
               International Municipal Lawyers Association;
      National Public Employer Labor Relations Association.
                                 ______
                                 
      Response to Questions of Senators Harkin, Enzi, and Coburn 
                         by Stuart J. Ishimaru
                             senator harkin
    Question 1. In her oral testimony on March 11, Jane McFetridge 
testified that ``in 2009, the EEOC found reasonable cause in only 4.6 
percent of the EPA charges and 5 percent of the title VII sex 
discrimination charges that it received, demonstrating the vast 
majority of employees who filed charges do not have valid claims.''
    Do you agree with Ms. McFetridge's conclusion?
    Answer 1. No. The ``reasonable cause'' rate does not provide a 
complete picture of the percentage of meritorious charges of 
discrimination filed with EEOC. Charges of discrimination are resolved 
in several ways, not just through the issuance of a ``cause'' or ``no 
cause'' determination. The statutes enforced by EEOC encourage 
voluntary compliance and early resolution of charges of discrimination, 
and significant numbers of charging parties and respondents choose to 
settle their charges prior to a finding on the merits of the charge. 
This choice is consistent with the statutory schemes and does not 
indicate that those charges do not have merit.
    Charges often are settled through a negotiated settlement 
procedure, settled through mediation, and/or are withdrawn by the 
charging party with or without benefits. Many of the charges that are 
settled prior to a finding or that are withdrawn with benefits are 
meritorious claims. The EEOC's ``merit factor'' rate captures and 
reflects all charge resolutions in which the charging party received a 
benefit (including negotiated settlements, mediations, conciliations, 
and withdrawals with benefits). This ``merit factor'' rate thus is a 
better measure of the percentage of meritorious claims filed with the 
EEOC than the ``reasonable cause'' rate. In fiscal year 2009, the merit 
factor rate for all charge resolutions was 20.3 percent. The merit 
factor rate for EPA charges was 19.5 percent, the merit factor rate for 
title VII sex-based wage charges was 21 percent, and the merit factor 
rate for all sex-based charges was 21.7 percent, all significantly 
higher than the cause rate.

    Question 2. Ms. McFetridge further testified that ``in claims where 
the EEOC found a basis to proceed, successful parties received over 
$126 million in compensation, proof positive that the EEOC is already 
identifying and compensating the true victims of pay discrimination.''
    Do you agree with Ms. McFetridge's conclusion?
    Answer 2. To the extent Ms. McFetridge's comments suggest that all 
victims of pay discrimination are being identified and appropriately 
compensated, we would not agree. To be sure, the Commission has 
recovered significant relief for some of these victims. In fiscal year 
2009, the agency obtained $4.8 million in monetary benefits in Equal 
Pay Act charges, $17 million in title VII sex-based wage charges, and 
$121.5 million in all sex-based charges. Examining just wage 
discrimination charges, from fiscal year 2000 to fiscal year 2009, EEOC 
obtained $120,825,776 in total monetary benefits for sex-based wage 
charges filed by women, and $222,253,820 in monetary benefits for all 
sex-based wage charges.
    However, there undoubtedly are other victims of compensation 
discrimination who are unaware that they are being discriminated 
against. (Indeed, Lilly Ledbetter was unaware for decades that she was 
being paid less than men performing the exact same job.) Further, even 
workers who do know that they are the victims of pay discrimination may 
be choosing not to come forward to file charges, many perhaps out of 
fear that they will be retaliated against for challenging company pay 
practices. The Paycheck Fairness Act would provide the Commission with 
much-needed tools to help some of these victims vindicate their right 
to be free from compensation discrimination and free from retaliation 
for discussing pay in the workplace.

    Question 3. Given the successes you have had, why do you believe 
that the EEOC needs additional tools to combat sex-based wage 
discrimination? What tools does the EEOC need to better enforce the 
laws prohibiting sex-based wage discrimination?
    Answer 3. The Paycheck Fairness Act would make significant changes 
to the Equal Pay Act that would enhance EEOC's capacity to combat 
gender-based wage discrimination, while at the same time preserving an 
employer's ability to base wages on bona fide factors other than sex.
    One of the most significant barriers to eradicating pay 
discrimination is the fact that workers are often in the dark about 
what their coworkers make. The Paycheck Fairness Act will help to 
address this problem by making it unlawful for an employer to penalize 
workers for asking about or discussing wage information. Critically, 
however, these protections would not apply to employees who as part of 
their essential job functions have access to information about the 
wages of other employees and who disclose the wages of other employees 
to an individual who does not otherwise have access to this information 
(unless the disclosure is in response to a charge or complaint or in 
furtherance of an investigation, proceeding, hearing or other action 
related to the Equal Pay Act).
    Similarly, the Paycheck Fairness Act would make it clear that 
Congress expects the Commission to begin collecting wage data. The EEOC 
currently does not collect any compensation-related data from private 
sector employers. Appropriate compensation data would reveal wage 
disparities based on sex, race, or national origin in particular 
occupations at particular companies and/or in particular industries. 
This data would enable the Commission to identify employers that may be 
engaging in unlawful wage discrimination. This information could also 
be useful in fulfilling our obligations to provide technical assistance 
to employers and help them comply with Title VII of the Civil Rights 
Act of 1964 and the Equal Pay Act.
    The Paycheck Fairness Act also would aid enforcement by allowing 
workers to compare their wages to workers of the opposite sex who work 
for the same employer anywhere in the same county or similar political 
subdivision of a State, rather than only to workers in the same 
physical location. This change would not prevent an employer from being 
able to justify pay differences in appropriate circumstances, such as 
where the differential is based on geographic disparities.
    Currently under the Equal Pay Act, employers are able to justify a 
pay differential between a man and a woman who are performing 
substantially equal work by pointing to ``any other factor other than 
sex.'' The Paycheck Fairness Act would require employers to establish 
that a pay discrepancy is based on a bona fide factor other than sex, 
such as education, training, or experience. This new standard would 
help to close the loophole in current law that has allowed employers to 
defend wage discrepancies by pointing to factors that are inherently 
gender-based without having to establish that they reflect job-related 
qualifications.
    Further, by expanding EPA remedies to include compensatory and 
punitive damages, the Paycheck Fairness Act would provide the necessary 
incentive to promote employer compliance, deter violations, and ensure 
that victims receive complete make-whole relief.
                              senator enzi
    Question 1. Please describe your personal experience as an employer 
in a private sector, non-government-funded workplace. Have you hired 
employees in a private sector workplace? Have you been charged with 
setting compensation in a setting where salary and wage levels were not 
government-set? Have you been responsible for determining raises and 
fringe benefits in a setting where these costs were not born by 
taxpayers? If so, was your business profitable?
    Answer 1. Other than hiring a limited number of household 
employees, I have not previously served as an employer in the private 
sector.

    Question 2. Section 8 of S. 182 directs your agency to survey 
available wage data and issue regulations to collect pay information 
from employers as described by sex, race, and national origin of 
employees for enforcement use. Please describe how you envision EEOC 
using this data for enforcement.
    Answer 2. The EEOC currently does not collect any compensation-
related data from private sector employers. Appropriate compensation 
data could reveal wage disparities based on sex, race, or national 
origin in particular occupations at particular companies and/or in 
particular industries. This data would enable the Commission to 
identify employers that may be engaging in unlawful wage 
discrimination. This information could also be useful in fulfilling our 
obligations to provide technical assistance to employers and help them 
comply with Title VII of the Civil Rights Act of 1964 and the Equal Pay 
Act.
    Additionally, when EEOC identifies potential issues of compensation 
discrimination, EEOC may, to the extent authorized by law, share such 
information, as appropriate, with the Department of Labor's (DOL) 
Office of Federal Contract Compliance Programs (OFCCP), as well as any 
other information that will enhance the effectiveness of OFCCP and 
DOL's Wage and Hour Division as enforcement agencies or programs. 
(EEOC-ESA Memorandum of Understanding Providing for Cross-Training, 
Referrals and Information Sharing on Compensation Discrimination Cases 
(April 7, 1999)).

    Question 3. Would you advocate EEOC collecting this data from all 
employers?
    Answer 3. The Commission has not yet determined which employers (if 
any) would be required to collect or report compensation data.

    Question 4. How frequently would you recommend requiring this data 
reporting?
    Answer 4. The Commission has not determined how often or the 
circumstances under which employers would be required to collect or 
report compensation data.

    Question 5. Do you plan to require employers to update this data 
when pay levels or workforce makeup change?
    Answer 5. The Commission has not yet determined how often or the 
circumstances under which employers would be required to collect or 
report compensation data.

    Question 6. Would you suggest that EEOC collect compensation data 
on employees who work on commission or tips? Why or why not?
    Answer 6. The Commission has not yet determined the type or 
categories of compensation data (if any) that should be collected or 
reported.

    Question 7. Would you support exempting small employers for whom 
these reporting requirements will be overly burdensome?
    Answer 7. The Commission has not yet determined which employers (if 
any) would be required to collect or report compensation data. However, 
section 709(c) of Title VII of the Civil Rights Act of 1964, which 
provides the Commission with the authority to require employers to 
collect and/or report various types of data, only applies to employers 
with 15 or more employees. Currently, only private sector employers 
with 100 or more employees (or Federal contractors with 50 or more 
employees and a contract amounting to $50,000 or more) must file the 
Employer Information Report EEO-1.

    Question 8. Would you support a hardship exemption for employers 
with valid conditions making the reporting impossible, such as natural 
disasters, economic distress, personnel loss, etc?
    Answer 8. The Commission has not yet determined the circumstances 
under which employers would be required to collect or report 
compensation data. However, section 709(c) of Title VII of the Civil 
Rights Act of 1964, which provides the Commission with the authority to 
require employers to collect and/or report various types of data, 
explicitly allows any employer to apply to the Commission for an 
exemption from the collection or reporting requirement if the employer 
believes that the requirement would result in undue hardship.

    Question 9. Would you support penalizing employers who fail to 
submit data by scheduled deadlines?
    Answer 9. The Commission has not yet determined the circumstances 
under which employers would be required to collect or report 
compensation data. However, by way of comparison, the filing of 
Employer Information Report EEO-1 is mandatory. Under section 709(c), 
which provides the commission with the authority to require employers 
to file the Report EEO-1, any employer who fails or refuses to file the 
Report EEO-1 when required to do so may be compelled to file it by 
order of a U.S. District Court (upon application by the Commission).

    Question 10. How could EEOC protect the privacy of this data, 
should it choose to do so? Would the data be accessible via Freedom of 
Information requests?
    Answer 10. Section 709(e) of Title VII of the Civil Rights Act of 
1964 would make it unlawful for any officer or employee of the 
Commission to make this type of information public. In fact, section 
709(e) provides that any Commission official who makes this type of 
information public in violation of section 709(e) shall be guilty of a 
misdemeanor and subject to a fine and/or imprisonment. For this reason, 
company-specific data submitted by employers who currently file the 
Employer Information Report EEO-1 is never made available to members of 
the public--even in response to a Freedom of Information Act (FOIA) 
request. Only data aggregating information by industry or area, in such 
a way as not to reveal any particular employers statistics, is made 
public. Company-specific Report EEO-1 data may be disclosed to a 
charging party who files a FOIA request to obtain information in the 
EEOC's investigative file on the charging party's charge if the data 
was obtained by the investigator during the investigation, deemed 
relevant to the charge, and included in the charge file, so long as the 
deadline for filing suit on the charge has not yet expired. In such a 
case, the charging party is not a member of the public for purposes of 
title VII's confidentiality restrictions. Report EEO-1 data also could 
be provided to the charging party after he or she has filed suit on a 
title VII charge if the EEO-1 data is involved in the lawsuit, or could 
be made public in conjunction with an enforcement lawsuit filed by the 
Commission against the company which submitted the data (as permitted 
by section 709(e) of title VII).

    Question 11. Based on EEOC's ability to fulfill other mandates and 
duties, how many employees will be necessary to collect and analyze 
this data? What additional personnel, information technology and budget 
resources will be required?
    Answer 11. The number of additional employees or resources the EEOC 
would need to collect and analyze this data cannot be determined until 
the Commission has determined the precise nature of the compensation 
data to be collected and/or reported, the form in which this data 
should be collected and/or reported, and the number of employers that 
would be subject to the collection and/or reporting requirement.
                             senator coburn
    Question 1. In January of 2009, the Department of Labor released a 
detailed statistical analysis of the wage gap carried out by the non-
partisan Consad Research Corporation. The study, An Analysis of the 
Reasons for the Disparity in Wages Between Men and Women, found that 
most of the so-called wage gap was an artifact of the different choices 
men and women make--such as different fields of study, different 
professions, different balance between home and work. In the Foreword, 
a Labor Department official writes:

          ``This study leads to the unambiguous conclusion that the 
        differences in the compensation of men and women are the result 
        of a multitude of factors and that the raw wage gap should not 
        be used as the basis to justify corrective action. Indeed, 
        there may be nothing to correct. The differences in raw wages 
        may be almost entirely the result of the individual choices 
        being made by both male and female workers.''

    Do you think it is appropriate for ``wage gap'' calculations to 
ignore these differences?
    Answer 1. Former Assistant Secretary Charles James' quote is one 
interpretation of the report's findings. To be sure, a portion of the 
gap between men's and women's earnings is likely attributable to other 
measurable factors like occupational segregation, time spent in the 
labor force, and education. However, different studies have also found 
that such measurable factors do not account for all of the gender wage 
gap, and that a significant portion remains unexplained. For example, 
in 2009, Maria Shriver, working with the Center for American Progress, 
released a ground breaking report entitled, ``A Woman's Nation Changes 
Everything.'' This sweeping study of the role of women in our Nation's 
economies and the economies of our families today provided a wealth of 
insights into the challenges women still face when it comes to earning 
equal pay for equal work. This study found that although some of the 
pay gap can be explained by differentials in experience or as a result 
of the differences in the occupations men and women typically do, about 
41 percent of the pay gap cannot be explained by these factors.\1\
---------------------------------------------------------------------------
    \1\ The Shriver Report: A Woman's Nation Changes Everything 58 
(Heather Boushey and Ann O'Leary, eds., 2009).
---------------------------------------------------------------------------
    As the Supreme Court has recognized in analyzing employment 
discrimination claims, once nondiscriminatory reasons for differential 
treatment have been eliminated, ``discrimination may well be the most 
likely alternative explanation.'' \2\ In the wage context, the Supreme 
Court has explained that discrimination need not be proven with 
scientific certainty and that statistical evidence of a wage disparity 
may be sufficient to prove a plaintiff 's case of discrimination even 
if the evidence does not account for all measurable variables.\3\ Thus, 
the EEOC's Compliance Manual Section on Compensation Discrimination 
notes that a rough but plausible measure of the extent of gender-based 
pay discrimination may be the portion of the wage gap that is 
unexplained by measurable factors.\4\
---------------------------------------------------------------------------
    \2\ Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133, 147 
(2000).
    \3\ Bazemore v. Friday, 478 U.S. 385, 400 (1986).
    \4\ Section 10: Compensation Discrimination, EEOC Compliance 
Manual, Volume II (2000), available at http://www.eeoc.gov/policy/docs/
compensation.html (citing President's Council of Economic Advisers, 
Explaining Trends in the Gender Wage Gap (June 1998)); see also GAO 
Rep. 09-729 (portion of the Federal wage gap that could not be 
explained by measurable factors may be based in part on gender 
discrimination).
---------------------------------------------------------------------------
    Moreover, even as to measurable factors contributing to the wage 
gap, it is not necessarily clear that all such factors are gender-
neutral. In particular, the Consad Research study includes 
``motherhood'' among the measurable factors contributing to the wage 
gap but does not appear to examine the effect of fatherhood on wages. 
Courts have long recognized that treating mothers less favorably than 
fathers constitutes unlawful gender discrimination.\5\ Wage 
discrepancies between working mothers and working fathers may reflect 
gender-based stereotypes about motherhood. For example, a recent study 
found that mothers were offered lower starting salaries than similarly 
situated childless women whereas fathers were offered higher starting 
salaries than similarly situated childless men.\6\
---------------------------------------------------------------------------
    \5\ See Phillips v. Martin Marietta Corp., 400 U.S. 542 (1971) 
(treating women with preschool-age children less favorably than men 
with preschool-age children violates title VII).
    \6\ Shelley Correll & Stephen Benard, Getting a Job: Is There a 
Motherhood Penalty?, 112 Am. J. Sociology 1297, 1316 (2005).

    Question 2. Many critics of the Paycheck Fairness Act, including 
the editorial board of the Washington Post, say that it is intrusive, 
impractical, and potentially injurious to the free enterprise system. 
For example, it gives government the power to determine what 
constitutes fair wages. It requires any employer accused of wage 
discrimination to cite a ``bona fide'' reason for paying a particular 
male employee more than a female; potential reasons for the wage 
difference include the male's superior education or his special skills. 
However, the Paycheck Fairness Act further stipulates that the alleged 
``bona fide'' explanation ``shall not apply'' if the employee 
``demonstrates that an alternative employment practice exists that 
would serve the same business purpose without producing such 
differentials and the employer has refused to adopt such alternative 
practice.'' What happens in a case where an employer judges the 
``alternative'' (e.g. a special training program for female employees) 
to be prohibitively expensive? Business owners protest that this 
vaguely worded second provision turns the Federal courts into a quasi 
business partner with unlimited authority to second guess key business 
decisions? Do you think such fears are unfounded?
    Answer 2. The concept of ``alternative employment practices'' 
already exists in Federal employment discrimination law.\7\ The concept 
was codified almost 20 years ago as part of the Civil Rights Act of 
1991,\8\ and it is a standard with which courts are familiar.\9\ Under 
the current law, the plaintiff bears the burden of proving the 
availability of an alternative employment practice, and the alternative 
must be equally effective in meeting the employer's business needs.\10\
---------------------------------------------------------------------------
    \7\ See 42 U.S.C.  2000e-2(k)(1)(A)(ii).
    \8\ See Pub. L. 102-166, title I 105(a).
    \9\ See, e.g., Allen v. City of Chicago, 351 F.3d 306, 315-17 (7th 
Cir. 2003) (neither the officers' proposed alternative to the merit-
based component of the promotion process nor their alternative to the 
requirement that they pass the test were equally valid-less 
discriminatory alternatives); Bryant v. City of Chicago, 200 F.3d 1092, 
1095 (7th Cir. 2000) (City liable because it failed to adopt a less 
discriminatory alternative for its Lieutenant's promotion exam); 
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1122 (11th Cir. 1993) 
(plaintiffs failed to introduce enough evidence to show that their 
proposal to allow firefighters to wear short beards was an equally 
effective alternative).
    \10\ See, e.g., Watson v. Fort Worth Bank and Trust, 487 U.S. 977, 
998 (1988) (``Factors such as the cost or other burdens of proposed 
alternative selection devices are relevant in determining whether they 
would be equally as effective as the challenged practice in serving the 
employer's legitimate business goals.''); see also EEOC Fact Sheet: 
Employment Tests and Selection Procedures, available at http://
www.eeoc.gov/policy/docs/factemployment_procedures.html. (``If a 
selection procedure screens out a protected group, the employer should 
determine whether there is an equally effective alternative selection 
procedure that has less adverse impact and, if so, adopt the 
alternative procedure.'').
---------------------------------------------------------------------------
    H.R. Rep. 110-783 of the House Committee on Education and Labor 
made clear that the Paycheck Fairness Act would adopt the well 
established title VII standard on ``business necessity'' because doing 
so would ``provide[] workers and employers with a known legal standard 
for assessing pay disparities.'' \11\ Similarly, the concept of 
``alternative employment practice''--codified at the same time and as 
part of the same statutory section as the concept of ``business 
necessity'' \12\--would provide workers and employers with a known 
legal standard. Accordingly, we think that fears that it gives courts 
``unlimited authority to second guess key business decisions'' are 
unfounded. That has not proved to be the case with respect to the 
application of the same concept under current law.
---------------------------------------------------------------------------
    \11\ H.R. Rep. No. 110-783, at 30 (2008).
    \12\ See 42 U.S.C.  2000e-2(k)(1)(A).

    Question 3. According to the Paycheck Fairness Act, an employer is 
legally vulnerable if an employee can show that she was paid less than 
a male colleague because of intentional discrimination or the 
``lingering effects of past discrimination.'' Could this prevent 
employers from paying market wages? For example, universities typically 
cite ``market forces'' as the reason professors of business are paid 
more than professors of social work. In many universities there are far 
more women teaching social work than business. Should they be able to 
sue on the grounds that ``market forces'' reflect the lingering effects 
of discrimination? They could surely find expert witnesses in women's 
studies programs who would testify that sexist attitudes led society to 
place a higher value on male-centered fields like business than female-
centered fields like social work. Is it your view that such litigation 
would be helpful in promoting the goals of the act?
    Answer 3. As the Supreme Court has recognized, the passage of the 
Equal Pay Act was intended to correct those market forces that had led 
employers to pay male workers more than female workers performing the 
same work simply because the men were unwilling to perform the work for 
the same low wages as the female workers.\13\ Nevertheless, because of 
the broadly worded ``any other factor other than sex'' defense, some 
courts have continued to permit employers to justify wage discrepancies 
by pointing to market forces or prior salary history without any 
showing that the market or prior salary history compensates employees 
for job-related skills and not merely their gender.\14\
---------------------------------------------------------------------------
    \13\ See Corning Glass Works v. Brennan, 417 U.S. 188, 205 (1974).
    \14\ H.R. Rep. No. 110-783, at 25-28 (2008).
---------------------------------------------------------------------------
    The EEOC Compliance Manual Section on Compensation Discrimination 
states that, under current law, ``[m]arket value qualifies as a factor 
other than sex only if the employer proves that it assessed the 
marketplace value of the particular individual's job-related 
qualifications, and that any compensation disparity is not based on 
sex.''\15\ The Paycheck Fairness Act would not affect employers' 
ability to base pay discrepancies on qualifications--including market 
forces--that are job-related with respect to the position in question 
and consistent with business necessity, as long as such criteria are 
not based upon or derived from a sex-based differential in 
compensation. As H.R. Rep. 110-783 of the House Committee on Education 
and Labor on the Paycheck Fairness Act points out, ``[w]hile market 
forces may be a legitimate basis for determining pay, market forces 
tainted with sex discrimination are not.''\16\
---------------------------------------------------------------------------
    \15\ Section 10: Compensation Discrimination, EEOC Compliance 
Manual, Volume II, at  10-IV F.2.g (2000), available at http://
www.eeoc.gov/policy/docs/compensation.html.
    \16\ H.R. Rep. No. 110-783, at 28 (2008).
---------------------------------------------------------------------------
    Critically, however, the Paycheck Fairness Act would not alter the 
requirement that the jobs being compared are substantially equal. Thus, 
an employer would not need to establish that ``market forces'' 
constitute a legitimate defense to a gender-based pay differential 
unless the employee has first demonstrated that the jobs being compared 
require substantially equal skill, effort, and responsibility and are 
performed under similar working conditions.

    Question 4. The 1963 Equal Pay Act awards victims of intentional 
discrimination up to $300,000 in compensatory damage and limited 
punitive damages. The Paycheck Fairness would change that by allowing 
for unlimited multi-million dollar settlements. This is good news for 
trial lawyers, but is it a good policy for a nation facing an 
unemployment crisis? Employers are nervous and fearful of making new 
hires. Won't the act reinforce fear?
    Answer 4. Under current law, the Equal Pay Act does not allow 
victims of sex-based wage discrimination to recover compensatory or 
punitive damages. Rather, the EPA allows victims to recover a maximum 
of 2 years of back pay (or 3 years for willful violations), and to 
recover ``liquidated damages'' in an amount equal to the amount of back 
pay awarded if an employer cannot show that it acted in ``good faith.'' 
Under Title VII of the Civil Rights Act of 1964, as amended by the 
Civil Rights Act of 1991, victims may recover compensatory and/or 
punitive damages, up to a total of $300,000 depending upon the size of 
the employer. Thus, victims of discrimination, including sex-based wage 
discrimination, who bring suit under the EPA and/or title VII are 
unable to recover complete relief in a case in which their actual 
damages exceed $300,000.
    By contrast, under 42 U.S.C.  1981, victims who prevail on claims 
of wage discrimination based on race or national origin can recover 
complete relief, since section 1981 contains no cap on damages. Since 
wage discrimination based on sex is no less illegal, intolerable, or 
pernicious than wage discrimination based on race and/or national 
origin, sex-based wage discrimination claims should be placed on an 
equal legal footing with race- and national origin-based wage 
discrimination claims. The Paycheck Fairness Act would accomplish this 
objective by authorizing victims of sex-based wage discrimination to 
recover compensatory and/or punitive damages that are not artificially 
restricted by an arbitrary cap. At the same time, however, the bill 
would impose critical constraints on a jury's ability to award punitive 
damages. Under the Paycheck Fairness Act, punitive damages could only 
be awarded in cases in which the employee proves that the employer 
acted with ``malice or reckless indifference.'' In title VII cases, 
this same statutory qualification has proven to be a significant 
limitation on plaintiffs' ability to recover punitive damages.

    Question 5. To help the agency increase hiring and reduce the 
backlog, the EEOC requests an increased budget in fiscal year 2011 of 
$385 million. However, EEOC data shows that ``reasonable cause'' was 
present in only 4.5 percent of the 93,277 discrimination charges 
received in fiscal year 2009. Given the low percentage of charges for 
which reasonable cause is ultimately determined, please explain how the 
EEOC's ``Education and Outreach'' program balances its responsibility 
of preventing discrimination with deterring frivolous charges that 
consume the EEOC's time and resources?
    Answer 5. The ``reasonable cause'' rate does not provide a complete 
picture of the percentage of meritorious charges of discrimination 
filed with EEOC. Charges of discrimination are resolved in several 
ways, not just through the issuance of a ``cause'' or ``no cause'' 
determination. The statutes enforced by EEOC encourage voluntary 
compliance and early resolution of charges of discrimination, and 
significant numbers of charging parties and respondents choose to 
settle their charges prior to a finding on the merits of the charge. 
This choice is consistent with the statutory schemes and does not 
indicate that those charges do not have merit.
    Charges often are settled through a negotiated settlement 
procedure, settled through mediation, and/or are withdrawn by the 
charging party with or without benefits. Many of the charges that are 
settled prior to a finding or that are withdrawn with benefits are 
meritorious claims. The EEOC's ``merit factor'' rate captures and 
reflects all charge resolutions in which the charging party received a 
benefit (including negotiated settlements, mediations, conciliations, 
and withdrawals with benefits). The ``merit factor'' rate thus is a 
better measure of the percentage of meritorious claims filed than the 
``reasonable cause'' rate. In fiscal year 2009, the merit factor rate 
for all charge resolutions was 20.3 percent. The merit factor rate for 
EPA charges was 19.5 percent, the merit factor rate for title VII sex-
based wage charges was 21 percent, and the merit factor rate for all 
sex-based charges was 21.7 percent, all significantly higher than the 
cause rate.
    In enacting Title VII of the Civil Rights Act of 1964, Congress 
recognized that the fight against employment discrimination requires a 
variety of tools for enforcing the law. Therefore, the Commission seeks 
to maintain a comprehensive enforcement program, which includes 
education, outreach, and technical assistance. Indeed, title VII 
specifically requires the EEOC to engage in outreach and educational 
activities.\17\ The Commission conducts both free and fee-based 
outreach and education. In 1992, Congress passed the Educational, 
Technical Assistance and Training Revolving Fund Act of 1992, which 
authorizes the Commission to charge a fee to recover its costs for 
education, technical assistance and training programs. The EEOC 
Training Institute conducts the EEOC's fee-based training program.
---------------------------------------------------------------------------
    \17\ See U.S.C.  2000e-4(h)(2) (providing that the Commission 
``shall carry out educational and outreach activities''); 42 U.S.C.  
2000e-4(j) (requiring the EEOC to ``establish a Technical Assistance 
Training Institute through which the Commission shall provide technical 
assistance and training regarding the laws and regulations enforced by 
the Commission'').
---------------------------------------------------------------------------
    The purpose of these outreach efforts is to educate employees, 
employers, advocacy groups, and others about the laws enforced by EEOC 
and rights and responsibilities under those laws. This work is vital to 
our mission. Outreach and education to the employer community helps to 
prevent discrimination from occurring in the first place. Outreach and 
education to employees not only informs them of the right to be free 
from discrimination in the workplace, but also helps them make informed 
decisions about whether to file a charge of discrimination, thus 
deterring the filing of frivolous charges.
    The agency's outreach program reached 238,017 persons in fiscal 
year 2009. EEOC offices participated in 4,240 educational, training, 
and outreach events. In addition, in fiscal year 2009, the EEOC 
Training Institute trained over 20,000 individuals from the private 
sector and State, local, and Federal Governments at more than 500 
events. The Commission has engaged in extensive outreach efforts on 
wage discrimination issues. Over the last 3\1/2\ years, we have 
conducted 491 outreach events where the Equal Pay Act or wage 
discrimination generally was discussed. Almost 38,000 people attended 
these events.

    Question 6. As you know, in February a Federal judge in Iowa 
dismissed a discrimination case brought by your agency brought against 
CRST, a Cedar Rapids, IA trucking company, and ordered the EEOC to pay 
CRST $4.5 million to cover defense costs and attorneys' fees. In 
dismissing the EEOC's complaint on behalf of 67 claimants, the court 
found the EEOC `` . . . did not conduct any investigation of the 
specific allegations [of these claimants] . . . let alone issue a 
reasonable cause determination as to th[eir] allegations or conciliate 
them.'' Given the judge's ruling, which consumes 20 percent of the 
agency's fiscal year 2010 budget increase, can you explain your 
rationale for filing suit in this particular case? What processes does 
the EEOC go through when considering whether or not to file a suit?
    Answer 6. This matter remains in litigation and is presently 
pending with the U.S. Court of Appeals for the Eighth Circuit. We 
believe it would be inappropriate to comment further on this matter at 
this time.
  Response to Questions of Senators Enzi and Coburn by Heather Boushey
                              senator enzi
    Question 1. Please describe your personal experience as an employer 
in a private sector, non-government-funded workplace. Have you hired 
employees in a private sector workplace? Have you been charged with 
setting compensation in a setting where salary and wage levels were not 
government-set? Have you been responsible for determining raises and 
fringe benefits in a setting where these costs were not born by 
taxpayers? If so, was your business profitable?
    Answer 1. I have worked as a staff-person with management 
responsibilities, but not as the employer with the final decisionmaking 
power on these issues.

    Question 2. More than two-thirds of employees working in human 
resources are female and, as was stated at the hearing, 30 percent of 
businesses are women-owned. Do you believe that women HR professionals 
and employers could possibly create and perpetuate gender-based pay 
discrepancies? If those pay discrepancies are not found to further a 
legitimate business purpose, is the only possible cause discrimination?
    Answer 2. In a market-based economy, pay should be based on 
legitimate business purposes because pay should be based by the 
contribution of an employee to an organization. Pay gaps that are not 
based on legitimate business purposes make no sense. Systemic pay gaps 
that are not tied to the job or the skills of the employee must 
therefore be discriminatory as there is no legitimate business purpose 
for them.
    The first question is whether women can perpetuate pay 
discrimination. Any employer can discriminate, regardless of their 
race, gender or other characteristics. Further, simply because women 
are commonly HR professionals does not mean that they have final 
decisionmaking power within an organization. The vast majority of CEO's 
are men and that power gap may play a role in perpetuating pay 
discrimination.
                             senator coburn
    Question 1. In January 2009, the Department of Labor released a 
detailed statistical analysis of the wage gap carried out by the non-
partisan Consad Research Corporation. The study, An Analysis of the 
Reasons for the Disparity in Wages Between Men and Women, found that 
most of the so-called wage gap was an artifact of the different choices 
men and women make--such as different fields of study, different 
professions, different balance between home and work. In the Foreword, 
a Labor Department official writes:

          ``This study leads to the unambiguous conclusion that the 
        differences in the compensation of men and women are the result 
        of a multitude of factors and that the raw wage gap should not 
        be used as the basis to justify corrective action. Indeed, 
        there may be nothing to correct. The differences in raw wages 
        may be almost entirely the result of the individual choices 
        being made by both male and female workers.''

    Do you think it is appropriate for ``wage gap'' calculations to 
ignore these differences?
    Answer 1. Analysis of the wage gap does not ignore productivity-
related differences between men and women. What economists find is that 
once we account for measurable, productivity-related differences 
between men and women, a pay gap remains.
    To better understand the gender pay gap, economists use so-called 
regression-
adjusted estimates of pay for men and women, controlling for all 
measurable productivity-related characteristics of workers. This method 
allows us to compare the pay of men and women with similar 
characteristics and determine what factors contribute to the pay gap 
and what the model cannot explain. Using regression analysis, labor 
economists Francine Blau and Lawrence Kahn found that educational 
attainment levels lowered the discrepancy in pay between men and women 
but also that other productivity-related factors, such as experience, 
occupation, and industry all widened the gap. Overall, nearly a third 
of the gender pay gap (27.4 percent) can be explained by differences in 
occupations, one-fifth (21.9 percent) can be explained by industry, and 
10.5 percent can be explained by labor force experience.
    This means that if women worked in the same jobs as men and had the 
same educational and experience levels, same propensity to be in a 
union, same racial and ethnic make-up as men--all factors we can 
measure--the gender pay ratio would rise from 80 percent to 91 percent 
of men's pay levels. In other words, just over half of gender pay 
inequity can be explained by these factors. But, this leaves nearly 
half of the total pay gap (41.1 percent of the pay gap) as not 
explainable by measurable productivity-related characteristics.
    As Blau and Kahn point out, half (49.3 percent) of the total pay 
gap can be explained by differences in the industries and occupations 
that men and women work in. Men continue to be more likely to hold jobs 
as managers and professionals, transportation or construction workers, 
or in heavy manufacturing.
    In contrast, women are disproportionately represented in nursing, 
teaching, retail sales, and clerical work. While the extent to which 
jobs in the U.S. economy are segregated by sex has fallen since the 
1950s, more so for workers with a college degree than for other 
workers, there remains a high degree of occupational segregation by 
gender. But many of these jobs that were historically held by women are 
underpaid, relative to men's jobs that require similar levels of skill.
    As women have taken their careers more seriously, they have worked 
hard to get more education. That is paying off in terms of narrowing 
the gender pay gap, even if it hasn't fully eliminated it. According to 
Blau and Kahn, women's education choices are narrowing the gap by 6.7 
percent. Women now are more likely than men to graduate from high 
school as well as college. It's worth noting though, that among women 
aged 25 to 45 only a quarter have at least a college degree, while 
nearly two-thirds have a high school degree, but no 4-year college 
degree (and this is similar for men as well).
    An important research finding that flies in the face of women's 
educational attainment, however, is that the gender pay gap emerges as 
soon as women graduate. The American Association of University Women 
examined the pay gap in pay between college-educated men and women and 
found that even once they accounted for the measurable factors that 
affect pay, such as the individual's job, whether the job boasts a 
flexible schedule, the kind of educational credentials they have 
(including their grade point average and the selectivity of the college 
that they attended), among graduates just 1 year out of school, a 5 
percent unexplainable pay gap remained.
    This means that a woman who goes to the same school, gets the same 
grades, has the same major, takes the same kind of job with similar 
workplace flexibility perks and has the same personal characteristics--
such as marital status, race, and number of children--as her male 
colleague earns 5 percent less the first year out of school. Ten years 
later, even if she keeps pace with the men around her, this research 
found that she'll earn 12 percent less. This is not about the 
``choices'' a woman makes because the model compares men and women who 
have made nearly identical choices.
    Differences in men's and women's work histories explain a large 
chunk--10.5 percent--of the gender wage gap. But the AAUW study cited 
above shows that the gender pay gap emerges right out of college--at a 
point in their lives when differences in work experience between them 
and their male colleagues do play a large role in determining pay.
    At least some of the wage gap between men and women is attributable 
to women taking on greater parenting responsibilities and working fewer 
hours. Women are more than twice as likely as men to be employed part-
time and since few jobs offer part-time work, the part-time jobs 
available tend to pay less than comparable full-time jobs. But, the 
reality is that this cannot fully explain the gap in pay.
    For example, it is a myth that women choose less-paying occupations 
because they provide flexibility to better manage work and family. The 
empirical evidence shows that mothers are actually less likely to be 
employed in jobs that provide greater flexibility. In general, workers 
who hold higher positions and are privileged in general (better 
educated, white, male) have more access to all kinds of workplace 
flexibility. Women are less likely than men to have access to 
flexibility, but parents--especially single mothers--are the least 
likely to have access to workplace flexibility. In fact, parents are 
more likely to have nonstandard shifts and rotating hours, making work/
family balance more difficult to achieve.
    Indeed, differences in work history are treated differently 
depending on whether a woman is a mother or not. In a 2001 paper, 
sociologists Michele Budig and Paula England found that interruptions 
from work, working part-time, and decreased seniority/experience 
explain no more than about one-third of the gap in pay between women 
with and without children, and that ``mother-friendly'' job 
characteristics explained very little of the gap. They conclude that 
two-thirds of the wage gap between mothers and non-mothers must be 
either because employed mothers are less productive at work or because 
of discrimination against mothers.
    A body of new research focuses on the role of the ``maternal wall'' 
in accounting for at least some--if not most--of the unexplained pay 
gap. In groundbreaking work, Cornell University sociologists Shelley 
Correll, Stephen Benard, and In Paik used a laboratory experiment to 
find out whether being a mother simply means being paid less, all else 
equal. They had study participants evaluate application materials for a 
pair of job candidates that were designed specifically to be equally 
qualified, but one person was identified as a parent and the other was 
not. The two candidates had equal levels of education and work 
experience at similarly ranked schools.
    Their findings were simply astonishing. The job candidates 
identified as mothers were perceived to be less competent, less 
promotable, less likely to be recommended for management, less likely 
to be recommended for hire, and had lower recommended starting salaries 
even though their actual credentials were no different from those of 
the non-mothers. The job candidates identified as fathers were not 
penalized in the same way, and often saw a boost. Study participants 
also held mothers to higher standards than non-mothers (both women 
without children and men with or without children) by requiring a 
higher score on a management exam and significantly fewer times of 
being late to work before being considered hirable or promotable.

    Question 2. Many critics of the Paycheck Fairness Act, including 
the editorial board of the Washington Post, say that it is intrusive, 
impractical, and potentially injurious to the free enterprise system. 
For example, it gives government the power to determine what 
constitutes fair wages. It requires any employer accused of wage 
discrimination to cite a ``bona fide'' reason for paying a particular 
male employee more than a female; potential reasons for the wage 
difference include the male's superior education or his special skills. 
However, the Paycheck Fairness Act further stipulates that the alleged 
``bona fide'' explanation ``shall not apply'' if the employee 
``demonstrates that an alternative employment practice exists that 
would serve the same business purpose without producing such 
differentials and the employer has refused to adopt such alternative 
practice.'' What happens in a case where an employer judges the 
``alternative'' (e.g. a special training program for female employees) 
to be prohibitively expensive? Business owners protest that this 
vaguely worded second provision turns the Federal courts into a quasi 
business partner with unlimited authority to second guess key business 
decisions? Do you think such fears are unfounded?
    Answer 2. This seems to be a legal, not economic question as the 
key issue is how the courts interpret ``bona fide'' explanation and 
``alternative employment practice.'' A lawyer familiar with these 
issues would be better suited to address how the courts interpret that 
phrase.

    Question 3. According to the Paycheck Fairness Act, an employer is 
legally vulnerable if an employee can show that she was paid less than 
a male colleague because of intentional discrimination or the 
``lingering effects of past discrimination.'' Could this prevent 
employers from paying market wages? For example, universities typically 
cite ``market forces'' as the reason professors of business are paid 
more than professors of social work. In many universities there are far 
more women teaching social work than business. Should they be able to 
sue on the grounds that ``market forces'' reflect the lingering effects 
of discrimination? They could surely find expert witnesses in women's 
studies programs who would testify that sexist attitudes led society to 
place a higher value on male-centered fields like business than female-
centered fields like social work. Is it your view that such litigation 
would be helpful in promoting the goals of the act?
    Answer 3. This seems to be a legal, not economic question as the 
key issue is how the courts define ``lingering effects of past 
discrimination.'' A lawyer familiar with these issues would be better 
suited to address how the courts interpret that phrase.

    Question 4. The 1963 Equal Pay Act awards victims of intentional 
discrimination up to $300,000 in compensatory damage and limited 
punitive damages. The Paycheck Fairness Act would change that by 
allowing for unlimited multi-million dollar settlements. This is good 
news for trial lawyers, but is it a good policy for a nation facing an 
unemployment crisis? Employers are nervous and fearful of making new 
hires. Won't the act reinforce fear?
    Answer 4. There is no logical reason for an employer who is paying 
their workers fairly to be nervous or fearful of making new hirers. In 
fact, because this law will level the playing field, the Paycheck 
Fairness Act will be a boon to employers who are currently paying their 
workers fairly. Competitors who now may choose to violate the law in 
hopes of not getting caught will now think twice as there will be real 
penalties. Therefore, many firms currently engaging in illegal pay 
practices will stop and discontinue their discriminatory pay, leveling 
the playing field between them and those firms who have been abiding by 
the law.
    For the law to be effective, it must include a sufficient penalty 
to act as a deterrent. Currently, employers have few real penalties for 
engaging in wage discrimination: if they are caught, they have to pay 
back wages--the fair pay level--but if they are not caught, they have 
been able (illegally) to pay some workers less wages. As Deborah Brake 
noted in her testimony, the law as it stands does not provide 
sufficient deterrents:

          Currently, employment discrimination law sets up a hierarchy 
        of remedies for employees who experience different kinds of pay 
        discrimination. Although full and uncapped remedies are 
        available to victims of pay discrimination on the basis of 
        race, no Federal statute provides complete remedies to women 
        who are paid less because of their sex. Under the Equal Pay 
        Act, an employee may recover only the amount of her unlawfully 
        withheld wages (up to 2 years' back pay, or 3 years' back pay 
        for ``willful'' violations) and an equal amount in ``liquidated 
        damages.'' (p. 10)

    Question 5. You speak of ``the segregation of men and women into 
different kinds of jobs.'' Do you rule out the possibility that men and 
women, as groups, might have different preferences? Is it really gender 
segregation that explains women's preference for say, teaching over oil 
drilling, or veterinary medicine over astrophysics? In your testimony, 
you imply that it is unjust that zookeepers make more than childcare 
workers. There are many people who know how to take care of children; 
there are very few who know how to bathe and feed a giraffe. Why is it 
wrong for a zookeeper to make more than a childcare worker when the 
zookeeper has a more specialized knowledge set?
    Answer 5. Certainly, each individual has their preferences. The 
challenge is that these preferences cannot explain the gender pay gap. 
For example, the gender pay gap emerges as soon as women graduate from 
college even if they made the same decisions as their male peers. The 
American Association of University Women examined the pay gap in pay 
between college-educated men and women and found that among graduates 
just 1 year out of school, a 5 percent unexplainable pay gap remained 
even once they accounted for the measurable factors that affect pay, 
such as the individual's job, whether the job boasts a flexible 
schedule, the kind of educational credentials they have including their 
grade point average and the selectivity of the college that they 
attended.
    Thus, what we learn from this research is that in analysis that 
compares men and women who have made identical choices, there remains a 
gap in pay. A woman who goes to the same school, gets the same grades, 
has the same major, takes the same kind of job with similar workplace 
flexibility perks and has the same personal characteristics--such as 
marital status, race, and number of children--as her male colleague 
earns 5 percent less than him the first year out of school. Ten years 
later, even if she keeps pace with the men around her, this research 
found that she'll earn 12 percent less.
           Response to Questions of Senators Enzi and Coburn 
                          by Deborah L. Frett
                              senator enzi
    Question 1. Please describe your personal experience as an employer 
in a private sector, non-government-funded workplace. Have you hired 
employees in a private sector workplace? Have you been charged with 
setting compensation in a setting where salary and wage levels were not 
government-set? Have you been responsible for determining raises and 
fringe benefits in a setting where these costs were not born by 
taxpayers? If so, was your business profitable?
    Answer 1. Business and Professional Women's Foundation is a non-
profit, 501(c)(3) organization and a non-government-funded workplace. 
As CEO, I am responsible for hiring all employees and setting 
compensation and wage levels. Washington, DC is a very competitive 
market for top-notch nonprofit employees and I have found that it is in 
the best interest of our organization to offer competitive salaries and 
benefits to attract the best talent. In addition, BPW Foundation has a 
written and transparent pay policy. Wages are reviewed annually and 
each time a new hire is made. I believe our organization is very 
profitable in that we successfully serve our mission to empower working 
women to achieve their full potential and partner with employers to 
build successful workplaces through education, research, knowledge and 
policy.
    In terms of the private sector, my for-profit experience includes a 
proven track record of leadership and influence as an executive in 
association management and for-profit businesses. I have served as 
Chief Operating Officer of a $29 million for-profit company providing 
an integrated portfolio of health care communications, information, 
education and research products and services. I have also served as 
President and CEO of a $7 million for-profit company market leader in 
health care provider data and information. For both companies, I was 
involved in hiring employees, setting compensation and benefits as well 
as determining raises and fringe benefits. And, yes, both companies 
were profitable.
    As an employer I support the Paycheck Fairness Act.

    Question 2. At the hearing we discussed the phenomenal growth of 
women-owned firms in recent years. You stated that women-owned firms 
would have ``a reduction in risk'' of being sued for discriminatory pay 
disparities. If that is the case, should the Equal Pay Act provide an 
exemption for women employers? If not, do you have reservations about 
attributing a gender pay disparity to discrimination when both the 
employer and the plaintiff employee are women?
    Answer 2. BPW Foundation believes in pay equity for both men and 
women and does not support an exemption for female employers. The Equal 
Pay Act prescribes ``equal pay for equal work'' and that protection is 
available to everyone regardless of the gender of the employer or 
employee.
    To clarify my statement, any firm that has written and transparent 
pay equity policies would have ``a reduction of risk'' of liability 
with regard to pay discrimination. Women business owners know that 
hiring women and paying them equally is good for business. A quest for 
fair pay is often the reason highly skilled women leave an employer to 
start their own companies. Business owners like Debra Ruh support the 
Paycheck Fairness Act. Ms. Ruh owns TecAccess in Rockville, VA. 
TecAccess is a consulting firm that helps companies update their web 
and information technology systems in order to reach and better serve 
people with disabilities. Like many women business owners, Ms. Ruh 
struck out on her own so that she could run a business her way. She 
told BPW Foundation it would never occur to her to pay a woman less 
than a man; it would be short-sighted and bad for business--she would 
lose out on a creative, innovative and loyal workforce. It would be 
supremely unfair to business owners like Debra Ruh who are doing right 
by their employees to have to compete on an unfair playing field 
against companies that discriminate and pay their women workers less.
                             senator coburn
    Question 1. In January 2009, the Department of Labor released a 
detailed statistical analysis of the wage gap carried out by the non-
partisan Consad Research Corporation. The study, An Analysis of the 
Reasons for the Disparity in Wages Between Men and Women, found that 
most of the so-called wage gap was an artifact of the different choices 
men and women make--such as different fields of study, different 
professions, different balance between home and work. In the Foreword, 
a Labor Department official writes:

          ``This study leads to the unambiguous conclusion that the 
        differences in the compensation of men and women are the result 
        of a multitude of factors and that the raw wage gap should not 
        be used as the basis to justify corrective action. Indeed, 
        there may be nothing to correct. The differences in raw wages 
        may be almost entirely the result of the individual choices 
        being made by both male and female workers.''

    Do you think it is appropriate for ``wage gap'' calculations to 
ignore these differences?
    Answer 1. The wage gap calculations do not ignore these 
differences. Even when researchers hold for differences in education, 
time out of the workforce and other factors--a gap between men's and 
women's wages still remains.\1\ Further, the median gender wage gap 
calculation is useful because it raises questions about the persistent 
gap between men's and women's wages and challenges us to look for 
answers. The gender wage gap is a complex social problem attributable 
to many factors including discrimination and the different choices men 
and women make about employment.
---------------------------------------------------------------------------
    \1\ AAUW Educational Foundation. (2007). Behind the Pay Gap, by 
Catherine Hill and Judy Goldberg Dey. Washington, DC. http://
www.aauw.org/research/behindPayGap.cfm and Jessica Arons, Lifetime 
Losses: The Career Wage Gap, Center for American Progress Action Fund, 
December 2008, http://www.americanprogressaction.org/issues/2008/
lifetime_losses.html.
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    A 2003 Government Accounting Office (GAO) study concluded that even 
after accounting for ``choices'' such as work patterns and education, 
women earn an average of 80 cents for every dollar that men earn.\2\ 
Even when women choose traditionally male fields such as business they 
receive lower salaries. Catalyst, Inc. found that on average, women 
MBA's are being paid $4,600 less in their first job than men.\3\ That 
is long before time out of the workforce for child rearing comes into 
play. Blau and Kahn, who are cited several times in the Consad report 
referenced in the question, found that once they controlled for 
education, labor force experience race, occupation, industry, and 
unionized workplace, 41.1 percent of the wage gap still could not be 
explained.\4\
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    \2\ General Accounting Office, Women's Earnings: Works Patterns 
Partially Explain Difference Between Men's and Women's Wages, GAO-04-
35, October 2003, http://www.gao.gov/new.items/d0435.pdf.
    \3\ Nancy M. Carter, Ph.D. and Christine Silva, Pipelines Broken 
Promise, Catalyst, February 2010. http://www.catalyst.org/publication/
372/pipelines-broken-promise.
    \4\ Blau, F., Kahn, L., ``The gender pay gap: have women gone as 
far as they can?'', Academy of Management Perspectives, February, pp.1-
23. (2007).
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    In 2008, women working full-time, year-round earned only about 77 
cents for every dollar earned by men. Things are even worse for women 
of color. African-American women make only 61 cents, and Latinas only 
52 cents, for every dollar earned by white, non-Hispanic men. Gender 
wage discrimination has been illegal since President Kennedy signed the 
Equal Pay Act in 1963 but the wage gap persists. Women earned 59 cents 
to every dollar earned by men in 1963, but progress has slowed and the 
gender wage gap widened slightly from 77.8 to 77.1 percent between 2007 
and 2008.
    No matter how you count it and what you hold for, a gender wage gap 
remains. Just as the differences in men's and women's wages may be the 
result of individual choices, the differences in wages may be the 
result of sex-based discrimination. And in instances where that gap is 
due to discrimination, it should be illegal and punishable to the 
fullest extent of the law.
    The Paycheck Fairness Act addresses the causes of the wage gap 
along with the results. This legislation would provide funding for 
education programs, employer guidelines and technical assistance as 
well as recognition of good practices by employers. In addition, there 
is a competitive grant program to develop salary negotiation training 
for women and girls. The Paycheck Fairness Act also recognizes that 
there are many employers doing right by their employees and establishes 
a recognition program through the Department of Labor for those 
employers.

    Question 2. Many critics of the Paycheck Fairness Act, including 
the editorial board of the Washington Post, say that it is intrusive, 
impractical, and potentially injurious to the free enterprise system. 
For example, it gives government the power to determine what 
constitutes fair wages. It requires any employer accused of wage 
discrimination to cite a ``bona fide'' reason for paying a particular 
male employee more than a female; potential reasons for the wage 
difference include the male's superior education or his special skills. 
However, the Paycheck Fairness Act further stipulates that the alleged 
``bona fide'' explanation ``shall not apply'' if the employee 
``demonstrates that an alternative employment practice exists that 
would serve the same business purpose without producing such 
differentials and the employer has refused to adopt such alternative 
practice.'' What happens in a case where an employer judges the 
``alternative'' (e.g. a special training program for female employees) 
to be prohibitively expensive? Business owners protest that this 
vaguely worded second provision turns the Federal courts into a quasi 
business partner with unlimited authority to second guess key business 
decisions? Do you think such fears are unfounded?
    Answer 2. These fears are unfounded; business owners that are 
paying equal pay for equal work have nothing to fear from the Paycheck 
Fairness Act. The Paycheck Fairness Act will not interfere in employer 
wage setting decisions or require costly trainings. This legislation 
will still allow businesses to reward employees with merit and 
performance-related increases. Wage differentials based on seniority, 
merit, quantity or quality of production are also allowable under the 
law. However, if a business wants to pay men and women doing the same 
job differently, there must be a business reason for doing so. 
Discrimination based on factors that are used as substitutes for gender 
such as a male worker's stronger salary negotiation skills or an 
assumption that women will work for less would not be allowed.
    The ``bona fide'' business necessity language is borrowed from 
Title VII of the Civil Rights Act, which has been the law for over 40 
years and is a familiar standard to employers. Title VII does not 
require employers to develop cost prohibitive programs to satisfy the 
comparable alternative requirement and neither would the Paycheck 
Fairness Act.
    Businesses which have clearly written pay policies and practices 
and proactively review the wages of existing employees will find 
compliance with the Paycheck Fairness Act easy. Development and 
adoption of formal, written pay equity policies lay the groundwork for 
unbiased compensation systems and provide metrics for analyzing 
salaries to identify disparities.

    Question 3. According to the Paycheck Fairness Act, an employer is 
legally vulnerable if an employee can show that she was paid less than 
a male colleague because of intentional discrimination or the 
``lingering effects of past discrimination.'' Could this prevent 
employers from paying market wages? For example, universities typically 
cite ``market forces'' as the reason professors of business are paid 
more than professors of social work. In many universities there are far 
more women teaching social work than business. Should they be able to 
sue on the grounds that ``market forces'' reflect the lingering effects 
of discrimination? They could surely find expert witnesses in women's 
studies programs who would testify that sexist attitudes led society to 
place a higher value on male-centered fields like business than female-
centered fields like social work. Is it your view that such litigation 
would be helpful in promoting the goals of the act?
    Answer 3. The Paycheck Fairness Act will not prevent employers from 
paying market wages. This legislation will still allow businesses to 
reward employees with merit and performance-related increases. Wage 
differentials based on merit, quantity or quality of production and 
seniority are also allowable under the law. However, if a business 
wants to pay men and women doing the same job differently, there must 
be a business reason for doing so. Discrimination based on factors that 
are used as substitutes for gender such as a male worker's stronger 
salary negotiation skills or an assumption that women will work for 
less would not be allowed.
    An employee alleging gender wage discrimination under the Equal Pay 
Act must identify a comparable male employee who makes more money for 
performing equal work, requiring ``equal skill, effort and 
responsibility'' under similar working conditions.\5\ This high burden 
of proof protects employers. If there is no comparator, then there is 
no case and the employer does not need to mount a defense.
---------------------------------------------------------------------------
    \5\ 29 U.S.C.  206(d)(1).
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    In addition, an employer is able to justify the wage disparity 
based on the most common business reasons for wage differentials which 
are seniority, merit, and quantity or quality of production.\6\ In the 
unlikely event that the employer would even get to the ``factor other 
than sex'' defense, they would still be able to say the wage 
differential was based on a gender-neutral factor, job related and 
consistent with business necessity.
---------------------------------------------------------------------------
    \6\ Peter Avery, Note, The Diluted Equal Pay Act: How Was It 
Broken? How Can It be Fixed?, 56 Rutgers L. Rev. 849, 868 (2004).
---------------------------------------------------------------------------
    Businesses which have clearly written policies and practices and 
proactively review the wages of existing employees will find compliance 
with the Paycheck Fairness Act easy.

    Question 4. The 1963 Equal Pay Act awards victims of intentional 
discrimination up to $300,000 in compensatory damage and limited 
punitive damages. The Paycheck Fairness Act would change that by 
allowing for unlimited multi-million dollar settlements. This is good 
news for trial lawyers, but is it a good policy for a nation facing an 
unemployment crisis? Employers are nervous and fearful of making new 
hires. Won't the act reinforce fear?
    Answer 4. The Equal Pay Act does not currently allow the award of 
compensatory or punitive damages. Currently, women who have been paid 
less than their male counterparts are entitled to recover only their 
unpaid minimum wages. Those subject to race and national origin 
discrimination are eligible for compensatory or punitive damages. 
Punitive damages are only awarded if the employer intentionally 
discriminated and acted with ``malice or reckless indifference to the 
plaintiff 's federally protected rights. Women and men who endure sex-
based wage discrimination should be entitled to the same remedies as 
those available in race and national origin cases.
    The Paycheck Fairness Act will not bankrupt employers through an 
explosion of court cases, class-action lawsuits, damages awards and 
damage awards would be limited by the usual limits in law.
    The Paycheck Fairness Act ensures that women can obtain the same 
remedies as those subject to discrimination on the basis of race or 
national origin. The Paycheck Fairness Act extends to victims of sex-
based discrimination the same standards for class action lawsuits. 
These are familiar regulations that business are already complying with 
and have been for some time.
    Employers that want to be profitable are not fearful about making 
new hires. Those that look to recruit and retain the best talent as 
well as maintain a competitive edge believe in equal pay for equal 
work.
    Pay equity is good for business and will result in improved 
employee retention, positive human capital outcomes, and a more 
productive work force. In addition to talent acquisition, gender 
diversity helps companies meet business goals. A recent European 
Commission study showed that 58 percent of companies with diversity 
programs reported higher productivity as a result of improved employee 
motivation and efficiency, and 62 percent said that the programs helped 
attract and retain highly talented people.\7\
---------------------------------------------------------------------------
    \7\ Desvaux, Georges, Devillard-Hoellinger, Sandrine and. Meaney, 
Mary C, A Business Case for Women, McKinsey and Company, September 
2008.
---------------------------------------------------------------------------
    Business owners that are paying equal pay for equal work have 
nothing to fear from the Paycheck Fairness Act. The current system is 
unfair to those employers who treat their employees fairly because it 
creates a competitive advantage for discriminatory employers. 
Currently, it is worthwhile for some businesses to pay a woman less 
than her male counterparts, and gamble that she won't sue for back 
wages in the future. If she doesn't sue, the employer keeps the 
``savings''; if she does, the employer only has to pay 2 years of back 
pay. This encourages discriminatory pay and unfair treatment of female 
employees.
    As we face this unemployment crisis, it is the best time to 
institute such a policy. Women are now half of workers on U.S. payrolls 
and many families are trying to make ends meet on women's earnings 
alone. Paying women equally is not only good for the women but their 
families and the Nation as a whole. As they help rebuild the national 
economy and workforce, shouldn't they be equally compensated?
      Response to Questions of Senator Enzi by Jane M. McFetridge
    Question 1. At the hearing there was some discussion of the 
phenomenal growth of women-owned firms in recent years, and it was 
claimed that women-owned firms had a reduced risk of being sued for pay 
discrimination. In your personal experience as an employment lawyer, is 
that the case?
    Answer 1. No, I have not seen a discernible difference in the 
litigation risks faced by women-owned businesses. Unfortunately, in my 
experience, a company's litigation risk often has less to do with its 
policies and practices--or its leadership--than one might think. The 
companies I work with, regardless of ownership, are committed to 
ensuring gender pay parity and work hard to eradicate discrimination in 
the workplace. However, that does not mean they don't get sued. As 
evidenced by EEOC statistics, the vast majority of Equal Pay Act of 
1963 (the ``EPA'') and title VII if the Civil Rights Act of 1964 
(``title VII'') charges filed with the agency lack merit. In 2009, for 
example, after thoroughly investigating and evaluating the charging 
party's allegations of discrimination, the EEOC found ``reasonable 
cause'' in only 4.6 percent of the EPA and 5 percent of the title VII 
charges it received.\1\ These statistics demonstrate that the vast 
majority of claims lack merit, irrespective of the gender of the 
business owner. Furthermore, many (if not most) of the businesses I 
work with are corporations with diverse ownership, so it is a little 
difficult to assign ``gender'' to such entities. I will say that the 
majority of corporate representatives with whom I deal are women--both 
in the corporate counsel's department and as decisionmakers in Human 
Resources or management. The presence of female decisionmakers and 
management does not appear to influence the likelihood of a business 
being sued, nor does it affect the outcome of litigation.
---------------------------------------------------------------------------
    \1\ EEOC Sex-Based Charges, available at http://www.eeoc.gov/eeoc/
statistics/enforcement/sex.cfm (last visited Mar. 5, 2010).

    Question 2. 2. How difficult is it for a woman who believes she may 
be the victim of gender-based pay discrimination to commence an 
investigation?
    Answer 2. It is very simple for an employee who believes she may be 
the victim of gender-based pay discrimination to commence an 
investigation under both the EPA and title VII: all she must do is file 
a charge of discrimination with the EEOC.\2\ The EEOC charge-filing 
process is intentionally designed so that employees do not have to rely 
on lawyers to prompt the EEOC to initiate an investigation.
---------------------------------------------------------------------------
    \2\ Although plaintiffs are not required to file a charge of 
discrimination with the EEOC prior to commencing an EPA lawsuit, the 
EEOC has the authority to investigate EPA charges and commence 
litigation. See 29 CFR 1620.30 (2008).
---------------------------------------------------------------------------
    A complaint can be filed with the EEOC through a phone call or a 
visit to a local EEOC office, as well as by mail. Although a formal 
charge cannot be filed by phone, anyone who believes she has been 
subjected to discrimination can call the EEOC's hotline and provide 
basic information, which the EEOC will then forward to a local office 
that will contact the caller.\3\ Where necessary, the EEOC provides 
special assistance, such as a foreign language interpreter, at local 
offices.\4\ The EEOC also allows an individual, organization or agency 
to file a charge on someone else's behalf.\5\
---------------------------------------------------------------------------
    \3\ The Charge Handling Process, available at http://www.eeoc.gov/
employees/howtofile.cfm (last visited Mar. 30, 2010).
    \4\ Id.
    \5\ Id.
---------------------------------------------------------------------------
    As the U.S. Supreme Court has explained, title VII ``sets up a 
`remedial scheme in which lay persons, rather than lawyers, are 
expected to initiate the process.' ''\6\ A filing constitutes a 
``charge,'' the Court has said, when it can be ``reasonably construed 
as a request for the agency to take remedial action to protect the 
employee's rights or otherwise settle a dispute between the employer 
and the employee.'' \7\ A Federal district court recently reiterated 
this reasoning in a sex-based pay discrimination case, holding that a 
plaintiff 's intake questionnaire, with allegations of unequal pay, was 
sufficient to constitute filing of an EEOC charge. ``While a formal 
charge was not signed by [plaintiff], the . . . questionnaire contained 
an allegation of discrimination, the name of the charged party and a 
request for the agency to take action.'' \8\
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    \6\ Federal Express Corp. v. Holowecki, 552 U.S. 389, 402 (Feb. 27, 
2008).
    \7\ Id.
    \8\ Glodek v. Jersey Shore State Bank, 2009 U.S. Dist. LEXIS 77118, 
at *31 (M.D. Pa. Aug. 28, 2009).
---------------------------------------------------------------------------
    Not only is the charge-filing process simple, but employees also 
have a substantial period of time to file. The Lilly Ledbetter Fair Pay 
Act of 2009 provides that the charge-filing period (300 days in most 
States and 180 days in States that do not have a fair employment 
agency) for title VII pay discrimination claims restarts each time an 
employee receives a paycheck based on a discriminatory compensation 
decision. For the EPA, an employee must file an EEOC charge or a 
lawsuit ``within 2 years of the alleged unlawful compensation practice 
or, in the case of a willful violation, within 3 years.'' \9\
---------------------------------------------------------------------------
    \9\ Equal Pay/Compensation Discrimination, available at http://
www.eeoc.gov/laws/types/equalcompensation.cfm (last visited Mar. 30, 
2010).
---------------------------------------------------------------------------
    Beyond investigating a charge of pay discrimination, the EEOC may 
also pursue mediation or file a lawsuit on an employee's behalf.\10\ In 
some cases, the EEOC even decides on its own to investigate whether a 
company is engaging in discrimination outside of what is alleged in a 
particular charge. A Federal appeals court in New York recently held 
that the EEOC has authority to request company-wide information 
regarding an employer's religious exemptions to company policy after 
two employees filed religious discrimination charges.\11\ In other 
words, if one or two female employees file EEOC charges alleging their 
employer engaged in gender-based pay discrimination, the EEOC could 
request nationwide pay data for all employees. The end result is that a 
single EEOC charge filed by an individual employee in Chicago can 
result in a massive litigation initiated by the EEOC against a company 
with operations across the country. In such a scenario, the EEOC could 
pursue class-wide relief for a group of female employees. Furthermore, 
the EEOC can take notice of possibly discriminatory practices through 
third party sources such as news reports and investigate employers for 
potential civil rights violations, such as gender pay disparities.\12\ 
In this scenario, no complainant is necessary to prompt an 
investigation.
---------------------------------------------------------------------------
    \10\ The Charge Handling Process, available at http://www.eeoc.gov/
employees/process.cfm (last visited Mar. 30, 2010).
    \11\ EEOC v. UPS, 587 F.3d 136 (2d Cir. Nov. 19, 2009).
    \12\ See 42 U.S.C.  2000e-5(b) (granting EEOC Commissioners 
authority to issue charges on their own initiative under title VII); 
see also Press Release, U.S. Equal Employment Opportunity Commission, 
$27.5 Million Consent Decree Resolves EEOC Age Bias Suit Against Sidley 
Austin (Oct. 5, 2007), available at http://www.eeoc.gov/eeoc/newsroom/
release/10-5-07.cfm (last visited Apr. 29, 2010) (noting that ``[t]he 
litigation has yielded a number of important legal decisions, . . . 
[including] ratifying the authority of EEOC to investigate and obtain 
relief for victims of age discrimination on its own initiative.'')

    Question 3. What would be the effect of S. 182 on litigation levels 
and liability exposure for small employers?
    Answer 3. S. 182 would undoubtedly increase litigation levels and 
liability exposure for small employers. The proposed legislation not 
only makes it more difficult for employers to establish an affirmative 
defense to EPA liability, but, by making uncapped punitive and 
compensatory damages available in EPA cases regardless of the 
employer's size, it both encourages plaintiffs' attorneys to bring such 
claims and increases potential exposure.
    When Congress added compensatory and punitive damages to the relief 
available in title VII disparate treatment cases through passage of the 
Civil Rights Act of 1991, it was careful to include a statutory cap on 
such damages. That cap is set at $50,000 (for companies with 15-100 
employees) to $300,000 total for compensatory and punitive damages, 
depending on the employer's size. As the U.S. Court of Appeals for the 
Second Circuit has pointed out, a review of the act's legislative 
history reveals that ``the purpose of the cap is to deter frivolous 
lawsuits and protect employers from financial ruin as a result of 
unusually large awards.'' \13\
---------------------------------------------------------------------------
    \13\ Luciano v. Olsten Corp., 110 F.3d 210, 221 (2d Cir. Mar. 21, 
1997) (referencing 137 Cong. Rec. S15472 (1991) (statement of Sen. 
Dole); 137 Cong. Rec. S15478-79 (1991) (statement of Sen. Bumpers)).
---------------------------------------------------------------------------
    S. 182, on the other hand, makes no attempt to ameliorate the size 
of available damages for smaller employers, who are arguably less 
capable of surviving such an award, or the cost of the litigation 
itself. Thus, S. 182 exposes small employers to significantly greater 
liability than what they currently face under both the EPA and title 
VII. The promise of uncapped damages will also provide added incentive 
for plaintiffs' counsel to bring EPA claims against employers in the 
first place, including small employers.
    To better understand how enhanced damage remedies affect litigation 
levels, a good place to look is the Civil Rights Act of 1991. According 
to one article, ``In the decade following the passage of the Civil 
Rights Act of 1991, the number of employment discrimination trials 
jumped 26 percent, while other civil trials declined by a roughly 
equivalent percentage.'' \14\
---------------------------------------------------------------------------
    \14\ Lee Reeves, Pragmatism Over Politics: Recent Trends in Lower 
Court Employment Discrimination Jurisprudence, 73 Mo. L. Rev. 481, 510 
(2008). In addition, as I mentioned in my Opening Remarks, the State of 
California has many times more discrimination cases than any other 
State in the country--and the cost of doing business there is 
significantly higher than in other locations--because State law 
provides for unlimited damages.
---------------------------------------------------------------------------
    Further, by allowing ``opt-out'' class actions under a law that 
makes it very difficult for employers to defend legitimate decisions 
while exposing them to unlimited damages, S. 182 would also encourage 
plaintiffs' attorneys to bring class action lawsuits against employers 
who may be forced to settle even when they did nothing wrong, or face 
financial ruin from the extraordinary costs associated with litigation 
of this nature. This is true for both large and small employers, but 
the threat of financial ruin is even greater for small employers.

    Question 4. 4. In your view could S. 182 impose liability on 
employers that have not engaged in any discriminatory behavior?
    Answer 4. Yes, I absolutely believe S. 182 could impose liability 
on employers that have not engaged in any discriminatory behavior. 
There are three specific aspects of the legislation that lead me to 
this conclusion: (1) Sec. 3(a)(2)(B), which would replace the EPA's 
``any factor other than sex'' defense with a ``business necessity'' 
requirement; (2) Sec. 3(a)(2)(C), which would amend the EPA to define 
``establishment'' as ``workplaces located in the same county or similar 
political subdivision of a State;'' and (3) Sec. 9, which would no 
longer require the OFCCP to use multiple regression analysis when 
performing compensation discrimination analyses. Further, if S. 182 is 
enacted, employers who have not engaged in any discriminatory behavior 
could be liable for uncapped compensatory damages. I will address each 
of these provisions in turn.
    First, the Paycheck Fairness Act would eliminate the EPA's ``any 
factor other than sex'' defense, replacing it with a ``bona fide factor 
other than sex'' that is ``consistent with business necessity.'' That 
defense would be unavailable if a plaintiff demonstrates that ``an 
alternative employment practice exists that would serve the same 
business purpose.'' As I stated in my opening remarks, as a practical 
matter, there is simply no way an employer will be able to demonstrate 
that each and every pay determination it makes is consistent with 
business necessity. There may be dozens or hundreds of factors that go 
into determining an employee's compensation, some objective and some 
subjective, and all of which can be legitimate, non-discriminatory 
considerations. Under S. 182, however, there is a clear dichotomy: 
either the reason for the pay differential is ``consistent with 
business necessity'' or it is discriminatory.
    In my testimony, I highlighted a few examples of how pay 
determinations that have nothing to do with discrimination would not 
fit into S. 182's ``business necessity'' defense. I gave the example of 
jobs that require frequent personal interaction, like a waitress. If S. 
182 is enacted, employers could be liable for pay differentials based 
upon qualities like a friendly disposition or positive attitude if a 
court does not consider them ``consistent with business necessity.'' 
This is just one example. There are an infinite number of scenarios in 
which an employer may decide to pay one employee more than a similarly 
situated employee for reasons having nothing to do with gender 
discrimination. Consider a company that decides to give a male manager 
a larger raise than a female manager because he has successfully 
implemented initiatives to improve employee morale, demonstrated 
excellent judgment and decisionmaking skills in high pressure 
situations, and has generally impressed senior-level management for 
reasons that cannot necessarily be quantified. In this situation, S. 
182 could impose liability on employers that have not engaged in any 
discriminatory behavior.
    Another example is mergers and acquisitions. When one company 
acquires another, it absorbs differing pay scales, oftentimes resulting 
in pay disparities that are wholly unrelated to sex. However, by 
requiring the justification to be job-related and consistent with 
business necessity, employers would arguably have to undertake a prompt 
review of these differing pay scales upon consolidation and normalize 
the disparities by elevating the lower salaries to the higher-paid 
salary (as the EPA does not allow employers to reduce salaries in 
response to a pay disparity).
    The inevitable result of S. 182's ``business necessity'' 
reformulation of the ``any factor other than sex'' defense is that 
employers may be liable for making individual pay determinations. Even 
if employers are not found liable, that result will only come after 
costly and protracted litigation.
    Second, S. 182 would amend the EPA to define ``establishment'' as 
``workplaces located in the same county or similar political 
subdivision of a State.'' This change would make it illegal for 
employers to incentivize employees who agree to work in less desirable 
neighborhoods or work less desirable shifts, even though the pay 
differential has nothing to do with discrimination. The same would be 
true for counties that encompass both urban and rural populations: 
employers could be liable for discrimination if they pay workers 
employed in an urban center more than workers employed in a rural 
setting, even though the cost of doing business is significantly higher 
in the rural location.
    Third, S. 182 would direct the OFCCP to use the ``full range of 
investigatory tools'' to determine the presence of potential 
discrimination in Federal contractors' compensation systems, including 
the ``pay grade methodology,'' which the OFCCP rejected in 2006. 
Instead, the OFCCP has been using multiple regression analyses--which 
generally allows the OFCCP to consider the impact of variables, such as 
years of work experience, education, and past performance--to determine 
the presence of potential discrimination. As a result, the OFCCP would 
likely bring more actions against employers based on inadequate and 
faulty data. Even if employers are not found liable, they would be 
forced to spend money defending themselves.
    For all of these reasons, I believe S. 182 could impose liability 
on employers that have not engaged in any discriminatory behavior.

    [Whereupon, at 12:03 p.m., the hearing was adjourned.]



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