[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[Senate]
[Pages 1357-1360]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  LILLY LEDBETTER FAIR PAY ACT OF 2009

  Mr. KYL. Mr. President, for nearly half a century, the Equal Pay Act 
of 1963 and the Civil Rights Act of 1964 have made it clear that 
discrimination on the basis of sex with regard to compensation paid to 
women and men for substantially equal work performed in the same 
establishment is illegal. As do my colleagues on both sides of the 
aisle, I strongly support both of these antidiscrimination laws.
  Unfortunately, some of my colleagues are misleadingly stating in the 
debate about the legislation pending that it is about pay 
discrimination. That is not true. The only issue is the length of time 
of the statute of limitations that will apply in such cases.
  In the case Ledbetter v. Goodyear Tire & Rubber Company, the Supreme 
Court considered the timeliness of the civil rights title VII sex 
discrimination claim that was based on paycheck disparities between a 
female plaintiff and her male colleagues. Under title VII, a plaintiff 
must file suit within 180 days of the alleged unlawful employment 
practice. In this case, the plaintiff attempted to argue that each 
paycheck constituted a new violation of title VII and consequently 
restarted the 180-day clock. The Supreme Court disagreed with that 
argument and held that:

       A new violation does not occur, and a new charging period 
     does not commence, upon the occurrence of subsequent 
     nondiscriminatory acts that entail adverse effects resulting 
     from past discrimination.

  In other words, the Court held that the plaintiff's suit had not been 
filed in a timely manner since the 180-day statute of limitations had 
long since passed.
  In the Ledbetter case, the Supreme Court restated its support for and 
the rationale behind a statute of limitations, stating they:

       Represent a pervasive legislative judgment that it is 
     unjust to fail to put the adversary on notice to defend 
     within a specified period of time and that the right to be 
     free of stale claims in time comes to prevail over the right 
     to prosecute them.

  In creating a 180-day statute of limitations period, Congress sought 
to encourage the prompt processing of all employment discrimination 
cases.
  Now, there are some additional commonsense reasons why virtually 
every criminal and civil law articulates a timeframe within which the 
charge or the complaint must be filed. The loss of evidence, which is 
more likely to occur with the passage of time due to loss of documents, 
cloudier memories, or even death can have a significant impact on the 
defendant's ability to mount a fair defense in the case.
  The other side has raised an interesting point, because information 
about an individual's paycheck is frequently a private matter, and the 
idea is, well, there was no way this plaintiff could have known she 
had, in fact, been discriminated against. So the argument is that there 
should be in effect no statute of limitations along the lines of the 
act today of 180 days but,

[[Page 1358]]

rather, should be tolled with each succeeding check.
  While everybody agrees with the argument, the point is there is 
already an answer to this and it has been in the common law for 
hundreds of years. It has been in statutory law, and it has been 
adopted by courts. It is the doctrine of equitable tolling, which 
essentially is, when you should have become aware of something, that is 
when the statute begins to run. When an employee did not know and could 
not be expected to know about certain facts relating to alleged 
discrimination, then the Equal Employment Opportunity Commission, the 
EEOC, and the courts may ``toll'' or freeze the running of the clock as 
it relates to the filing of the deadlines.
  In fact, there is a U.S. Supreme Court case square on point called 
Cada v. Baxter Health Care Corporation in which the Supreme Court 
clearly established the doctrine of equitable tolling which in the 
Court's words:

       Permits a plaintiff to avoid the bar of the statute of 
     limitations if, despite all due diligence, he is unable to 
     obtain vital information bearing on the existence of his 
     claim.

  That has always been the law.
  Senator Hutchison has introduced an amendment--an alternative to the 
bill that is before us--which preserves the balance between an 
employer's need for certainty with the right of an aggrieved employee 
to file a valid claim of discrimination. It does this by preserving the 
existing 180-day filing period for standard claims while offering 
employees the right to assert claims beyond the filing period in 
situations where they were unaware of the discrimination or where there 
were impediments to discovering the discrimination--exactly the 
allegation in this particular case. In essence, the Hutchison amendment 
codifies the doctrine of equitable tolling, which is the remedy to the 
alleged injustice in the Ledbetter holding, and makes sure that such 
tolling is applied more uniformly.
  Unfortunately, the majority legislation goes far beyond the remedy to 
the particular problem I have just discussed. It arguably provides the 
greatest expansion of the Civil Rights Act since 1964. It does this in 
three specific ways. First, it effectively eliminates the statute of 
limitations, as I said, by imposing this arbitrary paycheck rule which 
eviscerates the statute of limitations. Second, it expands the class of 
people who may file a claim by applying the statute to ``affected 
persons'' without defining what the limitation on affected persons is. 
So this class expansion would allow not only the aggrieved plaintiff or 
employee but any spouse, children, or other individuals who might claim 
to be affected by the discrimination to file a claim. Finally, the 
expansion would not just apply to sex discrimination but to all 
protected classes of multiple employment laws covering civil rights, 
age, disability, and so on. So it is a much broader statute than is 
being portrayed by some who are simply saying this is about employment 
discrimination and changing the statute of limitations.
  So I wish to stand with all Members of this body who I am sure agree 
that we need to have laws such as the Civil Rights Act to protect our 
Nation's citizens. I believe Senator Hutchison's amendment strikes the 
right balance between the needs of employers for certainty and the need 
of an aggrieved employee to file a valid claim alleging discrimination. 
I hope my colleagues will be supportive of the Hutchison amendment as a 
good-faith attempt to combine these two doctrines and in a way that has 
already been blessed by the U.S. Supreme Court in the Cada decision.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee is 
recognized.
  Mr. ALEXANDER. Mr. President, I congratulate the Senator from Arizona 
as usual for his very clear explanation of the issues. He is one of the 
legal scholars in the Senate with a great deal of experience. There is 
no need for me to go through the details of what he has just explained, 
so let me think about it and talk about it in a little bit different 
way.
  On Tuesday, a couple million people here and millions all over the 
world watched an eloquent ceremony from our Nation's Capital, the very 
moving speech by President Obama, and were reassured by his eloquence 
in a time of difficulty for our country. Among all of the difficulties 
we have, of course, the most important seems to be--or is--our economic 
troubles. The new President promised he would make his first order of 
business to get this economy moving again, get people working again, 
and to create new jobs. So it then becomes extremely important to say 
that is what the new President said, and we agree with him.
  I think we agree with that on the Democratic side and on the 
Republican side. The Democrats are in charge of the Congress, so it is 
important to see what their priorities are for fulfilling the 
President's promise to get the economy moving again. Would it be 
cutting payroll taxes so people have more money in their pockets? Would 
it be building new roads and bridges to try to create new jobs quickly? 
Would it be to extend unemployment benefits? Would it be new 
investments in energy research and development? All of those, one might 
expect, would be priorities. The President has talked about many of 
those ideas. But no, it is none of those.
  The first priority of the new Democratic Congress, which was already 
passed by the House and brought to the floor of the Senate without even 
being considered by a committee, and which we are debating today, is a 
trial lawyer bailout. Let's give our friends the trial lawyers a big 
bailout as the first order of business in our effort to help the 
economy. That is exactly what the Democrats' bill does.
  Why does it do that? The bill Senator Kyl talked about attempts to 
regulate a solution that is fair to employees and fair to business 
about a pay discrimination lawsuit, whether you are a woman or whether 
you are a man. You need to have a reasonable amount of time for the 
employee to file the cause of action, the act of discrimination, but 
you have to have a reasonable amount of time for the employer to know 
that the chances of that lawsuit being brought are limited. That is a 
part of every aspect of our law, and we call it the statute of 
limitations. You cannot sit in your backyard for 20 or 30 years with a 
cause of action in your pocket and then run up to the courthouse and 
say: Oops, I should have brought this 30 years ago, but I noticed now 
all the witnesses are dead, nobody is around to defend this; I am going 
to bring it now. That is, in effect, what we are talking about today.
  We have differences in our responses to the Supreme Court decision 
about what the reasonableness of a statute of limitations on a cause of 
action on pay discrimination might be. On this side of the aisle, 
Senator Hutchison's amendment on which we will be voting on later this 
morning says: Let's expand the current law and say that an employee 
should bring the lawsuit, not just within 180 days as the Supreme Court 
and the law now says, but whenever that employee could have known or 
reasonably should have known about the lawsuit. So that gives the 
employee even more fairness than the law exists today.
  On the other side of the aisle the solution is: Let's, in effect, 
abolish the statute of limitations and have never-ending lawsuits.
  What would the effect of this be in practical terms? I can speculate 
what the effect will be. I think it means that employers will have to 
keep more records. We are not talking about General Motors and General 
Electric here. They have big staffs who already keep lots of records 
and big law firms, in effect, that work for their companies. We are 
talking about the shoe shop owner, the filling station owner, and the 
small business owner who works 10 or 12 hours a day every day of the 
week. We are talking about the men and women in America on whom we are 
relying to create the largest number of jobs to spur the economic 
recovery that our new President talked about and that we all want.
  What are we saying to them? We are saying: Mr. and Mrs. Small 
Business Person, we want you to keep a lot more records. That means you 
might have to

[[Page 1359]]

spend money you are earning to hire an employee to keep records going 
back interminably so you can defend a lawsuit. We want you to be 
careful about pay for performance, rewarding one person over another 
person, because under the law proposed by that side, years later, some 
son or daughter or relative of that person may say: Somebody wasn't 
fair to mama or daddy and bring a lawsuit after everybody is gone, 
particularly whoever knew about whatever this situation was.
  So employers and small business people will be discouraged from being 
more competitive by saying to one employee over another employee that 
we are going to have pay for performance, which is never easy to do. 
The legitimate complaints, people who are real victims of real pay 
discrimination, also are going to be hurt. The Equal Opportunity 
Employment Commission had 75,000 or so claims and most of them were not 
meritorious. That means everybody is delayed in terms of the 
meritorious claims, and this will open the floodgates and slow justice 
for the real victims.
  It will mean, if you are a small businessman in America and this law 
passes, if Senator Hutchison's amendment is not adopted, you better get 
ready to hire a recordkeeper, you better get ready to pay some 
settlements to lawyers because, for the interminable future, a lawyer 
and someone who used to work for you or is a relative of that person 
may come in and allege pay discrimination, even though it was 25 years 
ago and they knew it all the time.
  What does that mean for you? You better set aside $25,000, $50,000, 
$200,000 of money that you could use to hire more people or pay a 
dividend or get the economy moving again to bail out the trial lawyers.
  I am disappointed with the proposal on the other side of the aisle. I 
fully support Senator Kay Bailey Hutchison, who has a proposal that I 
hope we adopt at 11:30 this morning that is fair to employees and that 
is fair to small businesses.
  I would think the majority would have something better to offer the 
American people in response to the new President's eloquent suggestion 
that it is time to get the economy moving again than a bailout for 
their friends, the trial lawyers.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Utah.
  Mr. BENNETT of Utah. Mr. President, I rise to comment with respect to 
the proposed Lilly Ledbetter legislation, and I bring the perspective 
of a small employer, for I have presided over firms with as few as half 
a dozen employees. I have been fortunate enough to see some of those 
firms grow to larger firms. Indeed, one firm I joined as the fourth 
employee in the history of that firm ended up listed on the New York 
Stock Exchange. So I have seen the travails employers go through as 
they deal with growth situations and creating jobs. The company with 
which I was involved grew from the original four employees to a staff 
of 4,000.
  One of the challenges that comes with a company that is growing that 
rapidly and creating that number of jobs is you are always involved 
with change. You are always involved with uncertainty. It is not the 
same thing as presiding over a company that has been established for 60 
or 70 years and has a degree of stability. Every month is a new 
adventure, a new challenge, and you are constantly changing your 
employee base. As new people are hired, the old people sometimes get 
resentful of the new people and say: We were here at the beginning; why 
aren't we getting these promotions? And you have to explain to them 
that the company has changed and we need new talents, we need to bring 
on board new skills, and, quite frankly, the small group that was with 
us in the beginning has to be augmented with new people.
  There are resentments, there are concerns, and occasionally there are 
discrimination cases filed.
  But if we were to take the position of the underlying legislation 
that says if there was genuine wage discrimination in a circumstance, 
everyone who was involved in writing a paycheck after that 
discrimination has committed the discrimination again and has 
effectively reset the clock for the statute of limitations.
  As I consider the impact of this on a business, I realize this, in a 
way, is the asbestos fight all over again. We saw in the asbestos fight 
companies that were taken down for actions that occurred outside the 
company on the part of those who worked in other companies that were 
acquired decades later. Let's put it specifically.
  Let's assume a business had a situation where there was, in fact, 
wage discrimination that took place. The individual against whom this 
discrimination was practiced did nothing with respect to it but 
continued to stay employed and continued to receive the paycheck.
  Under the Lilly Ledbetter legislation, the clock would be reset for 
the statute of limitations. The individual who performed the 
discrimination, let us say, was discharged. The individual who 
supervised the situation was unaware that discrimination had occurred. 
The company in which it happened is later acquired by another company. 
And then the trial lawyers discover this had been going on years ago. 
They now sue the eventual company that acquired the first company for a 
great amount of money, perhaps even a class action suit is filed. You 
cannot prove what happened because all the people involved have 
disappeared. They have gone away. They no longer work for the company. 
They have no memory of what happened. It is decades later.
  It doesn't matter. Under this legislation, the statute of limitations 
that is crafted to deal with a situation where there are no available 
witnesses anymore somehow magically, by virtue of this bill, keeps 
getting set again and again going forward.
  The Supreme Court got this one right. The attempt on the part of 
those who want to curry favor with the trial lawyers have got this 
wrong. What will happen? Will more people who have had wage 
discrimination receive benefits? There is no guarantee that will 
happen. Will trial lawyers who are looking for causes of action receive 
fees? There is a pretty good guarantee that will happen. Will small and 
medium-size businesses that cannot afford legal fees be faced with 
enormous settlement charges? I am pretty sure that will happen. Will 
jobs be destroyed as a result of this, as they were in the asbestos 
case? I guarantee that will happen.
  Here we are, in the worst financial situation any of us can recall, 
talking about a circumstance that would destroy jobs among small 
businesses and that would discourage employers who are struggling to 
create new jobs in medium-size businesses. We are talking about putting 
out billions of dollars in the name of a stimulus while simultaneously 
discussing legislation that would destroy jobs and create chaos among 
those who are trying to survive in this financial circumstance.
  This is bad legislation on its face and bad legislation on its 
merits. But the timing of this proposal is atrocious. To be making 
these kinds of proposals in this kind of financial circumstance is 
incomprehensible to me, unless I assume that there are those who say 
the trial lawyers played an important part in the election; the trial 
lawyers need to be rewarded for the important part they played in the 
election; let's have a bill that will line the pockets of the trial 
lawyers and look the other way in terms of the economic consequences.
  I compared this to the asbestos litigation. I was in the Chamber when 
we dealt with what are called strike suits, where trial lawyers would 
file lawsuits on behalf of clients who were, in fact, not aggrieved but 
were simply posing in behalf of a class that the trial lawyer himself 
had put together.
  We passed that legislation. It was vetoed by President Clinton. It 
was the only Clinton veto that was overridden in this Chamber, as 
everyone was outraged at the behavior of the trial lawyers who brought 
these strike suits.
  There are those who said: Oh, you still don't get it, you who are 
picking on the trial lawyers. They do wonderful things. I agree that 
the ability to file a

[[Page 1360]]

grievance and have a trial lawyer carry it forward, even in a class-
action suit, is a protection the American people need. But these 
lawyers were going far beyond anything that was good for the American 
people.
  The position was summarized by Bill Lerach, known as the ``king of 
the trial bar,'' when he said: I have the ideal law practice. I have no 
clients. He is now in jail because his practices finally caught up with 
him, as it was finally demonstrated that the people on whose behalf he 
was suing were, in fact, not real clients. They were paid by him to 
pose as people who were aggrieved.
  We saw those kinds of abuses that came out of that situation. We 
finally saw his law firm destroyed, and this man, and others like him 
from the trial bar, went to jail for their activities.
  Let's not create another circumstance where there is a temptation to 
once again take advantage of people who have been legitimately hurt, 
but by manipulating the law in such a way as to maximize the return to 
the plaintiff's bar, we see the economy hurt.
  The Supreme Court, as I say, got this one right. We should stay with 
the Supreme Court decision and not try to give special advantage to a 
special group simply because of their activities in the last election.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Kansas.
  Mr. BROWNBACK. Mr. President, I ask unanimous consent to speak as in 
morning business for up to 10 minutes.
  The ACTING PRESIDENT pro tempore. We are in morning business, and 
currently there is 3 minutes 45 seconds left of Republican time.
  Without objection, the Senator may speak for up to 10 minutes.

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