[House Report 110-783]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-783

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



 
                         PAYCHECK FAIRNESS ACT

                                _______
                                

 July 28, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. George Miller of California, from the Committee on Education and 
                     Labor, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1338]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and Labor, to whom was referred 
the bill (H.R. 1338) to amend the Fair Labor Standards Act of 
1938 to provide more effective remedies to victims of 
discrimination in the payment of wages on the basis of sex, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Paycheck Fairness Act''.

SEC. 2. FINDINGS.

  Congress finds the following:
          (1) Women have entered the workforce in record numbers over 
        the past 50 years.
          (2) Despite the enactment of the Equal Pay Act in 1963, many 
        women continue to earn significantly lower pay than men for 
        equal work. These pay disparities exist in both the private and 
        governmental sectors. In many instances, the pay disparities 
        can only be due to continued intentional discrimination or the 
        lingering effects of past discrimination.
          (3) The existence of such pay disparities--
                  (A) depresses the wages of working families who rely 
                on the wages of all members of the family to make ends 
                meet;
                  (B) undermines women's retirement security, which is 
                often based on earnings while in the workforce;
                  (C) prevents the optimum utilization of available 
                labor resources;
                  (D) has been spread and perpetuated, through commerce 
                and the channels and instrumentalities of commerce, 
                among the workers of the several States;
                  (E) burdens commerce and the free flow of goods in 
                commerce;
                  (F) constitutes an unfair method of competition in 
                commerce;
                  (G) leads to labor disputes burdening and obstructing 
                commerce and the free flow of goods in commerce;
                  (H) interferes with the orderly and fair marketing of 
                goods in commerce; and
                  (I) in many instances, may deprive workers of equal 
                protection on the basis of sex in violation of the 5th 
                and 14th amendments.
          (4)(A) Artificial barriers to the elimination of 
        discrimination in the payment of wages on the basis of sex 
        continue to exist decades after the enactment of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 201 et seq.) and the Civil 
        Rights Act of 1964 (42 U.S.C. 2000a et seq.).
          (B) These barriers have resulted, in significant part, 
        because the Equal Pay Act has not worked as Congress originally 
        intended. Improvements and modifications to the law are 
        necessary to ensure that the Act provides effective protection 
        to those subject to pay discrimination on the basis of their 
        sex.
          (C) Elimination of such barriers would have positive effects, 
        including--
                  (i) providing a solution to problems in the economy 
                created by unfair pay disparities;
                  (ii) substantially reducing the number of working 
                women earning unfairly low wages, thereby reducing the 
                dependence on public assistance;
                  (iii) promoting stable families by enabling all 
                family members to earn a fair rate of pay;
                  (iv) remedying the effects of past discrimination on 
                the basis of sex and ensuring that in the future 
                workers are afforded equal protection on the basis of 
                sex; and
                  (v) ensuring equal protection pursuant to Congress' 
                power to enforce the 5th and 14th amendments.
          (5) The Department of Labor and the Equal Employment 
        Opportunity Commission have important and unique 
        responsibilities to help ensure that women receive equal pay 
        for equal work.
          (6) The Department of Labor is responsible for--
                  (A) collecting and making publicly available 
                information about women's pay;
                  (B) ensuring that companies receiving Federal 
                contracts comply with anti-discrimination affirmative 
                action requirements of Executive Order 11246 (relating 
                to equal employment opportunity);
                  (C) disseminating information about women's rights in 
                the workplace;
                  (D) helping women who have been victims of pay 
                discrimination obtain a remedy; and
                  (E) being proactive in investigating and prosecuting 
                equal pay violations, especially systemic violations, 
                and in enforcing all of its mandates.
          (7) The Equal Employment Opportunity Commission is the 
        primary enforcement agency for claims made under the Equal Pay 
        Act, and issues regulations and guidance on appropriate 
        interpretations of the law.
          (8) With a stronger commitment by the Department of Labor and 
        the Equal Employment Opportunity Commission to their 
        responsibilities, increased information about the provisions 
        added by the Equal Pay Act of 1963, wage data, and more 
        effective remedies, women will be better able to recognize and 
        enforce their rights.
          (9) Certain employers have already made great strides in 
        eradicating unfair pay disparities in the workplace and their 
        achievements should be recognized.

SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

  (a) Bona-Fide Factor Defense and Modification of Same Establishment 
Requirement.--Section 6(d)(1) of the Fair Labor Standards Act of 1938 
(29 U.S.C. 206(d)(1)) is amended--
          (1) by striking ``No employer having'' and inserting ``(A) No 
        employer having'';
          (2) by striking ``any other factor other than sex'' and 
        inserting ``a bona fide factor other than sex, such as 
        education, training, or experience''; and
          (3) by inserting at the end the following:
  ``(B) The bona fide factor defense described in subparagraph (A)(v) 
shall apply only if the employer demonstrates that such factor (i) is 
not based upon or derived from a sex-based differential in 
compensation; (ii) is job-related with respect to the position in 
question; and (iii) is consistent with business necessity. Such defense 
shall not apply where the employee demonstrates that an alternative 
employment practice exists that would serve the same business purpose 
without producing such differential and that the employer has refused 
to adopt such alternative practice.
  ``(C) For purposes of subparagraph (A), employees shall be deemed to 
work in the same establishment if the employees work for the same 
employer at workplaces located in the same county or similar political 
subdivision of a State. The preceding sentence shall not be construed 
as limiting broader applications of the term `establishment' consistent 
with rules prescribed or guidance issued by the Equal Opportunity 
Employment Commission.''.
  (b) Application of Provisions.--Section 6(d)(1) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(d)(1)) is further amended by 
adding at the end the following: ``The provisions of this subsection 
shall apply to applicants for employment if such applicants, upon 
employment by the employer, would be subject to any provisions of this 
section.''.
  (c) Nonretaliation Provision.--Section 15 of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 215(a)(3)) is amended--
          (1) in subsection (a)(3), by striking ``employee has filed'' 
        and all that follows and inserting ``employee--
                  ``(A) has made a charge or filed any complaint or 
                instituted or caused to be instituted any 
                investigation, proceeding, hearing, or action under or 
                related to this Act, including an investigation 
                conducted by the employer, or has testified or is 
                planning to testify or has assisted or participated in 
                any manner in any such investigation, proceeding, 
                hearing or action or in an investigation conducted by 
                the employer, or has served or is planning to serve on 
                an industry Committee; or
                  ``(B) has inquired about, discussed or disclosed the 
                wages of the employee or another employee.''; and
          (2) by adding at the end the following:
  ``(c) Subsection (a)(3)(B) shall not apply to instances in which an 
employee who has access to the wage information of other employees as a 
part of such employee's essential job functions discloses the wages of 
such other employees to individuals who do not otherwise have access to 
such information, unless such disclosure is in response to a complaint 
or charge or in furtherance of an investigation, proceeding, hearing, 
or action under section 6(d) or an investigation conducted by the 
employer. Nothing in this subsection shall be construed to limit the 
rights of an employee provided under any other provision of law.''.
  (d) Enhanced Penalties.--Section 16(b) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 216(b)) is amended--
          (1) by inserting after the first sentence the following: 
        ``Any employer who violates section 6(d) shall additionally be 
        liable for such compensatory damages or punitive damages as may 
        be appropriate, except that the United States shall not be 
        liable for punitive damages.'';
          (2) in the sentence beginning ``An action to'', by striking 
        ``either of the preceding sentences'' and inserting ``any of 
        the preceding sentences of this subsection'';
          (3) in the sentence beginning ``No employees shall'', by 
        striking ``No employees'' and inserting ``Except with respect 
        to class actions brought to enforce section 6(d), no 
        employee'';
          (4) by inserting after the sentence referred to in paragraph 
        (3), the following: ``Notwithstanding any other provision of 
        Federal law, any action brought to enforce section 6(d) may be 
        maintained as a class action as provided by the Federal Rules 
        of Civil Procedure.''; and
          (5) in the sentence beginning ``The court in''--
                  (A) by striking ``in such action'' and inserting ``in 
                any action brought to recover the liability prescribed 
                in any of the preceding sentences of this subsection''; 
                and
                  (B) by inserting before the period the following: ``, 
                including expert fees''.
  (e) Action by Secretary.--Section 16(c) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 216(c)) is amended--
          (1) in the first sentence--
                  (A) by inserting ``or, in the case of a violation of 
                section 6(d), additional compensatory or punitive 
                damages,'' before ``and the agreement''; and
                  (B) by inserting before the period the following: ``, 
                or such compensatory or punitive damages, as 
                appropriate'';
          (2) in the second sentence, by inserting before the period 
        the following: ``and, in the case of a violation of section 
        6(d), additional compensatory or punitive damages'';
          (3) in the third sentence, by striking ``the first sentence'' 
        and inserting ``the first or second sentence''; and
          (4) in the last sentence--
                  (A) by striking ``commenced in the case'' and 
                inserting ``commenced--
          ``(1) in the case'';
                  (B) by striking the period and inserting ``; or''; 
                and
                  (C) by adding at the end the following:
          ``(2) in the case of a class action brought to enforce 
        section 6(d), on the date on which the individual becomes a 
        party plaintiff to the class action.''.

SEC. 4. TRAINING.

  The Equal Employment Opportunity Commission and the Office of Federal 
Contract Compliance Programs, subject to the availability of funds 
appropriated under section 11, shall provide training to Commission 
employees and affected individuals and entities on matters involving 
discrimination in the payment of wages.

SEC. 5. NEGOTIATION SKILLS TRAINING FOR GIRLS AND WOMEN.

  (a) Program Authorized.--
          (1) In general.--The Secretary of Labor, after consultation 
        with the Secretary of Education, is authorized to establish and 
        carry out a grant program.
          (2) Grants.--In carrying out the program, the Secretary of 
        Labor may make grants on a competitive basis to eligible 
        entities, to carry out negotiation skills training programs for 
        girls and women.
          (3) Eligible entities.--To be eligible to receive a grant 
        under this subsection, an entity shall be a public agency, such 
        as a State, a local government in a metropolitan statistical 
        area (as defined by the Office of Management and Budget), a 
        State educational agency, or a local educational agency, a 
        private nonprofit organization, or a community-based 
        organization.
          (4) Application.--To be eligible to receive a grant under 
        this subsection, an entity shall submit an application to the 
        Secretary of Labor at such time, in such manner, and containing 
        such information as the Secretary of Labor may require.
          (5) Use of funds.--An entity that receives a grant under this 
        subsection shall use the funds made available through the grant 
        to carry out an effective negotiation skills training program 
        that empowers girls and women. The training provided through 
        the program shall help girls and women strengthen their 
        negotiation skills to allow the girls and women to obtain 
        higher salaries and rates of compensation that are equal to 
        those paid to similarly-situated male employees.
  (b) Incorporating Training Into Existing Programs.--The Secretary of 
Labor and the Secretary of Education shall issue regulations or policy 
guidance that provides for integrating the negotiation skills training, 
to the extent practicable, into programs authorized under--
          (1) in the case of the Secretary of Education, the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), 
        the Carl D. Perkins Vocational and Technical Education Act of 
        1998 (20 U.S.C. 2301 et seq.), the Higher Education Act of 1965 
        (20 U.S.C. 1001 et seq.), and other programs carried out by the 
        Department of Education that the Secretary of Education 
        determines to be appropriate; and
          (2) in the case of the Secretary of Labor, the Workforce 
        Investment Act of 1998 (29 U.S.C. 2801 et seq.), and other 
        programs carried out by the Department of Labor that the 
        Secretary of Labor determines to be appropriate.
  (c) Report.--Not later than 1 year after the date of enactment of 
this Act, and annually thereafter, the Secretary of Labor and the 
Secretary of Education shall prepare and submit to Congress a report 
describing the activities conducted under this section and evaluating 
the effectiveness of such activities in achieving the purposes of this 
Act.

SEC. 6. RESEARCH, EDUCATION, AND OUTREACH.

  The Secretary of Labor shall conduct studies and provide information 
to employers, labor organizations, and the general public concerning 
the means available to eliminate pay disparities between men and women, 
including--
          (1) conducting and promoting research to develop the means to 
        correct expeditiously the conditions leading to the pay 
        disparities;
          (2) publishing and otherwise making available to employers, 
        labor organizations, professional associations, educational 
        institutions, the media, and the general public the findings 
        resulting from studies and other materials, relating to 
        eliminating the pay disparities;
          (3) sponsoring and assisting State and community 
        informational and educational programs;
          (4) providing information to employers, labor organizations, 
        professional associations, and other interested persons on the 
        means of eliminating the pay disparities;
          (5) recognizing and promoting the achievements of employers, 
        labor organizations, and professional associations that have 
        worked to eliminate the pay disparities; and
          (6) convening a national summit to discuss, and consider 
        approaches for rectifying, the pay disparities.

SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN THE 
                    WORKPLACE.

  (a) In General.--There is established the Secretary of Labor's 
National Award for Pay Equity in the Workplace, which shall be awarded, 
as appropriate, to encourage proactive efforts to comply with this Act.
  (b) Criteria for Qualification.--The Secretary of Labor shall set 
criteria for receipt of the award, including a requirement that an 
employer has made substantial effort to eliminate pay disparities 
between men and women, and deserves special recognition as a 
consequence of such effort. The secretary shall establish procedures 
for the application and presentation of the award.
  (c) Business.--In this section, the term ``employer'' includes--
          (1)(A) a corporation, including a nonprofit corporation;
          (B) a partnership;
          (C) a professional association;
          (D) a labor organization; and
          (E) a business entity similar to an entity described in any 
        of subparagraphs (A) through (D);
          (2) an entity carrying out an education referral program, a 
        training program, such as an apprenticeship or management 
        training program, or a similar program; and
          (3) an entity carrying out a joint program, formed by a 
        combination of any entities described in paragraph (1) or (2).

SEC. 8. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT 
                    OPPORTUNITY COMMISSION.

  Section 709 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-8) is 
amended by adding at the end the following:
  ``(f)(1) Not later than 18 months after the date of enactment of this 
subsection, the Commission shall--
          ``(A) complete a survey of the data that is currently 
        available to the Federal Government relating to employee pay 
        information for use in the enforcement of Federal laws 
        prohibiting pay discrimination and, in consultation with other 
        relevant Federal agencies, identify additional data collections 
        that will enhance the enforcement of such laws; and
          ``(B) based on the results of the survey and consultations 
        under subparagraph (A), issue regulations to provide for the 
        collection of pay information data from employers as described 
        by the sex, race, and national origin of employees.
  ``(2) In implementing paragraph (1), the Commission shall have as its 
primary consideration the most effective and efficient means for 
enhancing the enforcement of Federal laws prohibiting pay 
discrimination. For this purpose, the Commission shall consider factors 
including the imposition of burdens on employers, the frequency of 
required reports (including which employers should be required to 
prepare reports), appropriate protections for maintaining data 
confidentiality, and the most effective format for the data collection 
reports.''.

SEC. 9. REINSTATEMENT OF PAY EQUITY PROGRAMS AND PAY EQUITY DATA 
                    COLLECTION.

  (a) Bureau of Labor Statistics Data Collection.--The Commissioner of 
Labor Statistics shall continue to collect data on women workers in the 
Current Employment Statistics survey.
  (b) Office of Federal Contract Compliance Programs Initiatives.--The 
Director of the Office of Federal Contract Compliance Programs shall 
ensure that employees of the Office--
          (1)(A) shall use the full range of investigatory tools at the 
        Office's disposal, including pay grade methodology;
          (B) in considering evidence of possible compensation 
        discrimination--
                  (i) shall not limit its consideration to a small 
                number of types of evidence; and
                  (ii) shall not limit its evaluation of the evidence 
                to a small number of methods of evaluating the 
                evidence; and
          (C) shall not require a multiple regression analysis or 
        anecdotal evidence for a compensation discrimination case;
          (2) for purposes of its investigative, compliance, and 
        enforcement activities, shall define ``similarly situated 
        employees'' in a way that is consistent with and not more 
        stringent than the definition provided in item 1 of subsection 
        A of section 10-III of the Equal Employment Opportunity 
        Commission Compliance Manual (2000), and shall consider only 
        factors that the Office's investigation reveals were used in 
        making compensation decisions; and
          (3) shall reinstate the Equal Opportunity Survey, as required 
        by section 60-2.18 of title 41, Code of Federal Regulations, 
        designating not less than half of all nonconstruction 
        contractor establishments each year to prepare and file such 
        survey, and shall review and utilize the responses to such 
        survey to identify contractor establishments for further 
        evaluation and for other enforcement purposes as appropriate.
  (c) Department of Labor Distribution of Wage Discrimination 
Information.--The Secretary of Labor shall make readily available (in 
print, on the Department of Labor website, and through any other forum 
that the Department may use to distribute compensation discrimination 
information), accurate information on compensation discrimination, 
including statistics, explanations of employee rights, historical 
analyses of such discrimination, instructions for employers on 
compliance, and any other information that will assist the public in 
understanding and addressing such discrimination.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $15,000,000 to carry out this 
Act.

                                Purpose

    When President Kennedy signed the Equal Pay Act (EPA) into 
law in 1963 he observed that the statute ``adds to our laws 
another structure basic to democracy'' and ``affirms our 
determination that when women enter the labor force they will 
find equality in their pay envelope.'' \1\ Forty-five years 
later, women have made tremendous progress in the workplace.\2\ 
They comprise almost half of this country's workforce and more 
than 6 million businesses are owned by women.\3\ Despite these 
gains, women continue to be held back by wage discrimination. 
As a result of loopholes in the law and weak sanctions for 
violations, the EPA is ineffective in combating unequal pay. 
Women working full-time year-round earn 77 cents for every 
dollar earned by a man.\4\ The Paycheck Fairness Act, H.R. 1338 
modernizes the EPA and brings the country one step closer to 
ensuring that women earn equal pay for equal work.
---------------------------------------------------------------------------
    \1\ U.S. Equal Employment Opportunity Commission, ``The Equal Pay 
Act Turns 40,'' available at: http://www.eeoc.gov/epa/anniversary/epa-
40.html.
    \2\ 29 USC Sec. 206(d)
    \3\ U.S. Small Business Association, Women in Business: A 
Demographic Review of Women's Business Ownership (Aug. 2006), available 
at: http://www.sba.gov/ADVO/research/rs280tot.pdf.
    \4\ Jody Feder & Linda Levine, CRS Report, Pay Equity Legislation 
in the 110th Congress, at 1 (May 2, 2008)
---------------------------------------------------------------------------
    Pay disparity's long-term impact on women's lifetime 
earnings is substantial and can cost a woman anywhere from 
$400,000 to $2 million over her lifetime.\5\ H.R. 1338 will 
strengthen the EPA to make it a more effective means to combat 
wage discrimination. Specifically the bill: (1) expands the 
establishment requirement so female employees to look beyond 
their physical workplace to find a male comparator; (2) extends 
anti-retaliation protections so employees are free to discuss 
or disclose salary information; (3) clarifies the affirmative 
defense of `any factor other sex'; (4) establishes a grant 
program to fund training programs for women on employer/
employee negotiations; (5) directs the Secretary of Labor to 
conduct studies and provide information to employers, labor 
organizations and the general public on ways to eliminate pay 
disparities; (6) permits the Secretary of Labor to offer 
technical assistance to employers when carrying out wage 
evaluations; (7) makes it easier for women to join class action 
lawsuits ; (8) mandates that the Equal Employment Opportunity 
Commission (EEOC) survey available pay data and issue 
regulations to provide for the collection of pay data from 
employers, which identifies workers by sex, race and national 
origin; and (9) codifies the use of the Equal Opportunity 
Survey (EO) by Office of Federal Contract Compliance (OFCCP) 
for non-construction workers.
---------------------------------------------------------------------------
    \5\ Institute for Women's Policy Research, Memo to John Roberts: 
The Gender Gap is Real (2005).
---------------------------------------------------------------------------

 Committee Action Including Legislative History and Votes in Committee


                             105TH CONGRESS

    Senator Thomas Daschle (D-SD) introduced S. 71, the 
Paycheck Fairness Act, on January 21, 1997. The bill had 23 
cosponsors and was referred to the Committee on Labor and Human 
Resources. Congresswoman Rosa DeLauro (D-CT) introduced H.R. 
2023, the Paycheck Fairness Act, on June 24, 1997. The bill had 
95 cosponsors and was referred to the Committee on Education 
and the Workforce. H.R. 2023 was then referred to the 
Subcommittees on Workforce Protections and Employer-Employee 
Relations. No further action was taken on either bill.

                             106TH CONGRESS

    Senator Thomas Daschle (D-SD) introduced S. 74, the 
Paycheck Fairness Act, on January 19, 1999. The bill had 31 
cosponsors and was referred to the Committee on Health, 
Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-
CT) introduced H.R. 541, the Paycheck Fairness Act, on February 
3, 1999. The bill was referred to the Committee on Education 
and the Workforce and the Subcommittees on Workforce 
Protections and Employer-Employee Relations.
    The Senate Committee on Health, Education, Labor, and 
Pensions held a hearing on gender-based wage discrimination on 
June 8, 2000. The hearing, ``Examining the Bureau of Labor 
Statistics Report which Provides a Full Picture of the Gender-
Based Wage Gap, the reasons for these Gaps and the Impact this 
Discrimination has on Women and Families, and the Effectiveness 
of Current Laws and Proposed Legislative Solutions, and S. 74, 
to Amend the Fair Labor Standards Act of 1938 to Provide More 
Effective Remedies to Victims of Discrimination in the Payment 
of Wages on the Basis of Sex,'' featured testimony from Dr. 
Katherine Abraham, Commissioner, Bureau of Labor Statistics; 
Dr. June O'Neill, professor of economics and finance, Baruch 
College, Zicklin School of Business; Dr. Heidi Hartmann, 
Director, Institute for Women's Policy Research; Anita 
Hattiangadi, economist, Employment Policy Foundation; Barbara 
Berish Brown, partner, Paul, Hastings, Janofsky & Walker, LLP; 
Judith Applebaum, vice president and director of employment 
opportunities, National Women's Law Center; and Gail Shaffer, 
chief executive officer, Business and Professional Women/USA. 
Testimony was submitted for the record by Irasema Garza, 
Director, Women's Bureau, U.S. Department of Labor.

                             107TH CONGRESS

    Senator Thomas Daschle (D-SD) introduced S. 77, the 
Paycheck Fairness Act, on January 22, 2001. The bill had 32 
cosponsors and was referred to the Committee on Health, 
Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-
CT) introduced H.R. 781, the Paycheck Fairness Act, on February 
22, 2001. The bill had 196 cosponsors and was referred to the 
Committee on Education and the Workforce. Once in committee, it 
was referred to the Subcommittees on Workforce Protections and 
Employer-Employee Relations. No further action was taken on 
either bill.

                             108TH CONGRESS

    Senator Thomas Daschle (D-SD) introduced S. 76, the 
Paycheck Fairness Act, on January 7, 2003. The bill had 20 
cosponsors and was referred to the Committee on Health, 
Education, Labor, and Pensions. Congresswoman Rosa DeLauro (D-
CT) introduced H.R. 1688, the Paycheck Fairness Act, on April 
9, 2003. The bill had 116 cosponsors and was referred to the 
Committee on Education and the Workforce. The committee 
referred it to the Subcommittees on Workforce Protections and 
Employer-Employee Relations. No further action was taken on any 
bill.

                             109TH CONGRESS

    On April 19, 2005, Congresswoman Rosa DeLauro (D-CT) 
introduced the Paycheck Fairness Act. The bill had 111 
cosponsors and was referred to the Committee on Education and 
the Workforce. The Committee referred it to the Subcommittees 
on Workforce Protections and Employer-Employee Relations. The 
same day that Congresswoman DeLauro introduced her bill, 
Senator Hillary Rodham Clinton (D-NY) introduced S. 841, the 
Paycheck Fairness Act. The bill had 18 cosponsors and was 
referred to the Committee on Health, Education, Labor, and 
Pensions. No further action was taken on either bill.

                             110TH CONGRESS

    On March 6, 2007, Congresswoman Rosa DeLauro (D-CT) 
introduced H.R. 1338, the Paycheck Fairness Act. The bill has 
230 cosponsors and was referred to the Committee on Education 
and Labor, where it was referred to the Subcommittee on 
Workforce Protections. That same day, Senator Hillary Rodham 
Clinton (D-NY) introduced S. 766, the Paycheck Fairness Act. 
The bill has 22 cosponsors and was referred to the Committee on 
Health, Education, Labor, and Pensions.
    On Thursday, April 12, 2007, the Senate Committee on 
Health, Education, Labor, and Pensions held a hearing titled 
``Closing the Gap: Equal Pay for Women Workers.'' The hearing 
examined enforcement of the Equal Pay Act of 1963, the Fair Pay 
Act and the Paycheck Protection Act. At the hearing the 
following people presented testimony: Evelyn Murphy, President, 
WAGE Project, Inc. and Resident Scholar of the Women's Research 
Center at Brandeis University; Jocelyn Samuels, Vice President 
for Education and Employment at the National Women's Law 
Center; Dr. Philip Cohen, Associate Professor and Director of 
Graduate Studies for the Department of Sociology at the 
University of North Carolina; and Barbara Brown, Attorney at 
Paul Hastings.
    On Tuesday, April 24, 2007, the House Committee on 
Education and Labor conducted a hearing on gender based wage 
discrimination. At this hearing, ``Strengthening the Middle 
Class: Ensuring Equal Pay for Women,'' the Committee heard 
testimony describing the scope and causes of gender-based wage 
disparity.\6\ Witnesses included: Congresswoman Rosa DeLauro 
(D-CT); Congresswoman Eleanor Holmes Norton (D-D.C. Del.); 
Catherine Hill, Research Director for the American Association 
of University Women; Heather Boushey, Senior Economist at the 
Center for Economic and Policy Research; Dedra Farmer, 
Plaintiff in the Wal-Mart sex-discrimination class action 
lawsuit; and Diana Furchtgott-Roth, Director of the Center for 
Employment Policy at the Hudson Institute.
---------------------------------------------------------------------------
    \6\ U.S. Census Bureau, U.S. Bureau of Labor Statistics, Annual 
Demographic Survey (Aug. 2006).
---------------------------------------------------------------------------
    On Wednesday, July 11, 2007, the House Labor Subcommittee 
on Workforce Protections held a legislative hearing on H.R. 
1338, ``The Paycheck Fairness Act.'' The hearing focused on 
H.R. 1338 and the wage disparity that exists from the moment 
men and women enter the workforce--a disparity that only grows 
over time.\7\ Witnesses included: Evelyn Murphy, President, 
WAGE Project, Inc. and Resident Scholar of the Women's Research 
Center at Brandeis University; Joseph Sellers, Partner with the 
law firm of Cohen, Milstein, Hausfeld & Toll, PLLC; Marcia 
Greenberger, Co-President of the National Women's Law Center; 
and Camille A. Olson, Partner at Seyfarth Shaw, LLP.
---------------------------------------------------------------------------
    \7\ The Paycheck Fairness Act (H.R. 1338), 110th Congress, 1st 
Sess. (2007) (opening statement of Congresswoman Lynn Woolsey [D-CA])
---------------------------------------------------------------------------

Committee on Education and Labor Full Committee mark-up of the Paycheck 
        Fairness Act

    On Thursday, July 24, 2008, the Committee on Education and 
Labor met for a full committee markup of H.R. 1338. The 
Committee adopted by voice vote an amendment in the nature of a 
substitute offered by Chairman Miller and reported the bill 
favorably as amended by a vote of 26-17 to the House of 
Representatives.
    The Miller amendment incorporates the provisions of H.R. 
1338 with the following modifications:
     Adds language to the bill's findings section about 
the EEOC's role in combating gender-based wage discrimination.
     Narrows the `any factor other than sex' standard 
to provide that the bona fide factor defense shall only apply 
if the employer demonstrates that the such factor is not 
derived from or based upon a sex-based differential in 
compensation; is job-related with respect to the position in 
question; and is consistent with business necessity.
     Changes the establishment requirement from a 
nationwide standard to a countywide standard and further 
provides that consistent with EEOC rules and guidance, 
establishment could be broader than county when, for example, 
there is a central administrative unit making hiring and pay 
decisions for employees in different locations.
     Retains the anti-retaliation protections for 
employees who discuss or disclose wage information but limits 
when those protections will extend to employees who have access 
to payroll information as part of an essential function of 
their job. These employees, such as payroll and human resources 
personnel, are not protected if they disclose that payroll 
information to employees who do not otherwise have access to 
that information. However, their disclosure of wages will be 
protected if they: (1) disclose wage information with another 
employee who also has access to wage information such as their 
supervisor; (2) disclose their own wages; or (3) disclose wage 
information in response to or in furtherance of an internal 
employer or governmental investigation.
     Deletes what was originally Section 7 of the bill, 
which directed the Secretary of Labor to develop voluntary 
guidelines for employers to evaluate job categories based on 
characteristics such as skill, education and responsibility.
    Additionally, the following amendments were offered but not 
adopted:
     Representative Cathy McMorris Rodgers (R-WA) 
offered an amendment to the amendment in the nature of a 
substitute which would have substituted the text of H.R. 6025 
for the H.R. 1338. The amendment was ruled to be not germane 
because it did not deal with the subject matter of the 
underlying bill, which was to address pay discrimination 
against women.
     Representative Tom Price (R-GA) offered an 
amendment to the amendment in the nature of a substitute which 
would have required the Secretary of Labor to conduct a study 
on how the bill would affect recruitment and hiring by 
employers. The Price amendment would have delayed 
implementation of the underlying bill for 90 days while the 
study was being conducted. The amendment failed by a vote of 
17-26.
     Representative Price (R-GA) offered a second 
amendment to the amendment in the nature of a substitute which 
would have limited the amount of attorneys' fees that could be 
awarded in a suit brought under the Equal Pay Act. However, 
attorneys' fees are already limited to only those which are 
reasonable, and the amendment raised separation of powers 
issues. The amendment was defeated by a vote of 17-25.
     Ranking Member Howard McKeon (R-CA) offered an 
amendment to the amendment in the nature of a substitute which 
would have required the Bureau of Labor Statistics to report to 
Congress on the price of gasoline and its effect on women 
workers within 90 days of enactment of the bill. Chairman 
Miller ruled that Ranking Member McKeon's amendment was not 
germane; Mr. McKeon appealed the Chairman's ruling, and the 
McKeon appeal was defeated by a vote of 16-25.

                                Summary

    The Paycheck Fairness Act of 2007 updates and strengthens 
the EPA. Due to weaknesses in the law, the landmark 1963 
legislation has not lived up to its original purpose. Women 
working full-time earned just 58.9 cents to the dollar that men 
earned when the EPA was passed in 1963. The wage gap has 
narrowed slightly since then--but persists as a significant 
problem for American women. Today women on average earn just 77 
cents to the dollar that men earn.\8\ H.R. 1338 is a critical 
step forward in the fight to eliminate pay disparity which 
``depresses wages and living standards for employees necessary 
for their health and efficiency; prevents maximum utilization 
of the available labor resources; tends to cause labor 
disputes, thereby burdening, affecting, and obstructing 
commerce; and constitutes an unfair method of competition.'' 
\9\ Congress has a responsibility to amend the EPA and 
modernize the law so that it can better achieve its intended 
purpose.
---------------------------------------------------------------------------
    \8\ U.S. Bureau of Labor Statistics data on full-time workers, See, 
Feder & Levine, supra note 4 at 3.
    \9\ P.L. 88-38.
---------------------------------------------------------------------------
    H.R. 1338 builds upon the EPA and closes numerous loopholes 
that have enabled unscrupulous employers to evade liability 
under the law. The bill strengthens the penalties available 
under the EPA to include compensatory and punitive damages. The 
bill prohibits retaliation against workers who discuss or 
disclose salary information \10\; it expands the establishment 
requirement so that an employee can find a comparator at any 
workplace in the same county; it clarifies that one of the 
employer affirmative defenses against a disparity in pay must 
be related to the job in question and consistent with business 
necessity; and it reforms the class-action standard so that 
women with claims of unequal pay will automatically be part of 
a class action lawsuit unless they chose to ``opt-out'' of the 
case.
---------------------------------------------------------------------------
    \10\ Section 3(c) 2 provides that employees who have access to wage 
information of other employees as part of an essential job junction are 
not protected if they disclose the wages to workers who do not 
otherwise have access to such information. These employees' wage 
disclosures are protected if they disclose those wages to an employee 
who also has access to that information, disclose their own wages, or 
disclose wages in the or disclose wages in response to or in 
furtherance of a government or internal employer investigation.
---------------------------------------------------------------------------
    The bill also strengthens the role government will play in 
combating wage discrimination. It accomplishes this by 
increasing the role of the EEOC and the Department of Labor 
(DOL). H.R. 1338 authorizes additional training for EEOC staff 
on recognizing and remedying wage discrimination, requires DOL 
to collect data and codifies the use of the EO Survey by OFCCP 
for non-construction contractors. Finally, H.R. 1338 authorizes 
DOL to award competitive grants to be used for salary 
negotiation education and training programs for women and 
girls.

                     Statement And Committee Views

    The Committee on Education and Labor is committed to 
protecting the rights of workers in the workplace. Forty-five 
years after the passage of the EPA, women continue to earn less 
than men for the same work. The long-term impact of pay 
disparity on women's earnings is substantial and can cost a 
woman anywhere from $400,000 to $2 million over her 
lifetime.\11\ Women have been unable to utilize the protections 
afforded under the EPA because loopholes and ineffective 
sanctions have all but paralyzed the law. H.R. 1338 strengthens 
the EPA to more effectively combat wage discrimination. The 
bill builds upon Congress' efforts forty-five years ago when 
the EPA was enacted and is another step forward to close the 
wage gap between men and women.
---------------------------------------------------------------------------
    \11\ Institute for Women's Policy Research, Memo to John Roberts: 
The Gender Gap is Real (2005).
---------------------------------------------------------------------------

                    A. HISTORY OF THE EQUAL PAY ACT

    In 1963, Congress first \12\ addressed the issue of unequal 
pay when it passed the EPA as an amendment to the Fair Labor 
Standards Act (FLSA).\13\ The purpose of the legislation was 
broadly remedial to eliminate once and for all gender-based 
discriminatory pay practices:

    \12\ There was support for ``equal pay'' dating back to World War I 
when the War Board enforced regulations requiring pay equity. See: 
Elizabeth Wyman, The Current Framework of Sex/Gender Discrimination 
Law: The Unenforced Promise of Equal Pay Acts: A National Problem and 
Possible Solution from Maine, 55 Me. L. Rev. 23 (2004). In addition, 
Congress had considered ``equal pay'' bills as early as 1955, and the 
Kennedy and the two previous administrations supported equal pay 
legislation as well. House Committee on Education and Labor, House 
Report No. 309 (May 20, 1963) as found in House Committee on Education 
and Labor, Legislative History of the Equal Pay Act of 1963, U.S. 
Government Printing Office (December 1963), at 36, 59, 66, 67.
    \13\ 29 U.S.C. Sec. 206(d).

          The objective of the legislation is to insure that 
        those who perform tasks which are determined to be 
        equal shall be paid equal wages. The wage structure of 
        all too many segments of American industry has been 
        based on an ancient but out moded belief that a man, 
        because of his role in society, should be paid more 
        than a woman even though his duties are the same. This 
        bill would provide, in effect, that such an outmoded 
        belief can no longer be implemented and that equal work 
        will be rewarded with equal wages.\14\
---------------------------------------------------------------------------
    \14\ Senate Committee on Labor and Public Welfare, Senate Report 
No. 176 (May 13, 1963) as found in, Legislative History of the Equal 
Pay Act of 1963, supra note 12 at 42.

    As with minimum wages, overtime and the protection of child 
laborers, the EPA enshrined ``equal work for equal pay 
regardless of sex'' as another fair labor standard in the 
FLSA.\15\ Other versions of equal pay legislation had been 
introduced in 1963 and before, but because DOL had already 
developed ``a now familiar system of regulations and procedures 
for investigation, administration and enforcement,'' Congress 
decided that a simple expansion of the FLSA to include pay 
equity was the ``most efficient and least difficult course of 
action.'' \16\ Upon introduction of the bill, Senator McNamara 
stated:
---------------------------------------------------------------------------
    \15\ Introduction of S. 409, Senator McNamara, House Committee on 
Education and Labor as found in, Legislative History of the Equal Pay 
Act of 1963, supra note 12 at 1, 10-11.

    \16\ Id.
---------------------------------------------------------------------------
          Such a utilization serves two purposes: First, it 
        eliminates the need for a new bureaucratic structure to 
        enforce equal pay legislation. And second, compliance 
        should be made easier because of both industry and 
        labor's long-established familiarity with existing fair 
        labor standards provisions.\17\
---------------------------------------------------------------------------
    \17\ Id. See also: House Report 309, as found in Legislative 
History of the Equal Pay Act of 1963, supra note 12 at 43.

    Some legislators felt that the bill legislation did not go 
far enough but voted for it because it was ``a good start * * * 
in eliminating the unfairness of unequal pay.'' \18\
---------------------------------------------------------------------------
    \18\ Id,at 66.
---------------------------------------------------------------------------
    In passing the EPA, Congress intended that ``men and women 
doing the same job under the same working conditions * * * 
[would] receive equal pay.'' \19\ Representative Frelinghuysen 
elaborated on the standard:
---------------------------------------------------------------------------
    \19\ Comments of Representative Frelinghuysen as found in, 
Legislative History of the Equal Pay Act, supra note 12 at 43.

          * * * the jobs in dispute must be the same in work 
        content, effort, skill and responsibility requirements, 
        and in working conditions * * * it is not intended to 
        compare unrelated jobs, or jobs that have been 
        historically and normally considered by the industry to 
        be different.\20\
---------------------------------------------------------------------------
     \20\Id. at 11.

    At the same time, ``equal pay for equal work'' did not mean 
that the jobs in question had to be identical. They were to be 
similar in terms of ``work content, effort, skill and 
responsibility requirements and in working conditions.'' \21\
---------------------------------------------------------------------------
    \21\ Representative Frelinghuysen, ``jobs in dispute must be same 
in work content, effort, skill and responsibility requirements and in 
working conditions.'' Id. at 83; Representative Powell, citing the 
International Labor Organization Constitution which provides ``men and 
women should receive equal remuneration for work of equal value.'' Id. 
at 11; Representative Dwyer, referring to the ``same kind of work'' Id, 
at 61; Representative Donohue referring to ``similar jobs.'' Id. at 68; 
Senator McNamara, ``it is not the intent of the Senate that jobs must 
be identical.'' Id. at 91. See also, 29 C.F.R. Sec. 1629.13 defining 
equal work as work that is ``substantially equal.''
---------------------------------------------------------------------------
    In addition, the floor debate made clear that under the 
EPA, discrimination against one individual would be actionable 
and a showing of a pattern and practice of discrimination would 
not be required. Senator McNamara stated:

          It is inconceivable that this Congress should write 
        legislation that would permit selective discrimination 
        which, without doubt, would occur mostly likely against 
        those individuals who are least able to protest. It is 
        certainly the intent of the Senate that an employer 
        will have violated this act if he discriminates against 
        one employee, just as he will violate it if he 
        discriminates against many.\22\
---------------------------------------------------------------------------
    \22\ Id. at 16, 81.

    While the EPA was aimed at eradicating wage differentials 
based on sex, it was not intended to limit other kinds of pay 
inequity not based on gender. As such, even though the employee 
might show that the employer's wages were unequal as compared 
to a man, the EPA does provide employers with affirmative 
defenses to justify the differences in pay if such differences 
are based on: (1) seniority systems; (2) merit systems; (3) 
systems that measure earnings by quality or quantity of 
production; or (4) ``any factor other than sex.'' \23\
---------------------------------------------------------------------------
    \23\ 29 U.S.C. Sec. 206(d)(1).
---------------------------------------------------------------------------
    While the last affirmative defense was written broadly, 
Congress intended that any proffered reason for a pay 
differential be a bona fide one. In addition, the drafters made 
sure that the employer was shouldered with the burden of 
proving the legitimacy of its practice,\24\ making clear that 
these affirmative defenses were never intended to ``shield 
employers who have a plan or system in place that is devised to 
evade the law.'' \25\
---------------------------------------------------------------------------
    \24\ Legislative History of the Equal Pay Act, supra note 12 at 16.
    \25\ Id.
---------------------------------------------------------------------------

                  B. EPA, TITLE VII, AND SECTION 1981

    On July 2, 1964, President Lyndon Johnson signed the Civil 
Rights Act of 1964 \26\ into law. The Act was historic 
legislation prohibiting discrimination in employment, among 
other things, on the basis of race, color, religion, national 
origin and sex.\27\ While the EPA and Title VII--passed only 
one year apart--both prohibit sex discrimination in pay and 
provide overlapping coverage, there are distinct differences 
between the application of Title VII and the EPA in sex-based 
wage discrimination cases.\28\
---------------------------------------------------------------------------
    \26\ P.L. 88-352.
    \27\ 42 U.S.C. Sec. 2000e et. seq.
    \28\ Feder & Levine, supra note 4 at 8. In terms of coverage, under 
EPA all employees are covered so long as the employer has at least 
$500,000 in annual revenue. 29 U.S.C. Sec. 203(s)(1)(A)(ii). Under 
Title VII, employees who work for an employer with fewer than 15 
employees will fall outside of Title VII's requirements. 42 U.S.C. 
Sec. 2000e(b).
---------------------------------------------------------------------------
    Statute of Limitations/Exhaustion of Administrative 
Remedies: Under the EPA, an aggrieved person has 2 years (or 3 
years in a case of a willful violation) from the date of any 
instance of unequal pay to file a claim in court.\29\ Under 
Title VII, a worker must file her claim within 180 days of a 
violation.\30\ Specifically, following the Supreme Court's 
decision in Ledbetter v. Goodyear Tire & Rubber Company, 
Inc.,\31\ in cases of pay discrimination, she must file her 
charge within 180 days of the employer's decision to pay her a 
salary based on sex (rather than, as long-standing law had 
held, 180 days after each discriminatory paycheck).
---------------------------------------------------------------------------
    \29\ 29 U.S.C. Sec. 255.
    \30\ 42 U.S.C. Sec. 2000e-5(e)(1). This deadline is extended to 300 
days if the charge is also covered by a state or local 
antidiscrimination law. Id.
    \31\ 127 S. Ct. 2162 (2007).
---------------------------------------------------------------------------
    Burden of Proof: When alleging discrimination under the 
EPA, an employee is required to show that a man and a woman 
working in the same establishment and doing substantially the 
same job are receiving unequal pay. However, she does not bear 
the burden of proving that the employer intentionally committed 
wage-based gender discrimination. Once the employee has made a 
showing of unequal pay, the burden of proof shifts to the 
employer to show that the pay inequity is not due to gender 
discrimination.\32\
---------------------------------------------------------------------------
    \32\ ``Overview of the Equal Pay Act,'' AAUW.Www.aauw.org/advocay/
laf/lafnetwork/library/payequity_epa.efm.
---------------------------------------------------------------------------
    By contrast, under Title VII a plaintiff must typically 
prove that the employer intentionally discriminated against 
her, and she retains the burden of proving discrimination 
throughout the case. However, unlike an EPA complainant, a 
Title VII plaintiff is not required to demonstrate that she 
performed substantially the same (or equal) work as higher paid 
males, so long as she has other evidence of discrimination such 
as proof that a man worked fewer hours or evidence that she 
would have been paid more had she been a man.\33\
---------------------------------------------------------------------------
    \33\ Id.
---------------------------------------------------------------------------
    Damages: A plaintiff who successfully proves wage 
discrimination under the EPA can only recover backpay, and 
unless the employer can show that it acted in good faith, an 
equal amount in liquidated damages.\34\ Conversely, under Title 
VII a plaintiff is entitled to backpay, compensatory 
damages,\35\ as well as punitive damages \36\ for 
``intentional'' wage discrimination.\37\ Title VII damages 
compensatory and punitive damages do have monetary ``caps,'' 
which vary depending on the size of the employer.\38\ However, 
in no event may these damages exceed $300,000.\39\
---------------------------------------------------------------------------
    \34\ 29 U.S.C. Sec. 216.
    \35\ Feder & Levine, supra note 4 at 6, which state that 
compensatory damages include such items as pain and suffering, medical 
expenses and emotional distress.
    \36\ Id. Punitive damages may be recovered when the employer acted 
with malice or reckless indifference.
    \37\ Id.
    \38\ Id.
    \39\ Id.
---------------------------------------------------------------------------
    Section 1981: While it does not cover sex-based 
discrimination, Section 1981 is worth comparing as well. Passed 
as part of the Civil Rights Act of 1866, Section 1981 forbids 
discrimination on the basis of race or national origin in the 
making and enforcement of contracts.\40\ Such contracts may be 
between employee and employer or between businesses. Plaintiffs 
in Section 1981 cases may recover compensatory and punitive 
damages. But, unlike Title VII, those damages are not limited. 
Under current law, an employee receiving unequal pay for equal 
work on the basis of race may recover punitive damages without 
an arbitrary statutory limit, for example, but one receiving 
unequal pay on the basis of sex cannot.
---------------------------------------------------------------------------
    \40\ 42 U.S.C. 1981(a).
---------------------------------------------------------------------------

                C. WOMEN CONTINUE TO EARN LESS THAN MEN

    While progress has been made, ``equal pay for women is not 
yet a reality in our country.'' \41\ As previously noted a 
woman working full-time, year-round earns 77 cents for every 
dollar a male earns.\42\ Pay disparity can be even worse for 
minority women. Compared to men, African American women earn 66 
cents to the dollar; Latinas earn 55 cents to the dollar; and 
Asian-American women earn slightly more than 80 cents to the 
dollar.\43\ Each year, pay inequity causes American families to 
lose $200 billion in income, resulting in an annual loss to 
each working woman's family of more than $4,000.\44\
---------------------------------------------------------------------------
    \41\ Closing the Gap: Pay Equity for Women Workers, Hearing Before 
the U.S. Senate Health, Education, Labor and Pensions Committee 
Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written 
testimony of Jocelyn Samuels, Vice President for Education and 
Employment, National Women's Law Center, at 1) [Hereinafter Samuels' 
Testimony].
    \42\ Supra note 6.
    \43\ Perspectives on Wage Inequality and Workplace Solutions, 
Hearing Before the Education and Labor Committee, 110th Cong., 1st 
Sess. (2007) (written testimony of Business and Professional Women/USA 
and Business and Professional Women's Foundation at 4) (Hereinafter 
Business and Professional Women's Testimony).
    \44\ Equal Pay for Working Families, National and State Data on the 
Pay Gap and Its Costs, A Joint Research Project of the AFL-CIO and the 
Institute for Women's Policy Research at 1 (1999).
---------------------------------------------------------------------------
    In April 2007, the American Association of University Women 
(AAUW) released a study finding that not only do men earn more 
than women at the outset of their careers, but the wage gap 
grows wider as women age.\45\ Women one year out of college 
make 80 percent of what men earn, and 10 years later, make only 
69 percent.\46\ As compared to men with only a high school 
diploma, women with graduate degrees earn only slightly more 
($41,995 compared to $40,822).\47\
---------------------------------------------------------------------------
    \45\ Judy Goldberg Day and Catherine Hill, Behind the Pay Gap, 
Association of American University Women (AAUW) (April 23, 2007).
    \46\ Id.
    \47\ Business and Professional Women's Testimony at 3.
---------------------------------------------------------------------------
    Many argue that the wage gap is the result of `women's 
choices,' including the choice of college major and 
occupation.\48\ However the AAUW study found that different 
choices do not fully explain the pay gap:
---------------------------------------------------------------------------
    \48\ Strengthening the Middle Class: Ensuring Equal Pay for Equal 
Work, Hearing Before the Education and Labor Committee, 110th Cong., 
1st Sess. (2007) (written testimony of Heather Boushey, Senior 
Economist at the Center for Economic and Policy Research, at 1) 
[hereinafter Boushey Testimony].

          [AAUW's] analysis showed that men and women's 
        different choices can explain only some of the wage 
        gap. After controlling for factors like experience, 
        educational attainment, enrollment status, GPA, 
        institution selectivity, age, race/ethnicity, region, 
        marital status and children, a five percent difference 
        in the earnings of male and female college graduates is 
        unexplained. It is reasonable to assume that this 
---------------------------------------------------------------------------
        difference is the product of discrimination.

    Furthermore, AAUW's analysis showed that in almost every 
field in which women work, those working full-time earn less 
than men, although the size of the gap varies.\49\ Controlling 
for this similar set of factors, ten years after graduation 
there is a twelve percent difference in the earnings of recent 
male and female college graduates that is unexplained and 
attributable only to gender.\50\ The General Accounting Office 
(GAO) in a 2000 study came to a similar conclusion and found 
that women on average earn only 80 percent of what men earn, 
even after considering factors that can impact earnings such as 
marital status, race, children and income, work patterns such 
as experience and hours worked.\51\ The 20 percent pay gap 
between men and women was unexplained.\52\
---------------------------------------------------------------------------
    \49\ Strengthening the Middle Class: Ensuring Equal Pay for Equal 
Work, Hearing Before the Education and Labor Committee, 110th Cong., 
1st Sess. (2007) (written testimony of Catherine Hill, Research 
Director at the American Association of University Women, at 1) 
[hereinafter Hill Testimony].
    \50\ Id. at 4.
    \51\ United States General Accounting Office, Women's Earnings: 
Work Patterns Partially Explain Difference Between Men's and Women's 
Earnings, GAO-04-35 (Oct. 2003).
    \52\ Id.
---------------------------------------------------------------------------
    Pay disparity increases and follows women throughout their 
careers. A Carnegie Mellon University study \53\ found that 
male students who graduated with masters degrees earned 
starting salaries approximately $4,000 higher than their female 
counterparts. Professor Deborah Brake offered this example in 
her testimony before the Committee: if a 22-year-old man 
initially earns $30,000 and the female earns $25,000 and they 
receive identical 3-percent annual raises, the pay gap would 
widen to $15,000 by the time the workers reach 60, with a total 
difference of $361,171 over their employment lives. If the male 
earns 3-percent annual interest on the difference, the total 
disparity would be $568,834.\54\ Moreover, this pay gap not 
only impacts women's annual earnings but also has a significant 
impact on her retirement savings, including employer pension 
plans, percentage-based employer contributions to retirement 
savings plans and even Social Security.\55\
---------------------------------------------------------------------------
    \53\ Linda Babcock and Sara Laschever, ``Women Don't Ask: 
Negotiations and the Gender Divide'' (2003). See also, The Lilly 
Ledbetter Fair Pay Act of 2007, Hearing Before the Education and Labor 
Committee, 110th Cong., 1st Sess. (2007) (written testimony of Deborah 
Brake, Law Professor at the University of Pittsburgh Law School, at 2) 
[hereinafter Brake Testimony].
    \54\ Brake Testimony, at 2.
    \55\ Id.
---------------------------------------------------------------------------
    The wage gap is a threat to this country's middle class and 
the loss of women's income represents a ``huge loss to the 
economy in unrealized consumption and investment, as well as 
reduced tax revenues to governments at all levels.'' \56\ With 
seventy percent of all mothers in the labor force,\57\ and with 
married mothers typically providing over one-third of the 
family income,\58\ now more than ever, women's participation in 
the labor market is necessary for families to survive.\59\ 
While more families have a working wife, family income has 
failed to grow as much as it did in the decades just after 
World War II.\60\ Prior to the early 1970's, a married-couple's 
family income grew by 3 percent per year on average and income 
growth was about the same for families with and without a 
working wife. However, since then, income for married-couple 
families without a working wife grew at an annual average rate 
of just 0.1 percent, while the income growth for families with 
a working wife grew by less than one-percent.\61\
---------------------------------------------------------------------------
    \56\ Id.
    \57\ Boushey at 3. Id. at 5.
    \58\ Boushey Testimony, at 4. See also, Bureau of Labor Statistics 
2005.
    \59\ Id.
    \60\ Id.
    \61\ Id. at 4-5.
---------------------------------------------------------------------------

a. Pay discrimination is difficult to detect

    In today's workplace, pay discrimination is often extremely 
difficult to detect: ``Unlike most personnel actions, the 
results of which are readily evident to many employees, the 
levels of compensation paid to an employee are rarely known to 
co-workers.'' \62\ Employees typically do not have access to 
information which would raise a suspicion of pay 
discrimination, and workplaces often discourage, if not 
outright prohibit, discussions between employees about 
salaries.\63\ As Justice Ginsburg observed in Ledbetter v. 
Goodyear Tire & Rubber Co., ``comparative pay information * * * 
is often hidden from the employee's view.'' \64\ Employee 
compensation is regularly kept confidential by employers and 
may only be known by the individual employee, payroll staff and 
manager(s).\65\ In addition, many employers have policies 
prohibiting salary discussions.\66\ One-third of private sector 
employers have adopted specific rules prohibiting employees 
from discussing their wages with co-workers.\67\ Only one in 
ten employers has adopted a pay openness policy.\68\ Finally, 
for those employees who do know what their colleagues earn, 
they often lack information about the contributing factors that 
might influence pay levels, including performance, education 
and/or training.
---------------------------------------------------------------------------
    \62\ The Paycheck Fairness Act, H.R. 1338, Hearing Before the 
Education and Labor Committee, Subcommittee on Workforce Protections, 
110th Cong. 1st Sess. (written testimony of Joseph M. Sellers, Cohen 
Milstein, Hausfeld & Toll PLLC at 15). [Hereinafter Sellers Testimony].
    \63\ Id.
    \64\ Ledbetter v. Goodyear Tire & Rubber Co., 127 S.Ct. 617 (2007) 
(Ginsburg, J. dissenting). See also, Sellers Testimony at 15.
    \65\ Sellers Testimony.
    \66\ Id.
    \67\ The Lilly Ledbetter Fair Pay Act of 2007, Hearing Before the 
Education and Labor Committee, 110th Cong., 1st Sess. (2007) (written 
testimony of Wade Henderson, President and CEO of the Leadership 
Conference on Civil Rights, at 3) [hereinafter Henderson Testimony].
    \68\ Id.
---------------------------------------------------------------------------
    Pay discrimination is rarely accompanied by circumstances 
suggestive of gender discrimination.\69\ Disparate pay might 
not begin with a woman's initial salary determination but can 
readily develop with a decision to increase the pay of male 
colleagues. While employees are normally aware of which 
employees receive promotions, they are less likely to know when 
colleagues receive a pay raise.\70\ For example, an employee 
who receives a three-percent raise would have no reason to 
suspect pay discrimination when she does not know about the 
raises her colleagues earn.\71\
---------------------------------------------------------------------------
    \69\ Brake Testimony at 4.
    \70\ Id.
    \71\ Id. at 5.
---------------------------------------------------------------------------
    Discussions about wages are necessary to identify pay 
disparity, ``absent ready access to the pay levels of their co-
workers and the factors that led to those pay levels, most 
employees lack the knowledge needed to make a viable claim of 
pay discrimination under the EPA.'' \72\ Once a lawsuit is 
filed, discovery of wage data is available to help aggrieved 
employees develop their case; however, in order to learn more 
about employee salaries, however women need to have some basis 
to file suit in the first place. However, because employees 
lack knowledge about pay levels and the reasons behind 
different employer pay decisions ``only a small percentage [of 
claims] make specific allegations of pay discrimination.'' \73\
---------------------------------------------------------------------------
    \72\ Sellers Testimony at 16.
    \73\ Sellers Testimony. See also, Equal Employment Opportunity 
Commission, EEOC Litigation Statistics FY 1997 to FY 2006, Available at 
http: www.eeoc.gov/stats/litigation.html (out of 403 suits filed in 
2006, only 10 included EPA claims).
---------------------------------------------------------------------------

b. Lack of data on pay disparity

    Data collection is a critical component understanding what 
is really happening with women's wages workplace. In addition, 
sufficient data about pay discrimination is an invaluable tool 
for those agencies--such as the EEOC and the OFCCP--charged 
with enforcing employment discrimination laws such as the EPA. 
However, experts agree that these agencies have minimal 
information about gender-based disparities in pay.\74\ 
Additionally, the Bush Administration has halted (or attempted 
to halt) many of the data collection initiatives already in 
place for collecting information about women and men's wages.
---------------------------------------------------------------------------
    \74\ The Paycheck Fairness Act, H.R. 1338, Hearing Before the 
Education and Labor Committee, Subcommittee on Workforce Protections, 
110th Cong. 1st Sess. (written testimony of Evelyn Murphy, President of 
the WAGE Project) [hereinafter Murphy Testimony]. The Paycheck Fairness 
Act, H.R. 1338, Hearing Before the Education and Labor Committee, 
Subcommittee on Workforce Protections, 110th Cong. 1st Sess. (written 
testimony of Marcia Greenberger, Co-President of the National Women's 
Law Center) [hereinafter Greenberger Testimony].
---------------------------------------------------------------------------
    Bureau of Labor Statistics (BLS) Employment Statistics: For 
over forty years, BLS has been collecting data on female 
workers and comparing them to their male counterparts. This 
data has formed the basis for its monthly report on the 
employment situation.\75\ In 2005 BLS stopped collecting this 
data, citing employer inconvenience.\76\ In response, Congress 
passed (and the President signed into law) the 2006 Labor HHS 
appropriations bill,\77\ which contained a provision mandating 
BLS to continue to collect data on women workers.\78\ This 
language was retained for FY07 through a continuing resolution 
\79\ and is also part of the 2008 Labor-HHS Appropriations bill 
passed by both the House and Senate but vetoed by the 
President.\80\
---------------------------------------------------------------------------
    \75\ BLS Plans to Drop Data on Women From Payroll Survey Creates 
`Firestorm', BNA Daily Labor Report (March 7 2005).
    \76\ ``BLS has found that employers often to not have gender 
information in the same place they have earnings information.'' 
Statement of Commissioner Kathleen Utgoff, supra note 76.
    \77\ PL-109-149 (December 2006).
    \78\ The 2007 Labor-HHS appropriations bill was passed as part of a 
Continuing Resolution, and this provision went unchanged. The provision 
is contained in the 2008 Labor-HHS Appropriations bill passed by both 
the House and Senate but vetoed by the President.
    \79\ H.J. Res.20, which then became P.L. 110-5 on February 15, 
2007.
    \80\ H.R. 3043.
---------------------------------------------------------------------------
    Recognizing the value of collecting these statistics, the 
Paycheck Fairness Act requires BLS to continue to gather these 
statistics.
    Equal Employment Opportunity Commission (EEOC): The EEOC 
was created by the Civil Rights Act of 1964, and was given 
litigation enforcement authority in 1972.\81\ Experts agree 
that enhanced data collection by the EEOC, whose mission is to 
eliminate unlawful employment discrimination by the enforcement 
of anti-discrimination laws, is essential.\82\ The Paycheck 
Fairness Act requires the EEOC to survey existing data and 
determine what additional data is needed to enhance enforcement 
of the law.
---------------------------------------------------------------------------
    \81\ EEOC, 35 Years of Ensuring the Promise of Opportunity, 
available at: http://www.eeoc.gov/abouteeoc/35th/history/index.html
    \82\ National Women's Law Center, Comment Letter on Affirmative 
Action and Nondiscrimination Obligations of Contractors and 
Subcontractors; Equal Opportunity Survey (March 28, 2006) (letter on 
file with author).
---------------------------------------------------------------------------
    Office for Federal Contract Compliance programs (OFCCP): 
OFCCP is unique in that it is required by law to affirmatively 
conduct reviews to ensure that contractors with federal 
contracts are in compliance with equal employment measures, 
including Executive Order 11246, which prohibits discrimination 
in employment on the basis of race, color, religion, national 
origin and gender. About one-fifth of the labor force works for 
an employer who contacts with the federal government.\83\
---------------------------------------------------------------------------
    \83\ Id.
---------------------------------------------------------------------------
    Equal Opportunity Survey: The EO Survey was developed over 
three Administrations to ensure nondiscrimination in federal 
employment. It was intended to track employment data and to 
improve the enforcement of anti-discrimination requirements--
including gender-based wage discrimination--of federal 
contractors.\84\ Prior to the EO survey, OFCCP conducted 
targeted compliance reviews. Because of limited resources, 
OFCCP only reviews approximately four percent of contractors 
each year.\85\
---------------------------------------------------------------------------
    \84\ Id.
    \85\ Id. at 2.
---------------------------------------------------------------------------
    The EO Survey was designed to enable OFCCP to be far more 
effective in detecting and remedying wage discrimination and in 
encouraging self-awareness and self-evaluation among 
contractors as a means of increasing compliance.\86\ It was 
developed to query employers on an annual basis (to be 
eventually sent to at least one-half of all contractors each 
year) about their affirmative action program activities, their 
personnel actions (e.g. hires and promotions) and their 
compensation of full-time employees, all aggregated by job 
group, race and gender.\87\
---------------------------------------------------------------------------
    \86\ Id.
    \87\ Id.
---------------------------------------------------------------------------
    The first survey was sent out in 2000 during the Clinton 
Administration, but the Bush Administration which took office 
soon after, did not take any action on the surveys that were 
returned and did not follow-up on those surveys that were not 
returned.\88\ In 2003 and 2004, it sent out fewer and fewer 
surveys until 2005, when it failed to send out any at all. In 
January 2006, the OFCCP proposed eliminating the EOC survey 
altogether.\89\ The Paycheck Fairness Act would codify this 
very important enforcement tool for the OFCCP.
---------------------------------------------------------------------------
    \88\ Id.
    \89\ 71 Fed. Reg. 3373 (Jan. 20, 2006).
---------------------------------------------------------------------------
    Standards in Conducting Systematic Wage Discrimination 
Analysis: As a way of measuring more effectively whether or not 
employers were engaged in gender-based wage discrimination, the 
Clinton Administration developed a methodology to be used in 
the OFCCP's compliance reviews. The OFCCP asked employers to 
provide data on its pay levels (or pay grades), and then using 
the data, compared wages based on race, ethnicity and gender. 
If there were any pay disparities, the OFCCP requested 
employers to correct them.
    Generally, employers were not supportive of this analysis, 
arguing that differences in wages between men and women did not 
necessarily prove that they were engaging in gender-based 
discrimination. As a result, the Bush Administration published 
a formal guidance document that expressly prohibited OFCCP from 
using a ``pay grade'' analysis in conducting its compliance 
reviews. Under this guidance, OFCCP is required to conduct 
time-consuming analyses, including the gathering of anecdotal 
evidence before determining that a contractor is engaging in 
wage discrimination.\90\
---------------------------------------------------------------------------
    \90\ 71 Fed. Reg. 35124 (June 16, 2006).
---------------------------------------------------------------------------
    The Paycheck Fairness Act acknowledges that the ``pay 
grade'' analysis is a useful tool (even if it does not prove 
wage discrimination, it indicates some evidence of it), and 
simply provides that OFCCP, ought to be allowed to use it, 
along with other tools, when performing compliance reviews. 
This section does not impose the ``pay grade'' methodology as 
the sole means the OFCCP can use in determining if contractors 
for federal contracts are in compliance, but encourages its use 
in conjunction with other tools.

c. Women are less likely to negotiate

    Further contributing to the wage gap is the failure of high 
numbers of women to negotiate for higher salaries and 
promotions: ``most women hardly negotiate when they get a job 
offer * * * because they look at the offer as the goal, not the 
beginning of a relationship.'' \91\ While negotiation is a 
contributing factor to the wage gap, it does not justify 
gender-based pay discrimination. As the Supreme Court noted: 
``Congress enacted the Equal Pay Act * * * recognizing the 
weaker bargaining position of many women and believing that 
discrimination in wage rates represented unfair employer 
exploitation of this source of cheap labor.'' \92\
---------------------------------------------------------------------------
    \91\ Pallavi Gogoi, For Women, a Failure to Negotiate, Business 
Week (April 22, 2005) (quoting Lee E. Miller, co-author of A Woman's 
Guide to Successful Negotiation).
    \92\ Corning Glass Works v. Brennan, 417 U.S. 188, 206 
(1974)(citing the 2nd Circuit decision, 474 F.2d 226, 234 (1973).
---------------------------------------------------------------------------
    Researchers have found there are several reasons women fail 
to negotiate for themselves in the workplace.\93\ Women often 
do not promote their own interests, choosing instead to focus 
on others and believing that employers will recognize and 
reward them for good work. In addition, the culture in many 
workplaces ostracizes women who are ambitious and advance 
themselves. A study \94\ conducted by Harvard University and 
Carnegie Mellon University examined the starting salaries of 
MBA men and women who recently graduated from top business 
schools. Researchers noted that there was no difference between 
the salaries negotiated by men and women in jobs where 
``compensation standards were relatively clear to potential 
hires.'' \95\ However, in jobs where salaries were not clear, 
``male MBAs negotiated salaries that were $10,000 higher, on 
average, than those negotiated by female MBAs.'' \96\
---------------------------------------------------------------------------
    \93\ Linda Babcock, Nice Girls Don't Ask, Harvard Business Review 
(Oct. 2003).
    \94\ Dina W. Pradel, Hannah Riley Bowles and Kathleen McGinn, When 
Gender Changes the Negotiation, Harvard Business School (Feb. 13, 
2006).
    \95\ Id.
    \96\ Id.
---------------------------------------------------------------------------
    The wage gap which occurs with the initial salary remains 
with a female worker throughout her career; over a 30-year 
career with an annual 3 percent raise, a woman loses 
$600,000.\97\ The study did find, however, that women tend to 
be more successful when negotiating on behalf of others. Put in 
the position of negotiating for another employee, women were 
able to secure compensation that was 18 percent greater than 
what they negotiated for themselves.\98\
---------------------------------------------------------------------------
    \97\ Id.
    \98\ Id.
---------------------------------------------------------------------------
    Researchers concluded that the hesitation women have in 
advocating for themselves is not unreasonable. Women who 
initiate negotiations with their employer are responded to 
differently than men, and ``both men and women were likely to 
subtly penalize women who asked for more * * * '' \99\
---------------------------------------------------------------------------
    \99\ Shankar Vedantam, Salary, Gender and the Social Cost of 
Haggling, Wash. Post (July 30, 2007) at A07.
---------------------------------------------------------------------------
    While all employees have an economic incentive to 
negotiate, women are more likely to consider the risk involved 
and ``those risks are higher for women than for men.'' \100\ 
Employers have a responsibility to ensure that men and women 
are compensated equally for equal work. Consequently, if a man 
asks for a raise or negotiates a higher salary during the 
hiring process, women who perform the same or a substantially 
similar job should have their compensation levels adjusted 
accordingly. Furthermore, programs must be created to help 
strengthen the negotiation skills of girls and women. Linda 
Babcock one of the authors of the Carnegie Mellon study has 
begun a pilot project with the Girl Scouts creating a new 
`badge' for negotiation. This project seeks to help girls learn 
negotiating by observing adults, practicing themselves and 
teaching negotiation skills to others.\101\ H.R. 1338 
authorizes the Secretary of Labor to award competitive grants 
aimed at training girls and women on negotiation skills, an 
important tool in ending gender-based wage discrimination.
---------------------------------------------------------------------------
    \100\ Id.
    \101\ ``PROGRESS and Girl Scouts Create New Badge to Teach 
Negotiation Skills,'' available at: http://www.heinz.cmu.edu/whatsnew/
archives/2006/girl--scouts.html (last visited July 22, 2008).
---------------------------------------------------------------------------

 D. THE EQUAL PAY ACT HAS BEEN INEFFECTIVE IN ERADICATING PAY DISPARITY

    A plaintiff raising a claim under the EPA carries a heavy 
burden of proof in establishing a case for gender-based 
discrimination. To make out a prima facie case, she must not 
only show that a pay disparity exists between employees of the 
same ``establishment,'' but she must also identify specific 
employees of the opposite sex holding equal positions who were 
paid higher wages.\102\ Courts will look to whether the work 
between the plaintiff and her comparator(s) was ``equal or 
substantially equal * * * considering such factors as skill, 
effort, responsibility and working conditions.'' \103\
---------------------------------------------------------------------------
    \102\ Greenberger Testimony at 5.
    \103\ Sellers Testimony at 3.
---------------------------------------------------------------------------
    While a plaintiff does not have to demonstrate the work was 
identical, she has to show that it is somewhere between similar 
and identical. As such, the meaning of ``equal work'' has 
generated significant uncertainty about what a woman must 
demonstrate when comparing herself to a co-worker in order to 
satisfy this standard.\104\ Courts often compare ``superficial 
features of the jobs and overlook fundamental similarities that 
are masked by trivial differences.'' \105\
---------------------------------------------------------------------------
    \104\ Id.
    \105\ Id. at 4.
---------------------------------------------------------------------------
    In addition, the courts have tended to define ``equal 
work'' very strictly despite the clear intent of Congress that 
the EPA be remedial and that ``equal work'' means similar not 
identical.\106\ In her testimony before the House Subcommittee 
on Workforce Protections, Marcia Greenberger, co-president of 
the National Woman's Law Center cited Angelo v. Bacharach 
Instrument Company \107\ as one of many examples. In that case 
female ``bench assemblers'' in light assembly alleged that they 
were paid less than men who were classified as ``heavy 
assemblers.'' An engineering expert testified--along with the 
women--that the jobs were substantially the same in terms of 
``skill, effort and responsibility.'' Despite this, the court 
held that the jobs were comparable but not equal.\108\
---------------------------------------------------------------------------
    \106\ Wyman, supra note 12, See also, Greenberger Testimony.
    \107\ 555 F2d 1164 (3rd Cir. 1977).
    \108\ Id. See as well: Noel v. Medtronic Electromedics, Inc., 973 
F. Supp 1206 (Dist. Co. 1997), where a plaintiff failed to prove her 
prima facie case (substantial identity of job functions) when she 
showed that some but not all of her and her male comparator's job 
functions were identical.
---------------------------------------------------------------------------

a. Establishment

    The EPA states that to assert a claim, a plaintiff must 
find a male comparator within the same physical location is 
paid more; and courts have interpreted this provision 
strictly.\109\ Plaintiffs must ``demonstrate that pay disparity 
exists between employees in the same ``establishment''--that 
is, a distinct physical place of business rather than * * * an 
entire business or ``enterprise'' which may include several 
separate places of business.'' \110\ This means that an 
employer who has two stores in nearby towns can legally pay the 
male manager in store A more than female manager in store B 
despite the fact that they do the exact same job.
---------------------------------------------------------------------------
    \109\ Meeks v. Computer Ass'n Int'l, 15 F. 3rd 1013, 1017 (courts 
presume that multiple offices are not a single establishment unless 
unusual circumstances are demonstrated.)
    \110\ Samuels Testimony at 5 (citing Meeks v. Computer Ass'n Int'l, 
15 F.3d at 232).
---------------------------------------------------------------------------
    The establishment requirement contributes to the difficulty 
that plaintiffs face when asserting an EPA claim. It limits the 
ability of women to bring an EPA claim, since many times, women 
might not have a true comparator in their physical workplace. 
Today's employers are much different than they were forty-five 
years ago when the EPA was first enacted. Many have multiple 
facilities at which the same jobs are performed, and some 
locations may have only one person in a certain position (i.e. 
manager, or supervisor).
    The establishment requirement has particularly inhibited 
the ability of women who occupy higher level positions in the 
workplace to assert an EPA claim. In these cases, employers 
have been able to successfully assert that women in higher-
level positions have unique job duties and therefore have no 
comparator in the same establishment.\111\ In fact, as one 
commentator noted, women in ``administrative, managerial and 
executive positions have experienced a high rate of dismissal 
of their EPA claims because their jobs are more easily viewed 
as unique and therefore lack an appropriate comparator.'' \112\
---------------------------------------------------------------------------
    \111\ Sellers Testimony at 15. (citing Juliene James, The Equal Pay 
Act in the Courts: A De-Facto White-Collar Exemption, 79 N.Y.U.L. REV. 
1873 (2004)).
    \112\ Id.
---------------------------------------------------------------------------
    This is clearly illustrated by the court's decision in 
Georgen-Saad v. Texas Mutual Insurance Company.\113\ In that 
case, the complainant was a senior vice-president of finance 
who was being paid less than the other senior-vice presidents 
in the company. The court rejected the Georgen-Saad's claim 
that any of the positions required ``equal skill, effort and 
responsibility,'' and elaborated:
---------------------------------------------------------------------------
    \113\ 195 F. Supp. 2d 853 (W.D.Tex. 2002).

          According to Defendant, there are no male comparators 
        working in a position requiring equal skill, effort, 
        and responsibility under similar working conditions. 
        The Court agrees. The sealed exhibits filed with 
        Defendant's Motion for Summary Judgment include job 
        descriptions for the Senior Vice Presidents of 
        Investments, Insurance Services, Underwriting Services, 
        Underwriting and Policy Holder Services, Public 
        Affairs, Internal Audit, Benefits/Loss Prevention, 
        Administration, Data Processing Services, and Branch 
        Operations/Marketing.
          The assertion that any one of these jobs requires 
        ``equal skill, effort, and responsibility'' as 
        Plaintiff's Senior Vice President of Finance position 
        cannot be taken seriously. These are Senior Vice 
        Presidents in charge of different aspects of 
        Defendant's operations; these are not assembly-line 
        workers or customer-service representatives. In the 
        case of such lower-level workers, the goals of the 
        Equal Pay Act can be accomplished due to the fact that 
        these types of workers perform commodity-like work and, 
        therefore, should be paid commodity-like salaries. 
        However, the practical realities of hiring and 
        compensating high-level executives deal a fatal blow to 
        Equal Pay Act claims.\114\
---------------------------------------------------------------------------
    \114\ Id. at 856.

    In 1986, the EEOC issued regulations interpreting the 
definition of establishment under the EPA.\115\ The regulation 
in part provides that an establishment can encompass more than 
a single physical establishment when the employer has a central 
administrative unit charged with making salary and employee 
decisions. In Grumbine v. United States \116\ the Court held 
that for purposes of the EPA, `the establishment' was the Civil 
Service in its entirety and that a woman could not be paid less 
than a man merely because she worked in a different location.'' 
\117\
---------------------------------------------------------------------------
    \115\ 29 C.F.R. 1620.9 provides: (a) Although not expressly defined 
in the FLSA, the term ``establishment'' had acquired a well settled 
meaning by the time of enactment of the Equal Pay Act. 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. (b) In unusual 
circumstances, two or more portions of a business enterprise, even 
though located in a single physical place of business, may constitute 
more than one establishment. For example, the facts might reveal that 
these portions of the enterprise are physically segregated, engaged in 
functionally separate operations, and have separate employees and 
maintain separate records. Conversely, unusual circumstances may call 
for two or more distinct physical portions of a business enterprise 
being treated as a single establishment[emphasis supplied]. For 
example, a central administrative unit may hire all employees, set 
wages, and assign the location of employment; employees may frequently 
interchange work locations; and daily duties may be virtually identical 
and performed under similar working conditions. Barring unusual 
circumstances, however, the term "establishment" will be applied as 
described in paragraph (a) of this section.
    \116\ 586 F.Supp. 1144 (D.C. 1984). Note, the U.S. Claims Court in 
Molden v. U.S., 11 Cl.Ct. 604 (1987) distinguished the D.C. court's 
application of establishment nationwide. It stated that: ``Grumbine 
adopted an evaluation on a nationwide basis in order to give effect to 
the legislative purpose of providing equal pay for equal work. In 
contrast, defendant has acknowledged in the case at bar that plaintiffs 
have demonstrated equal skill, effort, and responsibility with other 
employees in the two Chicago offices.'' As a result ``there [was] no 
need to expand the definition of an ``establishment'' to include the 
Civil Service in its entirety as in Grumbine.''
    \117\ Id.
---------------------------------------------------------------------------
    The plaintiff in Grumbine was a Regional Counsel of Customs 
Service working in Baltimore, Maryland and was the only female 
among the nine Regional Counsels. The counsels were spread out 
among nine regions; however the eight males were paid more than 
the one female counsel. Consequently, the plaintiff raised a 
claim of pay discrimination under the EPA. The government 
argued that the Regional Counsels each worked in different 
``establishments'' for purposes of the EPA. The court rejected 
this defense and found: \118\ ``It would hardly make sense to 
permit an employer to rely on geographic ``establishment'' 
concept in defense of an equal pay practice when that employer 
has itself adopted a uniform, non-geographic pay policy and 
system.'' \119\
---------------------------------------------------------------------------
    \118\ Id.
    \119\ Id. at 1148.
---------------------------------------------------------------------------
    Courts apply the EEOC regulation to apply establishment can 
include more than one physical location. In 2000, a court \120\ 
held that a female district sales manager in the Dallas/Fort 
Worth facility could compare herself other district sales 
managers in the State of Texas for purposes of the plaintiff's 
EPA claim. The plaintiff in the case had no comparator in her 
physical establishment. As a result, the court reasoned that 
limiting her comparators to a single physical establishment 
``would effectively permit a large employer with national 
operations to exempt its managerial staff (each of whom is in 
charge of a single facility) from the reach of the EPA.'' \121\ 
The 5th Circuit held that a school district with 182 schools 
was a single establishment for purposes of an EPA claim \122\ 
as were thirteen elementary schools operated by a single school 
district near Houston Texas.\123\
---------------------------------------------------------------------------
    \120\ Vickers v. Intern'l Baking Co., 2000 U.S. Dist. LEXIS 17995 
(N.D. Tex.).
    \121\ Id. at *15.
    \122\ Marshall v. Dallas Indep. Sch. Dist., 605 F.2d 191, 194 (5th 
Cir. 1979).
    \123\ 519 F.2d 53 (5th Cir. 1975).
---------------------------------------------------------------------------
    Numerous courts have recognized that there is a trend in 
the law interpreting ``establishment'' to include all places of 
business of one corporation or a multi-employer.\124\ Under 
these circumstances the courts have recognized that 
accountability flows from the decision making structure. It is 
clear that the single-location establishment interpretation is 
an unworkable standard in today's workplace and threatens to 
eliminate a large number of women from the Act's protections.
---------------------------------------------------------------------------
    \124\ Brownlee v. Gay & Taylor Inc., 642 F.Supp. 347, 350 (D. Kan. 
1986); Vickers v. Intern'l Baking Co., 2000 U.S. Dist. LEXIS 17995 
(N.D. Tex.).
---------------------------------------------------------------------------
    Recognizing that the single-site establishment has limited 
women's ability to assert an EPA claim, H.R. 1338 expands where 
a worker can look to find a comparator. Under the bill, a woman 
can look to a similarly situated male co-worker anywhere in the 
same county or similar political subdivision of a state. 
Workplaces in the same county operate under the same cost of 
living and labor market conditions. County-wide comparisons are 
already the law in Illinois under the state's Equal Pay 
Act.\125\ However, consistent with EEOC rules and guidance, 
including 29 CFR 1620.9, the bill does not restrict courts from 
applying establishment more broadly than county.
---------------------------------------------------------------------------
    \125\ ILL. 93rd G.A., P.L. 93-6
---------------------------------------------------------------------------

b. Any factor other than sex

    Under the EPA, employers can affirmatively defend and 
justify unequal pay if it is based on: (1) seniority systems; 
(2) merit systems; (3) systems that measure earnings by quality 
or quantity of production; or (4) ``any factor other than 
sex.'' \126\ Historically, courts have interpreted the ``any 
factor other than sex'' criteria so broadly that it embraces an 
almost limitless number of factors, so long as they do not 
involve sex.\127\ Consequently, it is the fourth affirmative 
defense that has posed the ``greatest problems for women 
pressing an EPA claim,'' \128\ and employers have been able to 
prevail in these cases by asserting a range of ``other than 
sex'' factors.
---------------------------------------------------------------------------
    \126\ 629 U.S.C. Sec. 206(d)(1).
    \127\ See for example: Fallon v. Ill, 882 F. 2d 1206 (7th Cir. 
1989); AAUW supra note 34.
    \128\ Wyman, supra note 12 at34.
---------------------------------------------------------------------------
    Moreover, there is no consensus among the circuit courts as 
to whether a factor other than sex under the EPA needs to be 
business related, and the Supreme Court has failed to resolve 
this issue. It denied certiorari in the case of Randolph Cent. 
Sch. Dist. v. Aldrich \129\ with three justices dissenting and 
acknowledging the conflict among the circuits.\130\
---------------------------------------------------------------------------
    \129\ 506 U.S. 965 (1992).
    \130\ Id.
---------------------------------------------------------------------------
    To the detriment of an effective Equal Pay Act, many courts 
have found that the ``factors other than sex'' need not be 
business-related or even related to the particular position in 
question. In addition, employers are able to successfully raise 
factors such as market forces and prior salaries (even if they 
are based on a discriminatory wage) that in themselves 
undermine the goals of the Equal Pay Act.\131\ Marcia 
Greenberger explains:
---------------------------------------------------------------------------
    \131\ Corning Glass Works 417 U.S. 188 (1974); Greenberger 
Testimony at 6.

          Cases such as these undermine both the spirit and 
        analytical approach of the Equal Pay Act. What was 
        intended to be an affirmative defense for an employer--
        a defense that demands that the employer carry the 
        burden of proving that its failure to pay equal wages 
        for equal work is based on a legitimate reason--has 
        instead been converted by these courts into a 
        requirement merely that an employer articulate some 
        obstensibly nondiscriminatory basis for its 
        decisionmaking. Because their basis can so easily mask 
        criteria that are at bottom based on sex, the courts' 
        failure to engage in searching analysis circumvents the 
        burden Congress intended employers to bear.\132\
---------------------------------------------------------------------------
    \132\ Greenberger Testimony at 6-7.

    To ensure a broadly remedial statute, designed to eradicate 
the gender pay gap for women and men performing equal work, the 
Equal Pay Act's affirmative defense of a factor other than sex 
must be clarified to require that the factor be job-related, 
not derived or based upon a sex-based differential, and 
consistent with business necessity. A review of court cases 
reveals the loopholes that these reforms would fix.
    Job-Relatedness: In Boriss v. Addison Farmers Insurance 
Co.,\133\ the plaintiff brought an EPA claim alleging that in 
the ten years she worked for the employer as an underwriter, 
she was paid less than her male colleagues while performing 
substantially equal work. When comparing the plaintiff to three 
of her male colleagues, the employer alleged that the 
difference in pay was due to factors other than sex, including 
more underwriting experience and a college education, even 
though a college degree was not a prerequisite for the 
position.
---------------------------------------------------------------------------
    \133\ 1993 U.S. Dist. LEXIS 10331.
---------------------------------------------------------------------------
    The court found that the employer successfully met its 
burden; the difference in pay was due to a ``factor other than 
sex.'' It noted, but did not consider, the fact that the higher 
salaries of the male employees were based on the pay they 
received at their prior employment.\134\ In the end, it relied 
on a very broad interpretation of the ``factor other than sex'' 
and that the factor need not be related to the ``requirements 
of the particular position in question, nor that it be a 
`business-related' reason.'' \135\ All that needs to be 
evaluated is ``whether the factor is discriminatorily applied 
or if it causes a discriminatory effect.'' \136\
---------------------------------------------------------------------------
    \134\ Id. at 23.
    \135\ Id. citing, Covington v. SIU, 816 F.2d 317, 321-22 (1987). 
See also, Fallon v. State of IL, 882 F.2d 1206 (7th Cir. 1989).
    \136\ Id.
---------------------------------------------------------------------------
    In addition, the court held that employers can lawfully pay 
a male more than a similarly situated female employee if the 
motivation is to induce the male worker to take the job and/or 
if employers take into account what the employee was making at 
his prior job. Despite the fact that these situations may 
result in female employee[s] being paid less, the court stated 
that none of these situations violate the EPA.
    In addition, just this year, in the case of Warren v. Solo 
Company,\137\ reaffirmed its position that the Defendant need 
not show that a ``factor other than sex'' is related to the 
requirements of the particular position or a ``business-
related'' decision, when it found that unequal pay was 
justified because the male employee had a college degree and 
two masters degrees, despite the fact that the degrees were 
unrelated to the jobs they were both performing.
---------------------------------------------------------------------------
    \137\ 516 F. 3d 627 (7th Cir. 2008).
---------------------------------------------------------------------------
    Derived from or based upon sex-based differentials: In 
1974, the Supreme Court held that ``market forces''--such as 
the value given by the market to men's and women's work or the 
more effective bargaining power that men historically have--
cannot be cited as a factor other than sex to evade 
liability.\138\ The court in Corning Glass Works noted that the 
company's decision to pay women less for the same work men 
performed ``took advantage of the market and was illegal under 
the EPA.'' \139\
---------------------------------------------------------------------------
    \138\ 417 U.S. 188 (1974). See, Greenberger Testimony at 6.
    \139\ Id.
---------------------------------------------------------------------------
    Despite clear direction from the Supreme Court, lower 
courts, as recently as 2006, have accepted market forces as a 
defense to a pay disparity. In Merillat v. Metal Spinners, 
Inc.,\140\ for example, the plaintiff, who had been with the 
company for nearly 20 years, was promoted to a Senior Buyer 
position in the materials department. Around that time, the 
employer created a new position entitled ``Vice President of 
Procurement and Materials Management.'' While the duties of 
both jobs were similar, the new position also included managing 
materials department employees (including the plaintiff). The 
job was offered to a male with a starting salary of $62,500. At 
that time, the plaintiff earned $49,800, and she helped to 
train the new employee for his position.
---------------------------------------------------------------------------
    \140\ 470 F.3d 685 (7th Cir. 2006).
---------------------------------------------------------------------------
    The Merillat plaintiff brought an EPA claim against the 
employer who asserted the affirmative defense that the pay 
disparity was due to factors other than sex such as education, 
experience and market forces. The employer alleged that the 
plaintiff was paid more, in part because of education and 
experience, but also because his salary represented the market 
rate for the position in question. The court agreed and held 
that the pay disparity was due to factors other than sex, 
including education, experience and ``the market forces at the 
time of [his] hire.'' \141\ The court noted that it had 
previously ``held that an employer may take into account market 
forces when determining the salary of an employee,'' \142\ 
although cautioning in a footnote against employers taking 
advantage of market forces to justify discrimination.
---------------------------------------------------------------------------
    \141\ Id. at 698.
    \142\ Id. at 697.
---------------------------------------------------------------------------
    Similarly, the 3rd Circuit, in the case of Hodgson v. 
Robert Hall Clothes,\143\ found that the employer was justified 
in paying the female workers less than the male workers because 
the ``economic benefits to the employer justified a wage 
differential even where the men and women were performing the 
same task.'' \144\ In Hodgson, the court was comparing the 
higher wages of male sales people working in the men's 
department of a store with the lower wages being paid to female 
sales people working in the ladies' department.
---------------------------------------------------------------------------
    \143\ 473 F. 2d 589 (3rd Cir. 1973).
    \144\ Id, In addition, in this case females were not allowed to 
apply to work in the men's department.
---------------------------------------------------------------------------
    In finding for the employer, the court based its decision 
on the fact that the men's department was more profitable than 
the ladies' department even though the products sold by the 
women were of lesser quality and cost less than the goods sold 
in the men's department. It concluded: ``Without a more 
definite indication from Congress, it would not seem wise to 
impose the economic burden of higher compensation on employers. 
It could serve to weaken their competitive position.'' \145\
---------------------------------------------------------------------------
    \145\ Id. at 596.
---------------------------------------------------------------------------
    Some courts have also held that it is acceptable for an 
employer to pay male employees more than similarly situated 
female employees based on the higher prior salaries enjoyed by 
the male workers. In addition, employers can successfully 
justify paying a male employer more if the higher salary is a 
business tactic to lure [or retain] an employee.
    In Drury v. Waterfront Media, Inc.\146\ the plaintiff was 
hired as the Director of Project Management, responsible for 
organizing and managing all corporate projects, at a salary of 
$85,000 with an annual bonus of $15,000, and $25,000 in stock 
options (in her previous position, she had earned $85,000). 
Over a year later she was promoted to Vice-President of 
Production and Operations with a salary of $95,000 and a bonus 
potential of $20,000.
---------------------------------------------------------------------------
    \146\ 2007 U.S. Dist. LEXIS 18435 (S.D.N.Y. Mar. 8, 2007).
---------------------------------------------------------------------------
    However, another vice-president (for customer service) was 
paid $110,000 with the possibility of a $25,000 bonus and 
$50,000 in stock options. This difference was the basis of the 
plaintiff's equal pay claim. In asserting its affirmative 
defense, however, the employer claimed that it was forced to 
pay the male vice-president more, not based on any sex-based 
wage differential but in order to lure him away from his prior 
employer. The court agreed and held that ``salary matching and 
experience-based compensation are reasonable, gender-neutral 
business tactics, and therefore qualify as ``a factor other 
than sex.'' \147\
---------------------------------------------------------------------------
    \147\ Id.
---------------------------------------------------------------------------
    The same conclusion was reached in Glunt v. GES Exposition 
Services,\148\ where the plaintiff brought a claim that her 
employer violated the EPA in two ways. First, she alleged that 
in her capacity as a project coordinator she was paid less than 
three male co-workers while performing essentially the same 
function. Second, she alleged that after being promoted to 
account executive, her employer failed to raise her salary to a 
level parallel to the starting salaries of the three male 
account executives. The court found that in each case, factors 
other than sex justified the employer paying Glunt less than 
her similarly situated male co-workers.
---------------------------------------------------------------------------
    \148\ 123 F. Supp. 2d 847 (D. Md. 2000).
---------------------------------------------------------------------------
    In its decision the court noted that ``offering a higher 
starting salary in order to induce a candidate to accept the 
employer's offer over competing offers has been recognized as a 
valid factor other than sex justifying a wage disparity.'' 
\149\ Furthermore, ``prior salary may be one of several gender-
neutral factors employed in setting the higher salary of a male 
coming in from the outside.'' \150\ In cases where a male 
employee is transferred or reassigned, ``it is widely 
recognized that an employer may continue to pay [a transferred 
or reassigned employee] his or her previous higher wage without 
violating the EPA, even though the current work may not justify 
the higher wage.'' \151\
---------------------------------------------------------------------------
    \149\ Id. at 859.
    \150\ Id.
    \151\ Id.
---------------------------------------------------------------------------
    Several other court decisions have similarly upheld such 
pay disparities. In Horner v. Mary Institute \152\ the Eighth 
Circuit Court allowed a private school to justify paying a male 
teacher it wanted to hire from the outside more pay because 
such payment was necessary to secure him for the position. In 
Englemann v. NBC,\153\ the Court found that ``salary matching'' 
was a valid defense to pay disparity; and in Sobol v. Kidder, 
Peabody & Co.,\154\ the Court held that a pay disparity is 
permissible when an employer paid males more as a ``premium to 
attract and hire talented new bankers.'' \155\
---------------------------------------------------------------------------
    \152\ 613 F. 2d 706 (8th Cir.)
    \153\ 1996 U.S. Dist. LEXIS 1865 (S.D.N.Y. 1996).
    \154\ 49 F. Supp. 2d 208, 220 (S.D.N.Y. 1999)
    \155\ Id.
---------------------------------------------------------------------------
    Finally, in Kouba v. Allstate Ins. Co.,\156\ and Wernsing 
v. Department of Human Services,\157\ the courts allowed the 
employer to use prior salaries as a justifiable ``factor other 
than sex.'' In Kouba, the Ninth Circuit found that the employer 
had shown that the prior salary at issue corresponded roughly 
to ``the employee's ability * * * and predict [ed] a new 
employee's performance as a sales agent,'' while in Wernsing, 
the Seventh Circuit upheld the policy of the Illinois 
Department of Human Services that based its salary levels on 
prior earnings.
---------------------------------------------------------------------------
    \156\ 691 F. 2d 873 (9th Cir. 1982)
    \157\ 427 F. 3rd 466 (7th Cir. 2005).
---------------------------------------------------------------------------
    In all of these cases, the courts essentially relied upon 
``market force'' or ``prior pay'' arguments for pay 
differentials between men and women without requiring further 
evidence of the nature of that market force. Such evidence 
might include, for example, evidence that women's earnings in a 
given position are not frequently or consistently lower than 
men's, thereby demonstrating that the lower pay offer to a 
woman at hiring did not piggy-back on a sex-based differential. 
While market forces may be a legitimate basis for determining 
pay, market forces tainted with sex discrimination are not. The 
broadly remedial purpose of the EPA is undermined where a 
seemingly gender-neutral excuse for unequal pay between 
similarly situated employees of opposite sex is based on or 
derived from a sex-based differential.
    Business Necessity: Under Title VII, in order to justify an 
employment practice that has the effect of discriminating 
against an employee on the basis of race, color, religion, 
national origin or sex (a disparate impact case), an employer 
must assert that the practice is consistent with business 
necessity. Like a disparate impact case, cases brought under 
the EPA, do not require a showing of intent. So a practice 
(which includes the payment of wages) that may be ``fair in 
form but discriminatory in operation'' \158\ is prohibited 
under Title VII. The same is true with regard to the EPA.
---------------------------------------------------------------------------
    \158\ Griggs v. Duke Power, 515 F.2d 86 (4th Cir. 1975).
---------------------------------------------------------------------------
    Both Title VII and the EPA afford the employer 
opportunities to defend their practices, but as previously 
explained, the ``factor other than sex'' defense under the EPA 
has been interpreted by the courts so broadly that nearly any 
explanation for a wage differential is acceptable.\159\ This is 
one of the main reasons that the EPA is ineffective.
---------------------------------------------------------------------------
    \159\ AAUW supra note 34.

    The business necessity defense originated in the case of 
Griggs v. Duke Power Co,\160\ decided in 1975. In that case, 
the Supreme Court determined that an employment practice, which 
resulted in the exclusion of black employees from certain jobs 
could only be justified in the case of business necessity 
(``The touchstone is business necessity.'').\161\ However, 
because the Court also introduced the concept of ``job 
relatedness,'' and appeared to use the two concepts 
interchangeably, there was some confusion over the years as 
what the correct standard should be.\162\ This culminated in 
the case of Wards Cove Packing Co., Inc. et. al. v. Antonio et. 
al.,\163\ where the Court abandoned the concept of business 
necessity altogether:
---------------------------------------------------------------------------
    \160\ 401 U.S. 424 (1971).
    \161\  Id. at 431.
    \162\ See: Earl M. Maltz, The Legacy of Griggs v. Duke Power Co.: A 
Case Study in the Impact of a Modernist Statutory Precedent, 1994 Utah 
L. Rev. 1353(1994) at pp. 1371-1372.
    \163\ 490 U.S. 642 (1989)
---------------------------------------------------------------------------
          * * * the dispositive issue is whether a challenged 
        practice serves, in a significant way the legitimate 
        employment goals of the employer [citations omitted]. 
        The touchstone of this inquiry is a reasoned review of 
        the employer's justification for his use of the 
        challenged practice. A mere insubstantial justification 
        will not suffice * * * At the same time, though, there 
        is no requirement that the challenged practice be 
        ``essential'' or ``indispensible'' to the employer's 
        business.\164\
---------------------------------------------------------------------------
    \164\ Id. at 659.

    Congress responded, with the passage of the Civil Rights 
Act of 1991, which overturned Wards Cove Packing and its 
brethren and enshrined the business necessity defense into law 
in Title VII disparate income cases.\165\ Under 42 U.S.C. 
2000e(o)(1)(B) business necessity requires employment practices 
to ``bear a significant relationship to a business objective of 
the employer.'' \166\ For the purposes of showing business 
necessity, ``unsubstantiated opinion and hearsay are not 
sufficient; demonstrable evidence is required.'' \167\ 
Subsequent cases applying the business necessity standard 
illustrate that the more rigorous showing an employer must make 
to justify disparate treatment furthers the remedial purposes 
of Title VII.\168\
---------------------------------------------------------------------------
    \165\ 42 U.S.C. Sec. 2000e(o)(1).
    \166\ In 42 U.S.C. Sec. 2000e(o)(1)(A), Congress also established 
the business necessity standard in case of employment practices 
involving selection: ``the practice must bear a significant 
relationship to successful performance of the job.'' Since EPA cases 
involve wages and wage scales, it is highly unlikely that a 
circumstance will arise where this definition will be applied.
    \167\ 42 U.S.C.Sec. 2000e(o)(2).
    \168\ Lanning v. SEPTA, 308 F. 3d 286 (3rd Cir. 2002); United 
States v. Delaware, 2004 U.S. Dist. LEXUS 4560 (D. Del 2004).
---------------------------------------------------------------------------
    The Paycheck Fairness Act seeks to strengthen the EPA by 
insisting that the ``factor other than sex defense * * * be 
confined to business practices shown to serve compelling and 
legitimate interests of the employer.'' \169\ Requiring an 
employer to show that a job is consistent with business 
necessity applies a term that is already specifically defined 
in civil rights law \170\ and thereby provides workers and 
employers with a known legal standard for assessing pay 
disparities.
---------------------------------------------------------------------------
    \169\ Sellers Testimony.
    \170\ 42 U.S.C. Sec. 2000e(o)(1).
---------------------------------------------------------------------------

c. Class actions

    The EPA requires plaintiffs to affirmatively `opt-in' to a 
class action lawsuit. This is contrary to other employment 
discrimination laws, which allow women with a pay 
discrimination claim within a certified class to `opt-out' of a 
multiple-claim case pursuant to Rule 23 of the Federal Rules of 
Civil Procedure.\171\ Title VII, for example, provides for 
claimants to `opt-out' of multi-party claims.\172\
---------------------------------------------------------------------------
    \171\ Sellers Testimony at 10.
    \172\ 42 U.S.C. Sec. 2000e-2(n).
---------------------------------------------------------------------------
    Allowing plaintiffs to opt-out, rather than requiring them 
to affirmatively opt-in, is important. The current EPA rule 
excludes women who may not be aware they have a claim and also 
excludes women who may even be aware they have a claim but are 
afraid that they will be retaliated against in the workplace if 
they affirmatively opt in. H.R. 1338 puts claimants under the 
EPA in the same position as other victims of discrimination who 
automatically become part of a class-action unless they 
affirmatively opt-out of the class.\173\
---------------------------------------------------------------------------
    \173\ Sellers Testimony at 11
---------------------------------------------------------------------------

d. Damages

    Damages under the original EPA are limited to backpay and 
liquidated damages in the form of double back pay. No 
compensatory or punitive damages are available, and liquidated 
damages may only be recovered if the employer fails to 
demonstrate good faith and reasonable grounds for believing it 
was in compliance with the Act.\174\ By contrast, Title VII of 
the Civil Rights Act (Title VII) permits successful 
complainants to recover compensatory and punitive damages.
---------------------------------------------------------------------------
    \174\ ``. . . if the employer shows to the satisfaction of the 
court that the act or omission giving rise to such action was in good 
faith and that he had reasonable grounds for believing that his act or 
omission was not a violation of the Fair Labor Standards Act of 1938, 
as amended [29 USCS Sec. Sec. 201 et seq., generally; for full 
classification, consult USCS Tables volumes], the court may, in its 
sound discretion, award no liquidated damages or award any amount 
thereof not to exceed the amount specified in section 16 of such Act 
[29 USCS Sec. 216].'' 29 USCS Sec. 260. In addition, one commentator 
has stated that even when ``liquidated damages are unavailable . . . 
the amounts available to compensate plaintiffs tend to be 
insubstantial.'' Greenberger Testimony at 7.
---------------------------------------------------------------------------
    EPA sanctions are inadequate and ``deprive women subjected 
to pay discrimination of full relief.'' \175\ In addition, they 
do nothing to deter future discrimination in the workplace and 
are often viewed by employers simply as the cost of doing 
business. Joseph Sellers, testifying before the Subcommittee on 
Workforce Protections in July 2007, explained:
---------------------------------------------------------------------------
    \175\ Id.

          The remedy fails to provide an adequate incentive for 
        employers to engage regularly in the examination of 
        their own compensation practices and to investigate and 
        address any pay disparities that may be detected. Even 
        the payment of lost wages doubled where an employer has 
        failed to demonstrate it acted in good faith permits 
        employers to tolerate the risk that employment 
        practices resulting in gender-based pay disparities 
        will be detected and challenged, as they can compute 
        precisely the economic exposure and determine whether 
        it is a tolerable cost of doing business.\176\
---------------------------------------------------------------------------
    \176\ Sellers Testimony.

    Damages under Title VII are capped and can be no more than 
$300,000.\177\ These caps do little to further the actual 
purpose of punitive damages, which is to punish the defendant 
and deter future misconduct by the defendant and others 
similarly situated.\178\ As such, the Paycheck Fairness Act 
does not limit damages in this regard.
---------------------------------------------------------------------------
    \177\ Id.
    \178\ The Ineffectiveness of Capped Damages in Cases of Employment 
Discrimination: Solutions Toward Deterrence; Ruggles, Vanessa; 
Connecticut Public Interest Law Journal; Vol. 6:1 at 147 (2006) citing 
Kemezy v. Peters, 79 F.3d 33, 34 (7th Cir. 1996) (noting that 
``deterrence is a purpose of punishment, rather than, as the 
formulation implies, a parallel purpose, along with punishment itself, 
for imposing the specific form of punishment that is punitive 
damages'')
---------------------------------------------------------------------------
    The unfairness of damage limitations is illustrated in 
Brady v. Wal-Mart Stores, Inc.\179\ where the plaintiff Patrick 
Brady brought a suit against Wal-Mart and the store manager, 
alleging violations of the American with Disabilities Act (ADA) 
and the New York Human Rights Law. In his suit, Brady, who has 
cerebral palsy, claimed Wal-Mart subjected him to adverse work 
conditions and a hostile work environment based on his 
disability. The jury agreed with Brady and awarded him a 
settlement for back pay and emotional pain and suffering, and 
$5 million award in punitive damages. Unfortunately, the ADA's 
remedies are capped and the judge was required to reduce the 
award to $300,000.\180\ In his opinion, Judge Orenstein stated 
that his ruling ``respects the law, but it does not achieve a 
just result,'' \181\ especially for one of the biggest 
companies in America.\182\
---------------------------------------------------------------------------
    \179\ 2005 U.S. Dist. LEXIS 12151 (2005).
    \180\ Id.
    \181\ Brady, 2005 U.S. Dist. LEXIS 12151, at 10, aff'd 2008 U.S. 
App. LEXIS 13850 (2d Cir.).
    \182\ Supra note at 180.
---------------------------------------------------------------------------
    Punitive damages, especially uncapped punitive damages, are 
necessary to deter unscrupulous businesses from harming workers 
and consumers to gain a competitive advantage.\183\ Often, 
without punitive damages, a business may treat its labor 
violations as merely a cost of doing business. Furthermore, 
empirical studies conducted by the US Department of Justice's 
Bureau of Justice Statistics estimated that from 1991-92 and in 
the years 1996 and 2001, punitive damages were awarded in less 
than one percent of all civil actions.\184\ Juries awarded 
punitive damages in only 5.7 percent of tort and contract cases 
when the plaintiff prevailed at trial.\185\ The Department of 
Justice also studied awards made in the nation's seventy-five 
largest counties in 2001 and found that out of seventy products 
liability cases, plaintiffs received punitive damages in only 
three cases. Out of three-hundred and eleven medical 
malpractice cases, plaintiffs received punitive damages in just 
fifteen cases.\186\
---------------------------------------------------------------------------
    \183\ In Defense of Punitive Damages in Products Liability: Testing 
Tort Anecdotes with Empirical Data; Rustad, Michael; Iowa Law Review; 
78 at 12 (1992-1993).
    \184\ Bureau of Justice Statistics, U.S. Dept. of Justice, Civil 
Justice Survey of State Courts, 1992: Civil Jury Cases and Verdicts in 
Large Counties, Bureau of Justice Statistics Special Report NCJ 154346 
(July 1995) [hereinafter ``Bureau of Justice Statistics July 1995'']; 
Bureau of Justice Statistics, U.S. Dept. of Justice, Civil Justice 
Survey of State Courts, 1996: Civil Trial Cases and Verdicts in Large 
Counties, 1996, Bureau of Justice Statistics Bulletin, NCJ 173426 
(Sept. 1999) [hereinafter ``Bureau of Justice Statistics September 
1999'']; Bureau of Justice Statistics, U.S. Dept. of Justice, Civil 
Justice Survey of State Courts, 2001: Civil Trial Cases and Verdicts in 
Large Counties, 2001, NCJ 202803 (Apr. 2004) [hereinafter ``Bureau of 
Justice Statistics April 2004'']; Bureau of Justice Statistics, U.S. 
Dept. of Justice, Civil Justice Survey of State Courts, 2001: Tort 
Trials and Verdicts in Large Counties, 2001, NCJ 206240 (Nov. 2004) 
[hereinafter ``Bureau of Justice Statistics November 2004'']; Bureau of 
Justice Statistics, U.S. Dept. of Justice, Civil Justice Survey of 
State Courts, 2001: Punitive Damage Awards in Large Counties, 2001, NCJ 
208445 (Mar. 2005) [hereinafter ``Bureau of Justice Statistics March 
2005'']
    \185\ Brief of Amici Curiae in support of respondent in Philip 
Morris USA v Mayola Williams No. 05-1256 at 5.
    \186\ Id at 9.
---------------------------------------------------------------------------
    There is precedent for uncapped damages against employers 
who discriminate;\187\ damages awarded under Section 1981 for 
race or national origin discrimination are not subject to 
statutory limitations.
---------------------------------------------------------------------------
    \187\ 42 U.S.C. Sec. 1981.
---------------------------------------------------------------------------
    Still, even in those cases, courts generally do not award 
unjustifiable or excessive damages and base relief based on 
sound factors, such as the willfulness or egregiousness of the 
violation \188\ and the effectiveness of damages as a 
deterrent.\189\ Because decisions are made by each court on a 
case by case basis, courts are able to strike the needed 
balance between assessing penalties based upon particular facts 
and circumstances and assessing the severity of the 
discrimination.\190\
---------------------------------------------------------------------------
    \188\ Court found it improper to award punitive damages in the 
absence of evidence of egregious conduct, willfulness, or malice on the 
part of the employer. Beauford v. Sisters of Mercy-Province of Detroit, 
Inc. 816 F2d. 1104 (6th Cir. 1987)
    \189\ The appellate court reduced the punitive award amount when it 
found that the employer's discriminatory act was minor and quickly 
remedied. Circuit court reasoned that a higher amount would remove 
monetary incentive to remedy minor violations, and would remove 
incentive from escalating minor discrimination into major 
discrimination. Lust v. Sealy, Inc., 383 F3d. 580 (7th Cir. 2004); See 
also, Jones v. Western Geophysical Co., 761 F.2d 1158 (5th Cir. 1985) 
(Employer who has been found to have engaged in racial discrimination 
need not pay punitive damages to plaintiff if said employer is taking 
steps to eliminate discrimination, and if evidence against employer is, 
at times, ambiguous and does not necessarily lead to the conclusion 
that the employer behaved maliciously in practice of racial 
discrimination); Beauford v. Sisters of Mercy-Province of Detroit, 
Inc., 816 F.2d 1104 (6th Cir. 1987) (holding that it was improper to 
award punitive damages to employee alleging race discrimination without 
evidence that employer acted egregiously, willfully, or maliciously in 
failing to promote an plaintiff because of his race); Stephens v. South 
Atlantic Canners, Inc., 848 F.2d 484 (4th Cir. 1988) (holding that 
extraneous materials submitted to the jury relating to discharged 
employee's infractions warranted reversal of punitive damages issued 
against his former employer in his discriminatory discharge case 
brought under 42 USCS Sec. 1981 and Title VII.); Edward v. Jewish 
Hospital, 855 F.2d 1345 (8th Cir. 1988) (Court denied reducing punitive 
damages award of $25,000 to reflect reduction in actual damages from 
$50,000 to $1 nominal damages because of lack of a general 
proportionality rule requiring nominal damages to invalidate punitive 
damages award.)
    \190\ The Court distinguished the need to address levels of 
discrimination in terms of appropriate amount for recovery, reasoning 
that a higher amount would remove monetary incentive to remedy minor 
violations, and would remove incentive from escalating minor 
discrimination into major discrimination. Lust v. Sealy, Inc., 383 F3d. 
580 (7th Cir. 2004)
---------------------------------------------------------------------------
    The Paycheck Fairness Act provides for uncapped damages and 
as such ``redresses the deficiencies in the remedies available 
under the EPA [and] eliminates a shortcoming of the EPA that 
has long diminished in its value as a vehicle for addressing 
unlawful pay disparities.'' \191\ Longstanding judicial 
discretion under Sec. 1981 directly addresses these concerns of 
frivolous and excessive claims for relief.\192\
---------------------------------------------------------------------------
    \191\ Testimony of Joseph Sellers at 14.
    \192\ See generally, Jones v. Western Geophysical Co., 761 F.2d 
1158 (5th Cir. 1985) (Employer who has been found to have engaged in 
racial discrimination need not pay punitive damages to plaintiff if 
said employer is taking steps to eliminate discrimination, and if 
evidence against employer is, at times, ambiguous and does not 
necessarily lead to the conclusion that the employer behaved 
maliciously in practice of racial discrimination); Beauford v. Sisters 
of Mercy-Province of Detroit, Inc., 816 F.2d 1104 (6th Cir. 1987) 
(holding that it was improper to award punitive damages to employee 
alleging race discrimination without evidence that employer acted 
egregiously, willfully, or maliciously in failing to promote an 
plaintiff because of his race); Stephens v. South Atlantic Canners, 
Inc., 848 F.2d 484 (4th Cir. 1988) (holding that extraneous materials 
submitted to the jury relating to discharged employee's infractions 
warranted reversal of punitive damages issued against his former 
employer in his discriminatory discharge case brought under 42 USCS 
Sec. 1981 and Title VII.); Edward v. Jewish Hospital, 855 F.2d 1345 
(8th Cir. 1988) (Court denied reducing punitive damages award of 
$25,000 to reflect reduction in actual damages from $50,000 to $1 
nominal damages because of lack of a general proportionality rule 
requiring nominal damages to invalidate punitive damages award.)
---------------------------------------------------------------------------

e. Retaliation for discussing or disclosing salary information

    The EPA does not explicitly protect employees who discuss 
or disclose salary information. As previously noted, many 
employers discourage and may even have workplace policies 
against the sharing of salary information. This makes it 
extremely difficult to detect pay discrimination. For example, 
Lilly Ledbetter was paid less than her male co-workers for 
years but she did not realize it. A company policy prohibited 
her from discussing her pay with her co-workers. The only 
reason she discovered the pay discrimination when someone sent 
her an anonymous note.\193\
---------------------------------------------------------------------------
    \193\ Ledbetter supra note 65.
---------------------------------------------------------------------------
    The National Labor Relations Act (NLRA) prohibits 
retaliation against employees \194\ who share salary 
information for the purposes of union organizing. Section 7 
protects the right of employees to join a union and ``engage in 
* * * concerted activities for the purpose of collective 
bargaining or other mutual aid or protection * * *'' \195\ 
Concerted activity includes the right to discuss wages, hours 
and other terms and conditions of employment.\196\ It also bans 
blanket prohibitions on discussing wages.\197\ Even with the 
National Labor Relations Board's recent turn to roll back 
worker protections, this basic rule has been upheld.\198\ 
However, supervisors are not protected under the NLRA and can 
be prevented and reprimanded for discussing and/or sharing 
salary information.
---------------------------------------------------------------------------
    \194\ 29 U.S.C. Sec. 152(3)
    \195\ 29 U.S.C. Sec. 157
    \196\ Id.
    \197\ 29 U.S.C. 158(a)(1) provides that it is an unfair labor 
practice for an employer to interfere, retrain or coerce employees in 
the exercise of the rights guaranteed in section 157.
    \198\ See, Northeastern Land Services, Ltd. 352 NLRB No. 89 (June 
27, 2008) ([Respondent's] confidentiality provision is unlawful * * * 
the provision, by its clear terms, precludes employees from discussing 
compensation). See also, Dickens, Inc. and Wenqing Lin. 352 NLRB No. 84 
(May 30, 2008)([the employer] admitted * * * he instructed employees 
not to discuss their bonus with other, recently hired employees * * * 
such comments reasonably tend to coerce employees in the exercise of 
Section 7 rights).
---------------------------------------------------------------------------
    Under the FLSA, employers are prohibited from retaliating 
against employees who seek to assert their rights under the 
Act.\199\ As such, this protection extends to a woman claiming 
an EPA violation who has filed, instituted, initiated or 
participated in any capacity in a proceeding under or related 
to [the Act].\200\ However, in some cases interpreting the 
anti-retaliatory provision \201\ the courts have limited the 
protection afforded by anti-retaliation provisions, 
particularly when they find that an aggrieved worker has not 
stepped outside her role representing the employer.
---------------------------------------------------------------------------
    \199\ 29 U.S.C. Sec. 215(a)(3) provides that it shall be unlawful 
for any person to discharge or in any other manner discriminate against 
any employee because such employee has filed any complaint or 
instituted or caused to be institute any proceeding under or related to 
this Act generally; for full classification, or has testified or is 
about to testify in any such proceeding or has served or is about to 
serve on an industry committee.
    \200\ 29 U.S.C. Sec. 215(a)(3)
    \201\ Id.
---------------------------------------------------------------------------
    For example, in McKenzie v. Reinberg's Inc,\202\ the 
plaintiff alleged that she was fired in violation of the FLSA's 
anti-retaliation provision because she questioned whether her 
employer was in compliance with the overtime provisions of the 
FLSA. The plaintiff was a personnel director who, as part of 
her job, monitored compliance with state and federal wage and 
hour laws. After attending a training on the FLSA, she 
determined that her employer was likely in violation of law's 
overtime provisions. She brought this to her employer's 
attention and was fired as a result.\203\ The court held that 
because McKenzie merely articulated her concerns about the wage 
and hour violations with her employer:
---------------------------------------------------------------------------
    \202\ 94 F.3d 1478 (1996)
    \203\ See also: Hagan v. Echostar, 529 F.3d 617 (2008) where the 
Court found that the plaintiff was not protected for participating in 
activities that ``are neither adverse to the company nor supportive of 
adverse action to the company.'' The Court stated that ``in order to be 
protected must step out of role of representing the company by either 
filing or threatening to file an action adverse to the employer, by 
actively assisting other employees in asserting FLSA rights or by 
otherwise engaging in activities that reasonably could be perceived as 
directed toward the assertion of rights protected by the FLSA.''

          [she] did not engage in activity protected under 
        Sec. 215(a)(3). To qualify for the protections the 
        employee must step outside his or her role of 
        representing the company and either file (or threaten 
        to file) an action adverse to the employer, actively 
        assist other employees in asserting FLSA rights, or 
        otherwise engage in activity that reasonably could be 
        perceived as directed towards the assertion of rights 
        protected by the FLSA.\204\
---------------------------------------------------------------------------
    \204\ McKenzie, supra note 202.

    The Sixth Circuit reached a similar--and misguided--
conclusion in Crawford v. Metropolitan Government of 
Nashville,\205\ when it limited the reach of the Title VII 
anti-retaliation provision by finding that its protections did 
not extend to internal investigations. In that case, the 
plaintiff alleged she was fired because, in the midst of an 
internal investigation conducted by the employer she made 
statements to the in-house investigator about sexual harassment 
by another employee. The court in ruling against the plaintiff, 
misinterpreted the Title VII provision when it held that 
employer initiated investigations are not covered under the 
Act.
---------------------------------------------------------------------------
    \205\ 2006 U.S.APP. LEXIS 28280.
---------------------------------------------------------------------------
    Protecting employees who participate in employer initiated 
investigations does not ``expand'' the law (``expanding the 
purview of the participation clause to cover such 
investigations would simultaneously discourage them.'').\206\ 
As such, the decision in Crawford is contrary to the principle 
that ``employee actions [should] receive the broadest 
protections from retaliation, protecting employees from adverse 
consequences even if their beliefs about discrimination turn 
out to be factually or legally incorrect, as long as the 
employees acted in good faith.'' \207\
---------------------------------------------------------------------------
    \206\ Id.
    \207\ Joanna Grossman & Deborah Brake, The Supreme Court Agrees to 
Review a Sixth Circuit Ruling that Narrowly Construes Title VII's 
Protections Against Retaliation, (Feb. 7, 2008) available at, http://
writ.news.findlaw.com/_scripts/printer--friendly.pl?_page=/commentary/
_20080207_brake.html.
---------------------------------------------------------------------------
    A key component in eliminating the wage gap is protecting 
workers who discuss wages or participate in an EPA suit by 
ensuring that they can do so without fear of reprimand. Even 
when employers do not have explicit policies ``legal or not, 
workers are expected to keep their lips sealed about their 
salaries. It's the unwritten law.'' \208\ As one employer 
advised other employers ``sit down with people, talk to them * 
* *. be clear: it's not OK to talk salary at the office.'' 
\209\
---------------------------------------------------------------------------
    \208\ Sacha Cohen, Shhh, They're Talking Salary, USA Today (Dec. 
20, 2002) (quoting Lee Miller, Co-author of A Women's Guide to 
Successful Negotiating), Available at: http://www.usatoday.com/_money/
jobcenter/_jobhunt/salary/_2002-12-20-salary-_talk_x.htm.
    \209\ Id. (Quoting Bob Lambert, managing partner at Christian & 
Timbers, Irvine, California).
---------------------------------------------------------------------------
    H.R. 1338 protects the rights of employees to discuss and 
disclose wage information in the workplace and affirms the 
rights of workers to disclose this information as part of an 
employer or government investigation. Its provisions are 
intended to give robust protection to those employees who act 
to oppose violations of the Act, as well as to provide a shield 
of protection for the kinds of discussions that will allow 
employees to uncover unequal pay. However, the bill recognizes 
that employers may entrust some employees with access to wage 
information as part of an essential function \210\ of their 
job. These confidential employees will not be protected for 
disclosing the wages to those who do not otherwise have access. 
However, they could (1) disclose their own wages; (2) disclose 
wage issues ``up the chain'' or ``horizontally'' if they become 
aware of potential pay discrimination regarding other 
employees; or (3) disclose wages in response to or in 
furtherance of an employer or government investigation or other 
proceeding under the Act.
---------------------------------------------------------------------------
    \210\ ``Essential job function'' as used in the Americans with 
Disabilities Act, 42 U.S.C. 31211 generally means ``the fundamental job 
duties of the employment position. Factors to be weighed in this 
determining an essential function include: (1) the reason(s) the 
position exists; (2) the number of employees whose functions are 
similar; (3) the specialized nature of the job; and (4) the expertise 
needed to perform the required functions.
---------------------------------------------------------------------------

                      Section-by-Section Analysis

    Section 1 is the short title.
    Section 2 contains the findings.
    Section 3(a) clarifies the ``any factor other than sex'' 
defense by requiring employers to provide non-gender reasons 
for the difference in wages based on a business justification. 
To successfully raise this affirmative defense an employer must 
demonstrate that the disparity is based on a bona fide factor 
other than sex, such as education, training, or experience, 
that is: (1) not based upon or derived from a sex-based 
differential; and (2) related to the position in question; and 
(3) consistent with business necessity. Such a defense shall 
not apply if the employee can then demonstrate that an 
alternative employment practice exists that would serve the 
same business purpose without producing the differential, and 
the employer refused to adopt the alternative.
    Section 3(a) broadens where a female employee can look to 
find a male comparator. Employees shall be considered to work 
in the same establishment if the employees work at workplaces 
located in the same county or similar political subdivision of 
a state. In addition, the bill recognizes that establishment, 
consistent with rules or guidance offered by the EEOC, can be 
applied more broadly when, for example, there is a central 
decision making structure that makes the salary and hiring 
decisions for employees in multiple locations.
    Section 3(b) provides that this subsection applies to 
applicants for employment.
    Section 3(c) provides that employers are prohibited from 
retaliating against employees who share salary information with 
their co-workers. Employees are protected when they have 
disclosed, discussed, or inquired about the wages of another 
employee. In addition, employees are protected if they make a 
charge, file a complaint or participate in any way in a 
government initiated or employer initiated investigation, 
including but not limited to testifying, assisting or 
participating in anyway an investigation, proceeding, hearing 
or has served or plans to serve on an industry committee.
    Section 3(c) contains limiting language on when the anti-
retaliation protections apply extend to employees with access 
to wage information of other employees as an essential function 
of their job. These employees such as payroll and human 
resource personnel would not be protected if they disclose that 
wage information to individuals who do not otherwise have 
access to this information. However, they would be protected 
if: (1) they were disclosing that wage information to someone 
who also has access to such information; (2) they were 
disclosing their own wages; or (3) the disclosure was in 
response to a complaint or charge or in furtherance of an 
investigation, proceeding, hearing or action under the EPA, 
including an internal employer investigation.
    Section 3(d) provides that compensatory and punitive 
damages are available in private EPA suits. In addition, class 
action lawsuits brought under the EPA shall proceed as opt-out 
class actions in conformity with the Federal Rules of Civil 
Procedure.
    Section 3(e) provides for compensatory and punitive damages 
and class actions in cases (for minimum wages and unpaid 
overtime compensation) brought by the Secretary of Labor on 
behalf of an employee.
    Section 4 requires the EEOC and the OFCCP (subject to the 
availability of funds) to provide training to EEOC employees on 
pay discrimination.
    Section 5(a) authorizes the Secretary of Labor (after 
consultation with the Secretary of Education) to establish and 
carry out a grant program to provide negotiation skills 
training programs for girls and women. The training would help 
girls and women strengthen their negotiation skills to obtain 
higher salaries and equal pay.
    Section 5(b) requires the Secretary to issue regulations or 
guidelines integrating negotiation skills training into 
existing education and work training programs.
    Section 5(c) mandates the Secretaries of Labor and 
Education to submit an annual report to Congress on the grant 
program.
    Section 6 requires the Secretary of Labor to conduct 
studies and provide information to employers, labor 
organizations and the public on ways to eliminate pay 
disparities. This includes conducting and promoting research, 
publishing and otherwise making available findings from studies 
and other materials; sponsoring and assisting State and 
community informational and educational programs; providing 
information on the means of eliminating pay disparities; and 
recognizing and promoting achievements and convening a national 
summit.
    Section 7 establishes an annual award entitled the 
``Secretary of Labor's National Award for Pay Equity in the 
Workplace'' for businesses that demonstrate substantial effort 
in eliminating pay disparities.
    Section 8 requires the EEOC, within 18 months of enactment, 
to survey pay data already available, and based on the results 
of the survey, issue regulations to provide for the collection 
of pay information from employers identified by sex, race and 
national origin of employees.
    Section 9(a) requires the continued collection by the 
Commissioner of Labor Statistics of gender-based data in the 
Current Employment Statistics survey.
    Section 9(b) sets standards for the OFCCP in conducting 
systematic wage discrimination analyses and reinstates the 
Equal Opportunity Survey.
    Section 9(c) requires the Secretary of Labor to distribute 
(or make available) accurate information on wage 
discrimination.
    Section 10 authorizes the appropriation of $15 million to 
carry out the Act.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 203 of the Congressional Accountability Act (CAA) 
applies certain rights and protections of the Fair Labor 
Standards Act of 1938 (FLSA) to covered employees. These rights 
and protections include the Equal Pay Act protections against 
sex discrimination in wages paid to men and women. The House, 
Senate, and Instrumentalities of Congress all have slightly 
different regulations regarding the implementation of the FLSA.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates.

                           Earmark Statement

    H.R. 1338 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e) or 9(f) of rule XXI.

                               Roll Call



  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the body of this report.

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 1338 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 25, 2008.
Hon. George Miller,
Chairman, Committee on Education and Labor,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1338, the Paycheck 
Fairness Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jessica 
Sherry.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 1338--Paycheck Fairness Act

    H.R. 1338 would authorize the appropriation of $15 million 
to enhance enforcement of the equal pay requirement established 
in the Fair Labor Standards Act of 1938. Additionally, the bill 
would authorize grants to eligible public agencies to provide 
training to women and girls on negotiation skills. Finally, the 
bill would direct the Secretary of Labor to conduct research on 
the means available to eliminate gender-related pay 
disparities, and would direct the Commissioner of Labor 
Statistics to continue to collect data on female workers and 
pay equity between men and women.
    CBO estimates that implementing H.R. 1338 would cost $15 
million over the 2009-2013 period, assuming appropriation of 
the authorized amounts. The costs of this legislation fall 
within budget function 500 (education, training, employment, 
and social services). Enacting the bill would not affect direct 
spending or revenues.
    Section 4 of the Unfunded Mandates Reform Act (UMRA) 
excludes from the application of that act any legislative 
provisions that establish or enforce any statutory rights that 
prohibit discrimination on the basis of race, color, religion, 
sex, national origin, age, handicap, or disability. CBO has 
determined that section 3 of H.R. 1338 would fall within that 
exclusion because it would enforce an existing prohibition of 
sex discrimination by pay. Therefore, CBO has not reviewed that 
section of the bill for mandates.
    The remaining provisions in the bill would impose no 
mandates on state, local, or tribal governments. Training 
programs authorized by the bill would benefit state, local, and 
tribal governments. Likewise, the remaining provisions of this 
bill contain no private-sector mandates as defined in UMRA.
    The CBO staff contact for this estimate is Jessica Sherry. 
This estimate was approved by Peter H. Fontaine, Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with Clause 3(c) of House rule XIII, the goal 
of H.R. 1338 is to protect employees from wage discrimination.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 1338. The 
Committee believes that the amendments made by this bill are 
within Congress' Constitutional authority under Article 1, 
Section 8, Clause 3 (the Commerce Clause), Amendment V (Due 
Process) and Section 1 of the Amendment XIV (the Equal 
Protection and Due Process Clauses).

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 1338. 
However, clause 3(d)(3)(B) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                    FAIR LABOR STANDARDS ACT OF 1938




           *       *       *       *       *       *       *
                             MINIMUM WAGES

  Sec. 6. (a) * * *

           *       *       *       *       *       *       *

  (d)(1) [No employer having] (A) No employer having employees 
subject to any provisions of this section shall discriminate, 
within any establishment in which such employees are employed, 
between employees on the basis of sex by paying wages to 
employees in such establishment at a rate less than the rate at 
which he pays wages to employees of the opposite sex in such 
establishment for equal work on jobs the performance of which 
requires equal skill, effort, and responsibility, and which are 
performed under similar working conditions, except where such 
payment is made pursuant to (i) a seniority system; (ii) a 
merit system; (iii) a system which measures earnings by 
quantity or quality or production; or (iv) a differential based 
on [any other factor other than sex] a bona fide factor other 
than sex, such as education, training, or experience: Provided, 
That an employer who is paying a wage rate differential in 
violation of this subsection shall not, in order to comply with 
the provisions of this subsection, reduce the wage rate of any 
employee. The provisions of this subsection shall apply to 
applicants for employment if such applicants, upon employment 
by the employer, would be subject to any provisions of this 
section.
  (B) The bona fide factor defense described in subparagraph 
(A)(v) shall apply only if the employer demonstrates that such 
factor (i) is not based upon or derived from a sex-based 
differential in compensation; (ii) is job-related with respect 
to the position in question; and (iii) is consistent with 
business necessity. Such defense shall not apply where the 
employee demonstrates that an alternative employment practice 
exists that would serve the same business purpose without 
producing such differential and that the employer has refused 
to adopt such alternative practice.
  (C) For purposes of subparagraph (A), employees shall be 
deemed to work in the same establishment if the employees work 
for the same employer at workplaces located in the same county 
or similar political subdivision of a State. The preceding 
sentence shall not be construed as limiting broader 
applications of the term ``establishment'' consistent with 
rules prescribed or guidance issued by the Equal Opportunity 
Employment Commission.

           *       *       *       *       *       *       *


                            PROHIBITED ACTS

  Sec. 15. (a) After the expiration of one hundred and twenty 
days from the date of enactment of this Act, it shall be 
unlawful for any person--
          (1) * * *

           *       *       *       *       *       *       *

          (3) to discharge or in any other manner discriminate 
        against any employee because such [employee has filed 
        any complaint or instituted or caused to be instituted 
        any proceeding under or related to this Act, or has 
        testified or is about to testify in any such 
        proceeding, or has served or is about to serve on an 
        industry committee;] employee--
                  (A) has made a charge or filed any complaint 
                or instituted or caused to be instituted any 
                investigation, proceeding, hearing, or action 
                under or related to this Act, including an 
                investigation conducted by the employer, or has 
                testified or is planning to testify or has 
                assisted or participated in any manner in any 
                such investigation, proceeding, hearing or 
                action or in an investigation conducted by the 
                employer, or has served or is planning to serve 
                on an industry Committee; or
                  (B) has inquired about, discussed or 
                disclosed the wages of the employee or another 
                employee.

           *       *       *       *       *       *       *

  (c) Subsection (a)(3)(B) shall not apply to instances in 
which an employee who has access to the wage information of 
other employees as a part of such employee's essential job 
functions discloses the wages of such other employees to 
individuals who do not otherwise have access to such 
information, unless such disclosure is in response to a 
complaint or charge or in furtherance of an investigation, 
proceeding, hearing, or action under section 6(d) or an 
investigation conducted by the employer. Nothing in this 
subsection shall be construed to limit the rights of an 
employee provided under any other provision of law.

                               PENALTIES

  Sec. 16. (a) * * *
  (b) Any employer who violates the provisions of section 6 or 
section 7 of this Act shall be liable to the employee or 
employees affected in the amount of their unpaid minimum wages, 
or the unpaid overtime compensation, as the case may be, and in 
an additional equal amount as liquidated damages. Any employer 
who violates section 6(d) shall additionally be liable for such 
compensatory damages or punitive damages as may be appropriate, 
except that the United States shall not be liable for punitive 
damages. Any employer who violates the provisions of section 
15(a)(3) of this Act shall be liable for such legal or 
equitable relief as may be appropriate to effectuate the 
purposes of section 15(a)(3), including without limitation 
employment, reinstatement, promotion, and the payment of wages 
lost and an additional equal amount as liquidated damages. An 
action to recover the liability prescribed in [either of the 
preceding sentences] any of the preceding sentences of this 
subsection may be maintained against any employer (including a 
public agency) in any Federal or State court of competent 
jurisdiction by any one or more employees for and in behalf of 
himself or themselves and other employees similarly situated. 
[No employees] Except with respect to class actions brought to 
enforce section 6(d), no employee shall be a party plaintiff to 
any such action unless he gives his consent in writing to 
become such a party and such consent is filed in the court in 
which such action is brought. Notwithstanding any other 
provision of Federal law, any action brought to enforce section 
6(d) may be maintained as a class action as provided by the 
Federal Rules of Civil Procedure. The court [in such action] in 
any action brought to recover the liability prescribed in any 
of the preceding sentences of this subsection shall, in 
addition to any judgment awarded to the plaintiff or 
plaintiffs, allow a reasonable attorney's fee to be paid by the 
defendant, and costs of the action, including expert fees. The 
right provided by this subsection to bring an action by or on 
behalf of any employee, and the right of any employee to become 
a party plaintiff to any such action, shall terminate upon the 
filing of a complaint by the Secretary of Labor in an action 
under section 17 in which (1) restraint is sought of any 
further delay in the payment of unpaid minimum wages, or the 
amount of unpaid overtime compensation, as the case may be, 
owing to such employee under section 6 or section 7 of this act 
by an employer liable therefor under the provisions of this 
subsection or (2) legal or equitable relief is sought as a 
result of alleged violations of section 15(a)(3).
  (c) The Secretary is authorized to supervise the payment of 
the unpaid minimum wages or the unpaid overtime compensation 
owing to any employee or employees under section 6 or 7 of this 
Act, or, in the case of a violation of section 6(d), additional 
compensatory or punitive damages, and the agreement of any 
employee to accept such payment shall upon payment in full 
constitute a waiver by such employee of any right he may have 
under subsection (b) of this section to such unpaid minimum 
wages or unpaid overtime compensation and an additional equal 
amount as liquidated damages, or such compensatory or punitive 
damages, as appropriate. The Secretary may bring an action in 
any court of competent jurisdiction to recover the amount of 
the unpaid minimum wages or overtime compensation and an equal 
amount as liquidated damages and, in the case of a violation of 
section 6(d), additional compensatory or punitive damages. The 
right provided by subsection (b) to bring an action by or on 
behalf of any employee to recover the liability specified in 
[the first sentence] the first or second sentence of such 
subsection and of any employee to become a party plaintiff to 
any such action shall terminate upon the filing of a complaint 
by the Secretary in an action under this subsection in which a 
recovery is sought of unpaid minimum wages or unpaid overtime 
compensation under sections 6 and 7 or liquidated or other 
damages provided by this subsection owing to such employee by 
an employer liable under the provisions of subsection (b), 
unless such action is dismissed without prejudice on motion of 
the Secretary. Any sums thus recovered by the Secretary on 
behalf of an employee pursuant to this subsection shall be held 
in a special deposit account and shall be paid, on order of the 
Secretary, directly to the employee or employees affected. Any 
such sums not paid to an employee because of inability to do so 
within a period of three years shall be covered into the 
Treasury of the United States as miscellaneous receipts. In 
determining when an action is commenced by the Secretary under 
this subsection for the purposes of the statutes of limitations 
provided in section 6(a) of the Portal-to-Portal Act of 1947, 
it shall be considered to be [commenced in the case] 
commenced--
          (1) in the case of any individual claimant on the 
        date when the complaint is filed if he is specifically 
        named as a party plaintiff in the complaint, or if his 
        name did not so appear, on the subsequent date on which 
        his name is added as a party plantiff in such 
        action[.]; or
          (2) in the case of a class action brought to enforce 
        section 6(d), on the date on which the individual 
        becomes a party plaintiff to the class action.

           *       *       *       *       *       *       *

                              ----------                              


                        CIVIL RIGHTS ACT OF 1964



           *       *       *       *       *       *       *
TITLE VII--EQUAL EMPLOYMENT OPPORTUNITY

           *       *       *       *       *       *       *


          INVESTIGATIONS, INSPECTIONS, RECORDS, STATE AGENCIES

  Sec. 709. (a) * * *

           *       *       *       *       *       *       *

  (f)(1) Not later than 18 months after the date of enactment 
of this subsection, the Commission shall--
          (A) complete a survey of the data that is currently 
        available to the Federal Government relating to 
        employee pay information for use in the enforcement of 
        Federal laws prohibiting pay discrimination and, in 
        consultation with other relevant Federal agencies, 
        identify additional data collections that will enhance 
        the enforcement of such laws; and
          (B) based on the results of the survey and 
        consultations under subparagraph (A), issue regulations 
        to provide for the collection of pay information data 
        from employers as described by the sex, race, and 
        national origin of employees.
  (2) In implementing paragraph (1), the Commission shall have 
as its primary consideration the most effective and efficient 
means for enhancing the enforcement of Federal laws prohibiting 
pay discrimination. For this purpose, the Commission shall 
consider factors including the imposition of burdens on 
employers, the frequency of required reports (including which 
employers should be required to prepare reports), appropriate 
protections for maintaining data confidentiality, and the most 
effective format for the data collection reports.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              INTRODUCTION

    Committee Republicans are united in their support for the 
simple proposition that equal work should be rewarded with 
equal pay, irrespective of an employee's sex. Indeed, that very 
principle has been the law of the land for decades. It is 
already--as it should be--against federal law to discriminate, 
in pay or other employment practices, on the basis of sex. To 
the extent that wage disparities exist and are a product of 
workplace discrimination, Committee Republicans are committed 
to eliminating them in order to ensure a fair, productive, and 
competitive workforce.
    In 1963, Congress enacted the Equal Pay Act (EPA) within 
the Fair Labor Standards Act.\1\ The EPA makes it illegal to 
pay different wages to employees of the opposite sex for equal 
work. One year later, Congress enacted comprehensive anti-
discrimination civil rights protection based on race, color, 
national origin, religion, and sex under Title VII of the Civil 
Rights Act.\2\ Together, these laws protect against sex 
discrimination, and provide a range of remedies for victims. In 
short, the question is not whether sex discrimination in the 
workplace should be permitted. That question has been 
answered--Committee Republicans agree that such discrimination 
should not be tolerated: that is why it is a direct violation 
of not one but two federal laws.
---------------------------------------------------------------------------
    \1\ See 29 U.S.C. Sec. 206(d).
    \2\ See 42 U.S.C. Sec. 2000e et seq.
---------------------------------------------------------------------------
    It is against this backdrop that Committee Republicans 
reject H.R. 1388, the so-called ``Paycheck Fairness Act.'' 
Simply put, H.R. 1338 does little to protect the wages and 
paychecks of American workers, and far more to line the pockets 
of the plaintiffs' trial-lawyer bar. The bill radically expands 
liability and damages under the Equal Pay Act, while 
dramatically limiting the ability of employers to defend claims 
of discrimination based on pay disparities that arise from 
wholly lawful and legitimate business purposes. For these 
reasons, and as set forth more fully below, Committee 
Republicans are united in their opposition to H.R. 1338.\3\
---------------------------------------------------------------------------
    \3\ At markup on July 24, 2008, the bill was ordered reported 
favorably to the House on a party-line vote of 26-17, with all 
Republicans present voting against favorably reporting the measure.''
---------------------------------------------------------------------------

                     THE FLAWED ``WAGE GAP'' THEORY

    Equal pay advocates claim that despite federal law 
prohibiting discrimination in pay on the basis of gender, 
female workers are still paid considerably less than male 
workers, and thus a ``wage gap'' exists. Advocates commonly 
support this claim with reference to the most recent census 
data available, which indicated that in 2005, the average 
median income for women was $31,858, roughly 77 percent of the 
median income for men, which was $41,386.\4\ The Majority 
argues that this flawed theory makes enactment of H.R. 1338 
necessary. Committee Republicans reject that argument.
---------------------------------------------------------------------------
    \4\ See U.S. Census Bureau, Current Population Survey, 2006 Annual 
Social & Economic Supplement, PINC-05.
---------------------------------------------------------------------------
    Pay equity advocates argue that the root cause of pay 
inequity is the fact that ``many women and people of color are 
still segregated into a few low-paying occupations. More than 
half of all women workers hold sales, clerical and service 
jobs. Studies show that the more an occupation is dominated by 
women or people of color, the less it pays. * * * In other 
words, certain jobs pay less because they are held by women and 
people of color.'' \5\ Supporters thus appear to argue that 
differences in wages between men and women (or minorities) are 
not caused by intentional discrimination, or the fact that 
these workers are paid less because of the nature of the jobs 
they hold, but rather because certain jobs are held 
predominantly by women or minorities, employers systematically 
undervalue the job and thus ``underpay'' these workers.
---------------------------------------------------------------------------
    \5\ See http://www.pay-equity.org/info--Q&A.html.
---------------------------------------------------------------------------
    The logic of this assertion is readily discredited. Critics 
of the wage gap theory note that the ``77 percent'' figure most 
frequently cited as evidence of wage discrimination derived by 
comparing the 2005 full-time (defined as working 35 hours per 
week or more) median annual earnings of women with men, as 
compiled by the Census Bureau. If the comparison is men and 
women who work 40 hours weekly, this data shows women's 
earnings at 88 percent of men's. Moreover, these statistics do 
not necessarily take into account education, job title, 
responsibility, regional labor markets, work experience, 
occupation, and time in the work force. Critics of the ``wage 
gap'' theory note that when economic studies include these 
major determinants of income, rather than simple averages of 
all men and women's salaries, the pay gap shrinks considerably.
    GAO has reached similar conclusions.. In October 2003, GAO 
released a report entitled ``Women's Earnings: Work Patterns 
Partially Explain Difference between Men's and Women's 
Earnings.''\6\ GAO's report found that a number of factors are 
critical to resolving the issue of whether a ``pay gap'' 
exists, and notably explained that the agency could not 
conclude that the ``wage gap'' was simply a function of wage or 
sex discrimination. As GAO summarized (emphasis added):

    \6\ A copy of the complete report is available at http://
www.gao.gov/new.items/d0435.pdf.

          Of the many factors that account for differences in 
        earnings between men and women, our model indicated 
        that work patterns are key. Specifically, women have 
        fewer years of work experience, work fewer hours per 
        year, are less likely to work a full-time schedule, and 
        leave the labor force for longer periods of time than 
        men. Other factors that account for earnings 
        differences include industry, occupation, race, marital 
        status, and job tenure. When we account for differences 
        between male and female work patterns as well as other 
        key factors, women earned, on average, 80 percent of 
        what men earned in 2000. While the difference 
        fluctuated in each year we studied, there was a small 
        but statistically significant decline in the earnings 
        difference over the time period.
          Even after accounting for key factors that affect 
        earnings, our model could not explain all of the 
        difference in earnings between men and women. Due to 
        inherent limitations in the survey data and in 
        statistical analysis, we cannot determine whether this 
        remaining difference is due to discrimination or other 
        factors that may affect earnings. For example, some 
        experts said that some women trade off career 
        advancement or higher earnings for a job that offers 
        flexibility to manage work and family responsibilities.
          In conclusion, while we were able to account for much 
        of the difference in earnings between men and women, we 
        were not able to explain the remaining earnings 
        difference. It is difficult to evaluate this remaining 
        portion without a full understanding of what 
        contributes to this difference. Specifically, an 
        earnings difference that results from individuals' 
        decisions about how to manage work and family 
        responsibilities may not necessarily indicate a problem 
        unless these decisions are not freely made. On the 
        other hand, an earnings difference may result from 
        discrimination in the workplace or subtler 
        discrimination about what types of career or job 
        choices women can make. Nonetheless, it is difficult, 
        and in some cases, may be impossible, to precisely 
        measure and quantify individual decisions and possible 
        discrimination. Because these factors are not readily 
        measurable, interpreting any remaining earnings 
        difference is problematic.

    Given the flaws in its advocates' logic, and the absolute 
lack of definitive evidence that a ``wage gap'' counsels 
enactment of sweeping reforms to the Equal Pay Act and other 
federal laws, Committee Republicans question the premise upon 
which H.R. 1338 is founded.

                  SUBSTANTIVE CONCERNS WITH H.R. 1388

    Aside from questions as to its necessity, Committee 
Republicans oppose H.R. 1338 for numerous policy reasons. Among 
the bill's most objectionable provisions are those described 
below.\7\
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    \7\ During Committee consideration of the bill, an Amendment in the 
Nature of a Substitute was offered by Chairman Miller and adopted by 
voice vote. Except where otherwise noted, the discussion contained in 
these Views reflects the provisions of H.R. 1388 as amended.
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H.R. 1338 radically expands remedies
    Perhaps most troubling, H.R. 1338 would expand remedies 
under the Equal Pay Act to provide for unlimited punitive and 
compensatory damages to a successful plaintiff, even where 
there was absolutely no showing that any pay disparity were the 
effect of intentional ``discrimination.'' In doing so, H.R. 
1338 would place claims of discrimination in wages on the basis 
of sex in a more favorable position than similar claims of pay 
discrimination under Title VII or the Americans with 
Disabilities Act, which properly provide for limited 
compensatory and punitive damages. Indeed, taken in concert 
with the remedies available under Title VII, remedies for 
claims of pay discrimination under H.R. 1388 would be greater 
than those available under any of our Nation's current civil 
rights law schemes. This radical expansion of remedies, 
particularly where they may be assessed without showing any 
discriminatory intent, is reason enough to oppose this 
legislation.
H.R. 1338 dramatically limits legitimate and lawful employer defenses
    At the same time that it exponentially expands available 
remedies, H.R. 1338 dramatically scales back an employer's 
ability to defend itself from claims of ``pay discrimination'' 
where disparities arise from wholly lawful business decisions. 
For example, as reported to the House, H.R. 1338 significantly 
limits the ability of employers to justify differences in pay 
on the basis of different work locations (as has been the case 
throughout the 45-year history of the EPA). Rather, under the 
bill as reported, an employee can compare his or her pay to any 
other coworker in the same county or political subdivision (or 
perhaps more broadly, given the bill's provision allowing for 
the Equal Employment Opportunity Commission to define ``work 
establishment'' even more broadly) in an attempt to prove ``pay 
discrimination.'' The practical elimination of a legitimate 
defense available to employers under current law simply fails 
to recognize economic reality and our market-based economy.
    Equally pernicious, H.R. 1388 strictly limits an employer's 
ability to defend pay differentials which are accounted for by 
reasons wholly unrelated to an employee's sex. Under current 
law, an employer can defend itself from a claim of pay 
discrimination by propounding evidence and convincing a trier 
of fact that the differential is based not on sex, but on 
another factor. H.R. 1388 would dramatically curtail the scope 
of that defense, and require that an employer convince a judge 
or jury that its reasons were ``bona fide'' and ``job related'' 
or required by ``business necessity''--essentially, putting 
courts in charge of determining what is ``fair'' pay. Even more 
egregious, even if an employer persuades the factfinder, an 
employee is still entitled to argue that there are other ways 
to address this business need. In short, H.R. 1388 would take 
core management decisions out of the hands of employers, and 
place them squarely in the realm of judges, juries, and trial 
lawyers. This brazen attack on market economies must be 
rejected.
H.R. 1338 eliminates employers' ability to protect the confidentiality 
        of wage and salary data
    H.R. 1338 attempts to further undermine the ability of 
employers to manage their businesses by adopting broad new 
``anti-retaliation'' provisions relating to discussions of pay 
or compensation, extending protection far beyond the scope of 
protection already provided to employees under federal law. 
Indeed, H.R. 1338 would effectively eliminate the ability of an 
employer to maintain any policy protecting the privacy and 
confidentiality of its payroll and wage information, even for 
supervisory and managerial employees, long considered to be 
part of the legitimate management of a business. These 
provisions of the bill will only increase the burden on the 
ability of businesses--particularly small businesses--to grow 
and run their companies, and should be defeated.
H.R. 1338 will lead to more frivolous class action lawsuits
    Finally, perhaps nowhere is this bill's true intent--to 
generate more lawsuits and to line the pockets of trial 
lawyers--made more evident as in its provisions expanding class 
action lawsuits. Currently, under the Fair Labor Standards Act, 
plaintiffs may sue on behalf of themselves and those similarly 
situated, and pursue a collective action. To ensure that these 
suits are brought on the basis of merit--and by those who wish 
to pursue them--employees must ``opt in'' to these collective 
suits. H.R. 1388 would reverse that presumption and eliminate 
those safeguards, instead deeming all potential class members 
to be joined to a suit, and placing the affirmative burden on 
these plaintiffs--who may not even know of the suit's 
existence--to opt out of a claim. These provisions are plainly 
designed to ensure that plaintiffs' lawyers get the ``most bang 
for their buck'' in bringing and pursuing class-action 
lawsuits, far more than protecting the paychecks of American 
workers, and should be rejected.
    The above represent but a few of the most egregious policy 
flaws in H.R. 1388.\8\ There are numerous others, ranging from 
the ill-conceived resurrection of flawed statistical models 
(one of which results in a 93 percent false positive) to the 
creation of new ``negotiation skills'' training programs for 
girls and women which, at best, have yet to be shown necessary, 
and at worst smack of paternalism. Whether singly or taken as a 
whole, the provisions of H.R. 1388 should be rejected.
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    \8\ Committee Republicans do applaud the removal of one provision 
from the text of H.R. 1338 as introduced, namely, those provisions 
within the bill which would have sought to furtively insert the long-
discredited theory of ``comparable worth'' in federal wage law. Section 
7 of the introduced bill would have required the Secretary of Labor to 
establish formal guidelines to enable employers to evaluate jobs using 
supposedly ``objective'' criteria such as educational requirements, 
skill requirements, independence, working conditions, and 
responsibility, including decision-making responsibility and de facto 
supervisory responsibility, but irrespective of market factors or 
prevailing wage rates. Employers would have been encouraged to follow 
the guidelines in order to eliminate ``unfair pay disparities between 
occupations traditionally dominated by men or women'' and ``ensure that 
women are paid fairly in comparison to men.'' Although nominally 
``voluntary,'' these guidelines were plainly the first step down a 
slippery slope of ``comparable worth'' theory. It is not difficult to 
imagine these guidelines used as evidence to foist liability on 
employers who did not ``voluntarily'' meet the Department's idea of 
``worth,'' or to show favor or disfavor in government grants, 
contracting, and the like. They were properly removed from H.R. 1338; 
Committee Republicans urge that these provisions not be raised again 
during consideration of this bill.
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                         REPUBLICAN AMENDMENTS

    Recognizing the fundamental failures of policy contained in 
H.R. 1338, Committee Republicans did offer a number of 
amendments during markup to highlight Republican priorities and 
solutions for working women and men.
    During Committee markup of H.R. 1388, Representative Cathy 
McMorris Rodgers offered an amendment truly aimed at improving 
the lives and working conditions of American workers, 
especially women. The McMorris Rodgers amendment would have 
allowed private sector workers to have the same choice as their 
public sector counterparts--the option of choosing paid time 
off in lieu of cash overtime wages. The amendment was identical 
to the text of H.R. 6025, the Family-Friendly Workplace Act, 
introduced earlier this year by Representative McMorris 
Rodgers.
    The McMorris Rodgers Amendment recognized that many working 
women, particularly those in lower-wage occupations, find it 
difficult to balance work and family responsibilities, a 
situation made worse by the fact that employers are often 
unable to accommodate employee requests for flexible work 
schedules because of the 1938 Fair Labor Standards Act.
    Current law prohibits private sector employers from 
offering employees the choice of opting for paid time off as 
compensation for working overtime hours (often called ``comp 
time''). Comp time is not a new idea; public sector employers 
and employees have long enjoyed this flexibility. The McMorris 
Rodgers Amendment would have allowed private sector employers 
the option of offering their employees the choice of paid time 
off in lieu of cash for overtime, if--and only if--the employee 
prefers comp time instead of overtime pay (importantly, an 
employee would always have been entitled to opt for overtime 
cash wages). Notwithstanding that it would improve the working 
conditions of millions of Americans, the McMorris Rodgers 
Amendment was ruled non-germane, and denied a vote.
    To demonstrate just how far afield the Majority has gone 
with this legislation, Representative Tom Price (R-GA) offered 
two common-sense amendments during the Committee's 
consideration of H.R. 1388. The first would simply have delayed 
the implementation of the Equal Pay Act amendments contained in 
the bill until the Secretary of Labor examined and reported to 
Congress (within 90 days) on the bill's effect on employers' 
ability to hire and retain workers, irrespective of gender. 
Were the Secretary to determine that the expansion of the Equal 
Pay Act contained in H.R. 1338 significantly hindered 
recruitment and hiring, those provisions would not have become 
effective. The Price Amendment would simply have allowed 
Congress to know the facts before imposing draconian 
legislative penalties and threatening jobs and economic 
livelihood; Democrats unanimously rejected this common-sense 
approach on a party-line vote.
    The second amendment offered by Representative Price 
underscored the true beneficiaries of this bill--the trial 
lawyers' lobby. Under the Fair Labor Standards Act (and 
unchanged by H.R. 1338), a successful plaintiff may recover a 
``reasonable'' attorney's fee. Representative Price's amendment 
would simply have provided that in no instance would an 
attorney's fee in excess of two thousand dollars per hour be 
considered ``reasonable.'' Democrats unanimously rejected the 
simple proposition that no trial lawyer can ``reasonably'' be 
paid a fee of more than two thousand dollars per hour.
    Republicans offered a final amendment, reflecting their 
belief that the time and energy of Congress should be devoted 
to efforts to truly improve the lives of working Americans. 
Notably absent from H.R. 1338, is a critical element when it 
comes to wage disparities and the impact of such disparities on 
working families: the high price of energy. For that reason, 
Representative Howard P. ``Buck'' McKeon, the Committee's 
Senior Republican, offered an amendment that would have 
acknowledged that rising energy costs--which have been shown to 
disproportionately impact lower-income workers--can exacerbate 
existing wage disparities.
    The McKeon Amendment would have required a study by the 
Bureau of Labor Statistics on the impact of gas prices on wage 
disparities, to examine how high gas prices might further erode 
women's earning and purchasing power. Finally, the McKeon 
Amendment expressed the sense of Congress that our nation 
should be taking steps to become energy independent, which 
would be in our best interest for both national and economic 
security. Committee Republicans firmly believe that 
comprehensive energy reforms, including the expansion of 
environmentally-safe energy production at home, will help bring 
down gas prices and ease the burden on working families.
    Although a Sense of Congress is nonbinding, it expresses 
congressional priorities. At markup, Democrats made clear that 
their priority is doing everything in their power to avoid 
providing real energy solutions for American families. In this 
Congress, the Majority has categorically refused to take up 
legislation that would allow for increases in the production of 
American-made energy. That refusal was once more underscored at 
markup, where a vote on the McKeon Amendment was blocked by 
parliamentary procedure, and rejected on a party-line vote. 
Indeed, it appears clear that Congressional Democrats appear 
unwilling to even admit that high gas prices are a problem for 
working families.

                               CONCLUSION

    H.R. 1338 represents fundamentally-flawed policy, and at 
bottom does nothing to ensure ``paycheck fairness.'' Rather, it 
is one more effort by the Majority to bestow a token on a 
favored constituency--trial lawyers--without reason, substance, 
or a demonstrated need. For these reasons, and all of those set 
forth about, we oppose enactment of H.R. 1338 as reported from 
the Committee on Education and Labor.

                                   Buck McKeon.
                                   Pete Hoekstra.
                                   Joe Wilson.
                                   John Kline.
                                   Cathy McMorris Rodgers.
                                   Kenny Marchant.
                                   Thomas Price.
                                   C. W. Boustany, Jr.
                                   Virginia Foxx.
                                   David Davis.
                                   Tim Walberg.

                                  
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