Articles

Unintended Consequences: The Lilly Ledbetter Fair Pay Act and Document Retention

November 30, 2010

Within days of taking office, on January 22, 2009 President Obama signed the Lilly Ledbetter Fair Pay Act (“Ledbetter Act”).   Congress passed the Ledbetter Act for the express purpose of overturning the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Company.  In that case, the Court sided with the employer and held that the plaintiff could not sue for discrimination under Title VII based on the fact she is currently paid less than her male co-workers because of allegedly discriminatory decisions that were made more than 180 days before she filed her claim with the Equal Employment Opportunity Commission.  The employer successfully contended that because the statute of limitations articulated in Title VII runs from the occurrence of discrimination, it was the date that a pay decision was made, and not the date of the paycheck, that mattered.

In the preamble to the Ledbetter Act, Congress stated that a discriminatory act “occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice.”  Congress also provided that the protections afforded by the Ledbetter Act apply to any form of discrimination in pay that is barred by Title VII:  race, religion, national origin or gender, as well as discrimination based on age, under the Age Discrimination in Employment Act, or disability pursuant to the Americans with Disabilities Act or the Rehabilitation Act of 1973.  As a result, compensation decisions or practices that may have occurred years before the employment ended have become actionable.

Much has been written about the direct and intended impact of the Lilly Ledbetter Fair Pay Act and the subsequent cases in expanding the scope of discrimination litigation.  Less has been said, however, about the practical consequence that this legislation has on the document retention policies and practices of employers.

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Reproduced with permission from HR Decision Support Network California Section (November, 2010). Copyright 2010 by The Bureau of National Affairs, Inc. (800-372-1033).  http://www.bna.com