President Barack Obama both kept and broke campaign promises when he signed the first bill of his administration.
The Lilly Ledbetter Fair Pay Act, signed by Obama just two days after it passed Congress in January, effectively extends the statute of limitations for an employee to file a lawsuit alleging unequal pay.
Under the new law an employee has 180 days to file such a lawsuit, and the clock resets every time an employer issues a paycheck reflecting the alleged discrimination.
Obama made clear during his nomination acceptance speech at the 2008 Democratic National Convention he supported the concept of “equal pay for an equal day’s work, because I want my daughters to have the exact same opportunities as your sons.”
However, he also pledged to give citizens at least five days to review nonemergency legislation before taking presidential action.
Overrules Supreme Court
The new law overturns the U.S. Supreme Court’s 2007 ruling in Ledbetter v. Goodyear Tire & Rubber Co.
The case involved Lilly Ledbetter, a Goodyear employee for two decades before she discovered the company had not paid her as much as male counterparts performing the same job.
Ledbetter won in lower courts, but the Supreme Court held the 180-day window for filing a lawsuit applies only to the time after the pay was originally agreed to. Because Ledbetter’s claim occurred years later, she lost her case and claim to more than $200,000 in back pay.
‘Kickbacks to Lawyers’
Critics say the new law is a trial lawyer’s dream. Brian Johnson of the Alliance for Worker Freedom said the bill “does nothing more than provide political kickbacks to trial lawyers” because it removes caps on damage awards and applies those damages even to unintentional wage errors.
According to James Sherk and Andrew Grossman at The Heritage Foundation, businesses will likely take steps to reduce their risk of lawsuits, passing additional costs of compliance onto consumers in a tough economy.
Obama’s signing of the law seemed to break his “sunlight before signing” ethics pledge to wait five days before signing nonemergency legislation, to allow time for public review and comment before presidential action.
‘No Wait, No Emergency’
Tom McClusky of the Family Research Council criticized Obama because “there was no five-day ‘waiting period’ before President Obama signed the legislation into law, and certainly no explanation that this trial lawyer’s dream of a bill is ’emergency’ legislation.”
He said the quick signing casts doubt on the sincerity of Obama’s statements in support of greater government transparency.
The new law does not apply retroactively and will not grant Ledbetter new grounds for a lawsuit based on her old claims, but she said she is proud that “losing that case has opened so many doors.” At a pre-inauguration event, Ledbetter stated, “I never won so much having lost so much, so to speak.”
Scott Dilley ([email protected]) is a labor policy analyst at the Evergreen Freedom Foundation in Olympia, Washington.
