Obama Signs Lilly Ledbetter Fair Pay Act into Law

Making good on his campaign promise to be a champion of fairness and equal rights, President Obama signed the Lilly Ledbetter Fair Pay Act into law this morning. The law will make it easier for women to sue employers for wage discrimination. In addition, Michelle Obama will be by his side to make her first high-profile statement to the public as first lady.

Lilly Ledbetter and the Lilly Ledbetter Fair Pay Act

The Lilly Ledbetter Fair Pay Act was inspired by the story of Lilly Ledbetter, who brought a wage discrimination lawsuit against Goodyear Tire and Rubber Company. In 1979, Ledbetter started working in Goodyear's unionized Gadsdon, Alabama plant. She retired in 1998. Toward the end of her tenure, however, she received an anonymous tip that she was being paid less than her male colleagues at the plant. Consequently, she filed a suit with the Equal Employment Opportunity Commission, citing Title VII of the 1964 Civil Rights Act as the legal basis for her action. A jury awarded her $3million in punitive damages; however, a judge later reduced her award to $300,000.

Lilly Ledbetter and the Supreme Court

In a 5-4 decision that many found baffling, the Supreme Court tossed out Ledbetter's ruling on the grounds that the statute of limitations had run its course. The court argued that Ledbetter would have had to bring her suit within 180 days of the first act of discrimination. The sticking point for those opposed to the decision, however, is the fact that Ledbetter was unaware of the discrimination.

The Rationale for the Lilly Ledbetter Fair Pay Act

The Lilly Ledbetter Fair Pay Act seeks to reform the 180 day rule used by the Supreme Court as justification for throwing out Ledbetter's case. The law will require that the 180 rule be reset every time an act of discrimination occurs. So, under this new law, Ledbetter and others bringing similar suits would be able to claim that discrimination occurred with each paycheck. In other words, each paycheck that Ledbetter received during the entire course of her tenure at Goodyear was an unlawful act.

The Lilly Ledbetter Fair Pay Act and Libertarians

Of course, there are going to be some who hold that the Lilly Ledbetter Fair Pay Act infringes upon a company's rights. They would argue that if a company chooses to pay women less than it pays men, then so be it. They would claim that the free market would eventually set things right. In other words, If qualified and competent female employees start leaving a company en masse, the company will feel the pinch and start paying higher wages to women. And all this will play out without government intervention.

Sources:

Obama to sign pay bill, Foon Rhee, boston.com, January 29, 2009

Ledbetter v. Goodyear, Wikipedia