Congress Kills Paycheck Fairness Act
By Ted Olsen
The "Paycheck Fairness Act" (H.R. 12 and S. 182), which would have given employees substantially greater rights with regard to gender-based pay discrimination, was defeated in the Senate on a procedural vote (58-41) on November 17, 2010. The Act had previously passed in the House of Representatives (in January 2009) and enjoyed the support of the Obama Administration.
The Act was generally designed to narrow the fourth affirmative defense ("any factor other than sex" defense) available to employers in pay discrimination cases under the Equal Pay Act, and would have given the EEOC and the U.S. Department of Labor substantial powers to address pay discrimination.
Under current law, an employer may avoid Equal Pay Act liability by proving that pay differences between men and women are based on "any factor other than sex." The proposed law would have limited this defense to certain "bona fide factors," such as education, training, or experience. The bill also would have severely restricted the bona fide factor defense to those situations where an employer could prove that the factor: (1) was not based upon or derived from a sex-based differential in compensation; (2) was job-related with respect to the position in question; and (3) was consistent with business necessity. Further, if the bill had passed into law, the "bona fide factors" defense would not have been available when an employee demonstrated that: (1) an alternative employment practice would have served the same business purpose without producing a sex-based differential, and (2) the employer refused to adopt the alternative practice.
Those proving sex discrimination in pay under the Equal Pay Act currently receive back pay and liquidated damages (if the violation is willful). The Act would have provided compensatory and punitive damages, as are available in Title VII and Americans with Disabilities Act cases.
The bill also would have permitted Equal Pay Act plaintiffs to pursue class actions under Rule 23 of the Federal Rules of Civil Procedure, on behalf of persons who would have received relief unless they took action to opt-out of this class. This would have brought Equal Pay Act class actions into line with those under Title VII, the ADA, and various other discrimination laws. Presently, Equal Pay Act class actions provide relief only for those class members who give affirmative written consent to opt-in the case.
The Paycheck Fairness Act would have amended Title VII to require the EEOC to collect from employers pay information data regarding the sex, race, and national origin of employees for use in the enforcement of federal laws prohibiting pay discrimination. Legal protections for those retaliated against for sharing their pay information with others and for questioning an employer's pay practices would have also been expanded.
Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.
©2011 Sherman & Howard L.L.C. January 4, 2011