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Groundhog Day Every Payday

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Does the passage of time render past pay discrimination untouchable? Or is it like Groundhog Day, where it happens again and again with every paycheck? That was the question the Supreme Court faced on Monday, in the case of Ledbetter v. Goodyear Tire and Rubber Co. Situated right where law and reality collide, you have to wonder, from the tenor of the Supreme Court’s questioning, whether the legal principles at stake will end up reinforcing a harsh reality for female workers — and any workers who get paid less for discriminatory reasons — one that repeats itself over and over.

In 1997, Lilly Ledbetter was an Area Manager at the Goodyear plant in Gadsen, Alabama, working her way up from the Production Supervisor position she started at when she was hired in 1979 with 15 years of supervisory experience. Early on in Ms. Ledbetter’s career, she had been subjected to discrimination and harassment due to her sex, primarily from her direct supervisor, Mike Maudsby, who when she refused to sleep with him, falsified her performance audits and gave her poor evaluations.

Goodyear’s “neutral” raise policy was that each employee received a percentage-based increase over the previous year’s salary, which meant that when Ms. Ledbetter was discriminated against early in her career, resulting in poor evaluations and smaller raises, it had a ripple effect later on in her career. By 1997, when she challenged a transfer, Ms. Ledbetter’s salary was less than the the lowest paid male in the same job and department, substantially less than men with equal or less seniority, and even so low that it sometimes fell below the minimum salary set by Goodyear’s pay scale for her position.

When Lilly Ledbetter sued for discrimination, she had to show that there had been discrimination against her in the 180 days (or 300 in some states) prior to the point at which she filed with the Equal Employment Opportunity Commission (EEOC). (See Filing a Discrimination Claim – Alabama) The question then was whether — assuming for a moment that her current boss had no knowledge that she had been discriminated against early in her career — receiving a paycheck that was lower than everyone else’s was a new act of discrimination. If it isn’t, then she could only challenge the poor evaluations from Mike Maudsby that were the result of discrimination and affected her pay, and since she hadn’t done so at the time, she would be out of luck.

To the EEOC, which gets these claims first and has to decide whether there’s evidence of discrimination, this is an easy call. It’s been the agency’s position for a number of years, based upon a 1986 Supreme Court decision (Bazemore v. Friday), that as long as the employee received a paycheck that represented discriminatory treatment during the previous 180/ 300 days, the employee had not missed the filing deadline for a lawsuit. However, in cases argued before the Supreme Court, the Solicitor General’s office gets to make the final judgment call on the U.S. Government’s position, and so the Solicitor General weighed in NOT in support of the employee or its own agency (the EEOC) in this case, but on behalf of defendant corporations who want a free pass when it comes to addressing their legacy of discrimination.

So will Lilly Ledbetter get to keep the $350,000 + that an Alabama jury ruled she was entitled to after hearing her evidence of sex discrimination? (The original award was over $3 million, but was reduced due to damages caps which limit how much plaintiffs can receive in punitive and compensatory damages.) That’s what the Supreme Court has to decide — and based upon the argument, it looks like she and millions of other workers receiving less than what they should may be reliving their paltry paychecks for some time to come.

Justices Kennedy and Scalia questioned whether decisions regarding pay should be treated differently than other kinds of discriminatory decisions, such as promotions, because if the decision did not involve a lowered paycheck, the amount of time needed to file a claim within 180 days. (Transcript, p. 4-7) Chief Justice Roberts expressed concern about going back 15 years and having to relitigate what happened so far back, while Justice Alito worried about making people now responsible for past discrimination with which they were not involved. (Transcript, p. 10-15) And while Justice Thomas said nothing — as usual — if his decision in National Railroad Passenger Corporation v. Morgan is any indication, he may be inclined to find that the discrimination is a discrete act and does not continue with each paycheck. (See Workplace Profs blog.)

Justice Souter provoked some laughs in the courtroom when asking Irving Gornstein from the Solicitor General’s office what would happen if the government was essentially forced to eat crow and swallow the EEOC’s position — highlighting the divisiveness of having the agency which is supposed to protect the workers’ interests and vindicate the civil rights statutes overruled by the more political Justice Department. (Transcript, p. 51-53) But unfortunately, it won’t be so funny if over two decades of precedent is overruled in this case to undo what’s known as the “paycheck accrual rule.”

What’s ironic is that it might be a decision that employers live to regret, even if the Supreme Court gives them what they’re asking for here. If it’s good policy for workers to wait to file a lawsuit until there’s clear evidence of discrimination, then there must be latitude in the law to allow that to happen. If a worker can only challenge a discriminatory pay decision right away, or forfeit the right to do so forever, then there could be an awful lot of lawsuits about every evaluation that affects a worker’s pay.

Say, for example, that one year, a worker has a bigoted supervisor, which leads to a poor evaluation and no raise for the worker that year. But the next year, the worker has a different supervisor, and no discrimination takes place; in fact, the worker gets a merit raise for a flat amount. In this example, the worker would have an incentive to file a claim right away, rather than to wait and see whether company rectifies the problem. And practically speaking, most workers would prefer to wait and see — that is, unless they’re told they have no choice if they want to challenge discrimination at all.

Not to mention that once that claim is filed right away, if the worker stays with the company, the company is going to have to worry about a retaliation claim too, and managers accused of discrimination frequently ends up shooting themselves in the foot, since the desire for retribution (and vindication) is an all-too-human need. Unlike harassment, which has to build to a severe and pervasive level before an employee can file suit, any decision regarding pay, no matter how severe, could serve as the basis for a lawsuit — just the kind of thing that employers and the Supreme Court would seemingly want to avoid.

Also, workers are going to demand a less opaque pay system. If the only way you can fight pay discrimination is to know what you’re being paid and how it compares to your coworkers’ pay, then workers must have adequate information. Companies that have saved money and manipulated morale by shielding what each worker individually makes are going to have to “give it up.” Why should workers trust that they’re not being treated adversely unless a company shows they have nothing to hide, and their compensation system survives scrutiny? Companies may find it was easier to pit workers against each other by keeping everyone in the dark, than it will be to shed light on their entire compensation structure.

But we’ll just have to see what the Supreme Court rules in the next few months, and whether workers will have to swallow the horror of each deficient paycheck each time a new one comes along — just like Groundhog Day.

More Information:

Ledbetter v. Goodyear: The Supreme Court Considers Procedural Technicalities That Perpetuate the Gender Wage Gap

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Okay, Workers Won, So What Now?

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Those of us more than a little giddy about the election results, and what it could mean for workers, still haven’t come down to earth yet after the November 7 election. But now the hard part is coming — and you thought the hard part was getting the entrenched incumbents out of office. Now that Democrats have the majority in both houses of Congress (albeit with a Republican president), what can we expect to see from those legislators whose pro-worker agenda helped get them elected?

Minimum Wage: Let’s start with an easy one — raising the federal minimum wage. Rep. Nancy Pelosi, now the Speaker of the House, has vowed to raise the minimum wage within the first 100 hours of the Democratic takeover. See Speaker Pelosi’s Huffington Post blog entry. On Election Day, six states passed their own minimum wage increases, but some of those raises could be superseded if the federal minimum wage is increased to $7.25, the number that has been proposed. (See Star-Tribune article.) One of the remarkable features of the state proposals that were passed is that they are indexed to inflation, so that they go up automatically without workers losing purchasing power. (See Kansas City Star article.) Unfortunately, most of the federal proposals have historically not contained this type of provision, so we run the risk of the political gridlock delaying future increases when they are needed.

Health Care: This one is obviously a huge issue, and two years may not be enough to fix it. However, President Bush could actually try to salvage his legacy if significant progress is made here, since this was something that President Clinton tried to tackle and was largely unsuccessful. The growing clamor to fix the Medicare prescription drug plan has significantly overshadowed any sense of achievement it could represent, and does nothing for the millions of other Americans without any health care coverage at all. Even the insurance industry has a proposal for expanding coverage over the next ten years to the uninsured, and while you can bet that the insurance industry doesn’t always have consumers’ best interests in mind, at least the industry is willing to put a proposal out there for public debate. (See San Francisco Chronicle article.) Can progressives and the business community find common ground to increase the number of working people with health insurance? Is the solution more employer-centered coverage (such as the Fair Share bills which required large employers such as Wal-Mart to ensure its workers)? Or will a consensus emerge that a government-centered, or “universal” plan is what is needed? Hopefully, by the 2008 election, we’ll be able to see some significant progress on this front, and the party who can take the most credit may very well tip the presidential election in its favor.

ADA Restoration Act: The Americans with Disabilities Act, after over 15 years of existence, needs some tweaking. The ADA’s requirement that an individual prove that he or she is disabled — while sounding reasonable at first blush — has developed into an almost impermeable barrier preventing many if not most of those who need the ADA’s coverage from having any significant protections. The ADA Restoration Act would change the language that prohibits discrimination “against an individual with a disability” with “on the basis of a disability,” which harmonizes the ADA with the Civil Rights Act of 1964 and other civil rights laws that prohibit discrimination “on the basis of race, color, religion, national origin, and sex.” This changes the focus from whether an individual meets the legal criteria of being disabled to whether the discrimination suffered was because of a disability. This measure has bipartisan support, but will the current President Bush move to protect the legacy of his father, who signed the ADA?

Could Happen, but Less Likely:

Sexual Orientation Discrimination Protections: Seventeen states and the District of Columbia have protections against sexual orientation discrimination, but there are no similar federal protections. A proposal to create federal protections, known as the Employment Non-Discrimination Act (ENDA) has been kicking around for over a decade, but only once was close to making its way out of Congress, back in 1996 when the measure failed in the Senate by one vote. (See Advocate article.) The bill has never had a floor vote in the House of Representatives, but that could change under Speaker Pelosi’s reign. After all, as she was painted before the election, she is a San Francisco liberal. But would President Bush sign the measure, if ENDA was kept clean of any amendments that give him an out? While the President has kept opposition to same-sex marriage on the front burner, it’s not clear whether it was mostly because that issue appeals to his conservative base of supporters. (See Advocate article.)

Another concern is whether the measure could implode before ever reaching the president, due to internal disagreement whether gender identity should be included. There has been historical opposition to including gender identity, out of fears that doing so could impact the overall success of the bill, but for now, it appears that a trans-inclusive bill will be introduced. (See Washington Blade article.) Although philosophically it is clearly the right thing to do, will this inclusion be too much for the Blue Dog Democrats who tend to be more socially conservative than the rest of their party? (See Washington Blade article.)

Union Election Reform: Union groups are pushing to bring the Employee Free Choice Act to the forefront of the pro-worker agenda in the next Congress. This bill, which provides several mechanisms which will make it easier for workers to form unions. The most important provision is card check recognition which allows unions to gather authorizations from workers to represent them, rather than waiting to hold an election, which allows employers to intimidate and scare their employees during the period of time it takes for an formal election to be held. This proposal has also been kicking around for a little while, and groups such as American Rights at Work and the AFL-CIO are poised to push it again. It remains to be seen whether this issue will be pushed aside in favor of some of the more pressing issues for everyone, such as minimum wages and health care — if progress is made on those fronts, will Congress feel that enough has been done for working people? Will labor have the muscle to get this issue attached to something that is definitely moving through Congress?

So as you can see, workers and their advocates have a pretty full plate. After we all take a deep breath and savor the potential for creating a better climate for working people, we need to all get to work. Workplace Fairness is already busy trying to figure out how to work with other groups, and most importantly, with those of you who know what an invaluable resource this site provides, in the days ahead. We hope that we can count on your support.

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Vote on November 7

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As a nonprofit and nonpartisan organization, Workplace Fairness can’t tell you how to vote (although we’d sure like to sometimes!) But we can tell you a few things that we hope you’ll be keeping in mind next Tuesday, November 7. Although workplace issues, and domestic issues in general, have trouble rising to the forefront as candidates focus on Iraq and national security issues, and run ads smearing their opponents’ records, it’s important to keep in mind just how much job security, the economy and other workplace-related issues affect every single day of your life.

A few facts to keep in mind as you’re considering the candidates for whom you will be voting:

  • Almost 46 million Americans have no health insurance, and many more have insurance with limited benefits. Fewer employees receive health insurance through their employers now than in the past, as coverage has declined from 61.5% in 1989 to 58.9% in 2000 to 55.9% in 2004. Those who still receive employer-provided coverage are now paying a larger share of those insurance costs than ever before. From 1992 to 2005, this share has risen from 14% to 22%. Annual health care costs per person were estimated to be about $6,300 per person in 2004, and are projected to increase to about $12,300 by 2015. (Citizen’s Health Care Working Group Report and EPI Postcards from an Ailing Economy)
  • Since 2000, the median family headed by someone of working age (65 or less) has seen its income drop 5.4% after adjusting for inflation, representing a loss of $3,000 in annual income. Adjusted for inflation, the median earnings of full-time workers have fallen since 2001, even after the second round of tax cuts in 2003 which were supposed to have jolted the economy. (EPI Income Picture)
  • Some claim that wages grow slowly because people are getting fringe benefits, particularly health insurance. For the bottom 20% of the workforce, wages fell by 1.9% from 2004 to 2005, despite the fact that only 24% of these workers even receive health insurance. (See EPI: Increasing health costs can’t explain earnings dip for low-wage workers.)
  • One-third of employees can be considered to be chronically overworked, making them at higher risk for on-the-job mistakes and stress-induced health risks and depression. (See Families and Work Institute: Overwork in America.)

To paraphrase Ronald Reagan, are you better off than you were two years ago? Here’s some commentary from the Economic Policy Institute, who provided many of the statistics above, about that very question: The U.S. Economy’s on the Table. (You’re also invited to share your thoughts — and any resources you’re relying upon — in the comment section, as your own perspective is likely to be helpful to our blog’s readers.)

Here are some voting guides from other organizations who pay attention to the concerns of working Americans:

America Votes
Leadership Conference for Civil Rights
National Women’s Law Center
Women Employed

If it will be a challenge for you to vote on Tuesday, based upon your work commitments, arm yourself with this information provided on our site: Voting Rights. In a number of states, you have the right to take time off from work or rearrange your schedule in order to facilitate voting, but you may have to give advance notice to your employer. Regardless of what legal protections may apply in your state, it is better to work cooperatively with your employer to ensure that you get to vote and that the work gets done.

And while it’s probably too late to request an absentee ballot if you haven’t done so already, if you have requested one and will have conflicts on Election day, please go ahead and send in your ballot, so that it gets counted in a timely fashion.

Let’s hope that workers have cause to celebrate on Election Night! (I have the feeling it will be a very late night, and that there will be a number of workers who appear a little bleary-eyed the next morning. Let’s hope the sleep deprivation will be worth it.)

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The Workplace Fairness Attorney Directory features lawyers from across the United States who primarily represent workers in employment cases. Please note that Workplace Fairness does not operate a lawyer referral service and does not provide legal advice, and that Workplace Fairness is not responsible for any advice that you receive from anyone, attorney or non-attorney, you may contact from this site.