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Paying Now to Avoid Paying Later
Compensation discrimination has been a hot topic since the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007). In Ledbetter, the Supreme Court determined that under Title VII of the Civil Rights Act of 1964 ('Title VII'), a plaintiff must establish that a discriminatory decision with respect to pay was made during the statute of limitations period. In other words, a plaintiff cannot proceed with a claim of pay discrimination under Title VII when the pay is the result of prior decisions made outside the statute of limitations period. Although this decision has been touted as a major victory for employers, it did not, as some have seemed to suggest, eviscerate the risk of compensation discrimination claims or insulate from liability employers who have unexplained disparities. Unwary employers, particularly federal contractors or subcontractors, who do not regularly review their own compensation practices, remain at risk for costly litigation.
Many Laws Prohibit Compensation Discrimination
Title VII prohibits discriminatory compensation decisions based on an employee's sex, race, religion, national origin or color. A number of other statutes also prohibit employers from discriminating against certain employees with respect to pay or compensation. For example, the Age Discrimination in Employment Act (ADEA) prohibits discriminatory decisions based on an employee's age, and the Americans with Disabilities Act (ADA) prohibits such decisions based on an employee's disability. Each of these statutes, like Title VII, prohibits intentional discrimination in connection with employment decisions affecting pay.
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