The Lilly Ledbetter Fair Pay Act of 2009

An Affirmitive Action Myth: “Women are paid less than men when doing the same job.”

Truth: If women were paid less than men when doing the same job, and when I say “same”, I don’t mean same job description, but rather at the same level of productivity, wouldn’t business owners and managers be prone to give preference to hiring women over men?

It also makes it easier for people to sue for and win big bucks that they don’t deserve, because the alleged discrimination will be so far in the past that the only one who can convincingly claim to remember anything about it is the plaintiff himself.

Yes? That’s not really what the Lily Ledbetter fair pay act was about, as far as I know. Lily Ledbetter was a woman at, what, Goodyear? who found out that she WAS getting less pay for the SAME work, and had been for many years. For a long time, the department of labor, or whatever the right agency was, said that the anti-discrimation law gets retriggered everytime the lower pay is made (I think the anti-discrimination law limits your recourse to discrimination that happened within the last 180 days). Lily said that each payment was discriminatory, Goodyear said that the discrimination happened years ago, when she first didn’t get the proper raise.

The Supreme Court ruled in Goodyear’s favor, with the dissenters saying that the law seems to clearly favor Lily, so maybe Congress should just fix that. Congress did exactly that.

The idea, I think, is, let’s say you and I make the same pay. Five years ago, because of some discrimination against me, you get a 5% raise and I get a 3% raise. From then on, even if we get the same raises, I’ll always fall further and further behind you. Now, is each paycheck discriminatory or just the bad raise that I got years ago?

Let’s posit that all the parties agree that the lower raise 5 years ago was discriminatory. I have no idea what your pay is, and I’ll never uncover that within 180 days – companies are very secretive about that. How could I ever be made whole?

Your myth seems really irrelevant to the Ledbetter act.

Falsehood: Employers are rational.

That said, you didn’t read the law, did you? It’s a response to the US Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., in which they ruled against Ledbetter because Goodyear’s discriminatory intent (found by the original jury) lay more than 180 days before the suit was filed. The new law causes the statute of limitations to reset with each discriminatory paycheck.

Discrimination still has to be shown in court, and it still happens.

Don’t businesses and the IRS keep track of who works where and what their job titles are?

False. You’re using logic in an attempt to explain away an illogical prejudice.

Every employer I’ve ever had has paid every employee the least amount they could. This is as true of female managers/employers as it is of male ones.

You state that it is a myth, but don’t actually cite anything that disproves it. "Logic is a wonderful thing, but it doesn’t always substitute for actual thought.’

It is much more complicated than that. There is a whole body of economics of discrimination. The employer has to take into consideration the prejudices of the employees. Or according to the law the employer can’t, except to take corrective action. Not to mention customer preferences.

Say we have a sales team with nine whites males and one green male. The Black male is the highest performing and has other characteristics that make him qualified to be promoted to sales manager. But assume all the whites are racist, and prefer not to work for a green person. So all the most productive of the nine leave and go to other employers who have white managers. The employer’s business is in the toilet. In the real world the green manager gets labelled as a failure using seemingly objective criteria. Low sales performance and high employee turnover. Losers all around.

None of this is a good thing, and anti-discrimination legislation seeks to correct this by forcing people to make illogical choices. It forces employers to absorb privately the cost of unwinding the impact of centuries of discrimination and current prejudice. But given a certain starting point, discrimnation can be perfectly logical.

Or say you have an orange receptionist. But your green and blue customers don’t like dealing with orange people. So they go to your competitor who has a purple receptionist, even though you have better prices and quality. There was a case long ago where a temporary agency (Kelly, I think) used to put “AA” on some of their job orders. AA stood for All-American, which was code for whites only. Their defence was customer preference. They lost.

On a macroeconomic scale, discrimination is largely a losing strategy. But not for individual firms, operating in a society where employees and customers are prepared to sacrifice economic advantage to avoid associating with people of certain groups.

And yes. I am using funny colors for people because I don’t want to type “African-American” and “Caucasian” every time, and there are societies where the dominant group that discriminates is not white. China, Japan and Korea, for example.

I think you are wrong. Forcing equal pay has been used as a tool to keep certain minority groups out of particular jobs. Our own minimum wage law was started as a way to keep blacks (who were willing to work for less) from taking construction jobs from white workers. The racism may be illogical but, in the end, money trumps personal prejudices.

Yes, so IF employees across the whole society don’t like female managers they would be paid less. The employer can make it up by paying the lower level employees less.

The rub is most often not so much in the “employer” (typically a corporation) as it is the individual managers making the decisions. Many hires are “buddy hires” where the manager is trying to pay the employee as much as possible, and will go battle HR over it. Unsurprisingly buddies (except those of a very special kind, a different kind of EEO violation) of male hiring managers tend to be other males. So if you start off with a male dominated management, it perpetuates itself quite nicely. If non buddies are offered jobs, they are offered a lower pay.

Every job offer pay decision I have been involved in (dozens, maybe hundreds) depend first and foremost on whether the prospective employee is an insider or an outsider. The compensation guys can do their math, but the hiring manager provides lots of subjective input into the calculation.

I imagine most businesses do, but I can’t imagine the IRS does.

But the issue is not whether the plaintiff actually worked there or what they were paid. The issue is why was this person paid $X when someone else with the same title was paid $X+.

In most companies that have merit-based salaries, people with identical job titles are not necessarily paid the exact same amount. Variances include different performance reviews, levels of experience, types of job and so on. In the case of LL, Goodyear took the position that LL was paid less than the men because of merit issues. The jury found for LL. See: Ledbetter v. Goodyear Tire & Rubber Co. - Wikipedia.

My point is that it’s very difficult for anyone to establish how Person X performed relative to Person Y 15 years ago. As such, the jury will typically not have a lot to go by in such situations. So a sympathetic plaintiff who will testify unambiguously about the situation will generally have the edge over the “big company” and its witnesses whose memories will tend to be less certain. Regardless of the actual facts.

Maybe. I think in real life the prejudice is much more straightforward that your contrived and hypothetical example. It’s at least as likely that the green (or black? you seemed to have changed colors in mid-example) manager just doesn’t like black people.

In any case, so what? This has nothing to do, really, with Lily’s act. The act, as I understand it, says, if there has been discrimination, how long does the discriminated-against (not alleged, at this point) have to complain and recoup lost pay? Is it 180 days from the original discrimination or does it reset with every discriminatory pay stub?

I wish the OP would rejoin us – are we debating whether there is discrimination in the workplace or whether the Lily act is a good one?

So, what remedy do you propose? I don’t know what people around me make and the company works to keep that a secret. I certainly don’t know within 180 days of getting or not getting a raise what others are making. I don’t even know whether others are getting a raise, within 180 days.

If companies are willing to post everyone’s salary and the reason for the pay and raises they get, then fine. Lacking that, 180 days seems to be a ridiculous time limit, given that companies do everything they can to keep that information hidden.

Sounds like you’re indicting the jury system, not the LL act.

Maybe the company could pay the white employees a get-the-fuck-over-it-it’s-the-21st-century-bonus to retain them and then the government could come in and tax it at 90%.

No question that this is a serious problem.

I’m just pointing out that there’s a problem with the LL Act as well.

Almost everyone I know tends to take a much more positive view of their own performance and abilities than the consensus view of others. Most people who don’t get what they think they deserve tend to seek out reasons that involve them being wronged for some reason or other and don’t involve the possibility that maybe just maybe they didn’t actually deserve what they didn’t get.

Proponents of the LL Act tend to emphasize one particular issue. It’s a legitimate issue but it’s not the only issue.

The LL Act brings out the worst aspects of the jury system.

To paraphrase, the jury system is the worst, with the exception of all the other systems.

Hey, if corporations keep pay and raises secret, they can’t complain that it might take more that 180 days for someone to object. Since it’s unworkable for companies to publicize everyone’s pay, I really can’t think of a better solution than the LL act.

It seems to me that it was the intent of the original law, it was how the law was applied for many years. It was only recently turned over in a pretty bizarre ruling (IMHO), so congress fixed it.

This is exactly how this is supposed to work, right?

Obviously I was responding to the post that I quoted. Prejudice is simple. What an employer does about it is not so simple. My examples are hardly contrived. I have encountered each of them in working for (very large) companies over the last 15 years.

And yes I did get too cute with the colors and confused even myself.

The most pernicious form of discrimination I encounter is the hiring of people who are socially connected to the manager or another influential person in the company. So better qualified candidates are passed over in favor of golf buddies and fraternity brothers. Which perpetuates the all white club. I fight this every time we make a hiring decision in my group. There is almost always one “connected” candidate that people are working to make sure is hired, regardless or other candidates relative qualifications. People use terms like “will fit into the team” which just translates to, my wife is best friends with his wife, and he really needs a job. But this is really hard to unwind, because no one is making racist comments before or after the hire.

What the new law will do is require companies to keep track not only of the raises they give, and how they are decided, but also review the relative compensation to make sure that the starting points that were long in the past, or “exigent” competitive situations in the hiring process, don’t lead to wide disparities that are not justified by performance or difference in the job content. So even if you were hired by your brother-in-law to be twenty years ago at the top of the pay scale, and all you have gotten since then are the same raises as everyone else, you could still be used by other employees in their discrimination claims twenty years later.

I do have some concerns about the fairness of asking an employer to defend a pay differential that has its roots in an action taking many years ago, but:

  1. It isn’t as easy to sustain an employment discrimination claim as some people seem to think. This is just from my personal observation of claims made against my (former) employers by other people. Even though I was helping the employer defend against the claim, I could often see evidence supporting the claim that was not available to the employee, who has the burden of proving the case.

  2. Employers really should be reviewing the results of their pay decisions periodically, not just the process for changes in pay rates. The cumulative effects can be starker than the individual actions along the way.


I’m not sure this is correct. My impression is that the plaintiff can subpoena all sorts of information that they might not know about offhand but might conceivably be related to the case (e.g. annual reviews, salary information etc.)

In addition, for many companies, the bad press of having these lawsuits filed against them and the cost of defending them are harmful in their own right.