On October 12, 2024, this country lost a true hero. Lilly Ledbetter gave many years of her life fighting for women’s equal pay after being grossly discriminated against by Goodyear Tire & Rubber Co. Her efforts culminated in a federal law that bears her name—the Lilly Ledbetter Fair Pay Act of 2009—that benefits countless women, though she herself never received any recompense for the pay discrimination she suffered.
Ledbetter’s Lawsuit: Discriminatory Harm Without a Remedy
Lilly Ledbetter was a production supervisor at a Goodyear plant in Alabama. She accepted an early retirement package in 1998 after being involuntarily transferred to a job on the production floor—a clear demotion. Six months prior to the transfer, she had filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), the federal agency that is charged with implementing many of the nation’s federal civil rights laws, including Title VII and the Equal Pay Act. Those two laws prohibit employers from paying employees differently on the basis of sex.
Ledbetter filed the EEOC charge and eventually a lawsuit because she had learned quite by surprise that she was paid as much as 40 percent less than the lowest-paid male supervisor at Goodyear. She had worked at Goodyear for nineteen years and yet learned of this disparity through an anonymous note left in her mailbox at work. Having always received top raises and very favorable reviews, she was stunned.
At trial, a jury concluded she had indeed suffered illegal pay discrimination on the basis of sex. She was awarded $3 million in damages by the jury, which was reduced to $300,000 by the judge in accordance with Title VII’s statutory cap on damages (which has not, incidentally, been raised since first imposed in 1991). But even the lower amount was not paid because a federal appellate court took it away. Goodyear argued successfully that it didn’t matter whether it had discriminated against Ledbetter by paying her less than her male counterparts because she had waited too long after the discriminatory pay decisions were made to file the charge with the EEOC.
Ledbetter’s Disappointing Trip to the Supreme Court
The U.S. Supreme Court agreed to hear this case, which was the beginning of Ledbetter’s journey into the public eye. The issue in the case revolved around a provision of Title VII that requires an employee to file an EEOC charge before filing a lawsuit—and requires that the charge be brought within 180 days of the discrimination (300 days in some states that have work-sharing arrangements with the EEOC). The question was whether the limitations period began to run when a pay decision was made (say, a salary offer for an initial hire or a raise) or whether it was triggered anew with each paycheck that was depressed by a discriminatory decision (the so-called paycheck accrual rule).
Although this might seem like a narrow technical issue, it was an important one. The limitations period under Title VII is incredibly short, especially for pay discrimination, where the employee often doesn’t have the information necessary to assess whether discrimination has occurred. “Pay” is a good thing—it is only revealed as discriminatory if a woman knows that men are being paid more to do the same work.
Before the Court’s decision in Ledbetter, most federal courts and the EEOC had followed the paycheck accrual rule, based on an earlier Supreme Court decision, Bazemore v. Friday that had seemed to countenance it. All members of the Court joined Justice William Brennan’s separate opinion in that case, in which he wrote: “[e]ach week’s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII.” (Title VII prohibits discrimination based on a number of protected characteristics, including race and sex.)
In Ledbetter v. Goodyear Tire & Rubber Co., however, the Supreme Court abandoned this approach. It ruled 5-4 in favor of Goodyear, holding that unlawful pay discrimination is a discrete act that occurs when the pay decision is made. It declined even to consider whether the limitations period might be extended when the discrimination is unknown to the employee (a “discovery” rule). It held that the clock starts ticking as soon as a discriminatory pay decision is made and ends six months later.
The effect of this ruling was made clear by Justice Ruth Bader Ginsburg’s dissent: “Any annual pay decision not contested immediately (within 180 days) . . . becomes grandfathered, a fait accompli beyond the province of Title VII ever to repair.” Under this rule, an employer could pay a woman less than her male counterparts for their entire career, and openly admit that the reason for doing so is because she is female, as long as the decision to set the discriminatory wage happened at least six months earlier. The same was true for pay discrimination on the basis of race or any other protected characteristic. This rule placed untenable burdens on employees and circumvented Title VII’s substantive protection against pay discrimination.
At the close of a dissent she read from the bench (as Justices do when they feel especially strongly about a case’s holding), Justice Ginsburg exhorted that “[o]nce again, the ball is in Congress’ court.” She was clearly referring to the Civil Rights Act of 1991, which had overturned a spate of Supreme Court decisions adopting stingy readings and narrow interpretations of Title VII and other civil rights statutes.
Ledbetter and the Realities of Pay Discrimination
Although Ledbetter dealt with a rather technical rule, it promised significant adverse effects for victims of pay discrimination. In order to prevail on a pay discrimination claim after this ruling, an employee would have to quickly perceive that she had suffered discrimination and promptly report it. But the realities of pay discrimination mean this rarely happens.
An employee who has been fired knows they have been fired. But an employee who suffers pay discrimination most likely does not. Short of a pay cut, pay decisions are not usually perceived as adverse at all. And even if a pay cut is imposed, a victim may assume that it was imposed across the board. Indeed, a woman who suffers pay discrimination may not even hear of the discriminatory decision at all—for it may not change her pay, but instead may be a decision to increase the pay of a male colleague while leaving her pay the same.
Employees typically lack the information that would allow them to discern that their pay is unfair. Like the psychological study where Capuchin monkeys are happy to perform tasks in exchange for broccoli until they see another monkey being offered (more desirable) grapes in exchange for the same task, pay feels fair until you discover that someone else gets paid more to do the same thing. That’s the essence of discrimination. Yet, employers actively conceal the information that might allow for such comparisons. Many employers encourage confidentiality when it comes to their workers’ salaries, and many workers simply do not feel comfortable discussing how much they make. Without access to information about who gets paid how much and why, employees simply cannot perceive pay discrimination.
Perceiving pay discrimination is difficult and yet only half the battle. An employee who learns her pay is discriminatory (or might be) has to challenge it almost immediately. But there are many obstacles to filing formal complaints. Retaliation is very common and deters many complaints, and there are often social costs at work for being a “complainer.”
As a result of these barriers, most pay discrimination goes unperceived or unchallenged or both. And those pay disparities grow over time and often affect retirement pay as well as current wages. The gender wage gap—the difference between what women make on average versus men in our country—persists. (Some background on the wage gap can be found here.) While the gap narrowed significantly in the 1980s, it has remained steady since then. Economists agree that a portion of the gap can be attributed to pay discrimination. And the Ledbetter ruling ensured that it would remain difficult to challenge in court.
Ledbetter’s Trip to Capitol Hill: Congress Heeds the Call
Just a few weeks after the Supreme Court issued its decision in Ledbetter, the House Education and Labor Committee convened a hearing as a first step toward considering whether to take corrective legislative action to correct the Court’s interpretation. Congress ultimately considered two versions of a bill to restore the paycheck accrual rule—the Lilly Ledbetter Fair Pay Act, and the Fair Pay Restoration Act. However, a Statement of Administration Policy from the George W. Bush administration promised a veto of any such bill. Congressional efforts thus stalled through the end of that administration, despite strong support for such a bill in Congress.
A new version, the Lilly Ledbetter Fair Pay Act of 2009, was introduced in the Senate on January 8, 2009. It passed 61-36, after supporters successfully fought off hostile Republican amendments. It then passed the House by a vote of 250 to 177 and was signed into law by President Barack Obama two days later—the first bill he signed after being inaugurated.
Using a different pen for each letter of his name (to maximize the number of souvenir pens available for those involved in the bill’s passage), President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law on January 29. As Obama declared in his speech at the Ledbetter signing, the bill sends “a clear message that making our economy work means making sure it works for everybody.”
The Ledbetter Fair Pay Act reverses the damage done by the Court in the case of the same name. It did so based on a Congressional finding that the ruling “significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades.”
The new law adds a provision to Title VII, which provides:
unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
The amendments also apply to other anti-discrimination laws like the Age Discrimination in Employment Act and the Americans with Disabilities Act, which borrow Title VII’s limitations period. The Act is made retroactive to May 28, 2007, the day before the Court issued its ruling in Ledbetter.
A Victory for Working Women—Though Not for Lily Ledbetter Herself
This law did not broadly attack the problem of pay discrimination, but it did remove a significant and unnecessary barrier to lawsuits. One need not look very far for evidence that gender-based pay discrimination remains pervasive. Efforts to pass broader pay equity laws at the federal level have stalled, although some states have passed their own laws targeting the practices that fuel pay discrimination such as reliance on prior salary. But the Ledbetter Act was a necessary step in working for greater pay equity.
The Lilly Ledbetter Fair Pay Act helped lots of women challenge unequal pay, even though Lilly herself was never compensated for the harm Goodyear inflicted on her. As she often noted in speeches: “I didn’t get a dime of the money I was shortchanged.” But that did not stop her from devoting her 70s to the cause of fair pay. She gave speeches around the country, wrote a book about her experience, and inspired countless people to fight for equality. She would often say that “equal pay for equal work is an American value.” And she was right.
Ledbetter once told a reporter that she’d be happy “if the last thing they say about me after I die is that I made a difference.” She made such a difference, and she will be missed. Rest in power, Lilly Ledbetter.
