The Fair Pay Act overturned the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co, 550 U.S. 618 (2007), which held that employees were required to file pay discrimination lawsuits against their employers within 180 days (or 300 days based on certain state laws) of an employer’s initial discriminatory compensation decision. Let’s briefly describe the facts behind this case to show why Congress and the President overturned the court by passing the Fair Pay Act.

Lilly Ledbetter worked as an employee at Goodyear Tire & Rubber Company for almost 20 years from 1979 to 1998. Around the time Ledbetter retired from Goodyear, she filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging pay discrimination because from time to time over the course of her career she received lower pay increases than her male co-workers. Ledbetter alleged that she worked for Goodyear for about 19 years before discovering that Goodyear paid her significantly less than her male counterparts with the same or less experience.

The main contention of the case came when Ledbetter argued that each check she received while employed at Goodyear for almost 20 years constituted a new act of discrimination, which reinitiated the 180-day statutory filing period. However, Goodyear argued against Ledbetter and said that the act of pay discrimination could only have occurred one (1) time – the first time Goodyear made the decision to pay her less than her male co-workers toward the beginning of her employment.

Goodyear argues that Ledbetter had to have filed her charge in the early 1980s – 180 days after any alleged discriminatory decision to pay her less than her male co-workers.

Ledbetter argues that she could have filed a charge against Goodyear up until the last paycheck she received sometime around 1998.

The U.S. Supreme Court, in a 5-4 decision, found for Goodyear. The Court held that Ledbetter’s claims had to be filed within 180 days of the initial compensation decision, i.e. the first time Goodyear made a decision to pay her less than her male co-workers (in the early 1980s). This decision precluded lawsuits by plaintiffs who alleged ongoing pay discrimination but did not discover it until years later. However, the Court did leave open the possibility that a plaintiff could sue beyond the 180-day period if the plaintiff did not, and could not, have discovered the discrimination earlier.

In 2009, the 111th Congress and President Obama overturned the court and said that employees can file claims against employers for every act of discrimination, including each paycheck received based on a discriminatory act.

Next, we’ll explore how the Fair Pay Act works.