Ever heard of the Lilly Ledbetter Fair Pay Act? Neither had I. But it caught my attention since it involves a lady from my state of Alabama. Lilly Ledbetter was employed by Goodyear Tire Co. and apparently discovered years later that she had been paid less than the male executives that worked there. She therefore brought a lawsuit and won at the lower levels. A higher level court threw the case out though because the statute of limitations had passed. They basically said she should have brought the lawsuit during the time the discrimination was occuring. The Lilly Ledbetter Fair Pay Act that Congress just passed would basically rewrite the statute of limitations rules for sexual discrimination lawsuits to be anytime within 180 days of your most recent paycheck.
Of course, the first thing that pops into your head is that this is just a siren song to trial lawyers to come feast at the lawsuit table. That will definitely happen, but the more likely scenario is pointed out by Sam Dealey on his US News blog:
Say a woman was hired five, 10 or 15 years ago at a discriminatory pay level. She worked just as hard as her male colleagues, but received paltry raises or bonuses. But then her company underwent some sort of restructuring—a change of ownership, a new board, a new supervisor. Since then, the company has treated all employees the same, giving raises and bonuses where merited. The woman is a good worker and now her salary rises by 8- or 10-percent a year, well above many of her male colleagues. The company should be exempt from any possible lawsuit, right?
Maybe not. That’s because a wily trial lawyer could well sell the argument that, no matter how generous the woman’s recent raises, they were all applied to what was fundamentally a discriminatory salary baseline.
The Heritage Foundation has a great writeup on their site about the implications of this bill, but here is one that stood out:
The Ledbetter Act may actually harm those it is intended to protect.
- In making employment decisions, businesses would consider the potential legal risks of hiring women, minorities, and others who might later bring lawsuits against them and, as a result, hire fewer of these individuals.
- Other employers might simply fire employees protected by Title VII–and especially those who are vocal about their rights under the law–to put a cap on their legal liabilities.
How many times have we seen this from liberals. It happens over and over and over. They make an emotional appeal that pulls at the heartstrings of the public – nobody wants unequal pay for equal work based on gender – and the “fix” they come up with ends up having the exact opposite effect and doing more harm. We see this with minimum wage, the Community Reinvestment Act, affirmative action, and on and on. If a company decides to have a policy of underpaying equally productive employees based on something like gender, they will pay the price for it. It might make people feel better to have some sort of instant gratification in the media with the signing of a bill, but that company would have been harmed by losing productive workers in the long run, when those women quit and go to work for a competitor. The free market punishes the people who make bad business decisions. Laws like this punish entire groups of people that may somehow resemble bad decision makers, and end up screwing over lots of good people in the process.