With the Senate a mere four weeks away from adjournment for campaign season, Senate Majority Leader Harry Reid turned a few heads when he reintroduced the Paycheck Fairness Act (S. 3772) to the legislative calendar on September 14th. The Act, which earlier this summer President Obama called a “common sense bill,” is intended to update and strengthen the Equal Pay Act of 1963, which made it illegal for employers to pay unequal wages to men and women who perform substantially the same work. The House of Representatives passed the Act over a year ago, in January 2009, but the Senate has never voted on the legislation.
On its face, the Act purports to ensure that women can obtain the same remedies for sex-based pay discrimination as those available to victims of race-based and national origin discrimination, as well as prohibiting employer retaliation against employees who disclose their salaries, and improve wage data collection. Section 3(a) of the Act would also clarify that an employer relying on a “factor other than sex” defense must show that: 1) the defense is based on a bona fide factor, such as education, training, or experience; 2) the factor is job-related for the position in question; and 3) the factor is consistent with business necessity. In short, it aligns employers’ affirmative defenses for such claims so that they now echo those under Title VII.
For those readers presently wondering why this article is appearing on an employment class action blog, the reason (and the devil) is in the details: Section 3(c) of The Paycheck Fairness Act would allow Equal Pay Act class actions to proceed under the opt-out provisions of Rule 23(b)(3), effectively putting Equal Pay Act plaintiffs in the same position as other alleged victims of pay discrimination. Proponents of the Act hail this as the bill’s greatest achievement—but their endorsement simply overlooks the existence of other laws that would provide largely the same relief. While it is true that the recovery of punitive and compensatory damages is limited by the Equal Pay Act’s recovery of only back pay (and liquidated damages for willful violations), a plaintiff under the Equal Pay Act would typically also allege a violation under Title VII, with the accompanying EEOC or private action. The remedies available with that combination of charges would cover the spectrum intended with the Paycheck Fairness Act, thus rendering the class action provisions of the Act somewhat…redundant.
Critics are also quick to point out that its provisions allowing prevailing plaintiffs to recover compensatory and punitive damages without “caps” could put small employers out of business (a particularly sore subject given the current economic times). In addition, opponents point out that the Act could have a detrimental effect on companies attempting to hire new employees and promote existing ones by complicating the procedures and removing the flexibility in providing for pay demands.
The bottom line: With many of the “loopholes” in the Equal Pay Act already filled through attentive lawyering, this introduction of the Paycheck Fairness Act to the Senate with only a month before adjournment smacks more of legal grandstanding than a true attempt to streamline the present law.