The New Jersey District Court Clarifies the Application of the Lilly Ledbetter Fair Pay Act of 2009

Employment Law: The United States District Court for the District of New Jersey, recently issued one of the first opinions to examine the application of the newly enacted Lilly Ledbetter Fair Pay Act of 2009 (“FPA”). In Gilmore v. Macy’s Retail Holdings, 2009 WL 305045 (D.N.J.) the Court indicated that the FPA applied to the plaintiff’s Title VII discrimination claim, but did not apply to the plaintiff’s claims under the New Jersey Law Against Discrimination.

The FPA amended Title VII’s provisions concerning when the statute of limitations accrues. As amended, Title VII now provides that “an unlawful employment practice occurs, with respect to discrimination in compensation, 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 time wages, benefits, or other compensation is paid, resulting in whole or in part from a decision or other practice.” 42 U.S.C. 2000e-5(e)(3)(A).

In other words, as the New Jersey District Court noted, the FPA clarified when the period to file a claim commences by expressly permitting “a victim of discrimination in compensation who files a timely EEOC charge as to at least one instance of pay discrimination to recover back pay for a pay discrimination that occurred during the two years preceding the filing of the charge if such preceding discrimination is ‘similar or related to’ the practice that is the subject of the timely-filed charge.”

In Gilmore, Ms. Gilmore, the plaintiff, filed suit against her employer alleging discrimination on the basis of racial discrimination. She filed a complaint with the Equal Employment Opportunities Commission on July 7, 2005. The basis of her complaint was that she was not fairly promoted within her retail employer to departments that would have provided her with better commission opportunities, and therefore better pay. She claimed that such failures on the part of Macy’s were a result of racial discrimination.

The Court noted that since Ms. Gilmore’s discrimination claim involved an unlawful employment practice relating to compensation, the FPA, signed into law by President Obama January 29, 2009, was triggered. The law, which expressly applies retroactively to May 28, 2007, was designed to redress the Supreme Court decision of May 29th of that year, in which the Court had limited the time period as to when the triggering event occurs.

The Gilmore Court examined the legislative intent behind the FPA and specifically noted that Congress, in propounding the FPA stated that the Supreme Court decision “undermine[d] … [statutory protections against discrimination] by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions . . .” Congress specifically noted that the Supreme Court decision demonstrated an impracticable approach, “ignoring the reality of wage discrimination.”

Interestingly, the Gilmore Court did note its opinion that the FPA does not apply to a claim made under the New Jersey Law Against Discrimination (NJLAD), but rather, is limited to the plaintiff’s Title VII claim. Its rationale was that NJLAD applies a different statute of limitations to its claims that are distinct from the timing that an EEOC charge is made.

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