the Employment

Spring 2009 Volume 4 Issue 2 Lawnewsletter Minimizing Exposure to RIF-Related Welcome

Claims: A Strategic Approach Tough economic times compel many employers to consider reducing their workforce as one means of lessening the By Diane Dettmann, PHR and Lisa Richards, SPHR adverse impact of business downturns. RIFs, however, can, and frequently do, lead to added problems in the form of Tough Economic Times Inevitably Bring RIFs employee claims of discriminatory or Think about it—when was the last time you turned on the news or picked up a otherwise wrongful discharge. In our newspaper and did not hear or read about some of the country’s largest employers first article, human resource specialists slashing jobs, experiencing mass layoffs, or implementing reductions-in-force (RIF)? Diane Dettmann and Lisa Richards offer We have all heard about Pfizer, Home Depot, General Motors, Caterpillar, Microsoft, some helpful suggestions for conducting United Airlines, and the list goes on. In the local arena, we hear of smaller employers workforce reductions with a view toward going through the same struggles. During these tough economic times, it is evident minimizing such claims. that every industry and employer, regardless of size, is affected by this recession. Unfortunately, many are confronted with tough decisions involving layoffs or Another potential, and developing, reductions-in-force. hotspot for claims is “credit slander.” Brian Franklin’s article examines a What’s an Employer to Do? recent federal district court decision Any organization’s decision to conduct a RIF is not one to be made in haste. addressing the risks facing employers Executive leadership and human resources should continuously partner together who provide adverse information about in a concerted, ongoing effort to make well-informed planning decisions and avoid a discharged employee to an internet- based employment screening service. continued on page 2 In our third article, Angela Coll Caliendo discusses another potential conundrum facing employers in light of Congress’ C o n t e n t s recent passage and the Obama administration’s endorsement of the “Lilly Welcome ...... 1 Ledbetter Fair Pay Act,” which expands Featured Article the bases and extends the deadlines Minimizing Exposure to RIF-Related Claims: A Strategic Approach for employees asserting discriminatory By Diane Dettmann, PHR and Lisa Richards, SPHR...... 1 compensation claims. Additional Articles Internet Consumer Credit Slander: Newest Minefield for Employers? As always, we welcome your comments By Brian W. Franklin ...... 4 and questions.

The Obama Administration Takes Aim at Equal Pay Gregory E. Rogus, Editor By Angela Coll Caliendo...... 6 [email protected]

Austin Baltimore Chicago Detroit Jersey City New York Philadelphia

© 2009 Segal McCambridge Singer & Mahoney Minimizing Exposure to RIF-Related Claims... Cont. unplanned, “knee-jerk” reactions to business downturns or committee, you should nonetheless attempt to include at other unexpected conditions. least two individuals in the process. It is also advisable to incorporate an element of diversity into the committee if If, despite its best efforts, your organization faces the need to at all possible. reduce its workforce, realize from the outset that planning and carrying out a reduction-in-force can be a time-consuming 2. Establish a Formalized Approach to Determine the Need and painstaking ordeal that requires thorough research and for a RIF preparation. You must also recognize that no matter how Appoint one of the committee members to gather well prepared and documented your RIF may be, you are information and document the entire RIF process. Evaluate not guaranteed freedom from eventual employee claims of the legitimate business reasons for the RIF, including the discrimination or wrongful termination. However, if done well, short and long term goals to be reached. Document your your efforts to ensure fairness and objective reasonableness consideration of alternatives, e.g., offering a voluntary exit in carrying out a RIF will substantially reduce your potential incentive plan, instituting a hiring freeze, restructuring the exposure to such claims. organization, etc.

Of course, no two RIF scenarios are identical. Some companies 3. Create a RIF Plan face the need for across-the-board reductions. In other This is your “mechanic’s document.” Your RIF plan should instances, reductions may be limited to specific locations or spell out the steps you will take to conduct the RIF and within certain departments or operating units. Regardless, identify those responsible for executing each step. This every employer, no matter what size or unique organizational plan should not be published to your workforce. Instead, characteristics, should approach the necessity of implementing its viewing should be limited to the highest level of a RIF in a systematized, objective fashion. management and those directly involved in the RIF process. The following checklist sets forth several planning and procedural recommendations. It does not address every 4. Evaluate the Impact of Existing Contractual conceivable RIF-related variable and thus is not intended to Commitments provide an exhaustive, foolproof formula for success. It does, Review documents such as employment contracts, however, present a helpful step-by-step overview designed bargaining agreements, and employee handbooks to incorporate objectivity and fairness into the process, and to minimize any conflict between your RIF plan and thereby achieve the desired goal of minimizing the prospect any established procedures for termination or specific of future claims. severance provisions. Also review your employee benefit plans to determine what impact, if any, a RIF will have on 1. Select a Management Committee to Establish Goals and benefits administration and continuation. Oversee the RIF Process Typically, this committee should include (a) members 5. Determine Your Selection Criteria of upper management familiar with your organization’s There are numerous selection criteria to consider. Before financial picture, strategic goals, and reasons for making your choice, be mindful of the ultimate business considering a RIF, and (b) at least one HR representative. goals you seek to achieve through the RIF, since different If your organization is smaller and does not have a formal selection criteria could yield different results. Without HR department or sufficient personnel to comprise a reference to individual employees, selection criteria include but are not limited to: elimination of positions, last in-first out (LIFO), performance ratings, disciplinary status, productivity, etc. Again, remember to review your policies and comply with those relating to RIFs.

6. Determine Which Employees Will be Affected Once your RIF selection criteria has been decided, determine which employees will be affected and conduct an analysis to determine if there is an adverse or disparate impact on any protected class, i.e., women, minorities, workers over 40, or the disabled. If so, be prepared to show that such impact was merely the incidental result of legitimate, non-discriminatory criteria.

2 www.smsm.com Minimizing Exposure to RIF-Related Claims... Cont.

7. Decide Whether to Offer a Severance Package and honest about the possibility of future layoffs. Consider If your determination is to offer a severance package, communicating an incentive for employees you wish to consider whether it will be offered in exchange for a release retain, but who may contemplate leaving out of fear. of employment-related claims. If so, take steps to ensure your release complies with the waiver provisions of the Do Not Lose Sight of the Human Element Older Workers Benefit Protection Act (OWBPA) for assurance It is important for the employer to recognize that while the that an age discrimination claim is effectively waived. RIF may be necessary from an organizational standpoint, it represents a loss of livelihood for the exiting employees and 8. Ensure Compliance With Federal and State Notice Laws may instill a feeling of panic in those remaining. Both will Determine whether your organization is required to comply experience emotions ranging from anger to relief to fear— with the Worker Adjustment and Retraining Notification fear of failure, uncertainty, and instability. How you treat your Act (WARN). In addition, be aware that many states have employees during and after a RIF will directly impact your adopted varying versions of the federal WARN Act. You organization’s reputation. Are you an employer who treats your may find that you are required to comply with your state’s employees fairly and empathetically as you all go through a notice requirements even if the federal act does not apply difficult circumstance together? Or will you be viewed as a cold, to your organization. uncaring, unfair, or even mean-spirited organizational machine —in other words, a likely target for claims brought by angry, 9. Determine the Manner of Communicating the RIF disillusioned, or distraught former workers? You will greatly Methods of communicating the RIF to your employees enhance your chances to avoid claims if you create and follow may include one group meeting followed by individual a well documented plan, communicate effectively throughout exit meetings, two simultaneous meetings (one for the the process, avoid condescension and confrontation, and most employees being laid off and one for the employees importantly, treat all your employees with dignity and respect. being retained) followed by individual exit meetings, written notice followed by individual exit meetings, etc. Consistency in your message is crucial. Regardless of your method, group RIF communications as well as individual Diane Dettmann, PHR, is the Director meetings should be conducted by no less than two of Human Resources at Segal McCam- members of your RIF or management committee and/or bridge Singer & Mahoney. Ms. Dettmann HR department. has been a human resource profession- al for over twelve years, ten of which have 10. Prepare Individualized Packets for the Affected been at the management level. She com- Employees pleted the Human Resource Management Individualized packets should be presented to those Program at the University of Texas at Austin and received employees affected by the RIF during the individual exit her professional in human resources (“PHR”) certification in meetings. These packets may include the severance 1999 from the Human Resource Certification Institute, an af- agreement and release; the employee’s last pay check filiate of the Society for Human Resource Management. or information regarding when and how it will be made available (be sure to research and comply with state payday laws, if any); if applicable, a check for payment of accrued and unused vacation or paid/personal time off (PTO); reimbursement of expenses; and information Lisa Richards, SPHR, is the Midwest Region- regarding COBRA and continuation or termination of other al Human Resources Manager at Segal Mc- employee benefits. Cambridge Singer & Mahoney. Ms. Richards has over five years’ experience as a human 11. Prepare for Post-Announcement Activities resource professional, including three years Depending on your security concerns and other business at the management level. She received her requirements, be prepared to execute various post- B.A. from Roosevelt University in 1999 and announcement activities, such as: deactivating building, her senior professional in human resources (“SPHR”) certifica- garage, computer and systems access; changing door tion in 2008 from the Human Resource Certification Institute. locks; canceling company credit/calling cards; and accounting for all company-owned equipment.

12. Meet With Employees Not Selected for the RIF Following the RIF, meet with your retained workforce to motivate and discuss plans for moving forward. Be open www.smsm.com 3 Internet Consumer Credit Slander: Newest Minefield for Employers?

By Brian W. Franklin

fraud. Though Mr. Pendergrass denied any wrongdoing, he was compelled to sign a written statement, and was then fired.

Shortly afterwards, Rite Aid forwarded a report regarding Pendergrass’ alleged criminal activity to ChoicePoint, which it added to its database. As a data aggregation firm, one service that ChoicePoint offered its subscribers was an employment screening database designed to supplement background investigations of prospective applicants. The database is accessible online by subscribing members only, which includes many major retailers.

Mr. Pendergrass did not learn of the report until November 30, 2006, when he applied for positions at two other companies. Although both potential employers approved Pendergrass’ qualifications, they ultimately denied him employment based Employee Discharge Data Used for Consumer Credit on the negative report, which stated he had committed “cash Reporting register fraud and theft of merchandise” at Rite Aid, with the A Pennsylvania federal district judge has held, in a case loss valued at $7,313.00. involving “credit slander,” that an employer furnishing defamatory information about an employee to an employment Mr. Pendergrass attempted to correct the inaccuracy of the screening database may be liable for multiple suits well beyond report directly with ChoicePoint, but without success. When the statute of limitations cutoff date for the original offense. he later applied for a position at another major retail chain, Eastern District Judge Bruce Kauffman’s decision inPendergrass Pendergrass was again confronted with the posted report. v. ChoicePoint, Inc.1 denied defendant Rite Aid Corporation’s In fact, the prospective employer included a copy with its motion to dismiss a defamation lawsuit filed one year beyond rejection letter. On January 10, 2008, plaintiff brought suit the state’s defamation statute of limitations. The case examines against Rite Aid and ChoicePoint for defamation of character an employer’s role in furnishing consumer credit information and violation of the Fair Credit Reporting Act. regarding a discharged employee to an internet-wide database, and offers insight regarding an employer’s potential liability Does the Internet Alter the Employment-Related when that information may contain defamatory statements. Defamation Playing Field? Defamation, in general, is the publication of a false and Mr. Pendergrass’ Predicament defamatory statement about another to a third person, causing Theodore Pendergrass sued his former employer, Rite Aid injury to the defamed individual. A statement is considered Corporation, for defamation and false imprisonment following defamatory if it would cause harm to one’s reputation or deter his abrupt termination in January of 2006. He also claimed third persons from associating with the individual defamed.3 that both Rite Aid and ChoicePoint, Inc., a “data aggregation” To recover damages, a private person (as opposed to a public firm that provides background checks for more than half the figure) must prove that the maker of the statement knewit country’s 100 largest companies, had violated the federal was false and defamatory, or acted with reckless disregard Fair Credit Reporting Act (“FCRA”).2 Mr. Pendergrass had or negligence in failing to ascertain the facts.4 The statute of worked as a shift supervisor at a Rite Aid store in Philadelphia, limitations for defamation suits in Pennsylvania is one year Pennsylvania. On January 11, 2006, he was confronted by the from the date of publication.5 store’s loss prevention officer, who escorted him to an employee break room and then interrogated him about an alleged series A person’s right to sue may be based on communication of of merchandise thefts as well as instances of cash register defamatory statements to one individual or many. The great

4 www.smsm.com Internet Consumer Credit Slander... Cont. majority of states, Pennsylvania included, follow the “single consumer’s credit, and establishes “reasonable procedures” that publication rule” for mass publications.6 The rule provides that must be followed to ensure the accuracy, fairness, and proper a single communication heard at the same time by two or more utilization of consumer reports, as well as consumer privacy. other persons is a single publication that gives rise to only one “Consumer reporting agencies” are entities in the business action for damages. Likewise, any one edition of a book or of gathering information pertaining to an individual’s credit newspaper, or any one radio or television broadcast, exhibition worthiness, credit standing or capacity, or, in some instances, of a motion picture, or similar aggregate communication is general reputation, character, personal characteristics, or mode a single publication. All damages suffered in all jurisdictions of living.11 Such information is relied upon to establish an can be recovered in one action. A judgment reached upon individual’s eligibility for credit, insurance, or even employment. the merits in that one action, whether for or against the claimant, bars any other lawsuit between the same parties in The false reporting of consumer information by a consumer all jurisdictions.7 The mere repetition of defamatory remarks reporting agency has led to lawsuits under the FCRA, often by other persons ordinarily does not convert the repeater into termed “credit slander” suits. A reporting agency making this a defamer, unless he or she authorized or reasonably expected information available over the internet, while possibly immune members of his viewing or listening audience to repeat it.8 from a state defamation claim, may nonetheless be liable for credit slander under the FCRA. Those who furnish the inac- A majority of courts have ap- curate information, or use it plied these rules to internet- inappropriately, may be liable based defamation claims Employers: Err on the Side of Caution in as well.12 The injured person based on several interre- Making Statements about Former Employees may sue for damages within lated rationales: (1) internet the earlier of two years from access is world-wide; (2) the date of discovery of the consequently, internet com- • Employers who make defamatory statements violation or five years from the munications, as opposed to to background check firms may be committing date of its occurrence.13 Thus, conventional mass-media “credit slander” under the Fair Credit Reporting by providing a longer statute publications, reach a far Act of limitations for such claims, more vast audience; and (3) and by holding accountable material posted online can • A single publication of a defamatory report could those who distribute defama- remain for an indeterminate give rise to multiple credit defamation suits tory credit information on the period of time. As the New internet, the FCRA may pro- • Make sure you know the difference between a York court of appeals has vide employees with a new, commented, a rule allow- permissible opinion and a defamatory remark more fertile area of litigation ing suit for multiple publica- • If you can’t prove it, don’t say it than state defamation law. tions on the internet “would implicate an even greater Back to Pendergrass potential for endless retrig- With Mr. Pendergrass facing gering of the statute of limitations, multiplicity of suits and ha- a limitations bar on his state law defamation claim, as well rassment of defendants.”9 It would also increase the exposure as the additional restrictions imposed by Congress on state of publishers to stale claims. defamation claims arising from the publication of information over the internet, Judge Kauffman looked instead to the “credit Furthermore, federal statutory law significantly limits a slander” approach under the FCRA. The Court presumed claimant’s right to sue for internet defamation by immunizing ChoicePoint’s status as a “consumer reporting agency” with interactive computer service providers (“ICSPs”) and users— little discussion. Further, noting that Pennsylvania courts have those who host or use websites where offensive matter is not specifically decided whether to apply the single publication posted. Congress has determined that ICSPs should not be rule to information conveyed to consumer reporting agencies, held legally responsible for material content appearing on the District Court applied federal common law for FCRA cases. the internet. Thus, the statute provides that ICSPs and other Those cases14 generally hold that information conveyed to a web hosts are not “publishers” of the material that is posted to consumer reporting agency is not a “mass publication” subject their sites, and therefore cannot be sued on state defamation to a single publication rule. Rather, credit information is claims.10 confidential, dissemination is limited, and it is easy to determine when and to whom the information is communicated. The risks The FCRA and “Credit Slander”—Fertile Source of justifying the single publication rule—endless retriggering of New Litigation? the statute of limitations, multiplicity of suits, and harassment The FCRA prohibits a consumer reporting agency from of defendants—are not present in a credit slander case. disseminating to third persons inaccurate information about a Therefore, “each transmission of the defamatory information is www.smsm.com 5 Internet Consumer Credit Slander... Cont. a separate republication of that material, giving rise to a new cause of action.”15 1 Pendergrass v. ChoicePoint, Inc., 2008 U.S. Dist. LEXIS 99767 (E.D. Pa. 2008). 2 15 U.S.C. §1681 et. seq. 3 See, e.g., Restatement (Second) of Torts § 559 (1977). Thus, although Rite Aid published the allegedly defamatory 4 See Gertz v. Robert Welch, 418 U.S. 323 (1974). 5 42 Pa.C.S. § 5523. Employers situated in other states must be sure to check the appli- report only once, on January 11, 2006, it could be liable for cable limitations periods in those states, as there is some variation. Delaware and Indiana, multiple credit defamation suits well beyond the statute of e.g., have a two-year statute, Del. Code Ann. Tit. 10, §8119 (2002) and Burns Ind. Code Ann. §34-11-2-4 (2009). Massachusetts has a three-year statute, ALM GL Ch. 260, §4 (2008). limitations cutoff date for the original offense. Mr. Pendergrass 6 See 42 Pa.C.S. §8341(b). See also Restatement (Second) of Torts § 577A, Appendix, could sue Rite Aid each time ChoicePoint furnished the report Reporters Notes (1977), and cases cited. to one of its subscribers.16 Rite Aid could also be sued as a 7 Id. See also Graham v. Today’s Spirit, 503 Pa. 52 (1983). 8 Restatement (Second) of Torts § 576 (1977). furnisher of false credit information to a consumer reporting 9 See Firth v. State, 98 N.Y. 2d 365, 369-370 (2002). agency under the FCRA. 10 The Communications Decency Act, 47 U.S.C. §230, encourages ICSPs to develop filters and blocking technologies for the internet, placing regulation of internet speech content into the hands of private entities. The law further immunizes ICSPs from civil liability for Employers: Beware the New Potential Minefield actions taken to restrict access to or the availability of objectionable material. 11 15 U.S.C. § 1681a. Employers who provide employee references to prospective 12 See, 15, U.S.C. §§ 1681b, 1681e, and 1681s-2. employers or screening agencies must exercise impeccable 13 See, 15 U.S.C. § 1681p. 14 See Hyde v. Hibernia Nat’l Bank, 861 F.2d 446 (5th Cir. 1988); Larson v. Ford Credit, 2007 judgment when considering whether a particular statement U.S. Dist. LEXIS 47181; Jaramillo v. Experian Info. Solutions, Inc., 155 F. Supp. 2d 356 (E.D. Pa. about an employee’s work history or performance, or about 2001); Lawrence v. Trans Union, L.L.C., 296 F. Supp. 2d 582 (E.D. Pa. 2003). any particular difficult situations or issues involving the 15 Pendergrass, 2008 U.S. Dist. LEXIS 99767, at 12. 16 That is, barring application of collateral estoppel principles. employee, constitutes permissible opinion versus defamatory remark. The method of conveying a reference or opinion should always be given careful consideration. An employer Brian W. Franklin practices in the areas of should be aware of the implications of sharing certain products liability, general liability, and toxic information in some forums, especially the internet. If using an torts in Pennsylvania and New Jersey. Prior employment screening service, an employer should be aware to joining Segal McCambridge, Mr. Franklin that although access may be limited, the information supplied practiced in California as a public defend- could possibly be construed as “consumer credit” information. er and as a civil litigator defending man- As Pendergrass demonstrates, this could open a new Pandora’s ufacturers in wrongful death and personal box. Employers should, consequently, redouble their efforts to injury suits, and an employer in FELA tort claims. Mr. Franklin avoid crossing the proverbial line into the realm of actionable has also advised clients in employment discrimination matters. credit defamation.

The Obama Administration Takes Aim at Equal Pay

By Angela Coll Caliendo

The United States Congress recently passed, and President Background: The Supreme Court’s Ledbetter Decision Barack Obama has now signed into law, an Act providing Lilly Ledbetter worked at the Goodyear Tire & Rubber Co. expanded time limits for employees to assert fair pay claims. (“Goodyear”) plant in Gadsden, Alabama from 1979 until 1998. The new law, popularly called the Lilly Ledbetter Fair Pay Toward the end of her career in 1998, she first became aware Act (“LLFPA”),1 overrides a 2007 United States Supreme of a large discrepancy between her pay and that received by Court decision2 that imposed what many had considered an male employees at the plant. Upon learning this, she initially overly restrictive time limitation on such claims. In addition submitted an informal questionnaire, followed by a formal to amending Title VII’s protection against discrimination in charge, to the Equal Employment Opportunity Commission compensation, the LLFPA’s amended protections also apply to (“EEOC”), asserting discrimination on the basis of her gender. claims brought under the Age Discrimination in Employment Four months later, Ms. Ledbetter sued her employer in federal Act of 1967,3 the Rehabilitation Act of 1973,4 and the Americans court, alleging pay discrimination under both Title VII and the with Disabilities Act of 1990.5 Equal Pay Act of 1963. Ms. Ledbetter introduced evidence

6 www.smsm.com The Obama Administration Takes Aim at Equal Pay Cont. that several of her Goodyear supervisors had given her poor fair pay protection to apply to discrimination factors such as evaluations in prior years because of her gender. The evaluations race, color, religion, national origin, disability, and/or age.11 negatively impacted her pay increases over the length of her Thus, any individual subject to compensation discrimination employment. Consequently, the gap between her pay and that under Title VII, the Age Discrimination in Employment Act, the of her male co-workers continued to widen over time, and had Rehabilitation Act, or the Americans with Disabilities Act may become quite significant by the time she decided to retire. file a charge within the applicable time frame (either 180 or 300 days)12 measured from: A jury found in Ms. Ledbetter’s favor and awarded her back pay and damages. Goodyear appealed, contending that Ms. 1. The date a discriminatory compensation decision or Ledbetter’s pay discrimination claim was time barred with other discriminatory practice affecting compensation is respect to all pay decisions made prior to September 26, 1997, adopted; or which was 180 days before the filing of her informal EEOC questionnaire. The Eleventh Circuit Court of Appeals took 2. The date the individual becomes subject to a discriminatory away Ms. Ledbetter’s verdict, holding that Title VII’s timely- compensation decision or other discriminatory practice filing requirement limited an employee, whose salary level affecting compensation; or was annually reviewed and re-established by the employer, to 3. The date the individual is affected by the application challenging the one affirmative decision directly affecting the of a discriminatory compensation decision or other employee’s pay that was made within the 180-day limitations discriminatory practice, including each time the individual period created by her EEOC charge, and that claims based on receives wages, benefits, or other compensation that is any acts of discrimination affecting her salary occurring before based in whole or part on such decision or other practice.13 then were time-barred.6 The Court also concluded there was insufficient evidence to prove that Goodyear had acted with It of course remains the employee’s responsibility to file a formal discriminatory intent.7 Ms. Ledbetter then requested the United charge of discrimination with the EEOC before bringing suit, States Supreme Court to review her case. and the failure to do so forfeits any challenge to an employer’s alleged act(s) of discrimination with regard to pay. The Supreme Court focused on the time limitation issue and concluded Ms. Ledbetter missed her chance to bring her cause The LLFPA has a retroactive effective date of May 28, 2007 (the of action. According to the Court, she should have “filed an day before Ledbetter was decided), and applies to all claims of EEOC charge within 180 days after each allegedly discriminatory discriminatory compensation pending on or after that date.14 pay decision was made and communicated to her.”8 She did not do so. Furthermore, the Court emphasized that “the paychecks LLFPA Will Likely Increase Fair Pay Claims that were issued to her during the 180 days prior to the filing The LLFPA may result in a short term uptick in fair pay claim of her EEOC charge do not provide a basis for overcoming that filings for several reasons. First, its retroactive provision may prior failure.”9 encourage employees whose claims were previously time- barred after May 28, 2007 to revisit LLFPA Nullifies the those claims to determine whether Supreme Court’s Ruling they would now be allowable under The LLFPA was enacted in direct the LLFPA. Second, some employees response to the Supreme Court’s are likely to view the expansive Ledbetter holding. By legislating language of the Act as providing, in that each new allegedly discrim- essence, a new breadbasket full of inatory paycheck extends the “goodies.” Since Congress, and the claim filing period for an addi- new administration, intended broad tional 180 days,10 Congress has coverage, those “goodies” are there now placed its own stamp of ap- for the taking. So, for example, using proval on the position that the some imagination and ingenuity EEOC itself had administratively (neither of which is lacking among enforced prior to the Supreme the ranks of the plaintiffs’ trial bar), Court’s ruling. there are bound to be employees fashioning present fair pay claims LLFPA Provides Other based on perceived slights or adverse Protections evaluations occurring in the past, The Act, however, is more than now that the limitations bar has been just a legislative override of significantly altered through the a court decision. It broadens legislation. www.smsm.com 7 The Obama Administration Takes Aim at Equal Pay Cont.

Some see the LLFPA as a potential boondoggle for plaintiffs’ trial lawyers, who may advise their clients to wait to file alleged 1 123 Stat. 5. 2 Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618, 127 S.Ct. (2007). discriminatory fair pay claims in the hopes of reaping larger 3 29 U.S.C. 626. damage awards based on longer alleged discriminatory pay 4 29 U.S.C. 791, 794. 5 42 U.S.C. 12111 et. seq., 12203. periods. Fortunately, the Act itself protects against any such 6 Ledbetter v. Goodyear Tire and Rubber Company, Inc., 421 F.3d 1169, 1178-80 (11th Cir. overreaching by imposing a cap limiting back pay awards to 2005). 7 Id. at 1185-89. two (2) years preceding the filing of the EEOC charge. 8 127 S.Ct. at 2169. 9 Id. The passage of the LLFPA this early in the administration (and 10 123 Stat. 5, § (3)(A). 11 123 Stat. 5, §§ (3), (4), (5). particularly considering all the troubling issues confronting 12 In “non-deferral” states, i.e. those not having an EEOC-like state administrative agency, both the executive and legislative branches) sends a strong the applicable time limit is 180 days. In “deferral” states, i.e. those having such a state administrative agency, the filing period is extended to 300 days. See Ledbetter, 421 F.3d message to employers that fair pay is a priority matter to this at 1178, n.13. administration and to this Congress. Employers who ignore 13 123 Stat.5, § 3 (A). 14 the message do so at their own peril. Prudent employers will Id. at, §6. review their policies and practices regarding compensation decisions, including, but not limited to, pay scales, raises, bonuses, payment of benefits, and promotions/demotions, to Angela Coll Caliendo is an associate in Segal ensure they conform to an objective scale model. If no such McCambridge’s Philadelphia office. Ms. Cali- policies or practices are currently in place, it is recommended endo is admitted to practice in New Jersey they be implemented. Furthermore, when making decisions and Pennsylvania. She received her J.D. from related to individual employee compensation, employers are Villanova University and her undergradu- encouraged to document objective reasoning behind their ate degree from the University of Florida. decisions so there is little room for doubt or ambiguity, and hence, little room for claims.

Disclaimer

This newsletter is intended to educate generally on certain issues and is not intended to provide legal or professional advice. The infor- mation and opinions expressed in this document are solely those of the authors and do not necessarily represent the views or opinions of any current or former clients of Segal McCambridge Singer & Mahoney, Ltd.

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