On January 29, 2009, President Obama signed his first piece of legislation into law — the Lilly Ledbetter Fair Pay Act. The Lilly Ledbetter Fair Pay Act expands the time frame in which workers can sue for discrimination they have experienced based on gender, race, national origin or religion. Under the new law, workers may now bring a lawsuit for up to six months after they receive any paycheck they allege is discriminatory.

The Lilly Ledbetter Fair Pay Act was initiated by Congress in reaction to the United States Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). Lilly Ledbetter was an employee at Goodyear Tire and Rubber Company. After years as a manager, she discovered she was being paid less than her male counterparts. Ledbetter sued claiming pay discrimination under Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963. Ledbetter claimed that she had been evaluated unfairly because of her gender and therefore had been paid significantly less than her male colleagues.  Goodyear claimed their evaluations were non-discriminatory and only focused on worker competence.  At trial, the jury found for Ledbetter and awarded her back pay and damages.  Goodyear appealed, arguing that all claims to damages before September 26, 1997 were void due to the statute of limitations placed on pay discrimination claims.

In a five-justice majority, the Supreme Court held that employers are protected from lawsuits over race and gender pay discrimination if the claims are based on decisions made by the employer more than 180 days before the plaintiff initiates a charge. In rejecting Ms. Ledbetter’s appeal, the Supreme Court held that “she could have, and should have sued” when the pay decisions were made, instead of waiting beyond the 180-day statutory charging period. Justice Ginsburg dissented from the opinion of the Court, and argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time.  In addition, she noted that the pay information of fellow workers is typically confidential and unavailable for comparison and thus, pay discrepancies are often difficult to recognize until more than 180 days after the pay change.

In an immediate reaction to the Court’s decision, in 2007, several Democratic members of Congress introduced the Lilly Ledbetter Fair Pay Act, which revised the law to state that the 180-day statute of limitations for pay discrimination resets with each new discriminatory paycheck.  In January 2009, Congress passed and President Obama signed the Lilly Ledbetter Fair Pay Act into Law. With the passage of the Lilly Ledbetter Fair Pay Act, the effect of the Court’s holding was reversed as the revised statutory language conforms to the interpretation advocated by Justice Ginsberg in her dissenting opinion.