Senate Puts Brakes on Paycheck Fairness Act

Posted by John Regan on Nov 17, 2010 3:43:00 PM

The U.S. Senate today put the brakes on the so-called Paycheck Fairness Act, which would have unleashed a mountain of litigation against employers working in good faith to provide opportunity to all employees.

Paycheck Fairness ActA 58 to 41 vote in favor of taking up Paycheck Fairness fell two votes short of the votes needed to break Republican opposition to the measure. Massachusetts’ two Senators split their votes, with Republican Scott Brown opposing the bill and Democrat John Kerry supporting it.

The House of Representatives approved the measure last year.

The legislation would allow unlimited punitive and compensatory damages in cases of suspected pay discrimination. Employers of all sizes would be exposed to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

Associated Industries of Massachusetts President and Chief Executive Officer Richard C. Lord commended Brown for voting against a bill that would benefit trial lawyers more than workers.

“We believe that existing laws protect workers from gender discrimination while allowing employers the freedom to adopt competitive business practices to retain and attract employees. Expanding punitive damages will not prevent actual instances of discrimination; instead it will encourage the filing of claims to the benefit of plaintiffs’ attorneys,” Lord said.

AIM opposes the Paycheck Fairness Act because:

  • It would remove the Equal Pay Act caps on punitive and compensatory damages and would apply punitive damages to all cases.
  • It would also eliminate a key justification for pay disparities by requiring that any difference in pay be substantiated as a “business necessity.” Additionally, these defenses would have to be based on “bona fide” factors and would prevent employers from paying employees in different localities different rates.
  • It would make it easier for plaintiffs’ attorneys to file class-action suits against employers by requiring participants to “opt-out” of equal pay class-action suits. Currently, claimants must “opt-in” to suits if they wish to be part of the class.
  • It would require that the government collect information on employee wages and other data. This would also enable confidential salary information to be publicly shared with employees’ coworkers, competitors and others. In addition, the bill would allow the Equal Employment Opportunity Commission (EEOC) to require employers to report sensitive wage information that may be publicly disclosed.

An editorial in today’s Boston Globe called the Paycheck Fairness Act “too broad a solution to a complex, nuanced problem.”

“But what if a company offers a higher salary for retail workers in a more dangerous location, and more men sign up? What if a male worker leverages a job offer into a higher salary? Should these be illegal acts?” the editorial asked. 


Topics: Senator John Kerry, Paycheck Fairness Act, Associated Industries of Massachusetts, AIM, Employment Law, Senator Scott Brown

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