This is a settled issue: since the 1963 Equal Pay Act, women have the right to sue for equal pay for equal work, and if they can prove it, they can get damages for the violating employer, but …
There are several reasons statistics can show why overall, women make lower wages than men. For example, they more often leave the workforce, for long or short term, to raise a family. This is a big picture view, but when you look at individual cases (men and women with same skills and experience in in the same company), the law since 1963 protects women from pay discrimination, and companies don’t want lawsuits. If there was widespread pay discrimination, there would be just asmuch litigation. But there’s not.
Interestingly, the fear of such lawsuits can have a detrimental effect on the advancement of women. Thomas Sowell on Firing Line, (start at 12 minutes).
Mr. Sowell explains that many universities will not hire a woman for assistant professorships if they are not certain she will advance. They won’t take a chance on a marginally qualified woman, because if she does not make tenure, they might have to deal with the EEOC and private lawyers in a discrimination claim. They can take that chance with a marginally qualified man, because if he does not make tenure, there is no such fear of legal action. Thus, fear of legal action is the reason marginally qualified women do not get the “same running chance.”
The Lilly Ledbetter Fair Pay Act (2009)
Applying the Marxist tactic mentioned above, this law is touted as fundamentally protecting a woman’s right to equal pay. But the truth is that it was largely a procedural change in the law that allowed women more time to sue for Fair Pay claims.
This law embraced the idea that the decision to pay less has an ongoing effect with each paycheck, and the time to sue should not start from that decision to pay less (the pre-act law), but rather it could start from the date of the last paycheck. For example, if a women got hired at a lower wage in year 1, and worked 20 years, she could sue for ‘equal pay’ in year 20 1/2, as the effect of the discrimination had continued to that day.
By way of comparison, the right to sue for accident injuries is limited to 1-2 years in most states, but under the logic of the Lilly Ledbetter act, if he could not work for 10 years from his injuries, he could sue 10 years after the accident.
The business community freaked — it puts them in an impossible position to defend these lawsuits because, after all those years, the managers, witnesses and paperwork (related to the “discrimination”) might be long gone and unavailable. Loss of evidence is one reason for statutes of limitations, and this law is a gross deviation from the general rules for filing lawsuits.
Think of the havoc this create for business — if you buy an incorporated company, there is no way to know of these kind of liabilities, like if a manager you never met denied a raise six years ago to a female employee who refused to date him.
There is always tension between companies and employees, and if a woman has a beef with her job, this becomes a tool of lawsuit extortion, and if you think people don’t lie in litigation, think again. Some say the Lilly Ledbetter act was mostly a boon to trial lawyers, big supporters of the Democratic Party.
An Interesting Scenario Under “Equal Pay” Law
Your CEO decides to cash in his stock options and do his own start-up — you are happy for him, but now you need to find a replacement. The last two times you filled this vacancy, you promoted the operations manager, who in both cases was a man. This time the operations manager is a woman, Sylvia, and she is expecting this promotion, and word has it she is already shopping for a new car.
Though she does a good job in operations, she never had sales or marketing responsibilities, and in a few joint projects, there was notable friction between her and Tom, the top producer on the sales team. Tom is important because he knows everyone in the industry, has brought in a lot of new business, and could probably get another job with just one phone call. He could very well take his clients with him. Tom lets it be known he does not want Sylvia as his boss in any way, shape, or form.
It’s your company. What do you do? There is only one correct answer.
The threat of legal remedies have unintended consequences and can create pressure to make bad businesses decisions.