Jeri G. Kubicki, vice president for human resources policy at the National Association of Manufacturers, has an op-ed today’s Examiner, commenting on the Lilly Ledbetter Fair Pay Act. Jeri debunks the claims of supporters that the bill is a narrow corrective to specific discrimination cases, noting the legislation would eliminate statutes of limitation all together and expand the range of people who can sue employers.

From, “The Ledbetter Bill: Stimulating the economy or more lawsuits?”

Without the deadline, alleged discrimination might go undetected for many years, subjecting more workers to disparate, unfair and illegal treatment. At the same time, employers will be forced to defend against a potential avalanche of decades-old, potentially frivolous claims.

Enactment of the Ledbetter legislation means companies may soon get complaints based on alleged discriminatory acts made decades ago. Picture this scenario, not so far-fetched: “My shift supervisor in the mid-’80s didn’t like women on the factory floor, and he gave me a bad review. So now I’m filing a complaint in 2009. And I’m suing too.”

What business can defend against that? Memories fade, employees move on, and supervisors retire or die. Companies are bought or merged.

Attorneys know full well that many employers will be reluctant to assume the prohibitive legal costs of fighting these kinds of suits. The real goal will be to force a cash settlement without ever stepping foot in the courtroom.

Another sweeping provision would expand the legal right to file a complaint to anyone potentially “affected” by the discrimination. It’s no longer the individual victim of discrimination who has a claim, it’s anyone! Given the inventiveness of the trial bar, expect lawsuits from family members or a college buddy who will surely blame the unfair treatment of a parent or colleague: “If only they had enough money to front me that loan. It’s the company’s fault, and I’m suing.”

 The column is on page 14 of the Examiner’s Digital Edition.

The Senate voted 72-23 Thursday to invoke cloture on a motion to proceed to consideration of S. 181, the Senate version of the Ledbetter bill. See the debate starting on page S557. 

Sen. Kay Bailey Hutchison (R-TX) also submitted a substitute amendment to address statutes of limitations more narrowly. Text of the substitute and her floor statement start on Page S588 . 

Expect debate to resume once the Senate reconvenes on Wednesday.

From President-elect Obama’s Speech on the Economy, January 8.

“If we act with the urgency and seriousness that this moment requires, I know that we can do it again….
…For if we hope to end this crisis, we must end the culture of anything goes that helped create it, and this change must begin in Washington.
It’s time to trade old habits for a new spirit of responsibility. It’s time to finally change the ways of Washington so that we can set a new and better course for America.”

But old habits die so hard…

The preliminary, foreshadowing, scene-setting Senate floor debate just began on S. 181, the Lilly Ledbetter Fair Pay Act. This is the bill that would eliminate statutes of limitations in employment discrimination claims under the Civil Rights Act, also also allow suits not just by the employee allegedly discriminated against, but by people “affected” by the discrimination.

This bill, sponsored by Sen. Mikulski (D-MD), has been kept distinct from the other “fair pay” bill that passed the House and then was combined with Ledbetter, the Paycheck Fairness Act. Two jobs-discouraging bills were apparently too much for the Senate to buy at the same time.

While the attention has been on the impact on “gender discrimination” cases, Sen. Maria Cantwell (D-WA) has just reminded fellow Senators that the bill also applies to race, color, religion and national origin.

We expect a cloture motion on the motion to proceed to start things off, so debate will continue through next week.

In any case, the National Association of Manufacturers today sent a “Key Vote” letter to the Senate expressing the NAM’s opposition to S. 181. Such letters indicate to members of Congress that the NAM may include the votes in the rankings of pro-manufacturing records.

The Key Vote letter is online here.

Dear Senator:

The National Association of Manufacturers (NAM), the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector and in all 50 states, urges you to oppose S. 181, the Lilly Ledbetter Fair Pay Act, because it could be harmful to the economy and jobs.

Manufacturers are strongly committed to equal employment opportunity and support vigorous enforcement of anti-discrimination laws.  As employers, we are dedicated to fairness in hiring, compensation and job advancement for all employees.  Unfortunately, this bill will do little to prevent unlawful discrimination but would invite unwarranted and costly litigation against employers at a time when businesses are struggling, costing jobs. (continue reading…)

From The D.C. Examiner, “Beholden Congress crafts a trial lawyer boondoggle“:

It didn’t take long for the heavily Democratic 111th Congress to begin approving legislative pay-offs to special interests. First in line were class-action trial lawyers who paid for big portions of the majority’s 2008 campaign costs. The House on Friday passed two measures that, unless they are killed or delayed by a filibuster, will hurt seriously businesses, consumers, and workers alike. The bills will also inflict serious damage on an already reeling economy.

The offending measures are the “Lilly Ledbetter Fair Pay Act” and the “Paycheck Fairness Act.” The first would effectively remove almost all statutes of limitations on claims of wage discrimination, meaning that claims could be filed decades after alleged offenses. The second would remove all limits on both compensatory and punitive damage awards under the Equal Pay Act, enabling trial lawyers to shake down businesses for awards many times as expensive as the wages in dispute. Quite simply, House Speaker Nancy Pelosi and her Democratic colleagues are blatantly encouraging their trial lawyer buddies to sue any business any time for any amount.

Both bills would burden employers with greatly increased record-keeping expenses and near-prohibitive insurance costs that eventually would be passed on to consumers. But the trial lawyers would reap a rich new bonanza in legal fees, much of which would return to Pelosi and company as campaign contributions. That’s called “pay to play” in Chicago. No wonder U.S. Rep. Howard McKeon, R-CA, calls this legislative duo a “trial lawyer boondoggle.”

The editorial also cites this excellent analysis by Andrew Grossman of the Heritage Foundation, “The Ledbetter Act: Sacrificing Justice for “Fair” Pay.” The Ledbetter bill represents a fundamental attack on the legal principle of statutes of limitations, Grossman writes, correctly.

The House just passed H.R. 12, the Paycheck Fairness Act, by a vote of 256-163. Speaker Pelosi is in the chair, providing symbolic, political oomph to passage.

Now for the vote on H.R. 11, the Lilly Ledbetter Fair Pay Act…

We’ll post the roll calls when they’re available.

UPDATE (1:29 p.m.): Houses passes H.R. 11 by a vote of 247-171. Rep. DeLauro now in the chair.

UPDATE (2:22 p.m.)

Roll Call No. 8, H.R. 12, Paycheck Fairness Act, 256-163. Ten Repubicans yea, three Democrats nay.

Roll Call No. 9, H.R. 11, Lilly Ledbetter Fair Pay Act, 247-171. Three Republicans yea, five Democrats nay.

The two Democrats who voted no both times were Rep. Bobby Bright and Rep. Parker Griffith, both freshmen from Alabama.

The NAM sent the following Key Vote letter to the House of Representatives yesterday expressing opposition to H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act.
Key Votes are used in the NAM’s ranking of Congressional members’ voting record on manufacturing issues.

Dear Representatives:The National Association of Manufacturers (NAM), the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector and in all 50 states, urges you to oppose H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act, because this legislation could be harmful to the economy and jobs.

Manufacturers are strongly committed to equal employment opportunity and support vigorous enforcement of anti-discrimination laws. As employers, we are dedicated to fairness in hiring, compensation and job advancement for all employees. Unfortunately, these bills will do little to prevent unlawful discrimination but would invite unwarranted and costly litigation against employers at a time when businesses are struggling.

(continue reading…)

From Bloomberg, “House to Vote on Employment Bills; Business Says Costs to Rise “:

Business groups say the measures, if enacted, would increase costs and expose companies to more lawsuits.

“This scares the heck out of me,” said Drew Greenblatt, owner of Marlin Steel Wire Products LLC in Baltimore. The privately held company makes wire baskets for manufacturers such as Toyota Motor Corp. and drugmaker Roche Holding AG.

Greenblatt, who has testified to Congress about small- business issues, said he expects the wage legislation to lead to higher premiums for his insurance protecting against lawsuits. His premium costs about 2 percent of his total payroll, he said.

“I have my health insurance going up and all these other costs going up,” Greenblatt said. “I just want to make wire baskets.”

Senator Majority Leader Reid has indicated that the Senate may vote next week on the bills, or at least H.R. 11, the Lilly Ledbetter Fair Pay Act. If passed, that means the first major bills of the 111th Congress will be those that discourage hiring by raising the marginal costs of labor, as Drew’s statement demonstrates. Odd priorities at a time of rising unemployment.

Andrew M. Grossman at the Heritage Foundation has written an excellent piece explaining the legal issues involved in the Ledbetter legislation, that is, how the bill would end statutes of limitations in filing wage claims. He makes the critical point that, contrary to the claims of the sponsors, the Ledbetter legislation goes far beyond merely reversing the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire and Rubber.

From “The Ledbetter Act: Sacrificing Justice for ‘Fair” Pay’“:

It was a surprise to many legal observers a year and a half ago that the Ledbetter case–an unremarkable application of a rule settled 20 years prior–would attract any interest at all. But on closer examination, the course of events leading up to the Supreme Court’s decision, and the reaction since, have not been by chance but by design, part of a “perfect storm” orchestrated by trial lawyers, wrongheaded civil rights organizations, and labor groups to achieve a radical shift in employment law.[29] These special interests have an extensive agenda planned for the current Congress. Yet Members should consider each plank of it on the merits.

Far beyond reversing the result of a single Supreme Court decision–one that, viewed fairly, was consistent with precedent and fairly represented Congress’s intentions–the Lilly Ledbetter Fair Pay Act would open the door to a flood of lawsuits, some frivolous, that employers would find difficult or impossible to defend against, no matter their ultimate merit. Rather than help employees, the bill could end up hurting them by reducing wages and job opportunities–at a time when unemployment is rising and many are nervous about their job prospects. Instead, Congress should recognize that statutes of limitations serve many important and legitimate purposes and reject proposals that would allow litigants to evade them.

Earlier posts this week:

• Unemployment Up, and the House Responds Bizarrely
• The NAM’s Opposition to Ledbetter, Fair Pay Act
• Leading Off Congress with Labor, Trial Lawyer Legislation

The bad news just came out from the Bureau of Labor Statistics, as reported by AFP, “US sheds 524,000 jobs; unemployment hits 7.2%”:

WASHINGTON (AFP) — The US economy shed 524,000 jobs in December, sending the unemployment rate to 7.2 percent, according to official data published Friday.

The recession-ravaged economy lost 2.6 million jobs over the course of 2008, the most since 1945, the Labor Department said. Of those, 1.9 million were lost in the past four months.

The jobless rate, which is calculated on a separate household survey, climbed to 7.2 percent from 6.8 percent a month earlier, hitting the highest level since January 1993, the report showed.

And what is on the floor agenda of the U.S. House of Representatives today? Two measures that will raise the costs of hiring new employees: H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act. The measures will not worsen unemployment, but they will certainly discourage employers from doing anything to reduce joblessness.

Very short versions: The Ledbetter Act removes statutes of limitations on filing wage complaints, and the Paycheck Fairness Act expands the grounds on which disgruntled employees can sue for gender discrimination under the Equal Pay Act. Advocates sell the bills as “restoring fairness” to the workplace, even though employment discrimination is already against the law.

They’ve done a remarkable job of keeping their fingerprints off the measures, but the major beneficiaries of the legislation are the trial lawyers, who will file many more lawsuits in the hopes of a big payoff or, more likely, a big-enough settlement from a company that finds it problematic to fight a lawsuit through the courts. Meanwhile, disgruntled employees will find it easier to tie their employers into knots.

No doubt there will be sincere unhappiness as well as political anguish expressed on the floor today about the unemployment rate (and anguish is a fair response). But then House members will give speeches about malicious employers and terrible treatment of employees.

We wish someone were frank enough to say: “Today, in the face of this horrible unemployment rate, I strongly support these bills to raise the marginal costs of labor. Each new hire will now bring with it greater legal liability and add costs to a company’s operations. In a time of severe recession, I believe this is the right thing to do, but, ahem, mostly for political reasons.”

The following letter registering the NAM’s opposition to H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act, went to the House of Representatives yesterday and was released to the media. It is signed by Jeri Kubicki, our vice president, human resources policy:

The National Association of Manufacturers (NAM), the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector and in all 50 states, urges you to oppose H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act.

Manufacturers are strongly committed to equal employment opportunity and support vigorous enforcement of anti-discrimination laws. As employers, we are dedicated to fairness in hiring, compensation and job advancement for all employees. Statistics from the Equal Employment Opportunity Commission indicate that “reasonable cause” is found in only 5 percent of the more than 82,000 charges of discrimination that it received in 2007. Unfortunately, these bills will do little to prevent actual instances of unlawful discrimination, but they will open the flood gates to unwarranted litigation against employers at a time when businesses are struggling to retain and create jobs.

H.R. 11, the Lilly Ledbetter Fair Pay Act, would eliminate current time limits for filing almost all discrimination charges. This would result in the removal of necessary incentives for prompt identification and resolution of potential discrimination claims and increase the potential for frivolous litigation. Eliminating this statute of limitation does not benefit the employees or employers. Instead, alleged discrimination could go undetected for many years, subjecting an increasing number of employees to wrongful actions. At the same time, employers would be forced to defend against an avalanche of decades-old, potentially frivolous claims. Prompt filing of claims allows employers to identify and, when necessary, to discipline those managers who may be violating the law.

This bill goes far beyond the issues raised in the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., by eliminating time limitations for claims of alleged employment discrimination in most cases, not just allegations of pay discrimination. This expansive bill would also create a new cause of action for family members or others “affected by” the alleged discrimination while impacting many forms of “compensation” such as pensions.

The Paycheck Fairness Act, H.R. 12, seeks to alter the Equal Pay Act (EPA) to include unlimited punitive and compensatory damages. This would expose employers to increased threats of litigation by making it significantly easier for plaintiffs’ attorneys to file class action suits. (continue reading…)

No point in feigning dismay or shock at the decision of House leadership to launch the 111th Congress with two pieces of legislation that were backed by core Democratic constituencies and fundraisers — organized labor, trial lawyers and activist women’s groups: H.R. 11, the Lilly Ledbetter Fair Pay Act, and H.R. 12, the Paycheck Fairness Act. (Both bills are on the House floor today or tomorrow.) Elections have consequences, and especially given labor’s demands for action on the anti-democratic Employee Free Choice Act — the SEIU plans to spend $85 million to push its passage! – you can understand the two bills as a signal to the unions to be patient, we know you’re there, just hang on, buddy.

But even as the nations struggles with the recession, we wonder at the signal it sends to the business community and the public at large. Last weekend Congressional leadership conceded passage of a stimulus package by January 20th, inaugural day, would be too big of practical challenge, but clearly responding to the economy ranks No. 1 as a legislative challenge. So the question is, how does making employers subject to flood of new lawsuits tied to employment, adding potential costs to the hiring of new employees, stimulate the economy? H.R. 12 allows punitive damages and lifts the lid on economic damages in gender discrimination lawsuits. We can see how that stimulates the trial lawyers, but does it do anything other than discourage private-sector employment?

No dismay or shock. But lots of confusion trying to reconcile the two messages: It’s the economy, stupid, but don’t hire any new employees unless you want to get sued.