Equal pay bill debate focuses on lawyers

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At a U.S. Senate hearing on legislation aimed at closing the gender pay gap, lawmakers, federal agents and experts spent much of the time discussing whether the bill would result in a flood of litigation if passed.

At last week’s hearing before the Committee on Health, Education, Labor and Pensions, opponents of the proposed Paycheck Fairness Act (S. 182) said it would benefit trial lawyers more than women in the workplace, spurring costly lawsuits that would hurt businesses.

“The legislation proposed today will not create any jobs except for trial lawyers,” said Sen. Mike Enzi, R-Wyo., who warned that the bill would create more class action lawsuits and result in employers being bullied into settling claims to avoid litigation costs.

But proponents of the bill said that it would not result in a flurry of litigation. Instead, they argued, the measure would provide women the same prohibition against workplace bias already in place for minorities and other protected groups.

“That is not the pattern we have seen with anti-discrimination legislation,” said Rep. Rosa DeLauro, D-Conn., a sponsor of the House version of the bill (H. R. 12). “Race-based anti-discrimination laws have been on the books for years. Employers have made adjustments necessary to avoid [being sued].”
Subject to damages

The legislation would subject employers who discriminate in pay on the basis of gender to compensatory and punitive damages.

The measure would also prohibit employers from retaliating against workers for discussing their salary with other workers, and would require employers to prove a job-related necessity for paying women less than men for similar positions as an affirmative defense to disparate pay charges.

Committee Chairman Sen. Tom Harkin, D-Iowa, said the bill would prevent employers from hiding behind policies that keep pay scales secret, preventing women from knowing whether their salaries discriminatorily lag behind men’s. Such a measure could prevent lawsuits rather than cause them, he said.

“If we give women information about what their male colleagues are earning, they can negotiate a better deal for themselves in the workplace,” said Harkin, a sponsor of the Senate version of the bill. “Right now, women who believe they are the victim of pay discrimination must file a lawsuit and endure a drawn-out legal discovery process to find out whether they make less than the man working beside them. With pay statistics readily available, this expensive process could be avoided.”
EEOC weighs in

Stuart Ishimaru, acting chairman of the Equal Employment Opportunity Commission, said the legislation would help combat the current pay disparity between men and women. Women currently earn an average of 77 cents per each dollar men make.

Ishimaru said the legislation’s disclosure requirements would allow the EEOC to collect wage data to better understand the extent to which gender pay bias exists — something that is impossible to ascertain now.

“We just don’t know how much wage discrimination is going on because of the secrecy of wage information,” said Ishimaru, noting that many companies have rules prohibiting the disclosure of pay information.

He compared the federal system, where almost no gender-based wage disparity exists and where pay scales are a matter of public record. “That may serve a model for us,” Ishimaru said. “The more people know about what people are making, less pay discrimination will go on.”

But Jane McFetridge, a partner in the Chicago office of Jackson Lewis who represents businesses in employment law matters, said the measure would impede companies’ ability to hire more women because of the risk of costly litigation.

“If I thought for a moment that this Act would help me or my daughter in the workplace, [I] would not be testifying today,” McFetridge said.

McFetridge cited California, where state law allows workers to seek punitive and compensatory damages for gender based wages violations, as an example. McFetridge said the flurry of litigation has caused some of her clients — particularly small businesses — not to do business in the state for fear of ligation costs.

And the affirmative defenses in the proposed law place an almost unreachably high burden on businesses, she said.

“As a practical matter, there is no way for an employer to demonstrate whether a decision they make is for a legitimate nondiscriminatory business reason,” she said.