By Sheryl L. Axelrod, Esquire

The Lilly Ledbetter Fair Pay Act was the first bill President Obama signed into law upon taking the oath of office. The Act gives an employee paid comparatively lesser wages, benefits or other compensation as a result of discrimination additional time to file a claim. In fact, literally every time an employee is handed a disproportionately low paycheck, Ledbetter calls for the employee to be given another 300 days to do so.

Ledbetter changed the landscape for employers. The passing of 300 days (nearly a year) without a claim after new pay scales offers employers no security now; claims may be brought indefinitely, as long as they are filed within 300 days after a lesser paycheck.

A recent court decision that would appear to limit Ledbetter’s breadth will likely offer employees insight into how to extend it. On May 21, 2009 in Rowland v. Certainteed Corp., the United States District Court for the Eastern District of Pennsylvania declined to extend Ledbetter to a failure to promote claim. Ms. Rowland claimed that she was denied promotions due to her gender. She did not file a claim until 300 days after a number of the denials occurred. While she claimed Ledbetter extended her time to bring these claims, the court found that Ledbetter did not apply and tossed out the claims as time-barred because (in the words of the court’s opinion), “Rowland's failure to promote claim is not based on a discriminatory compensation claim”.

While the decision would appear to benefit employers, employees denied promotions more than 300 days before filing claims will presumably now consider whether the denials were intertwined with discriminatory compensation plans. The employer’s refusal to promote, the claim may allege, was based on a discriminatory compensation structure tied to promotions and designed to keep those of a certain race, color, religion, sex or national origin from receiving their just compensation. If such claims prevail, the 300 day time period for bringing failure to promote claims will start over every time an employee is paid.

Employers should of course always have counsel review proposed structural compensation changes prior to their implementation. However, employers are well advised to have counsel regularly review their existing compensation structures. Rowland teaches that no matter how long the structures have been in place, they remain subject to attack.