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WASHINGTON � Congress’ swift reaction to reverse a recent pay discrimination decision by the U.S. Supreme Court and a legislative effort to eliminate caps on damages in workplace bias suits signal a major change in the political landscape for employers, and more compromising by them than in at least a decade, agree counsel for employers and employees. The Ledbetter Fair Pay Act � named for Lily Ledbetter, the losing petitioner in the high court case � was introduced in the House and moved out of committee just weeks after the high court announced a strict interpretation of the 180-day filing rule for claims of paycheck discrimination. It has already passed the full House and awaits the Senate’s return from its August recess. And just before the lawmakers left town, the Equal Remedies Act, removing damages caps in Title VII of the Civil Rights Act of 1964, the nation’s major job bias law, was introduced. “There’s a plethora” of employment-related legislation now pending in Congress, said employer counsel Lawrence Lorber, partner in the Washington office of New York-based Proskauer Rose and veteran of the intense negotiations culminating in the Civil Rights Act of 1991. “The real question is whether some of these things can be tailored to be more modest so you can move into the negotiation-compromise stage and get something passed and not face a veto,” he said. “Or, are [Democrats] looking for issues? It’s easy to find issues � do nothing on Ledbetter, have it vetoed, and then bet on a Democratic president in 2009.” The legislation that employers now face has been “pent up” for years, at least since 1995 when Republicans took control of Congress, said Donna Lenhoff, legislative and public policy director for the National Employment Lawyers Association. “It has actually been accumulating since before 1994,” she added. “There had been a number of bad Supreme Court decisions restrictively interpreting civil rights law. The [Americans With Disabilities Act] is a good example of this.” Civil rights groups and others representing employees’ interests, she said, would welcome the business community if it is willing to talk about changes that need to be made and not simply rely on a presidential veto as a “backstopping strategy.” What is clear now is that the battleground for employers is shifting from the courts to Congress, said employer counsel Michael Fox, a shareholder in Ogletree, Deakins, Nash, Smoak & Stewart’s Austin, Texas, office. “I think there is a real likelihood of change,” he said. “If not now, perhaps in a new administration, employers are going to have to make hard political choices whether to oppose totally or begin to negotiate to lessen the damage of coming legislation.” COMING LEGISLATION Congressional Democrats’ current priority on the employment front appears to be the Ledbetter Fair Pay Act, which passed the House on a party-line vote, and which President Bush has threatened to veto as drafted. In Ledbetter v. Goodyear Tire & Rubber Co., a Supreme Court held, 5-4, that Title VII’s statute of limitations � 180 days or 300 days � begins to run when the allegedly discriminatory pay decision was made and communicated to the employee. The court rejected Ledbetter’s argument that a new violation occurs and a new charging period begins with each subsequent paycheck that continues the adverse effects of the past discrimination. The Ledbetter legislation would reverse that ruling by adopting Ledbetter’s argument for pay discrimination claims under Title VII, ADA, the Age Discrimination in Employment Act and the Rehabilitation Act of 1973. The U.S. Chamber of Commerce and other employer representatives oppose the legislation � bills are in both chambers � arguing that it does much more than reverse the Supreme Court decision and eliminates statutes of limitations for all pay discrimination claims. “It’s going to be hard to get any sort of agreement,” said Neal Mollen, a partner in the Washington office of Paul, Hastings, Janofsky & Walker who testified on the legislation in the House on behalf of the U.S. Chamber. But there are some issues on which both parties could work together to get a bill, he added. There may be some agreement, he said, that it no longer makes sense today for the law to have a 180-day filing rule for claimants who live in jurisdictions where there is no state agency to process a bias claim and a 300-day filing rule for those who live where there is a state agency. “Would it be possible for Democrats to work with Republicans on a bill that would unify and even extend the limitations period?” asked Mollen. “I can’t say, but I think there would be people interested in talking about that.” When he testified about the U.S. Chamber’s position, Mollen said he was “shocked” at the degree of hostility displayed by Democrats toward the business community in general and employers in the discrimination context. “I think the employer community is much more open to compromise than Democrats want to believe,” he said. On this particular legislation, some of the hostility is the result of employers “very unfairly spreading the idea the act would open up the floodgates” to numerous and stale pay discrimination claims, said Dina Lassow, senior counsel at the National Women’s Law Center. “All it really would do is restore the status quo,” she said. “The decision in Ledbetter was the outlier. Employers weren’t yelling and screaming about all the stale cases they were getting. They have been living with this perfectly well. And, under Title VII, you only get two years of back pay, so it’s not opening floodgates.” In the Senate, Edward Kennedy, D-Mass., chairman of the Senate Health, Education, Labor and Pensions Committee, introduced the Equal Remedies Act immediately before the August recess. The bill would eliminate caps on compensatory and punitive damages that were amended into the Civil Rights Act of 1991 for intentional violations of Title VII. The law limits damages to $50,000 to $300,000, depending on the size of the employer, for cases in which discrimination is based on race, color, sex, religion or national origin. But employees who are subject to discrimination because of their race or national origin also can generally sue for damages under a different statute, 42 U.S.C. �1981, that has no caps. Kennedy and the bill’s supporters argue that the difference makes no sense. It is hard to argue that race and national origin discrimination, for example, is worse than sex or religious discrimination. “The caps were put in the 1991 Civil Rights Act, which itself was a major compromise on reversing a number of Supreme Court employment decisions in 1989 and 1990,” said Proskauer’s Lorber. “The numbers sounded good at the time; it didn’t make sense, but it was a compromise and it worked.” Employment law scholar Paul Secunda of the University of Mississippi School of Law agreed, saying, “There’s not really any real purpose behind the caps except to assure employers they won’t be subjected to some large jackpot.” But since 1991, he said, there has been a lot of Supreme Court case law on punitive damages, and it’s unclear there’s any realistic fear now of outrageous awards for Title VII claims. Republicans and employers may be open to raising the amount of the caps, given inflation and the passage of time, noted Paul, Hastings’ Mollen, but if eliminating the caps is the starting point, “That is an absolutist position and people respond in kind.” Increasing the caps would be better than the current law, said Lassow of the National Women’s Law Center. “But on principle, it doesn’t make sense; you don’t have them in race discrimination cases, but you do have them under Title VII and it’s particularly inequitable for sex discrimination.” Employer and employee groups agree it is only a matter of time � perhaps even before the end of the year � until Congress sends to the president the Genetic Information Non-Discrimination Act of 2007, which has been pending in various forms for a decade. The House passed the legislation on April 25 with bipartisan support. It would protect personal genetic information from discriminatory use by health insurers and employers. The legislation won’t have a substantial impact on employment, Lorber and others said, because many employers and states already have policies in place dealing with genetic information. The same is true of another “old chestnut” in job bias legislation: ENDA, the Employment Non-Discrimination Act, which prohibits discrimination on the basis of sexual orientation and gender identity. It is specifically directed to gay, lesbian, bisexual and transgender employees. “The gender-identity concept is new and wasn’t in previous versions of the bill,” said NELA’s Lenhoff. “The climate has changed so dramatically on lesbian and gay rights and rights of transgender people since it was introduced years ago that I think this has a chance of being wildly popular.” There is a sense “the tide is changing” on ENDA, agreed Ogletree’s Fox. He and other employer lawyers also suggest change is coming in the form of legislation to amend the Family and Medical Leave Act, possibly to require paid leave. “At this point I don’t see the business community likely to get the relief they’re seeking under that law,” said Fox. “There might be some compromises where issues like intermittent leave, which is problematic for employers, could be traded off.” Not a “big hot-button” issue and thus technically and politically easier to get through Congress is the Civil Rights Tax Relief Act, said Lenhoff, which would eliminate the award of non-economic damages from gross income and permits income averaging for lump sum payments of back pay. Business and civil rights groups have lobbied for the legislation. “Now it’s just a matter of figuring the best strategy and hopefully what vehicle to move it in this session,” she said. Unlikely to move this year, but definitely on the near horizon in Congress are two big-ticket items for employees and employers: the Americans With Disabilities Restoration Act and the Arbitration Fairness Act. The ADA Restoration Act is a response by Congress to a series of high court decisions in the past 17 years that the act’s sponsors believe incorrectly and significantly narrowed the definition of disability, and thus eligibility for the law’s benefits and protections. The arbitration legislation would prohibit mandatory arbitration in employment and consumer contracts. “I think employers who could rear up and stop these things will no longer be able,” said Fox. “There is real potential for a new course.” Marcia Coyle is a reporter with The National Law Journal, a Recorder affiliate based in New York City.

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