BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 793
Assemblymember Jones
As Amended April 29, 2009
Hearing Date: June 16, 2009
Code of Civil Procedure
GMO:jd
SUBJECT
Employment Discrimination: Statute of Limitation
DESCRIPTION
This bill would clarify when a cause of action accrues for the
purpose of filing a claim of discrimination with respect to
compensation. Specifically, the bill would establish that a
cause of action for discriminatory wages accrues: (1) when the
discriminatory pay decision was adopted; (2) when the plaintiff
became subject to the discriminatory pay decision; or (3) when
the plaintiff is affected by the discriminatory pay decision,
including, among others, each payment of a discriminatory wage
resulting in whole or in part from the discriminatory
compensation decision or other practice.
With respect to similar or related instances of unlawful
employment practices, this bill would provide that liability may
accrue and a complainant may seek relief for unlawful employment
practices occurring after an administrative complaint has been
filed. The bill also would not preclude or limit an aggrieved
person's right to introduce evidence of an unlawful employment
practice that has occurred outside the time for filing a charge
of discrimination.
Finally, the bill expressly provides it does not impose a
substantive change in the acts or omissions that constitute an
unlawful employment practice with respect to compensation, and
declares the Legislature's intent to construe and clarify
existing law and to reject the interpretation given to federal
law by the United States Supreme Court in Ledbetter v. Goodyear
Tire & Rubber Co. (2007) 550 U.S. 618.
(more)
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AB 793 would apply to claims pending or filed on or after the
effective date of the bill, and clearly expresses it does not
intend to revive claims that have lapsed as of this effective
date.
BACKGROUND
On May 29, 2007, the United States Supreme Court voted 5-4 to
overturn decades of precedent in Ledbetter v. Goodyear Tire &
Rubber Co., thereby severely limiting workers' ability to bring
pay discrimination claims. Lilly Ledbetter worked for
Goodyear's plant in Gadsen, Alabama for 20 years, and was the
only female production supervisor there. In 1998, Lilly took
early retirement after being transferred to a less-desirable job
on the production floor. Six months prior to her retirement,
and upon learning that she, as the only female supervisor at
that plant, was being paid 15 percent to 40 percent lower than
the lowest-paid male supervisor, Ledbetter filed an Equal
Employment Opportunity Commission (EEOC) charge, alleging
various forms of sex discrimination. Her case eventually went
to trial; the jury agreed and awarded her backpay and damages.
On appeal, Goodyear contended that her claim was time-barred
with regard to all pay decisions made before six months (180
days) prior to her filing of the EEOC questionnaire, and that no
discriminatory act occurred after that date. The Eleventh
Circuit agreed with Goodyear and reversed, holding that a Title
VII (of the Civil Rights Act of 1964) pay discrimination claim
cannot be based on allegedly discriminatory events that occurred
before the last pay decision that affected the employee's pay
during the EEOC's 180-day charging period.
The U.S. Supreme Court affirmed. The court said that Lilly
Ledbetter had waited too long to sue for pay discrimination,
even though she had submitted a questionnaire to the EEOC and
continued to receive, until her retirement seven months later,
her discriminatory weekly paycheck. The court explained that
Ledbetter was required to file a complaint within 180 days of
the discriminatory act, which the court said was the last
paysetting decision made by her employer, not the weekly payment
of discriminatory wages.
In her dissent, Justice Ruth Bader Ginsberg called on Congress
to act to correct the Court's reading of Title VII, especially
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with respect to discriminatory wages. On June 22, 2007, H.R.
2831 (Miller) was introduced in the 110th Congress in response
to the Ledbetter decision. In California, AB 437 (Jones, 2007)
was amended to reflect the language contained in HR 2831. AB
437 was subsequently amended to simply declare the Legislature's
rejection of Ledbetter. AB 437 was vetoed by the Governor, who
stated:
This bill proclaims the Legislature's rejection of a recent
United States Supreme Court case regarding gender pay equity.
However, instead of clarifying existing law, this measure would
create uncertainty regarding accrual of the statute of
limitation for wage discrimination. This uncertainty will
undoubtedly lead to unnecessary litigation. As I have stated
before in vetoing similar well-intentioned but poorly crafted
bills, I support the fight against gender pay inequity but
cannot support legislation that will encourage more frivolous
litigation against employers.
H.R. 2831 was never enacted. However a new bill was introduced
in the 111th Congress on January 9, 2009 (S. 181, Mikulski) and
on January 29, 2009, President Barack Obama signed the Lilly
Ledbetter Fair Pay Act of 2009 (the Act), the first act sent to
him by Congress for his signature. In its present version, AB
793 contains verbiage included in the Act.
CHANGES TO EXISTING LAW
Existing law prohibits an employer from paying an employee lower
wages based on gender for equal work on the same or similar
jobs. (Labor Code Sec. 1197.5.)
Existing federal law , Title VII of the Civil Rights Act of 1964,
prohibits discrimination in employment on the basis of, among
other characteristics, sex. To file an employment
discrimination claim under Title VII, existing law requires a
person to first file an EEOC charge within 180 days after the
alleged unlawful employment practice occurred. (42 U.S.C.
2000e-2(a)(1), 2000e-5(f)(1).)
Existing federal case law has held that an unlawful employment
practice occurs with respect to compensation each time payment
of an unlawful wage or salary is made. (Cf. Bazemore v. Friday
(1986) 478 U.S. 385.) ("Each week's paycheck that delivers less
to a [worker] than to a similarly situated [worker] is a wrong
actionable under Title VII, regardless of the fact that the
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pattern was begun prior to the [applicable limitations period]."
Id. at 395.)
Existing state law , the Fair Employment and Housing Act (FEHA),
prohibits discrimination in employment on the basis of, among
other characteristics, sex. A claim of discrimination in
employment must be filed within one year of the date the alleged
discriminatory act occurred, unless the time is extended as
specified by the statute. (FEHA, Gov. Code Sec. 12960.)
Existing state case law has held that a repeated pattern of
discrimination is actionable when a complaint is timely filed
within the series of discriminatory acts (the "continuing
violation" doctrine in employment discrimination cases,
discussed in Comment 2). (Richards v. Ch2m Hill (2001) 26
Cal.4th 798.)
Existing federal case law has held that a plaintiff was required
to file a complaint with the EEOC within 180 days of the alleged
discriminatory act, which the court said was the last paysetting
decision made by the employer, not the weekly payment of
discriminatory wages. (Ledbetter v. Goodyear Tire & Rubber Co.,
supra, further discussed in Comment 3.)
Existing federal law provides, for purposes of federal
anti-discrimination law, that an unlawful employment practice
occurs with respect to discrimination in compensation when a
discriminatory compensation decision or other practice is
adopted, when an individual becomes subject to a discriminatory
compensation decision or other practice, or when an individual
is affected by application of a discriminatory compensation
decision or other practice, including each time wages, benefits,
or other compensation is paid, resulting in whole or in part
from such a decision or other practice. (42 U.S.C. Section
2000(e)-5(e)(3)(A).)
This bill would establish when a cause of action accrues for
purposes of filing a claim or complaint based on any unlawful
employment practice with respect to compensation, including
discrimination claims and Labor Code violations.
This bill would specify that the cause of action accrues:
(a) when a compensation decision or other practice is adopted;
or
(b) when an individual becomes subject to a compensation
decision or other practice; or
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(c) when an individual is affected by the application of a
compensation decision or other practice, including each time
when wages, benefits, or other compensation is paid.
With respect to similar or related instances of unlawful
employment practices, this bill would provide that liability may
accrue and a complainant may seek relief for unlawful employment
practices occurring after an administrative complaint has been
filed. With respect to pension distributions, this bill would
provide that nothing in the act intends to change current law
treatment of pension fund distributions.
This bill declares the Legislature's intent by this act to
construe and clarify existing law and to reject the United
States Supreme Court's interpretation of federal law in its
decision in Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550
U.S. 618.
This bill would apply only to claims pending and filed on or
after the effective date of the act and would not revive claims
that have lapsed as of that effective date.
COMMENT
1.Need for the bill
The author states:
This legislation ensures that victims of pay discrimination
continue to have a fair opportunity to seek redress in the
courts for violations of state law. It clarifies that the time
period for alleging pay discrimination runs from the date of
each payment of a discriminatory wage.
The decision in Ledbetter ignores workplace realities. Most
employees, who are victims of discrimination, don't learn they
are being discriminated against until years into their
employment. Salaries information is often confidential. This
[Ledbetter] decision could result in employees filing needless
complaints simply to protect their rights before they have
enough information to know whether they have been discriminated
against or not. Wage discrimination causes real, ongoing harm
and the remedy needs to be ongoing as well.
The Lilly Ledbetter Fair Pay Act of 2009 declares: "The Supreme
Court [in Ledbetter v. Goodyear Tire & Rubber Co., supra]
significantly impairs statutory protections against
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discrimination in compensation that Congress established and
that have been bedrock principles of American law for decades.
The Ledbetter decision undermines those statutory protections by
unduly restricting the time period in which victims of
discrimination can challenge and recover for discriminatory
compensation decisions or other practices, contrary to the
intent of Congress." The Act further declares that "[t]he
limitation imposed by the Court on the filing of discriminatory
compensation claims ignores the reality of wage discrimination
and is at odds with the robust application of the civil rights
laws that Congress intended."
This bill would clarify that a cause of action for wage
discrimination accrues at one of three events: (1) at the time
the discriminatory paysetting decision was made; (2) at the time
the worker became subject to the discriminatory pay; and (3) at
each time the discriminatory wage was paid to the worker. Thus,
an applicable statute of limitation for filing an action would
begin to run from any of these points in time. This, according
to the author and proponents, is declarative of existing state
law, despite the U.S. Supreme Court's ruling in Ledbetter. It
is certainly true as far as federal law is concerned after
passage of S. 181, the Lilly Ledbetter Fair Pay Act. This bill,
by codifying the Richards v. Ch2m Hill court's three-point
timing requirements for the filing of a state claim, would
ensure that state law continues to reflect existing law on
continuing violations of anti-discriminatory compensation laws.
2.The continuing violation doctrine has been embraced in
California since Richards v. Ch2m Hill
In Richards v. Ch2m Hill, supra, the California Supreme Court
embraced the continuing violation doctrine as it applies to
discrimination cases under Title VII and the FEHA. The court
explained the doctrine as a multi-faceted theory used in
different contexts by both federal and state courts to extend
the statute of limitations in discrimination cases. Richards
involved a complaint of discrimination on the basis of a course
of conduct, such as the continuing failure of employer Ch2m Hill
to reasonably accommodate a disabled employee, Richards.
The first approach, as explained by the Richards court, is that
a continuing violation is found when a corporate policy is
initiated before the limitations period but continues in effect
within that period to the detriment of the employee. (Richards,
supra, 26 Cal.4th at 813, citing Williams v. Owens-Illinois,
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Inc. (9th Cir. 1982) 665 F.2d 918, other citations omitted.)
The second approach, according to the court, is derived from the
doctrine of equitable tolling, where a person injured by an
unlawful act "need not sue until he knows, or through the
exercise of reasonable diligence would have known, not only that
he has been injured (for once he discovers that, his cause of
action has accrued and the statute of limitations begins to run)
but also that he has been injured by a possibly wrongful act of
the [employer]." (Id., at 814, citing Moskowitz v. Trustees of
Purdue University (7th Cir. 1993) 5 F.3d 279, other citations
omitted.)
The third approach described by the court is the multifactored
test first articulated in Berry v. Board of Supervisors of
L.S.U. (5th Cir. 1983) 715 F.2d 971, and which combines
equitable tolling (such as when the employee was put on notice
that his or her rights had been violated) and other factors such
as whether the alleged acts involve the same type of
discrimination or whether the alleged acts are recurring (e.g.,
weekly paycheck) or isolated work decisions. (Id., at 814.,
other citations omitted.)
The fourth approach is essentially what the Ninth Circuit Court
of Appeals adopted in Counts v. Reno (D. Hawaii 1996) 949 F.
Supp. 1476, 1484-1486, which is the "course of conduct" test,
i.e., whether the separate acts of discrimination are "closely
enough related" to form a continuing violation.
Richards and all of the cited discrimination cases are clear
that the continuing violation theory can keep a claim alive if
the plaintiff meets the various tests applied by the courts.
3.Where the Court took the wrong turn: the Ledbetter decision
In Ledbetter the U.S. Supreme Court faced a decision on when pay
discrimination claims must be brought in order to be timely.
There was no dispute that the statute of limitations is 180
days, the EEOC's "charging period." The question was when the
180 days would start running. There are three possible answers,
and those answers are all incorporated into AB 793 (as well as
the federal Act): the limitation period starts running (1) from
the date of the pay decision that sets a discriminatory wage;
(2) from the date an employee learns that her pay is
discriminatory (the "date of discovery"); or (3) from the date
of any paycheck that contains an amount that is affected by a
prior discriminatory decision. The Ledbetter court chose the
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first date, i.e., the 180-day statute started running from the
date of the pay decision that set the discriminatory wage.
The issue before the court in Ledbetter was whether pay
discrimination claims, for statute of limitations purposes,
would be treated like wrongful termination claims (a "discrete
act") for example, where the clock starts running immediately,
or like hostile work environment claims (involving a series of
incidents of misconduct), where the clock starts ticking with
the last act alleged. The opinion, written by Justice Alito,
C.J. Roberts, J. Scalia, J. Kennedy, and J. Thomas concurring,
ruled that the "discrete act" rule, rather than the "hostile
environment" rule applies to pay discrimination claims. This
ruling is contrary to the longstanding policy of the EEOC, the
agency charged with enforcement of discrimination claims under
Title VII, that follows the paycheck accrual rule instead, and
allows a plaintiff to sue within 180 days of the last
discriminatory paycheck received.
In doing so, the Court rejected the "continuing violation"
doctrine under which lower courts and California's Supreme Court
had permitted plaintiffs to challenge a series of related acts
of discrimination, as long as at least one act occurred within
the 180 days prior to filing of an EEOC charge.
Justice Ginsberg, in her dissenting opinion to which Justices
Stevens, Souter and Breyer concurred, invited Congress to
correct the injustice wrought by the majority opinion in
Ledbetter:
The Court's insistence on immediate contest overlooks common
characteristics of pay discrimination. Pay disparities often
occur, as they did in Ledbetter's case, in small increments;
cause to suspect that discrimination is at work develops only
over time. Comparative pay information, moreover, is often
hidden from the employee's view. Employers may keep under wraps
the pay differentials maintained among supervisors, no less the
reasons for those differentials. Small initial discrepancies
may not be seen as meet for a federal case, particularly when
the employee, trying to succeed in a nontraditional environment,
is averse to making waves.
Pay disparities are thus significantly different from adverse
actions "such as termination, failure to promote" or "refusal to
hire," all involving fully communicated discrete acts, "easy to
identify" as discriminatory. (Citations omitted.)
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On questions of time under Title VII, we have identified as the
critical inquiries: "What constitutes an 'unlawful employment
practice' and when has that practice 'occurred'?" (citation
omitted.) Our precedent suggests, and lower courts have
overwhelmingly held, that the unlawful practice is the current
payment of salaries infected by gender-based (or race-based)
discrimination - a practice that occurs whenever a paycheck
delivers less to a woman than to a similarly situated man.
(Citing Bazemore, supra.)
Yet, under the Court's decision, the discrimination Ledbetter
proved is not redressable under Title VII. Each and every pay
decision she did not immediately challenge wiped the slate
clean. ? The Court's approbation of these consequences is
totally at odds with the robust protection against workplace
discrimination Congress intended Title VII to secure. This is
not the first time the Court has ordered a cramped
interpretation of Title VII, incompatible with the statute's
broad remedial purpose. Once again, the ball is in Congress'
court. As in 1991, the Legislature may act to correct this
Court's parsimonious reading of Title VII. (Emphasis added,
citations omitted.)
Congress has acted, and the President has signed S. 181 into
law. Thus federal employment discrimination claims involving
wage discrimination are now subject to the statute of
limitations identical to what AB 793 would enact for California.
AB 793 would clarify that for discrimination-based pay claims
under the state's FEHA and the Labor Code, the statute of
limitations remains as it was before Ledbetter, and as described
in Richards.
This bill incorporates all three approaches described in
Richards and embodied in the recently enacted federal Act. It
provides that for the purpose of filing a claim or complaint
under state law for any unlawful employment practice with
respect to compensation, including, but not limited to,
discrimination claims and Labor Code violations, a cause of
action accrues when any of the following occurs: (a) a
compensation decision or other practice is adopted; (b) an
individual becomes subject to a compensation decision or other
practice; or (c) an individual is affected by the application
of a compensation decision or other practice, including each
time when wages, benefits, or other compensation is paid,
resulting in whole or in part from the compensation decision or
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other practice
4.AB 793 would affect only claims pending or filed on its
effective date, and will not revive lapsed claims
This bill would codify the three-point Richards rules for filing
a discriminatory wage claim based on continuing violations. Thus
it only clarifies, not changes, existing law, and will apply
only to claims pending or filed on its effective date. While
the statement that the act only clarifies existing law may be
enough to limit its application to pending and filed cases on or
after its effective date (the normal rule for statutes that
clarify existing law), the proposed Code of Civil Procedure
Section 355.5(e) makes it amply clear that AB 793 does not
intend any retroactive application of its provisions to cases
that have concluded prior to its effective date. The emphasis
on prospective application of AB 793 was added to the bill to
address concerns expressed by opponents of the bill that it
"appears to retroactively apply to pending cases and could
breathe life into stale claims not yet filed."
As to pending cases, case law provides that where a new law
effects procedural changes - as distinguished from substantive
changes - the new law applies to cases pending when the change
becomes effective. (Cf. Coachella Valley Mosquito & Vector
Control Dist. v. California Public Employment Relations Bd.
(Cal. 2005) 35 Cal.4th 1072.) Thus AB 793 contains a statement
that it "shall apply to claims pending on or after the effective
date of this section."
As to the second concern (the stale claims issue), the bill has
been amended to expressly provide that it is not intended to
revive claims that have lapsed as of the effective date of the
bill. Except in rare cases where intent to revive language is
explicitly contained in the statute, newly enacted laws do not
revive old claims.
5.Arguments in support of the bill
The California Coalition of Civil Rights, a membership group of
civil rights organizations, educators, lawyers, and advocates,
supports AB 793 to ensure that victims of pay discrimination are
not denied a fair opportunity to seek legal redress for
violations of state law. "AB 793 safeguards access to justice by
assuring that the court's faulty reading of discrimination law
does not apply in California and reaffirming our state's
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commitment to non-discrimination in compensation. It is a
counterpart to the Lilly Ledbetter Fair Pay Act of 2009, the
first bill signed into law by President Obama, which corrects
the Court's reading of federal anti-discrimination law. By
clarifying that the time period for alleging pay discrimination
runs from the date of each payment of a discriminatory wage, in
addition to the date of annual discriminatory pay decisions, AB
793 will keep the courthouse doors open to those Californians
trying to pursue fundamental legal rights to fair pay."
A group of employees from the public and private sectors writes:
"The first bill signed by President Obama - the Lilly Ledbetter
Fair Pay Act - restored federal anti-discrimination laws, but
not state laws. AB 793 appropriately clarifies that, as has
been the case in California for decades, the time period for
alleging unequal pay and other illegal discrimination runs from
the date of each payment of a discriminatory wage or other
unlawful act."
6.Opposition Concerns and suggested amendments
The Civil Justice Association of California (CJAC) opposes AB
793, arguing that it will lead to increased lawsuits because it
could be interpreted as un-doing existing statutes of
limitations in employment discrimination claims. "?The Ledbetter
case was a federal case, interpreting federal law, and there is
no direct controlling authority that would require California
judges to follow the reasoning or the result in Ledbetter.
Furthermore, Congress has already passed and President Obama has
already signed the [Act], reversing the Supreme Court's
decision. There is no need for the California legislature to
weigh in on a federal issue that never changed our law and that
has already been resolved. ?[T]his bill could actually make
California employment law even more complicated than it already
is, and would hamper economic recovery efforts. ?AB 793 is both
unnecessary and potentially harmful?"
The California Chamber of Commerce, on behalf of a coalition of
employer organizations, also opposes AB 793 and suggests
amendments that would make the bill "to more closely conform to
the scope of the provisions and liability adopted under the
federal Lilly Ledbetter Fair Pay Act with respect to two
issues." Those issues are that: (1) AB 793 applies to any
California statute, while the (recently enacted) federal law was
limited to only those federal statutes comparable to the
California FEHA; and (2) because of the differences between
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California's FEHA and the federal employment laws, application
of the federal "Ledbetter law" in California will result in far
greater liability exposure for employers. One significant
difference, CalChamber points out, is that federal law applies a
two-year back-pay limit to wage damages, while FEHA has no such
limit. Thus, these employer organizations contend, California
public and private sector employers could be exposed to
virtually unlimited liability in lawsuits challenging any
California employer decision that impacts pay or benefits.
Support : Planned Parenthood Affiliates of California, Inc.
(PPAC); California Coalition for Civil Rights; Public Advocates;
California Commission on the Status of Women; Glendale City
Employees Association; Organization of SMUD Employees; San
Bernardino Public Employees Association; San Luis Obispo County
Employees Association; Santa Rosa City Employees Association;
California Labor Federation, AFL-CIO; American Civil Liberties
Union; California Applicant Attorneys Association; California
Nurses Association; California National Organization for Women;
California Communities United Institute; American Federation of
State, County, and Municipal Employees, AFL-CIO (AFSCME);
California State Conference of the NAACP; National Association
of Social Workers, California Chapter
Opposition : Civil Justice Association of California; California
Chamber of Commerce; California Independent Grocers Association;
California New Car Dealers Association; Pacific World;
CSAC-Excess Insurance Authority; California Grocers Association;
California Chamber of Commerce; Aerojet-General Corporation;
Associated General Contractors of California; Association of
California Insurance Companies; Auto Medics; Auto Supply
Company; California Apartment Association; California
Association of Joint Powers Authorities; California Bankers
Association; California Building Industry Association;
California Business Properties Association; California Citizens
Against Lawsuit Abuse; California Employment Law Council;
California Farm Bureau Federation; California Financial Services
Association; California Grocers Association; California
Hospital Association; California Lodging Industry Association;
California Manufacturers and Technology Association; California
New Car Dealers Association; California Restaurant Association;
California Retailers Association; California Taxpayers
Association; Center City Automotive Repair; Centre for Health
Care; Civil Justice Association of California; CompWest
Insurance; Construction Employers' Association; Contractors
Wardrobe; CSAC Excess Insurance Authority; Employers Group;
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FoamPRO Mfg, Inc.; Fulton Village Green Investors, LLC;
GeoSolve, Inc./BioTech Restorations; Hydra; Idyllwild Arts
Foundation; International Institute of Los Angeles; Lake
Arrowhead Resort and Spa; Lawyers Against Lawsuit Abuse; League
of California Cities; Long Beach Area Chamber of Commerce; Los
Angeles Dental Society; Lustre-Cal Corporation; Milpitas Chamber
of Commerce; Mother's Nutritional Center; National Federation of
Independent Business; Pacific Heart & Vascular Medical Group;
Pacific World Corporation; Personal Insurance Federation of
California; Quality Aluminum Forge; Rosewood Bar and Grill;
Sander, Jacobs, Cassayre & Griffin Inc.; S.D. Deacon Corp. of
California; SVTC Technologies; The Reunion Committee, Inc.;
United Chambers of Commerce; Western Electrical Contractors
Association; Western Growers Association; Wine & Roses; Young
Horizons Child Development Center; Zymo Research Corporation
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : AB 437 (Jones, 2007). See Background.
Vetoed.
Prior Vote :
Assembly Judiciary Committee (Ayes 7, Noes 3)
Assembly Floor (Ayes 49, Noes 28)
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