BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 793|
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THIRD READING
Bill No: AB 793
Author: Jones (D), et al
Amended: 4/29/09 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 6/16/09
AYES: Corbett, Florez, Leno
NOES: Harman, Walters
ASSEMBLY FLOOR : 49-28, 5/18/09 - See last page for vote
SUBJECT : Employment discrimination: state of limitation
SOURCE : Author
DIGEST : This bill clarifies when a cause of action
accrues for the purpose of filing a claim of discrimination
with respect to compensation. Specifically, this bill
establishes 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 provides that
liability may accrue and a complainant may seek relief for
unlawful employment practices occurring after an
CONTINUED
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administrative complaint has been filed. This bill also
will 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. This 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. This bill applies 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.
ANALYSIS : Existing law prohibits an employer from paying
an employee lower wages based on gender for equal work on
the same or similar jobs. (Section 1197.5 of the Labor
Code)
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 Equal Employment
Opportunity Commission (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 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
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of the date the alleged discriminatory act occurred, unless
the time is extended as specified by the statute. (FEHA,
Section 12960 of the Government Code)
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). ( 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)
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 establishes 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 specifies that the cause of action accrues:
1. When a compensation decision or other practice is
adopted.
2. Or, when an individual becomes subject to a compensation
decision or other practice.
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3. Or, 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 provides 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 provides 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 applies only to claims pending and filed on or
after the effective date of the act and will not revive
claims that have lapsed as of that 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. 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 back pay
and damages. On appeal, Goodyear contended that her claim
was time-barred with regard to all pay decisions made
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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 United States 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 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), 2006-07 Session, was amended to
reflect the language contained in H.R. 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
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/17/09)
American Civil Liberties Union
American Federation of State, County, and Municipal
Employees, AFL-CIO
California Applicant Attorneys Association
California Coalition for Civil Rights
California Commission on the Status of Women
California Communities United Institute
California Labor Federation, AFL-CIO
California National Organization for Women
California Nurses Association
California State Conference of the NAACP
Glendale City Employees Association
National Association of Social Workers, California Chapter
Organization of SMUD Employees
Planned Parenthood Affiliates of California, Inc.
Public Advocates
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
OPPOSITION : (Verified 6/17/09)
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
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California Chamber of Commerce
California Citizens Against Lawsuit Abuse
California Employment Law Council
California Farm Bureau Federation
California Financial Services Association
California Grocers Association
California Hospital Association
California Independent Grocers 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
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
S.D. Deacon Corp. of California
Sander, Jacobs, Cassayre & Griffin Inc.
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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
ARGUMENTS IN SUPPORT : 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 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
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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."
ARGUMENTS IN OPPOSITION : The Civil Justice Association
of California opposes this bill, 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 (Cal Chamber), on behalf
of a coalition of employer organizations, also opposes this
bill and suggests amendments that make the bill "to more
closely conform to the scope of the provisions and
liability adopted under the federal Lilly Ledbetter Fair
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Pay Act with respect to two issues." Those issues are that
(1) this bill applies to any California statute, while the
(recently enacted) federal law was limited to only those
federal statutes comparable to the California Fair
Employment and Housing Act (FEHA), and (2) because of the
differences between 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, Cal Chamber
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.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gilmore, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones,
Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza, Monning,
Nava, John A. Perez, V. Manuel Perez, Portantino, Ruskin,
Salas, Skinner, Solorio, Swanson, Torlakson, Torres,
Torrico, Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Hagman, Harkey,
Jeffries, Knight, Logue, Miller, Nestande, Niello,
Nielsen, Silva, Smyth, Audra Strickland, Tran, Villines
NO VOTE RECORDED: Eng, Price, Saldana
RJG:mw 6/18/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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