Washington Retail Insight

Senate Rejects Paycheck Fairness Act, ‘Flood’ of Lawsuits Cited

By J. Craig Shearman
Washington Retail Insight
June 6, 2012

The Senate this week joined the House in rejecting legislation one lawmaker said could unleash a “flood” of frivolous lawsuits against companies unfairly accused of paying women less than men, but President Obama and others said they would not give up on the bill.

The Paycheck Fairness Act, sponsored by Senator Barbara Mikulski, D-Md., was voted down 52-47 on a procedural motion Tuesday, less than a week after failing on a similar vote in the House.

“Senate Republicans put partisan politics ahead of American women,” Obama said in a statement issued after the vote. “My administration will continue to fight for a woman’s right for equal pay for equal work.”

Opponents countered that women’s right to equal pay is already well protected and that the legislation would benefit mostly lawyers.

“This legislation opens the door to frivolous lawsuits, which already cost our economy billions of dollars every year,” Senator Dean Heller, R-Nev., said during the debate. “Legitimate cases that could be addressed under the current system would be lost in a flood of lawsuits initiated by lawyers hoping to win a few large judgments.”

NRF argued against the legislation, telling lawmakers in a letter last week that retailers strongly opposed discrimination of any kind but that the bill was flawed and would “give trial lawyers an incentive to pursue unlimited litigation against American employers.”

If passed, the measure would allow workers who claim they are victims of gender-based wage discrimination to sue for unlimited compensatory and punitive damages. It would allow businesses to be sued even if wage differentials were due to legitimate reasons such as local market rates, revenue production or profitability rather than discrimination. Retailers would be effectively blocked from considering store locations and local economic conditions in setting wages.

NRF argued that the legislation is not necessary because the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 already provide broad prohibitions against pay discrimination and strong penalties for violators.

© 2012 National Retail Federation