Pro-labor proposal defeated in U.S. Senate

A proposal to make it easier for workers to sue their employers ”“ and offering an unlimited cap on damages ”“ has been defeated in the U.S. Senate. The so-called “Paycheck Fairness Act” would have opened employers to far greater exposure to litigation and its costs, and would have made it tougher for businesses to fight complaints, even if pay disparities were unintentional.

The proposal failed because Senate Democrats could not get the votes to overcome a Republican-led filibuster of the legislation. In early 2009, the House passed the bill, which would have expanded the existing Equal Pay Act of 1963, and was a significant part of the pro-labor agenda on Capitol Hill.

Leading the battle against the legislation were the U.S. Chamber of Commerce, National Association of Manufacturers (NAM) and other business groups. Their case was supported by a finding of the Equal Opportunity Commission that showed in more than 95 percent of the more than 93,000 discrimination charges filed in 2009, there was “no reasonable cause” for the charges.

“By removing all limits to punitive and compensatory damage awards on claims under the Equal Pay Act, (the legislation) would expose employers to increased threats of litigation even when unintentional pay disparities may have occurred,” said NAM in a letter to all members of the Senate.

The bill probably would have opened the door to more frivolous class-action suits. Consequently, employers would probably have felt pressured to buy additional legal liability insurance ”“ increasing their costs and decreasing their ability to raise wages, increase benefits or add jobs.

Employers in Connecticut and throughout the nation are struggling to create and keep good jobs. Proposals such as the Paycheck Fairness Act only increase costs and therefore weaken the ability of employers to grow jobs.

Kia Murrell is associate counsel at the Connecticut Business and Industry Association in Hartford. Reached her at kia.murrell@cbia.com.