3rd Circuit: Ledbetter Fair Pay Act doesn’t apply to failure-to-promote cases — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

3rd Circuit: Ledbetter Fair Pay Act doesn’t apply to failure-to-promote cases

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Here’s a bit of good news for employers worried about lawsuits that may crop up years after a faulty employment decision was made. The 3rd Circuit Court of Appeals, which has jurisdiction over New Jersey employers, has refused to expand the impact of the Lilly Ledbetter Fair Pay Act (LLFPA).

That law says that each paycheck that is lower than it should be because of a past discriminatory act can be the basis of a new lawsuit.

When the LLFPA was enacted, most legal experts believed it only covered unequal pay for equal work. But some enterprising lawyers have tried to apply it to cases when an employee who should have been promoted but wasn’t because of discrimination wound up being underpaid.

Now the 3rd Circuit has rejected that argument.

Recent case: Emmanuel Noel, who is a black Haitian national, claimed that when he was reassigned to a higher pay grade, white employees were promoted even higher. Thus, he argued, each of his paychecks was less than it should have been.

He blamed discrimination and sued.

The court tossed out his lawsuit, reasoning that the LLFPA applies only to “equal pay for equal work” claims, not to claims based on failure to promote. (Noel v. The Boeing Company, No. 08-3877, 3rd Cir., 2010)

Final note: This case is a big win for employers. Decided differently, it could have opened the door to countless lawsuits over promotion decisions made years ago.

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