As reported by the Wall Street Journal, President Obama signed the Lilly Ledbetter Fair Pay Act into law today. For two previous posts about this law, click here and here.

The Fair Pay Act overturns the U.S. Supreme Court’s decision in Ledbetter v. Goodyear, which applied a strict 180 day statute of limitations to Ms. Ledbetter’s gender compensation claim and refused to allow her to go back 20 years to the date the discrimination allegedly began. The new Act says the statute of limitations begins to run when a discriminatory compensation decision is adopted, when an employee becomes subject to the decision, or when an individual is affected by the application of the decision, including each time compensation is paid. Though unclear to me, most experts believe that the Act will restart the statute of limitations with each paycheck.

While touted as a women’s rights law, the Act applies to all discrimination claims under Title VII (race, color, national origin, religion — and gender), as well as age under the Age Discrimination in Employment Act (ADEA) and disability under the Americans with Disabilities Act (ADA). The new Fair Pay Act is retroactive to May 28, 2007, (the day before the Ledbetter case was decided) and would seem apply to compensation discrimination claims pending on or after that date. What about cases that have been dismissed in the meantime? What about the Ledbetter case itself? Time will tell I suppose.

To recap, you may have to defend a case going back for decades. Thus, you need to reconsider whatever your records retention policy is. You also need to justify and document compensation and promotion decisions.

Though we’ll have to see how the courts interpret the Fair Pay Act, right now, it’s hard to say just how far an employee can go back when claiming compensation discrimination.