Ledbetter Fair Pay Act

Date: April 30, 2009

NFIB strongly opposes H.R. 12, the “Paycheck Fairness Act” because it would impose significant costs upon small business owners who are trying to just stay afloat during these tough economic times.

NFIB members have long supported reasonable limits on lawsuit awards, but the Paycheck Fairness Act would open up Equal Pay Act claims to lawsuit abuse by allowing unlimited compensatory and punitive damages.  While compensatory damages (economic and non-economic) are often covered by liability insurance, punitive damages are frequently not – meaning small business owners are forced to pay them in full when they are pulled into a lawsuit.  Allowing unlimited damages will also have the likely effect of driving up liability insurance premiums, adding a further cost on small business owners struggling with our weak economy.  In addition, because of the fear of unlimited punitive damages, many owners settle out of court, even if the claim is unwarranted.

H.R. 12 would also make it easier for personal injury lawyers to bring class action lawsuits by allowing them to include individuals without their written consent.   Currently, employees must choose to join a class action suit, but the Paycheck Fairness Act deems all potential class members to be joined and places the burden on individuals, who may not even be aware of the lawsuit, to op-out.

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