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CFA Urges Franchisees to Oppose Paycheck Fairness Act

WASHINGTON – The Coalition of Franchisee Associations (CFA) is urging its members to contact their senators to oppose the Paycheck Fairness Act, S. 182. The bill was introduced to amend the Fair Labor Standards Act of 1938 to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex, and for other purposes.

The CFA, headquartered in Washington, D.C., was formed in 2007 and represents some of the largest franchisee associations. Its mission is "to leverage the collective strengths of franchisee associations for the benefit of the franchisee community," according to its website.  

In an Action Alert bulletin, Misty Chally, director of government relations, explained, “Despite last week's elections, Majority Leader Harry Reid continues to push anti-business legislation through the 111th Congress.  Next Wednesday during the Lame Duck Session of Congress the Senate will vote on this bill which will affect all franchisees.”

The main issue stated is that under current law, once employees have provided prima facie evidence (a legal presumption meaning on the face of it or at first sight) of gender discrimination, the burden of proof shifts to the employer to show that the difference in wages results from "any factor other than sex." The Paycheck Fairness Act eliminates the "any factor other than sex" defense and replaces it with a more strict "bona fide factor other than sex" defense, according to the bulletin.

It further states, “This means that employers can only overcome a claim of gender discrimination if they demonstrate that a "business necessity" demands it.” Chally said the Act also leaves it up to the courts to determine what constitutes a "bona fide factor" to justify any pay discrepancies. “This means that factors such as previous experience, market forces, negotiating ability and prior salaries may not be justifications for pay differentiations,” she explained.

Additionally, the bill invites class action suits by allowing unlimited punitive and compensatory damages and repealing the requirement that employees must give their written consent to become a party in an "equal pay" class action suit, Chally said. “This would provide a windfall for trial lawyers while costing employers unprecedented amounts of time and money to defend their business decisions.”

The International Franchise Association sent a letter in January 2009 to members of the House of Representatives urging them to oppose the Paycheck Fairness Act H.R. 12. It states, “This bill would allow unlimited punitive and compensatory damages for violations of the Equal Pay Act (EPA). The EPA was passed by Congress in 1963 to ensure every individual receives equal pay for equal work, regardless of gender. It is a strict liability statute that requires no evidence of intent to discriminate. If there is evidence of intentional discrimination, appropriate remedies, including punitive and compensatory damages, are available under Title VII of the Civil Rights Act of 1964.”

The IFA website does not show their organization sent a letter to members of the Senate.

Proponents of the Paycheck Fairness Act say the gender wage gap does exist, despite reports to the contrary. One news website for women, Hello Ladies, stresses it is time to pass the bill. “The Paycheck Fairness Act will help fight pay discrimination in a number of ways including prohibiting employers from punishing employees for sharing salary information with their coworkers, and improving the collection of pay information by the EEOC.”

The bill has already passed out of the House of Representatives and only needs to pass in the Senate before President Obama signs it into law. CFA urges franchise owners to contact their senators to inform them that they oppose the bill because it restricts their ability to compensate their workers bases on factors such as level of experience, prior salary history, amount of income generated, cost of living disparities and overall work responsibilities. It says, “By eliminating current limits as provided by the Equal Pay Act, the Paycheck Fairness Act allows for unlimited punitive damages, even for unintended pay disparities, and invites unjustified and unsupported claims against me and my business.”

Chally urged members to tell their senators that there are current anti-discrimination laws, such as the Equal Pay Act, in place which will help protect their workers while not interfering with their right to run their business.

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