The U.S. Senate today defeated for the second time on two years the so-called Paycheck Fairness Act, which would have unleashed a mountain of litigation against employers working in good faith to provide opportunity to all employees.

Senators voted 52 to 47 – eight votes short of the necessary 60 –  to take up Paycheck Fairness in a vote widely seen as a political step by Democrats seeking to paint Republicans as waging a “war on women.” Massachusetts’ two Senators split their votes, with Republican Scott Brown opposing the bill and Democrat John Kerry supporting it.

The legislation would allow unlimited punitive and compensatory damages in cases of suspected pay discrimination. Employers of all sizes would be exposed to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

Associated Industries of Massachusetts President and Chief Executive Officer Richard C. Lord commended Brown for voting against a bill that would benefit trial lawyers more than workers.

“We believe that existing laws protect workers from gender discrimination while allowing employers the freedom to adopt competitive business practices to retain and attract employees,” Lord said.

Brown said in a statement:

“As a father and husband of women in the workforce, I believe strongly in fair pay, and employers who discriminate against women should be prosecuted aggressively,” Brown said in a statement. “The bill before the Senate today was flawed and overreaching. It’s the right cause but the wrong bill. On the heels of last week’s dismal jobs report, the last thing we should be doing is putting more job-killing burdens on small businesses and employers. Instead, we should be focused on creating jobs for women who, like all Americans, have been negatively affected by the employment crisis.”

AIM opposes the Paycheck Fairness Act because:

• It would remove the Equal Pay Act caps on punitive and compensatory damages and would apply punitive damages to all cases.
• It would also eliminate a key justification for pay disparities by requiring that any difference in pay be substantiated as a “business necessity.” Additionally, these defenses would have to be based on “bona fide” factors and would prevent employers from paying employees in different localities different rates.
• It would make it easier for plaintiffs’ attorneys to file class-action suits against employers by requiring participants to “opt-out” of equal pay class-action suits. Currently, claimants must “opt-in” to suits if they wish to be part of the class.
• It would require that the government collect information on employee wages and other data. This would also enable confidential salary information to be publicly shared with employees’ coworkers, competitors and others. In addition, the bill would allow the Equal Employment Opportunity Commission (EEOC) to require employers to report sensitive wage information that may be publicly disclosed.