It faced a veto threat from President Bush and opposition from business groups and lawmakers.
The legislation failed to get the required 60 votes to clear it for debate and consideration. The vote was 56 to 42. The House passed the measure in July. It aimed to reverse a Supreme Court decision in May in the case of a Goodyear Tire & Rubber Co. employee who sued Goodyear for wage discrimination years after the alleged bias.
Lilly Ledbetter, a former supervisor in a Goodyear plant in Alabama, argued that she had been discriminated against throughout her career, receiving smaller raises than men in similar positions, and that each paycheck represented a new act of discrimination.
But the Supreme Court ruled 5-4 that alleged victims must file a complaint within 180 days of their first paycheck or lose the right to sue, upholding a federal statute of limitations.
The bill would have allowed employees to sue as long as they filed within 180 days of any paycheck. Salary discrimination is a violation of the Civil Rights Act of 1964. The bill capped the back-pay damages at $300,000 and prevented workers from collecting more than two years back pay.
The measure would have had broad implications for brands and retailers.
The National Retail Federation was among the business groups that opposed the legislation.
"This bill would allow individuals with potentially full knowledge of discriminatory acts to wait years before filing a claim," said Steve Pfister, senior vice president of government relations at the NRF, in a letter to senators. "[It] will increase frivolous litigation and contains numerous pitfalls that will make it more difficult to resolve discrimination claims in a timely manner."