Supreme Court Says No More Eternal Pay Discrimination Claims
Workers claiming unequal pay have generally had a right that no other discrimination claimants ever had – the right to pursue those claims even after the legal time frame for filing charges or lawsuits had expired. Now, the United States Supreme Court has ruled that most such claims are not indefinite and must be pursued within the same time frame as all other discrimination actions.
A series of unfortunate events
Over Lilly Ledbetter’s 19 years of work for Goodyear Tire, she received several negative performance reviews that resulted in diminished wage increases and lower earnings than many of her co-workers. Ledbetter thought that her gender was the reason for the poor reviews and that she should not have to a earn lower wage because of it. She therefore sued the company for a violation of Title VII and received a jury verdict in the amount of nearly $4 million (although the judge later reduced the award to $360,000). Goodyear appealed to the 11th Circuit U.S. Court of Appeals and was successful in getting the $360,000 verdict overturned. Ledbetter then appealed to the United States Supreme Court.
In seeking dismissal of the claim, Goodyear argued that Ledbetter had not filed the required charge with the EEOC in a timely fashion. Ledbetter countered that courts had always treated pay discrimination claims differently from other discrimination cases. Unlike hiring, promotion or discharge cases, where the act of discrimination can be pinpointed to a single decision, Courts had frequently viewed pay discrimination cases as a series of discriminatory acts that renewed Title VII’s charge-filing period each time the claimant received a paycheck. As a result, the time for filing such claims was indefinite and employers would be unable ever to “close their books” on pay decisions.
It’s about the decision, not the effects
The Supreme Court rejected this approach and ruled that claims of unequal pay under Title VII must be brought within the same statutory time frame as all other discrimination claims. The judges based their decision on a review of a number of their previous decisions addressing the basic principle that charges must be brought when the discriminatory act occurs, not when its effects are felt most painfully. In the past, they had disallowed a claim by a college professor who waited to challenge a tenure denial until after his one-year “terminal teaching assignment” ended, and had rejected claims from airline employees challenging seniority decisions years after they were made because those decisions had only recently resulted in layoffs. The justices ruled that the establishment of an employee’s wage rate is no less a separate and complete act than a termination or refusal to hire.
Simply stated, the Court ruled that pay discrimination is not a continuing act, but rather a singular act that can be traced to a particular point in time. In this instance, the discriminatory acts occurred when Ledbetter received her performance reviews and reduced wage increases, not when she got the paychecks reflecting those decisions. The Court therefore ruled that Ledbetter failed to bring her claim in a timely fashion and that the lawsuit should be dismissed. Ledbetter v. Goodyear Tire & Rubber Co., Inc. (U.S. Supreme Court, May 29, 2007).
This was definitely a win for employers but a few cautionary notes are in order:
- This case was decided only under Title VII,
and does not affect claims under the Equal
Pay Act of 1963 or other federal or state laws.
Therefore, workers still can challenge pay
claims under other laws and benefit from
extended filing periods. Remember, though,
the Equal Pay Act only applies to claims of
differential pay based on sex and not on any
other protected classification.
- Second, the majority in Ledbetter was a razor
thin 5-4 ruling, with Justice Ginsburg taking the unusual step of reading her vehement dissent aloud from the
bench. One new appointee to the bench could change this outcome.
- Third, this decision assumes that employees will immediately recognize that they have been victimized by possible discrimination when their pay rate is set. Unlike other employment decisions, a pay discrepancy is “often hidden from sight” (as the dissent asserts) and workers may not comprehend the discriminatory act until the legal filing period has expired. Future cases will probably resolve whether this is a valid excuse for not complying with the statutory filing period.
Still, this decision seems to recognize the fundamental reality that discrimination law addresses employer decisions. Experience tells us that employees do not wait very long to file a discrimination charge if they feel they have been wronged, and they don’t need a perpetually renewing filing period to assist them. Ledbetter v. Goodyear Tire & Rubber Co., Inc.
For additional information, please contact Dennis Merley (612-373-8434).