Supreme Court Requires Timely Challenge To Pay Decisions

In a sweeping decision, a 5-4 majority of the U.S. Supreme Court, split along ideological lines, ruled today that Title VII plaintiffs must timely challenge particular pay decisions and cannot rely on the continuing violation theory to reach back to allegedly discriminatory decisions made before the charge filing period established by the Equal Employment Opportunity Commission (EEOC).  Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074, U.S. Supreme Court (May 29, 2007).

According to Justice Samuel Alito, writing for the majority, “the time for filing a charge of employment discrimination [with the EEOC] begins when the discriminatory act occurs.”  That rule, he explained, “applies to any discrete act of discrimination” including decisions relating to pay.  The plaintiff in this case, Lilly Ledbetter, unsuccessfully argued that pay discrimination is different from other forms of discrimination and that a different rule should apply.

Ledbetter worked for Goodyear from 1979 until 1998.  Shortly before she retired in 1998, Ledbetter filed an EEOC charge alleging that Goodyear had discriminated against her in pay in violation of both Title VII of the Civil Rights Act and the Equal Pay Act (EPA).  The trial judge dismissed her EPA claim at an early stage of the litigation and she did not pursue that claim further.  In support of her Title VII claim, Ledbetter alleged that in years past the company had lowered her performance evaluations because of her gender and that the lower evaluations resulted in lower merit pay increases. She argued that those tainted lower pay increases, in turn, perpetually reduced her pay (because of her gender). Thus, Ledbetter argued, she should be able to challenge her pay at any time.

Not so, said the Supreme Court.  The majority opinion held that an EEOC charge must “identify with care the specific employment practice that is at issue,” and that such a requirement applies as much to pay claims as it does to challenges to other forms of discrimination (such as claims relating to hiring, promotion or termination). Because Ledbetter did not allege that Goodyear made any intentionally discriminatory decision within the charge filing time period, her pay claims were time-barred.

David Copus, a shareholder in Ogletree Deakins’ Morristown office, predicted the outcome of the Ledbetter case in an article published more than a year ago in the Journal of Forensic Economics.  According to Copus, the immediate impact of the decision will be to negate the Office of Federal Contract Compliance Programs’ guidelines on compensation discrimination.  Those guidelines were based on the exact theory rejected by the Ledbetter decision.  This ruling also will have an immediate impact on EEOC charges in general because employees will not be able to sue employers for pay discrimination based on decisions that were made years earlier.

In the longer term, however, Copus notes the likelihood of a legislative effort to reverse the Ledbetter decision by amending Title VII.  In the past, civil rights groups have been successful in passing legislative amendments to reverse conservative interpretations of Title VII – most notably the 1991 amendments which reversed more than one Supreme Court decision.
 
Additional Information

Should you have any questions about the impact of this ruling, please contact the Ogletree Deakins attorney with whom you normally work or the Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com. 

Note: This article was published in the May 29, 2007 issue of the National eAuthority.