New Jersey Supreme Court Rejects Ledbetter’s Limitation on Wage Claims Under the LAD

Alexander v. Seton Hall Univ., No. A-87-09 (N.J. Sup. Ct., November 23, 2010) – The New Jersey Supreme Court has refused to apply the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007) to wage claims under the New Jersey Law Against Discrimination (LAD), thereby reversing the Appellate Division’s decision last year. (For more information on that decision, see the December 2009 issue of the New Jersey eAuthority.) Under Ledbetter, each paycheck was determined not to be a discrete act of potential discrimination. Instead, according to Ledbetter, an employee had to identify and timely challenge a specific discriminatory pay decision. Therefore, a person receiving disparate pay during the limitations period had no recourse when the pay resulted from a discriminatory pay decision that occurred outside of the limitations period. In rejecting Ledbetter’s application to the LAD, the court noted that its holding no longer reflects federal policy, since Congress passed the Lilly Ledbetter Fair Pay Act of 2009, and held that under the LAD, each wage payment constitutes a new, actionable wrong. Even so, the court held that the two-year statute of limitations applies to limit the damages recoverable for past discriminatory compensation to the two years immediately prior to the filing of the complaint.