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Employers win pay-disparity case in Supreme Court: in Ledbetter, the Supreme court rules that Title VII's filing deadline bars employment discrimination claims based on decisions that occurred outside the limitations period, even if the employee's current pay is lower because of the decisions.

An employee works for her employer for nearly 20 years, in the course of which she believes that one or more managers give her less favorable evaluations and pay raises than similarly situated men. If her belief is true, her employer has committed a violation of Title VII of the Civil rights Act of 1964, 42 USC section 2000e et seq, as well as corresponding state and local anti-discrimination laws.

Her pay grade at the end of her career ends up being substantially less than would have been the case had those discriminatory decisions not been made. But the statute of limitations for seeking redress for violations of Title VII is only 180 or 300 days, depending on whether the employee has filed a charge with the state civil rights agency (42 USC 2000e--5(e)(1)).

Limitations periods under state laws and local ordinances may be even less. The Illinois human rights Act, for example, imposes a deadline of 180 days from the date of an allegedly discriminatory act for filing a charge of unlawful discrimination in employment. 775 ILCS 5/7A-102(A)(1).

May an employee who continues to be paid unfairly as the result of an allegedly discriminatory act that occurred outside the limitations period maintain an action to recover damages resulting from that act that accrued within the limitations period?

In a 5-4 decision, the United States Supreme Court held that the employee may not. Contrary to the holdings of some of the circuit courts of appeal, paychecks issued subsequent to discriminatory decisions regarding pay do not constitute additional discrete discriminatory events. Rather, they are merely nondiscriminatory, "continuing effects" of discrimination alleged prior to the charging period, which do not make out a present violation.

The case is Ledbetter v Goodyear Tire & Rubber Co, 127 S Ct 2162 (2007).

Trial, appellate court rulings

As the court recounted, Lilly Ledbetter worked for Goodyear Tire and Rubber Company from 1979 until late 1998, when she retired. During this time, employees in her position were given or denied raises based on their supervisors' evaluation of their performance.

In March 1998, Ledbetter filed allegations of sex discrimination against Goodyear with the EEOC. After her retirement, she filed suit in federal court asserting claims under the Equal Pay Act, 29 USC section 206(d), as well as under Title VII. The district court granted summary judgment to Goodyear on the Equal Pay Act claims but permitted her Title VII pay discrimination claim to proceed to trial. A jury found in Ledbetter's favor and awarded her backpay and other damages.

Goodyear appealed, contending that Ledbetter's pay discrimination claim was time barred with respect to all pay decisions made before the 180-day period before she filed her allegations with EEOC, and that no discriminatory acts relating to her pay occurred after the beginning of that periods. The court of appeals agreed.

It held, first, that a claim of pay discrimination under Title VII cannot be based on any pay decision that occurred prior to the last pay decision that affected the employee's pay during the EEOC charging period. Second, it found that Ledbetter had not proved that Goodyear acted based on discrimination when it made the only two pay decisions that occurred within the charging period. Ledbetter filed a petition for certiorari, which the Supreme Court granted.

Before the high court, Ledbetter argued not that Goodyear's decisionmakers acted with discriminatory intent when they denied her raise or issued her paychecks during the EEOC charging period, but, rather, that "the paychecks were unlawful because they would have been larger if she had been evaluated in a nondiscriminatory manner prior to the EEOC charging period." Ledbetter at 2167.

Put another away, her position was that Goodyear's conduct of paying her in accordance with decisions it had made outside of the statutory filing period "gave present effect" to that allegedly discriminatory conduct, that is, her supervisors' decisions as to what her salary should be.

Supremes: setting an employee's pay a "discrete act"

The Court applied rules it had explained in United Air Lines, Inc v Evans, 431 US 558 (1977), Delaware State College v Ricks, 449 US 250 (1980), Lorance v AT&T Technologies, Inc, 490 US 900 (1989), and National Railroad Passenger Corp v Morgan, 536 US 101 (2002) to reach its holding. It found that a decision to set an employee's pay "is a discrete act that occurs at a particular point in time," no different from any other act respecting an individual's employment that must trigger Title VII's limitations period for filing a charge of discrimination with the EEOC.

The subsequent issuance of a paycheck in accordance with those decisions are not further discriminatory acts, but, rather, are simply "an employment practice committed with no improper purpose and no discriminatory intent." Ledbetter at 2172. Its opinion does not apply to employers that have adopted and intentionally retained facially discriminatory pay structures that put some employees on a lower of scale because of prohibited considerations such as race or sex, the court cautioned (Id at 2173), nor, it said, is it applicable to cases of hostile work environment wherein a succession of harassing acts, any one of which may not be actionable on its own, are at issue. Id at 2175.

The court acknowledged that charge-filing limitations periods under Title VII (as well as under state and local laws) are short. Their brevity, the court said, "reflects Congress' strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation." Id at 2164.

Additionally, the court noted that permitting employees to bring charges of discrimination based on pay decisions that occurred long ago could place employers at a serious disadvantage, for "the employer's intent is almost always disputed, and evidence relating to intent may fade quickly with time ... [T]he passage of time may seriously diminish the ability of the parties and the factfinder to reconstruct what actually happened" and why. Id at 2171.

The "appropriate degree of insulation" for employers?

Peoria management side lawyer Tracy Litzinger finds the latter comments from the court particularly meaningful. "To hold an employer responsible for the conduct of a manager or managers 10 or more years ago defeats the purpose of the statutory limitations period. This decision provides the employer with an appropriate degree of insulation from liability for conduct that occurred many years ago."

Chicago plaintiffs' attorney William Borah, however, finds the court's opinion unfortunate, suggesting that it may encourage some employers to be more creative in finding ways to discriminate against their employees. "The passage of time should neither be a goal nor reward for those who intentionally engage in unlawful discrimination."

And stay tuned: soon after the decision came down, Congressional Democrats were crafting a strategy to legislatively overturn the ruling. See Osita Iroegbu, Assault launched on high court's pay disparity ruling, Legal Times (June 11, 2007).

Helen W. Gunnarsson is an attorney and writer in Highland Park. She can be reached at <>.
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Author:Gunnarsson, Helen W.
Publication:Illinois Bar Journal
Date:Aug 1, 2007
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