High court to decide Lilly Ledbetter's pay discrimination claim

Update January 2009: Congress takes action to change pay discrimination law in reaction to Supreme Court's decision

Update: July 2007: Court finds no continuing violation in Ledbetter pay discrimination claim

March 16, 2007

Excerpted from Louisiana Employment Law Letter, written by attorneys at the law firm Jones Walker

by Alia S. Wynne and Jennifer L. Anderson

Employment discrimination claims under Title VII of the Civil Rights Act of 1964 have a shelf life. They're only good for a certain period of time that -- although longer than the life of the milk now sitting in your refrigerator -- expires more quickly than you might think.

Figuring out the shelf life of a pay discrimination claim got a little sticky for one federal court, however, so the issue has been delivered to the doorstep of the U.S. Supreme Court.

With the milk in your refrigerator, it's a no-brainer that the clock starts ticking when you take it out of the grocery bag and put it on the shelf.

But what about a pay discrimination claim? Does the clock start ticking when you decide how much to pay an employee, or does each paycheck after you've made that decision have its own clock that leads to a separate claim?

The Supreme Court is poised to decide those issues, and we'll be monitoring the progress of the case so we can give you the outcome before it gets stale.

Proposed new law: Lilly Ledbetter Fair Pay Act

Overripe pay decisions lead to fresh claim
Under Title VII, which prohibits discrimination based on race, color, religion, sex, and national origin, an employee who thinks she has been discriminated against must file a discrimination charge with the Equal Employment Opportunity Commission (EEOC) within 180 days of the violation. (That time period is extended to 300 days in some states.)

In the case now being considered by the U.S. Supreme Court, Lilly Ledbetter, a female manager, claims that women in her position were paid less than men who held the same job. The manager started working for Goodyear in 1979, and her pay was determined annually through a salary review process. Ledbetter claims that in some years, she was paid less than some men in the same position.

In 1998, Ledbetter filed a charge with the EEOC alleging sex discrimination based on her pay and then filed a lawsuit in federal court. A jury awarded her damages based on a series of salary decisions dating back to 1979.

Goodyear appealed, arguing that Ledbetter didn't show that it had made any discriminatory decisions about her pay within the 180 days before she filed her EEOC charge. In other words, the shelf life of her pay discrimination claim had expired before Ledbetter filed her EEOC charge.

Ledbetter countered that Goodyear committed an act of discrimination each time it issued her paycheck based on an earlier discriminatory decision. In other words, she claimed, even though the discriminatory decision might be stale, each paycheck based on that decision is a new and separate Title VII violation.

Goodyear maintained that the discriminatory act is the unlawfully motivated decision to pay the employee less, not each and every paycheck that flows from that decision.

The appellate court sided with Goodyear, and Ledbetter asked the U.S. Supreme Court to weigh in. The Court agreed, and oral arguments in the case were heard on November 27, 2006. Ledbetter v. Goodyear Tire & Rubber Inc., 421 F.3d 1169 (11th Cir., 2005), cert. granted, U.S. No. 05-1074.

Legal claims don't get better with age
We hope to hear from the Court soon about whether one bad pay decision taints every paycheck that flows from it for the purpose of deciding the shelf life of a pay discrimination claim. Its decision will affect not only when an employee must file her pay discrimination claim with the EEOC but also how employers defend against those claims.

If the Court sides with Ledbetter in this case, employers faced with similar claims could have difficulty producing witnesses and documents to prove a defense when the complained-of action occurred a decade earlier. Employers aren't obligated to keep pay records indefinitely, and it isn't feasible or practical for most of them to do that.

Likewise, decisionmakers and witnesses may have changed jobs or moved away, making it difficult to locate them, much less gain their cooperation. Unlike fine wine, legal disputes don't get better with age.

Those are some of the considerations the Court may be weighing in this case, and no doubt, they're important to employers. We're hoping the Court's decision won't leave a bad taste in your mouth and subject you to litigation over claims that are well beyond their expiration date.

Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from LOUISIANA EMPLOYMENT LAW LETTER. LOUISIANA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Louisiana employment law. Questions about individual problems should be addressed to the employment law attorney of your choice. The State Bar of Louisiana does not designate attorneys as board certified in labor law.

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