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Court finds no continuing violation in Ledbetter pay discrimination claim
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The U.S. Supreme Court has handed employers a victory in the sex discrimination case of Lilly Ledbetter, a former manager at a Goodyear Tire & Rubber plant in Alabama. She started out earning the same as her male counterparts, but in 1998, as she neared retirement, she learned that she earned anywhere from $559 to $1,509 a month less. She sued the company under Title VII of the Civil Rights Act of 1964, charging sex discrimination and saying she should be able to recover what she should have earned throughout her career had it not been for Goodyear's bias.
Goodyear argued that it paid Ledbetter less based on her performance. Besides, she could recover only 180 days' worth of damages because of Title VII's 180-day statute of limitations. Ledbetter responded by saying pay discrimination — like hostile workplace discrimination — occurs repeatedly. An earlier Supreme Court decision made an exception to the 180-day limitation on damages for hostile workplace claims, and she argued that it should be the standard in pay discrimination cases as well.
HR Hero Line article: High court to decide Lilly Ledbetter's pay discrimination claim
Discrete acts
The high court, in a 5-4 decision, rejected Ledbetter's reasoning. The majority opinion, written by Justice Samuel Alito, held that companies make compensation decisions at distinct, separate times, much as they make hiring and firing decisions. An analogy to a hostile workplace situation — which reflects an accumulation of unpleasant incidents, some rude and annoying and others clearly illegal — doesn't hold up.
With pay, there's usually an annual salary review and then a series of paychecks based on that single decision, unlike the collection of actions that create a hostile workplace. Title VII was never intended to allow employees to reach years into the past for damages that become apparent late in one's career but could have been contested earlier, the majority said.
The dissenting justices, in an opinion written by Justice Ruth Bader Ginsburg, agreed with Ledbetter that her claim should be treated as a hostile workplace claim, allowing her a remedy for what she said was career-long discrimination. In most workplaces, salary information is a highly guarded secret, the dissenters wrote. It's unfair to limit workers to six months of damages when through no fault of their own they learn they've been shortchanged for years. A pay gap created through years of discriminatory nickel-and-diming resembles the hostile workplace, in which small slights and indignities add up to illegal discrimination. For that reason, the dissenters argued, Ledbetter should be allowed to recover full damages.
Proposed federal law: Lilly Ledbetter Fair Act
Take-away for employers
This case gives employers assurance that theyt won't have to defend pay discrimination claims that stem from decisions made years, even decades, earlier. The opinion places great emphasis on quickly resolving workplace disputes, sending a clear signal to employees to be diligent about workplace rights. Consequently, employers may expect to receive more equity-type questions from employees, both on pay and in other areas. They also may talk or consult more with their peers about salary and treatment, and don't be surprised if they file more discrimination charges.
Remember that employees may be engaging in protected concerted activity when they compare notes on salaries. Also, it's against the law to retaliate against an employee for exercising her rights under discrimination laws. As a preventive measure, it may be worth it to train managers to conduct fair and well-documented performance reviews and make well-grounded decisions on raises and promotions. It also may be worthwhile to address salary disparities — such as the one that apparently existed for years between Ledbetter and her counterparts — before the gap becomes a matter for litigation. Proceed with caution in this area, and check with experienced employment counsel.
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Copyright 2009 M. Lee Smith Publishers LLC. NORTH CAROLINA EMPLOYMENT LAW LETTER . NORTH CAROLINA EMPLOYMENT LAW LETTER is intended as a report on topics of interest in labor and employment law. It is not intended as legal advice. Readers with legal questions or problems should consult legal counsel and should not rely upon this publication without advice of counsel.
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