Lilly Ledbetter worked
at a Goodyear Tire & Rubber Co. plant in
retiring, she filed a sex discrimination charge with the U.S. Equal Employment
Opportunity Commission (EEOC) and then a lawsuit. She claimed that over the
years, she received poor performance evaluations because she was a woman—and
her pay wasn’t increased as much as it would have been had she been fairly
evaluated. She contended that these past decisions affected her pay levels
throughout her employment so much that near the end of her tenure with
Goodyear, she was paid significantly less than her male colleagues, in
violation of Title VII, the federal law that prohibits gender bias.
Goodyear asked the court
to dismiss the case based on Title VII’s requirement that an individual must
file a bias charge within 180 days (or 300 days in
act. Goodyear argued that Ledbetter’s claim was stale as to all pay decisions made
more than 180 days before Ledbetter filed her EEOC charge, and that no
discriminatory pay decisions had taken place within the 180 days before the
charge. Goodyear pointed out that Ledbetter’s claims rested principally on the
misconduct of a single supervisor who, in the early 1980s, allegedly retaliated
against Ledbetter by giving her a poor appraisal when she rejected his sexual
advances.
Jury Awards Millions on
Pay Bias Claim
Ledbetter responded that
a new EEOC filing period was triggered each time she received a paycheck that paid
her less than her male colleagues because each paycheck implemented a prior
discriminatory decision made years before. Thus, she claimed, she had 180 days
from the date of her last paycheck to file her EEOC charge.
A jury ruled in
Ledbetter’s favor, awarding her $223,000 in back pay plus more than $3 million
in punitive damages.
How To Survive an Employee Lawsuit: 10 Tips for Success
With lawsuits against employers becoming ever more common—and jury verdicts skyrocketing—your risk of getting sued has increased dramatically even if you’ve done all the right things. Learn how to protect yourself with our free White Paper, How To Survive an Employee Lawsuit: 10 Tips for Success.
Pay Claim Not Timely
But now the Supreme
Court has ruled, in a 5-4 decision, that Ledbetter’s EEOC charge was untimely.1 According to the
nation’s high court, the EEOC charge period is triggered when a discrete,
illegal practice occurs. A new violation doesn’t occur, and a new charge period
doesn’t commence, because of a subsequent nondiscriminatory act—such as merely
issuing a paycheck— that entails adverse effects resulting from past
discrimination. Said the court, “[c]urrent effects alone cannot breathe life
into prior, uncharged discrimination.”
Other Laws May Apply
This decision protects
employers from having to defend pay claims under Title VII that arose from decisions
long past. However, employers should take note that other laws may permit an
employee to challenge an old compensation decision. For example, the federal
Equal Pay Act doesn’t require the filing of an EEOC charge and has a three-year
statute of limitations for bringing claims. And pay discrimination claims based
on race or color may be brought under another federal civil rights law (known
as Section 1981) that has a four-year limitations period and no charge-filing requirement.
Thus, despite the protection this new decision provides from stale Title VII
pay claims, employers must continue to be vigilant about ensuring that their
compensation policies and practices are free from discrimination. Also, there
are already efforts underway in Congress to overturn this ruling, so the positive
effects for employers could be short-lived.
_
1 Ledbetter v. Goodyear
Tire & Rubber Co., Inc., U.S. Supreme Court No. 05-1074, 2007