Supreme Court holds pay discrimination claim time barred

Yet another decision denied court access based on a very narrow reading of a legislative fix. This time, the Supreme Court rejected the clear intent of Congress to completely invalidate Lorance v. AT&T Technologies, Inc., 490 U.S. 900 (1989), a decision interpreting the employment provisions of the Civil Rights Act. Relying upon the reasoning of Lorance, and giving little weight to the fact that Congress superseded Lorance by statute, the Court ruled that a woman's claim of discrimination in pay was time barred. Ledbetter v. Goodyear Tire & Rubber Co., Inc., 2007 WL 1528298, No. 05-1074 (May 29, 2007).

Lilly Ledbetter was a supervisor at Goodyear Tire & Rubber Co. from 1979 to 1998.  She worked as an area manager, a position largely occupied by men.  Initially, she received a comparable salary to men performing similar work.  However, over time, due largely to poor performance evaluations, her salary fell substantially below every male manager.   After she retired in 1998, she sued the company, alleging that her poor evaluations resulted from sex discrimination.  She alleged that these discriminatory evaluations continued to affect the amount of her pay throughout her employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1).  Her case went to trial, and the jury ruled in her favor, awarding substantial damages.  The Eleventh Circuit reversed, holding that a Title VII pay discrimination claim cannot be based on any pay decision prior to the EEOC charging period of 180 days.  The Supreme Court, in a 5:4 decision written by Justice Alito affirmed.  Justice Ginsberg authored a passionate dissent, which she read from the bench.

 

The majority rejected Ledbetter's allegation that "discriminatory acts that occurred prior to the charging period had continuing effects during that period."  Instead, the Court ruled that the "EEOC charging period is triggered when a discrete unlawful practice takes place.  A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent non-discriminatory acts that entail adverse effects resulting from past discrimination."  The Court stated that Ledbetter's arguments were "squarely foreclosed by our precedents."

 

One of the precedents relied upon by the majority was the Lorance case, which Congress superseded by statute.  42 U.S.C. § 2000e-5(e)(2).  The Court narrowly construed the legislative fix, rejecting the dissent's contention that the legislative fix demonstrated that Lorance was wrongly decided.  Instead, the Court stated that the legislative fix "applied only to the adoption of a discriminatory seniority system, not to other types of employment discrimination."  The Court stated that since the cases relied upon by Lorance were not explicitly rejected by Congress, the reasoning utilized by Lorance and its predecessors was controlling.

 

The majority was very concerned with protecting employers from the burden of defending old claims.  The Court noted that Ledbetter alleged a single Goodyear supervisor retaliated against her when she rejected his sexual advances during the early 1980's and mid-1990's.  By the time of trial, the supervisor had died and therefore could not testify.  The Court stated: "A timely charge might have permitted his evidence to be weighed contemporaneously." 

 

The majority rejected Ledbetter's contention that pay raise issues should be treated from other employment discrimination claims, due to their continuing effects.  The Court distinguished Bazemore v. Friday, 478 U.S. 385 (1986), in which Justice Brennan, concurring, stated that "[e]ach week's paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII."  The majority treated Bazemore exactly as it treated the Lorance legislative fix: limiting Bazemore to its facts.  The majority stated that the Bazemore ruling was based upon an explicitly race-based pay structure implemented prior to the charging period, while Ledbetter alleged that a facially neutral pay structure was applied in a discriminatory manner prior to the charging period.  The Court concluded that since Ledbetter could not prove that the purpose of the performance-based pay system was to discriminate on the basis of sex or that it was applied in a discriminatory manner within the charging period, "Bazemore is of no help to her."

 

Justice Ginsburg’s dissent argued that a pay discrimination claim is like a hostile work environment, because both types of claims are based on the cumulative effect of individual acts.  Justice Alito characterized the dissent as "coy," for not acknowledging that under the dissent's approach, an employee could wait 20 years before bringing an EEOC charge based on a single discriminatory pay decision.  In response, the dissent replied that such a suit would be barred by laches.  The majority countered that it was merely deferring to Congress, since "Congress has already determined that [the] defense [of laches is] insufficient" by including explicit timeframes for filing charges in the Civil Rights Act.

 

The dissent explained that discrimination with respect to compensation is often not easy to identify, since employers often do not publish pay levels.  Justice Ginsburg stated: "The problem of concealed pay discrimination is particularly acute where the disparity arises not because the female employee is flatly denied a raise but because male counterparts are given larger raises."  She indicated that the discrimination may not even be actionable until the discrepancy accumulates over time.  She distinguished pay disparities from other employment discrimination issues, such as termination, promotion, and hiring, which are immediately apparent to all.  She relied upon the Lorance legislative fix and Bazemore, and she stressed that the majority's interpretation of Title VII "strayed from…fidelity to the Act's core purpose."