Supreme Court Rules in Favor of Employers—Filing Period for Employees Claiming Pay Discrimination Runs From Pay Decision

Employment Law Insider & Alert

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PUBLISHED ON: September 19, 2007

The Supreme Court recently made it easier for employers to defend against Title VII discrimination claims based on past decisions regarding salary and raises. In Ledbetter v. Goodyear Tire & Rubber Co., Inc., 2007 WL 1528298, 112 S. Ct. 2162 (May 29, 2007), the Court found that employees claiming they received disparate pay treatment based on each gender or race must do so within 180 days (or 300 days depending on the state) of the original allegedly discriminatory pay decision or action, and not from the date the continuing consequences of that treatment manifest themselves.

At issue in Ledbetter was plaintiff Lily Ledbetter’s claim that she was paid less than her male counterparts. According to Ledbetter, this pay difference was created by past supervisors giving her poor performance reviews because of her gender, which resulted in her pay not increasing as much as it would have had she been evaluated fairly. Ledbetter further claimed that past pay-setting decisions impacted the amount of her pay throughout her employment, such that previous discriminatory treatment continued to have a disparate impact on her salary with each paycheck she received long after the initial discrimination occurred.

Relying upon precedent, as well as Congressional intent in drafting Title VII and creating a short EEOC filing deadline (i.e., 180 or 300 days), the Supreme Court found Ledbetter’s claims were time barred. According to the Court, several previous cases1 have established that:

The EEOC charging period [runs] from the time when the discrete act of alleged intentional discrimination occurred, not from the date when the effects of this practice were felt.
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A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from past discrimination.

Accordingly, Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay-setting decision was made and communicated to her because “current effects alone cannot breathe life into prior, uncharged discrimination.” Her claim was not revived with each subsequent paycheck she received.

In so finding, the Court delivered a favorable verdict for employers in that it will be easier in a disparate treatment case for an employer to limit a claim to treatment which occurred only within the previous 180 days. Employers will no longer need to defend against years-old claims of discrimination which may involve decisions made by supervisors or other employees who may no longer work for the company.

On July 31, 2007, by a vote of 225-199, the House passed legislation to reverse the Supreme Court’s decision limiting the time that workers have to sue their employers for pay discrimination by providing that each paycheck would constitute a separate act of discrimination.

1 See United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977); Delaware State College v. Ricks, 449 U.S. 250 (1980); Lorance v. AT&T Technologies, Inc., 490 U.S. 900 (1989).