Don't pay me now, don't pay me later (unless I complain now)

Friday, June 1, 2007
Contributed by: Dan L. Schaap

On May 29, 2007, the U.S. Supreme Court issued an employer-friendly decision making pay discrimination cases easier to defend. In Ledbetter v. Goodyear Tire & Rubber Co., the Court held that the triggering event for filing a Title VII claim alleging discriminatory pay practices on the basis of gender is when the "paysetting decision" is made, not when subsequent paychecks are received. Writing on behalf of a 5-4 majority, Justice Alito stated that a "new violation does not occur, and a new charging period does not commence, upon the occurence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination."

Lilly Ledbetter, who was a manager at a Goodyear plant in Alabama, filed the suit in federal court for the Northern District of Alabama in 1999. She claimed that Goodyear had paid her 15 to 40 percent less than her male counterparts over the course of many years. A jury agreed that she had suffered discrimination on the basis of her gender, and the district court awarded her over $220,000 in back pay and more than $3 million in punitive damages. The 11th U.S. Circuit Court of Appeals reversed the decision, finding that Ledbetter had not timely filed her charge of discrimination, and the Supreme Court agreed.

In Texas, employees generally have 300 days to file a "Charge of Discrimination" with the EEOC following the occurence of an employment action made unlawful under Title VII. Otherwise, the claim is lost. After the Ledbetter decision, Texas employees claiming their employers have paid them less because of their gender, race, or other protected status must file a charge within 300 days following the date when the "paysetting decision" is made, not when the actual discriminatory payments are made. Apparently, this is true even where the employee does not realize that other employees have been paid more or where it takes years to determine that discrimination has occured.

In issuing the Ledbetter decision, the Supreme Court was strongly divided. In a lengthy dissenting opinion written on behalf of the 4 dissenting Justices, Justice Ruth Bader Ginsburg stated that the "Court does not comprehend, or is indifferent to, the insidious way in which women can be victims of pay discrimination." She reached out to the legislature to "correct the Court's parsimonious reading of Title VII." Depending on how the 2008 elections go, Congress might just grant her request.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.