Discriminatory Pay Setting Decision Must Be Made During the Limitations Period to Be Actionable

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July 03, 2007

The Supreme Court has ruled that a plaintiff may not bring a claim under Title VII of the Civil Rights Act of 1964 for pay discrimination when the discriminatory decision setting the pay was made prior to the statute of limitations for filing such claims. Ledbetter v. The Goodyear Tire & Rubber Co., 550 U.S. __ (2007).

Lilly Ledbetter worked for Goodyear from 1979 until 1998. During most of her career, salary increases were based upon supervisor evaluations. Ledbetter introduced evidence demonstrating that she had received several poor evaluations based upon her sex that resulted in smaller pay increases then she would have received but for the sex discrimination. At the end of her career, she was receiving significantly less pay than male colleagues.

Goodyear argued that the pay discrimination claim was barred by the statute of limitations because all the discriminatory acts – the evaluations and related lower pay increases – were made before the statute of limitations period. The Court of Appeals for the 11 th Circuit agreed with Goodyear, and the Supreme Court affirmed that decision on May 29, 2007.

Under Title VII, an individual wishing to challenge an employment action must first file a charge of discrimination with the U.S. Equal Employment Opportunity Commission. The charge must be filed within the specified time period (either 180 or 300 days, depending on the state) after the alleged unlawful employment practice occurs.

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Ledbetter argued that her claim was timely because earlier discriminatory decisions denying her a raise “carried forward” into the limitations period with each subsequent pay check. She also argued that the resulting smaller paychecks issued during the limitations period were separate acts of discrimination.

The Supreme Court held that employees may file claims covering discrete acts occurring only during the appropriate time period. The court explained 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 nondiscriminatory acts that entail adverse effects resulting from past discrimination.”

Accordingly, the Supreme Court rejected Ledbetter’s argument that the paychecks received during the charging period triggered a new EEOC charging period. The court also rejected the argument that the paychecks during the charging period were actionable by giving “present effect to” the earlier discriminatory conduct that was barred by the statute of limitations.

The Ledbetter decision reinforces the need to identify the alleged discriminatory decision at issue and when that decision took place. Had the court ruled in favor of Ledbetter, it would have led to an increase in the number of pay discrimination suits based upon older evaluations and pay setting decisions.

For more information, please contact:

Samuel Charnoff
[email protected]

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