Supreme Court Limits Untimely Pay Discrimination Suits

Lew Clark
May 30, 2007 — 2,088 views  
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Supreme Court Limits Untimely Pay Discrimination Suits In a ruling that will greatly limit the ability of employees to file pay discrimination lawsuits, on May 29, 2007, the United States Supreme Court held that courts cannot consider claims of discriminatory pay based on acts preceding the deadline to file a charge with the EEOC. The case, Ledbetter v. Goodyear Tire & Rubber Co., Inc., involved Lilly Ledbetter, who began working as a supervisor in Goodyear’s Gadsden, Alabama plant in 1979. Goodyear increased managerial salaries through annual merit-based raises based upon supervisor recommendations. Ms. Ledbetter alleged that, for a number of years, her supervisor consistently ranked Ms. Ledbetter’s performance at or near the bottom of her co-workers. She maintained that, at the end of 1997, she was receiving less pay than all 15 other area managers. The lowest paid male was making 15% more and the highest paid male 40% more than her. Ms. Ledbetter’s last salary review was in February 1998. In March 1998, Ledbetter filed an EEOC charge alleging pay discrimination because of her sex. Ms. Ledbetter retired in November 1998 and filed a lawsuit in November 1999. For Title VII discrimination claims to be timely, an EEOC charge must be filed within 180 days (or 300 days, depending on the state) after the alleged unlawful practice occurred. Goodyear argued that Ms. Ledbetter could sue only on those pay-related decisions made within the 180 days prior to filing the charge. However, although only one such review fell within the 180-day period prior to the charge, the trial court allowed Ms. Ledbetter to challenge every annual review since 1979. A jury found for Ms. Ledbetter, and Goodyear appealed. The Eleventh Circuit Court of Appeals reversed, holding that Ms. Ledbetter was permitted to challenge only the pay decisions made within the limitations period and, by extension, the one immediately beforehand. In a 5-4 decision, the Supreme Court affirmed the Eleventh Circuit’s decision. The Court rejected Ms. Ledbetter’s argument that Goodyear’s nondiscriminatory conduct during the 180-day charging period gave present effect to discriminatory conduct outside of that period. By strictly construing the statute of limitations period for bringing charges of discrimination, the Supreme Court recognized the employer’s need for prompt notice of charges of discrimination in order to be able to adequately investigate and respond to charges. Although the Court’s decision may not have an immediate impact on employer’s day-to-day employment decisions and employers certainly should always establish employees’ compensation and other terms of employment without regard to sex or any other protected characteristic, the decision may impact other aspects of employment litigation. The decision may further motivate employees to commence litigation in state court under state law rather in federal court. The decision also may further limit other types cases in which employees attempt to allege that a certain employment violation is “continuing” in nature and attempt to point to events occurring outside the statute of limitations as a basis for the claim. ______________________ The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations. Counsel should be consulted for legal planning and advice. ©Squire, Sanders & Dempsey L.L.P. All Rights Reserved May 2007

Lew Clark


Lewis Clark concentrates his practice on counseling and advocacy for both private and public sector employers in all types of labor and employment matters and is an experienced mediator of employment and other civil litigation matters.