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On May 29, 2007, the United States Supreme Court issued an important decision regarding when an alleged victim of discrimination in pay must file a claim with the Equal Employment Opportunity Commission under federal law. Consistent with virtually all of the decisions of the Roberts Court, the holding in Ledbetter v. The Goodyear Tire & Rubber Co., Inc. represents a victory for employers: in order to be timely under federal law, an employee alleging discrimination in pay must file a claim within 180 days of the employer’s last discriminatory payroll decision, not from the date of the employer’s issuance of the last paycheck that allegedly carried forward adverse effects of a previously made discriminatory pay decision. The opinion was split 5-4 along political lines, with the majority opinion written by Justice Alito and joined by Chief Justice Roberts, Justice Scalia, Justice Kennedy, and Justice Thomas. A strongly written dissent by Justice Ginsburg, read from the bench, was joined by Justice Stevens, Justice Souter, and Justice Breyer.

The facts of the case were straightforward. Lilly Ledbetter was a supervisor at a Goodyear Tire and Rubber Company plant in Alabama from 1979 until 1998. For much of this time she worked as an area manager, a position largely occupied by men. Although initially Ledbetter’s salary was comparable to that of men performing substantially the same work, her pay slipped over the years, until, by the end of her time with the company, the pay discrepancy was significant: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest received $5,236 per month.

Employee salaries were based upon supervisory evaluations of performance. Ledbetter introduced evidence that several supervisors had in the past given her poor evaluations because of her sex, that as a result her pay had not increased as much as it would have if she had been evaluated fairly, and that these past pay decisions continued to affect the amount of her pay throughout her employment. Ledbetter did not, however, assert that the relevant Goodyear decision makers acted with discriminatory intent when they issued her paychecks during the relevant EEOC 180 day charging period. Instead, she argued that the paychecks were unlawful because they would have been larger if she had previously been evaluated in a nondiscriminatory manner. In other words, the imbalance in her pay during the 180 day charging period gave affect to prior discriminatory conduct for which claims had not been filed.

The Trial Court allowed Ledbetter’s Title VII claim to proceed to trial, and the jury held in favor of Ledbetter. Goodyear appealed to the Eleventh Circuit, which reversed and held that a Title VII pay discrimination claim cannot be based on issuance of paychecks during the charging period that were not issued with discriminatory intent, even if the effect is to carry forward the affects of prior discriminatory pay decisions.

The U.S. Supreme Court affirmed the Eleventh Circuit decision, reasoning:

“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 the past discrimination. But of course, if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed…. Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. She did not do so, and the paychecks that were issued to her during the 180 days prior to the filing of her EEOC charge do not provide a basis for overcoming that prior failure.”

The Ledbetter majority concluded by stating that “we apply the statute as written, and this means that any unlawful employment practice, including those involving compensation, must be presented to the EEOC within the period prescribed by statute.”

The Ledbetter decision is obviously favorable to employers. By analogy, its reasoning can extend into other areas of employment law wherever damages are sought for allegedly disparate pay and perhaps even where disparate treatment is alleged. Recognizing the importance of the Court’s ruling, Justice Ginsburg in her dissent lambasted the decision and characterized the Court’s reading of Title VII “parsimonious.” She stated that the Court’s insistence on immediate contest of discriminatory pay decisions ignores the realties of pay discrimination; namely, the fact that pay disparities often occur, as they did in Ledbetter’s case, in small increments that do not raise cause for concern until they have developed over time. According to Ginsburg: “[Ledbetter's] initial readiness to give her employer the benefit of the doubt should not preclude her from later challenging the then current and continuing payment of a wage depressed on account of her sex.” Ginsburg concluded by calling upon Congress to reverse the Court: “This is not the first time the Court has ordered a cramped interpretation of Title VII, incompatible with the statute’s broad remedial purpose…. Once again, the ball is in Congress’ court.”

Soon after the Ledbetter decision, Congress in fact heeded Justice Ginsburg’s call. The day after the decision, the Democratic caucus gathered on Capitol Hill to discuss a game plan. D.C. Delegate Eleanor Holmes Norton, who chaired the EEOC in the 1970s, said she wanted to change the law. Soon thereafter, she met with House and Senate staffers, including those from the office of senators Hillary Clinton and Edward Kennedy, and representatives John Conyers and George Miller, to begin putting together legislation to specifically address the issue.

A House bill (H.R. 2831) was introduced by California representative Miller, and was referred to the House Committee on Education and Labor on June 22. On June 27, the Committee voted in favor of the bill – a straight party-line vote of 25-20. The bill is now before the full House. A Senate bill (S. 1843) was introduced by senator Kennedy on July 20 and on the same day was referred to the Committee on Health, Education, Labor, and Pensions.

Both bills would amend Title VII and related legislation to overturn Ledbetter by expressly providing that an unlawful employment practice includes the application of a discriminatory compensation decision (which would include the issuance of a paycheck, as in Ledbetter). Although these legislators have sent a clear message that they disagree with the Ledbetter decision, it is considered likely that President Bush would surely veto both bills, at least in their present form.