ACSBlog: The Blog of the American Constitution Society

by Catherine Fisk, Professor of Law, Duke University

Ledbetter v. Goodyear Tire & Rubber Co. No. 05-1074

Ledbetter v. Goodyear Tire & Rubber Co. presents a technical but important question of how long an employee who is a victim of unlawful pay discrimination has to file a claim. If the Supreme Court accepts the lower court's decision, employees will not be able to sue for illegal discrimination in pay unless they file a claim within six or ten months, depending on the state, after the employer makes the decision that sets their salary or wages, even if the employer implements that decision in making discriminatorily small paychecks up to the time of the claim.

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, religion, gender, and national origin, and requires victims of discrimination to file a claim within either 180 days or 300 days of the discriminatory act, depending on the state. In Ledbetter v. Goodyear Tire & Rubber Co., the United States Court of Appeals for the Eleventh Circuit, based in Alabama, held that employees must file a charge within 180 days from the time when the employees' salary or wages are set, rather than from when the employees receive the discriminatorily low pay. Thus, in Ledbetter, the court overturned a jury's finding of discrimination against Lily Ledbetter, who was paid substantially less than the men in her department. The court held that because Ledbetter filed her charge more than 180 days after her annual performance review and salary determination, she could not sue. Other federal courts of appeals, however, have held that the time for filing a charge begins to run on the date when an allegedly discriminatory paycheck is tendered to the employee, even if the salary decision occurred more than 180 or 300 days before.

The Supreme Court has ruled on the time for filing Title VII claims in a number of previous cases. In Bazemore v. Friday, 478 U.S. 385 (1986), the Court held that a group of black employees could challenge pay discrimination even though the pay scale that resulted in blacks being paid less than white employees had been set before Title VII went into effect. The Court stated: "Each week's paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII." More recently, in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), the Court held that in cases alleging not a discrete act of discrimination (like a hiring, firing or promotion) but rather a continuing course of conduct that involves many related acts (like sexual or racial harassment), an employee could challenge acts occurring more than 180 days before so long as the acts were part of the same hostile work environment and at least one occurred within the filing period. The lower court in Ledbetter thought that under National Railroad Passenger Corp. v. Morgan salary decisions are the discrete acts that must be challenged within the 180 day period. Lower courts that have reached the opposite conclusion have read National Railroad Passenger Corp. v. Morgan not to affect the earlier decision in Bazemore v. Friday, that employees can challenge discriminatory pay schemes established before the filing period so long as they received a paycheck within the time for filing a claim.

A ruling for the employer in Ledbetter will make it difficult for many employees to challenge illegal pay discrimination. The 180-day time for filing claims under Title VII is relatively short, it is difficult for many employees to learn whether they are being paid less than their co-workers, and even those who suspect that they are may be reluctant to sue their employers while still employed at the firm. Moreover, because in many pay schemes, salaries are increased annually by a percentage over the past year's salary, a rule that prevents challenges to past discrimination in salary allows an employer to grant annual raises that are discriminatory in dollar amount so long as the percentage increase is nondiscriminatory. Thus, an employee whose starting salary is set discriminatorily low but who later receives the same five percent annual raise as other employees will forever receive smaller raises than co-workers.

Ledbetter could also have a significant impact on how Title VII cases are litigated and how damages are calculated. Defendants in discrimination cases, like the court of appeals in Ledbetter, prefer an interpretation of the timely filing requirement that bars not only challenging any act that occurred outside the 180-day period but also that excludes any evidence of past behavior or motives that might be used to infer discriminatory motives behind conduct within the 180-day period. In addition, a narrow reading of the timely filing requirement would affect the amount of damages plaintiffs can recover. If the Court accepts the employee's argument that today's paycheck is understood to be part of a continuing system of pay discrimination, it will be possible for plaintiffs to recover the pay differential attributable to discrimination going back in time. If the Court accepts the employer's argument that the only thing that is actionable is the decision to set pay, then the plaintiffs could be limited to recovering only the discrepancy in pay that flowed forward from the illegal decision 180 or 300 days before. Particularly in cases involving low-wage work, several months of backpay when the difference is only a dollar an hour may not result in a damage award large enough to provide a victim of discrimination with a reason to overcome the considerable obstacles to suing.