Supreme Court Restricts Time Frame For Bringing Discriminatory Pay Suits

By Proskauer Rose LLP's Labor & Employment Practice Group

In a significant victory for employers, the Supreme Court, on May 29, 2007, rejected an employee's claim that she should be permitted to sue for intentional pay discrimination that occurred several years earlier, outside Title VII's Charge-filing period. Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074, 2007 WL 1528298 (U.S. May 29, 2007). In a sharply divided 5-4 opinion, the Court held that an employer's "pay-setting decision is a 'discrete act'", so that the "period for filing an EEOC Charge begins when the act occurs." Id. at *1. Therefore, an employee's claim that a pay decision was discriminatory must be made within 180 days (or 300 days in states with local FEP agencies) of that discrete act. The Ledbetter decision is significant because many lower courts had interpreted an earlier Supreme Court decision, Bazemore v. Friday, 478 U.S. 385 (1986) (per curiam), as permitting employees to recover for pay discrimination under Title VII even when the alleged discriminatory pay-setting decision had occurred long ago in the past, grounded on the theory that each new paycheck restarted the Charge-filing time clock, carrying forward the cumulative effects of the past discriminatory pay practices. In rejecting that reading of Bazemore, Justice Alito declared: "Ledbetter's interpretation is unsound." 2007 WL 1528298, at *9.

The Fact Context

Lily Ledbetter worked for Goodyear from 1979 until 1998 at its Gasden, Alabama, plant. During much of the time, salaried employees (like Ledbetter) were given or denied raises based on their supervisors' evaluations of their performance. In 1998, Ledbetter filed a Charge with the EEOC alleging certain acts of sex discrimination. After taking early retirement in November 1998, Ledbetter filed suit against Goodyear asserting claims of pay discrimination under Title VII and the Equal Pay Act ("EPA"). Ledbetter alleged that although she was initially paid the same as her male colleagues, over time. She received smaller raises based upon performance evaluations that were discriminatorily motivated, and by the end of her employment, she was earning significantly less than her male comparators. Goodyear maintained that the evaluations had been nondiscriminatory.

After filing suit in federal district court, Ledbetter abandoned her EPA claims, proceeding to trial with the Title VII disparate-pay claim only. A jury found for Ledbetter and awarded backpay plus over $3 million in punitive damages, which was later reduced by the district court. On appeal, the U.S. Court of Appeals for the Eleventh...