Supreme Court Tackles Employment Issues

There is always an air of uncertainty in legal circles when the makeup of the United States Supreme Court changes. Following the retirement of Justice Sandra Day O’Connor and the death of Chief Justice William H. Rehnquist in 2005, President Bush had an opportunity to appoint two new justices. Having first nominated Judge John Roberts of the United States Court of Appeals for the District of Columbia Circuit to fill Justice O’Connor’s seat, President Bush withdrew that nomination following the death of Chief Justice Rehnquist and instead nominated Judge Roberts to the position of Chief Justice. The Senate confirmed this nomination in September 2005. Then, later that year, President Bush nominated Samuel Alito, a judge on the United States Court of Appeals for the Third Circuit, to fill Justice O’Connor’s seat. The Senate confirmed this nomination on January 31, 2006, in a vote closely split along party lines. If early returns are any indication, the Court under Chief Justice Roberts and new Associate Justice Alito has quite an appetite for employment issues.

How Late is “Too Late” to Assert a Pay Discrimination Claim?

Perhaps the most significant employment case to be decided by the new Supreme Court is Ledbetter v. Goodyear Tire & Rubber Co, Inc., decided on May 29th of this year. Ledbetter was employed by Goodyear from 1979 until 1998. During much of this time, salaried employees (such as Ledbetter) were awarded or denied raises based upon their supervisors’ evaluation of their performance. Ledbetter’s supervisors gave her several poor evaluations, which resulted in her pay increases being less than that of male supervisors. By the end of her employment, Ledbetter was paid significantly less than her male peers.

In March 1998, Ledbetter submitted a questionnaire to the Equal Employment Opportunity Commission (EEOC) alleging various acts of gender discrimination. Then, in July 1998, Ledbetter filed a formal charge of discrimination with the EEOC. After taking early retirement in November 1998, Ledbetter brought a lawsuit against Goodyear alleging, among other claims, a gender-based pay discrimination claim under Title VII and a similar claim under the Equal Pay Act.

The District Court granted summary judgment for Goodyear on Ledbetter’s Equal Pay Act claim, but allowed the Title VII claim to go to trial. Following trial, the jury found for Ledbetter and awarded her backpay and other damages. Goodyear appealed, arguing that Ledbetter’s pay discrimination claim was time-barred with respect to all pay decisions made more than 180 days before the filing of her EEOC questionnaire and that no discriminatory act relating to Ledbetter’s pay occurred after that date. (Generally speaking, an employee must file a charge of discrimination with the EEOC no later than 180 days after the alleged discriminatory act. This time period is extended to 300 days in states such as Tennessee that have a state human rights agency.)

The United States Court of Appeals for the Eleventh Circuit (which includes Alabama, Florida, and Georgia) agreed with Goodyear, holding that a Title VII pay discrimination claim cannot be based on any pay decision that occurred more than 180 days before the filing of an EEOC charge, even if the effects of that decision (in terms of lower pay) were felt within the statutory limitations period. Because it found insufficient evidence to prove that Goodyear had acted with discriminatory intent in making any pay decisions that occurred within the limitations period, the Court of Appeals reversed the jury verdict for Ledbetter.

On Ledbetter’s petition, the Supreme Court granted certiorari to address the following question: “Whether and under what circumstances a plaintiff may bring an action under Title VII of the Civil Rights Act of 1964 alleging illegal pay discrimination when the disparate pay is received during the statutory limitations period, but is the result of intentionally discriminatory pay decisions that occurred outside the limitations period?”

In essence, Ledbetter argued that her Title VII claim should not have been deemed time-barred because the allegedly discriminatory acts that occurred prior to the limitations period had continuing effects during that period, which were made evident every time she received a paycheck that was smaller than the paychecks of her male peers. By a 5-4 decision (with Chief Justice Roberts siding with the majority and Justice Alito writing the majority opinion), the Supreme Court disagreed. The Court found that following Ledbetter’s argument would require it to jettison the defining element of her Title VII claim – proof of discriminatory intent within the limitations period. The Court held that “any unlawful employment practice, including those involving compensation, must be presented to the EEOC within the period prescribed by statute.”

The dissent accused the majority of ignoring the realities of the workplace. According to the dissent, “[p]ay disparities often occur . . . in small increments; cause to suspect that discrimination is at work develops only over time. Comparative pay information, moreover, is often hidden from the employee’s view. Employers may keep under wraps the pay differentials maintained among supervisors, no less the reason for those differentials.” The dissent argued that the effect of the majority’s position is that it would force plaintiffs to sue too soon to prevail, while cutting them off as time-barred if they wait until a pay differential is large enough for them to “mount a winnable case.” In contrast to the majority’s focus on discriminatory intent, the dissent opined that the unlawful practice in pay discrimination cases, whether brought under the Equal Pay Act or Title VII, is “the current payment of salaries infected by gender-based . . . discrimination – a practice that occurs whenever a paycheck delivers less to a woman than to a similarly situated man.”

The real-world impact of Ledbetter remains to be seen. While it appears favorable to employers at first blush, there are several reasons for employers to keep their excitement in check. First, the case could cause employees to bring discrimination charges and lawsuits earlier than they otherwise would, which could result in more litigation. Moreover, the Equal Pay Act does not require the filing of a charge with the EEOC or proof of intentional discrimination, so that Act could take on greater importance in cases of alleged gender discrimination. Further, in writing for the minority, Justice Ginsburg urged Congress to “correct” the majority’s erroneous interpretation of Title VII. If Congress accepts this invitation, the result for employers may be more far-reaching than a simple reversal of the majority’s opinion in Ledbetter.

What Constitutes “Bringing a Charge” for Purposes of Discrimination Claims?

In order to bring a lawsuit alleging discrimination under certain federal anti-discrimination statutes, including Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, an employee must first “file a charge” with the EEOC within a prescribed time period (in Tennessee, 300 days after the alleged discriminatory act). However, it is not always clear what it means to “file a charge” with the EEOC. For example, what if an individual visits his local EEOC office, speaks to an intake officer, and completes the EEOC’s intake questionnaire within the required period of time, but does not actually complete and sign an EEOC Charge of Discrimination form until after the limitations period? On one hand, you can argue that the individual made his intent known within the limitations period. On the other hand, one of the key purposes of a limitations period is to ensure that the employer is put on notice of a discrimination claim and can defend it while the case is still “fresh.” Lower courts have disagreed on what an employee must do to satisfy this administrative “filing” prerequisite. The Supreme Court has granted review of a case to decide this issue. Depending upon the outcome, more discrimination claims may be dismissed on grounds of untimeliness.