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The Supreme Court Considers Procedural Technicalities That Perpetuate the Gender Wage Gap: Part One in A Series on Ledbetter v. Goodyear


Tuesday, Nov. 14, 2006

On November 27, the U.S. Supreme Court will hear argument in Ledbetter v. Goodyear Tire & Rubber Company, Inc. Under Title VII, a federal law that prohibits employers from discriminating on the basis of sex and other protected characteristics, workers may challenge decisions to pay them less on the basis of sex. The issue in Ledbetter is when such a challenge is timely, under the statute of limitations.

Though the issue is a technical one, it has important substantive consequences. Sex-based pay discrimination remains a reality - and a seemingly intractable one.

Despite slow progress in recent decades, working women continue to earn less on the dollar than men earn -- even after accounting for all the factors that might be cited to justify the gap: differences in hours worked, education, occupation, work experience and attachment to the labor force.

The remaining gap, once these factors are eliminated from the analysis, is caused by discrimination. Unless Title VII is robustly enforced, that discrimination will persist.

The Facts and the Rulings Below

The plaintiff in the case before the Supreme Court, Lilly Ledbetter, worked as a production supervisor at Goodyear Tire and Rubber's plant in Gadsen, Alabama. She took early retirement in 1998, nearly twenty years after she began working for the company, after being transferred against her will to a less desirable job on the production floor. Ledbetter filed a charge of discrimination in 1998 with the Equal Employment Opportunity Commission (EEOC), alleging various forms of sex discrimination.

At trial, Ledbetter proved to the jury that she had suffered illegal pay discrimination. She was paid less than the lowest-paid male in the same job -- so much less that her salary sometimes fell below the minimum salary set by the Company's pay policy for her position!

Goodyear did not dispute the pay disparity, but argued (unsuccessfully) that it resulted from her consistently poor performance - performance that, it said, dictated her unusually small or absent annual pay raises.

With a jury trial, one is never sure which evidence was most important to the verdict. However, Ledbetter presented substantial evidence to contradict Goodyear's explanation for the pay disparity. And the jury plainly found Ledbetter's evidence, taken as a whole, persuasive - after all, it found in her favor.

Ledbetter offered evidence that performance evaluations were falsified; that she received a "Top Performance Award" one year; that the company's policy with respect to pay raises was not followed; that there was widespread discrimination against female managers at the plant; and that plant officials bore discriminatory animus against female employees.

On this record, the jury awarded Ledbetter $223,776 in backpay, and more than $3 million dollars in punitive damages. (This award was reduced by the court to $300,000, however, because Title VII limits total damages to $300,000 for claims against employers of this size.)

When Must Discrimination Be Challenged?

On appeal, the employer, Goodyear, is claiming that Ledbetter is entitled to nothing, because, it says, her lawsuit was filed much too late.

Plaintiffs cannot file a Title VII lawsuit unless they have filed a charge with the EEOC, the federal agency charged with implementing Title VII, within 180 days of the unlawful employment practice they are challenging. (Or 300 days, in states that enter a work-sharing agreement with the EEOC.)

But when does that 180 days begin to run in a pay discrimination case? (In other cases, the ticking-clock statute-of-limitations issue is plain: If you're fired, it starts to run when you're fired. But when the clock starts and stops ticking is less clear in a pay case.)

Goodyear says that the clock was ticking as soon as the decision to pay the employee less on the basis of sex was first made.

But Ledbetter says it started ticking anew every time she received a paycheck reflecting (and implementing) the earlier discriminatory decision.

On appeal, the U.S. Court of Appeals for the Eleventh Circuit agreed with Goodyear, and reversed the jury's verdict. It said that a plaintiff alleging pay discrimination can reach no further back than (and possibly not as far as) the most recent pay decision prior to the beginning of the charge-filing period.

The Key Supreme Court Precedents

Two Supreme Court precedents are on point: Bazemore v. Friday and Amtrak v. Morgan.

In the 1986 case of Bazemore, all the justices agreed that "Each week's paycheck that delivers less to a black than a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern [of wage discrimination] was begun prior to the effective date of Title VII." Title VII was enacted in 1964, and the ruling, in effect, made sure employers could not "grandfather" in wage discrimination simply because it had begun earlier than 1964.

Bazemore was widely understood to permit plaintiffs to challenge ongoing pay discrimination no matter when the decision to discriminate was made. But then, in 2003, the Court issued Amtrak v. Morgan.

There, the Court held that discrete forms of discrimination must be challenged within 180 days of when they occur. It rejected the so-called "continuing violations doctrine," under which courts had sometimes permitted plaintiffs to reach prior discriminatory acts if similar acts occurred within the limitations period. So, after Amtrak, a plaintiff cannot sue based on a discriminatory transfer that occurred 3 years ago, just because she suffered another, similar discriminatory transfer within 180 days of when she filed the charge.

But the Court recognized an exception for "hostile environment" harassment claims since by their very nature they involve acts over a period of time; the very idea behind them is that, over time, a course of conduct eventually made a given workplace intolerable for the plaintiff.

Amtrak cited Bazemore with approval, suggesting the Court did not see an insoluble conflict between the two decisions.

The Eleventh Circuit's Ruling: Why It Was In Error

But in the Ledbetter case, the Eleventh Circuit paid little, if any, attention to Bazemore - ruling that the clock starts ticking with the most recent "affirmative" pay decision, and no prior decision can be challenged, even if that prior decision if still very much affecting the employee's paycheck.

A hypothetical will show why the Eleventh Circuit's ruling was in error:

On January 10, 2000, Jane Doe is hired at a discriminatorily low salary. Every year, on January 10, she receives an annual review; any change in pay that results is thereafter reflected in her paychecks.

On November 30, 2006, Jane files an EEOC charge, alleging that she is paid less than a male colleague who is equally qualified with no better record of work or performance. But according to the Eleventh Circuit, even though she has good reason to believe she's suffered sex discrimination for six years, she can only challenge the annual review decision that took place on January 10, 2006, and can only collect the damages flowing from that decision. (The reasons why a plaintiff in that situation might not file a claim after the initial discriminatory pay decision often involve informational deficits. The Eleventh Circuit's ruling fails to deal adequately with the reality that pay discrimination victims often do not learn of the discrimination until long after it is first set in motion.)

According to the Eleventh Circuit, Jane also must prove that discriminatory animus tainted that most recent decision - which may be difficult because the supervisor determining her annual raise may have no knowledge of the prior discrimination and no animus towards her. And it will do her no good to establish that her current pay continues to reflect gender bias from those prior discriminatory decisions.

The effect of the Eleventh Circuit's rule is that each pay review wipes the slate clean of any prior discriminatory decision -- even if the pay discrimination initiated by an earlier decision is never reconsidered, corrected or remedied.

That ruling was very wrong - for reasons we will discuss in detail in Part Two of this series. (Briefly, the ruling misinterprets Amtrak; ignores the realities of how victimized employees perceive and respond to pay discrimination; will exacerbate the existing gender wage gap; and fails to serve Title VII's remedial and deterrent goals.)

Ledbetter offered a better alternative, in her brief to the Supreme Court. She argues that "each paycheck that offers a woman less pay than a similarly situated man because of her sex is a separate violation of Title VII with its own limitations period, regardless of whether the paycheck simply implements a prior discriminatory decision made outside the limitations period."

The majority of federal appellate courts agree with this position. So does the EEOC itself.

The Solicitor General's Brief - Refusing to Support the EEOC's Interpretation

Before the Supreme Court, the United States filed a "friend of the court" brief that took a position even more draconian than the Eleventh Circuit's. It argued that an employee cannot challenge pay discrimination that results from any pay decision outside the 180 days before the complaint was filed.

So to go back to our hypothetical, and adopting the government's view, Jane Roe would be completely unable to sue, even for the January 2006 discriminatory pay decision - since she did not file her charge until November of this year. That would be true even if Jane continued to collect a payment that reflected past discrimination based on her sex - indeed, even if her starting salary was grossly discriminatory, and if the difference continued to infect every single paycheck she collected up until the present.

How much time did Jane have to challenge that crucial initial salary decision? According to the government, only 180 days - and if she failed to do so, then the decision, the government asserts, could continue to affect her salary for the rest of her career, yet she would have no legal remedy.

In sum, the adoption of the Solicitor General's position in this case would be disastrous for women in the workplace - for reasons we will detail further in Part Two.

Joanna Grossman, a FindLaw columnist, is a professor of law at Hofstra University. Her columns on family law, trusts and estates, and discrimination, including sex discrimination and sexual harassment, may be found in the archive of her columns on this site. Deborah Brake is a professor of law at the University of Pittsburgh. Her research focuses on sex discrimination in employment, education, and athletics. Together, Brake and Grossman co-authored an amicus brief in support of the plaintiff in Ledbetter v. Goodyear, which was filed on behalf of the National Partnership for Women and Families and the National Women's Law Center, as well as other interested women's groups.

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