Supreme Court Ledbetter Ruling Does Not Relieve Employers From Implementing Equitable Pay Practices

Congress Considers Reversing the Ruling

By Weldon H. Latham, John M. Bryson II and Jennifer Scheessele
[June 2007]

On May 29, 2007, the U.S. Supreme Court ruled on a purely procedural basis that employers are protected from pay-discrimination lawsuits when the claims are based on decisions made beyond the 180-day filing period prescribed in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”). In response to the Court’s limitation on Title VII claims, several members of Congress have announced their intention to introduce legislation repealing the Court’s ruling. Despite the holding, and regardless of any future legislation, employers are still required to ensure equitable pay practices. Employers cannot rely on procedural requirements, but must regularly review and analyze their pay practices and adjust them accordingly to prevent harmful and costly discrimination claims in the first place.

The Facts

The case, Ledbetter v. Goodyear Tire and Rubber Co., 550 U.S. ____ (2007), was brought by Lilly Ledbetter, a female manager at a Goodyear plant. Ledbetter filed a charge in 1998 with the Equal Employment Opportunity Commission (EEOC), asserting, among other claims, a Title VII pay discrimination claim. Under Title VII, a charge must be filed within 180 days after the alleged unlawful practice occurred. 42 U.S.C. § 2000e-5(e)(1).

In her claim, Ledbetter alleged that by the time she retired from Goodyear after 19 years of service, she was paid 15 to 40 percent less than her male counterparts. Ledbetter claimed that in the early 1980s she refused a supervisor’s sexual advances and the supervisor retaliated by providing unfavorable evaluations that led to diminished pay over time. Ledbetter argued that each subsequent paycheck constituted a discriminatory act, by paying her significantly less on the basis of her gender. Goodyear countered that Ledbetter filed her charge beyond the 180-day filing period in relation to the employment decision affecting her pay, and, thus, was precluded from bringing the claim.

The Holding

The Court agreed with Goodyear, holding that an employee must specify a “discrete unlawful practice” within the 180-day time period prescribed in Title VII, rather than pointing to “the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination.” The Court held that while there may have been a discriminatory motive behind the original decision setting her pay, the subsequent payments did not involve a discriminatory intent. Because Ledbetter could not point to a discrete discriminatory practice within the 180 days prior to filing her charge, her claim was time-barred by the express language of the statute.

Reactions and Congressional Response

The decision has created much debate. Proponents argue that the ruling merely enforces the 180-day time limitation imposed by Congress when Title VII was enacted. Critics of the decision, echoing Justice Ginsburg’s dissent, argue that pay discrimination is often a subtle and ongoing form of discrimination that only manifests over time, often well past the original discriminatory act, when subsequent raises are based on the original low pay resulting from the discrimination. Further, most employees do not become aware of a differentiation in pay until well after the 180-day time period has elapsed.

In response to the decision, several members of Congress have said they will introduce legislation that would effectively reverse the Court’s holding. Such legislation would appear to respond to Justice Ginsburg’s advice that “the ball again lies in Congress’ court” to “correct the Court’s parsimonious reading of Title VII.” On June 12, 2007, the House Committee on Education and Labor held a hearing to discuss the impact of the Ledbetter ruling, during which Ms. Ledbetter and other witnesses urged the Committee to redress the ramifications of Ledbetter.

Ruling Does Not Relieve Employers of Equal Pay Mandate

Regardless of the procedural impact of Ledbetter, the ruling does not relieve employers of any obligations to comply with the anti-discrimination and equal pay provisions of federal law, including Title VII, the Equal Pay Act, 29 U.S.C. § 206(d) et seq., and Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981. An employer confronted with any type of pay-discrimination charge is faced with the expense of defending such a charge, as well as the significant damage to its corporate reputation and employee morale, with an ever growing number of females in the workplace.

In today’s increasingly competitive market for talent, corporations are seeking to be “employers of choice” that need to be certain they establish and maintain a fair and equal pay environment. These employers want their employees to know that they will receive raises, promotions, and pay based on merit—not gender or race—to incentivize all employees to perform at their best. Such leading employers know that they cannot rely on appearance or procedural requirements as a safe harbor, as in the Ledbetter case, but must regularly review and analyze their pay practices and adjust them as necessary to avoid the discrimination claims in the first place.

For further information, please contact:

	Weldon H. Latham Washington, D.C. (202) 973-4200 weldonlatham@dwt.com		John M. Bryson II Washington, D.C. (202) 973-4200 johnbryson@dwt.com
	Jennifer Scheessele Washington, D.C. (202) 973-4200 jenniferscheessele@dwt.com

Davis Wright Tremaine has employment and labor lawyers in Alaska, Oregon, Washington state, California and Washington, D.C. We represent many clients nationally. For a specific referral for a DWT employment and labor attorney in your state, please contact an attorney above. Thank you.

Davis Wright Tremaine has employment and labor lawyers in Alaska, Oregon, Washington state, California and Washington, D.C. We represent many clients nationally. For a specific referral for a DWT employment and labor attorney in your state, please contact an attorney above. Thank you.

This advisory is a publication of theCorporate Diversity Counseling Group of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations. Attorney Advertising. Prior results do not guarantee a similar outcome. Thank you.

Copyright © 2007, Davis Wright Tremaine LLP.

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