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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:
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 the Employer Services Department of Davis
Wright Tremaine LLP. Our purpose in publishing this advisory
is to inform our clients and friends of recent developments
in employment law. 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.
Copyright
© 2007, Davis Wright Tremaine LLP.
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