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Clock Ticks on Disparate Pay Claims From The First Act of Discrimination

In a highly controversial 5-4 decision handed down last week, the U.S. Supreme Court held that a disparate treatment pay discrimination claim is untimely unless a discriminatory pay-setting decision has been made within the 180 day limitation period immediately prior to the filing of a charge with the EEOC (Equal Employment Opportunity Commission). Thus, a woman who has a valid disparate treatment pay discrimination claim, but does not realize it until many months or years after her pay level has been set, is forever precluded from challenging the unlawful discrimination, even if the discrimination and its effects are ongoing.

In Ledbetter v. Goodyear Tire & Rubber (Case No. 05-1074, May 29, 2007) the issue was whether plaintiff Lily Ledbetter had filed her employment discrimination case within 180 days "after the alleged unlawful employment practice occurred.” Ledbetter worked for Goodyear for almost twenty years. After retiring, she filed a Title VII claim, alleging that supervisors had given her poor evaluations based upon her gender, resulting in reduced pay throughout her career. She argued that her claim was timely because she had received paychecks, within the limitations period, which reflected the lower pay rate that stemmed from the discrimination.

The Supreme Court rejected the argument, holding that there must be an identifiable employment act taken by the employer, with discriminatory intent, during the 180 day period prior to the filing of the EEOC charge. There was no claim that the issuance of each paycheck was undertaken by Goodyear with a discriminatory intent. Rather, the discriminatory intent came with her prior evaluations that were negative because of her gender. Thus, each evaluation and pay-setting decision was a "discrete act" triggering the 180 day limitations period, but the issuance of paychecks thereafter were not such acts. The Court considered, and rejected, application of the continuing violations doctrine that is often appied to hostile work environment claims.

The dissent pointed out that employees often do not know other employees' pay rates, and those who are discriminated against may not learn of the discrimination until long after the discreet discriminatory acts occur. Justice Ruth Bader Ginsburg read the dissent from the bench. The plaintiff has already taken her cause to Congress, which will hold hearings soon to decide whether to amend Title VII to permit such claims to be heard.

Contrary to some misguided descriptions in the media, the decision does not affect claims under the Equal Pay Act, which need not be brought before the EEOC; which are governed by two or three year statutes of limitation (depending upon whether willfulness is proven); and which need not include proof of discriminatory intent.


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