Supreme Court Rules on Timeliness of Title VII Disparate-Treatment Pay Cases

The U.S. Supreme Court’s 5-4 decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., handed down on May 29, 2007, is a significant victory for employers disputing the timeliness of disparate-treatment pay cases under Title VII. The Court held that a plaintiff must file an EEOC charge within the statutory time period (180 days or, in jurisdictions covered by a parallel state or local commission, 300 days) after each alleged discriminatory pay decision is made and communicated to the employee. The EEOC charging period is triggered when a discrete unlawful practice takes place.

In Ledbetter, the plaintiff argued that her EEOC charge was timely despite the fact that it was made years after the alleged discriminatory pay decisions. The specific decisions allegedly leading to the pay discrepancy were denials by her supervisor, on more than one occasion, of pay raises based on poor performance evaluations. The Court held that the discriminatory acts, i.e. denials of pay raises, needed to take place within the charging period in order to be timely. The charge would be considered untimely if the discriminatory acts occurred outside of the charging period even if they had continuing effects lasting into the charging period as she claimed were reflected in her paycheck.

The Court distinguished this fact situation from that in Bazemore v. Friday. In Bazemore, the facts pointed toward a facially discriminatory dual pay structure in which blacks were paid less than whites. The Supreme Court held in Bazemore that when an employer adopts a facially discriminatory pay structure that puts some employees on a lower scale because of race, the employer engages in intentional discrimination each time it issues a check to one of the lower paid employees. The employer who intentionally retains a discriminatory pay structure can be regarded as intending to discriminate as long as that pay structure is used. The Court in Ledbetter found that the pay structure itself was neutral on its face and no evidence was submitted to the contrary. The alleged discrimination was based on the supervisor’s decision, not the performance-pay structure.

The Ledbetter holding appears to be limited to Title VII pay disputes. The Court expressly states that the timeliness standard holding is not applicable to actions under the Equal Pay Act (EPA) because the EPA does not require a plaintiff to prove a discriminatory intent as in Title VII pay disputes. Although the Ledbetter decision protects employers from having to defend decisions made years ago, employers still need to be cognizant of when the employee became aware of the pay decision and of any other possible recent pay decisions that may trigger a new EEOC charging period. It remains to be seen what the practical impact of the holding will be. Some speculate that more charges will be filed by employees fearful of a timeliness bar. Congress has taken interest in the Ledbetter decision as well, conducting hearings on the fairness of the decision and contemplating whether some legislative action is necessary to provide for broader timelines for employees wishing to file charges over pay disputes under Title VII.