Supreme Court Wrestles With Pay Discrimination Time Frame

A pay discrimination case facing the U.S. Supreme Court may hinge on whether justices decide that a worker can sue an employer for many years of unfair wages—a cumulative-effect approach that would treat pay suits similarly to suits involving sexual harassment.

On November 27, the court heard a case involving Lilly Ledbetter, a former floor manager at a Goodyear Tire & Rubber Co. plant in Gadsen, Alabama. Ledbetter, who worked for Goodyear from 1979 to 1998, is suing the manufacturer for paying her substantially less than it paid men for performing the same work.

Ledbetter filed a charge with the Equal Employment Opportunity Commission on March 25, 1998. Alleging that the discriminatory practices dated to the beginning of her tenure, she sought a ruling against the company for pay disparity that had accumulated over decades.

Such a time frame is far beyond the 180-day statute of limitations for a Title VII case. Goodyear argued that it should not be liable for any pay discrimination unless it occurs within the statute window.

A trial jury sided with Ledbetter, who was eventually awarded $360,000. But the 11th U.S. Circuit Court of Appeals in Atlanta overturned the verdict, citing the 180-day limitation.

The way the Supreme Court rules on the case may come down to whether pay discrimination can be assessed over a number of years, in much the same way a judgment can be made about a negative work atmosphere that fosters sexual harassment.

“Do you put it in the box with the hostile environment that builds up over time, and as long as the environment is hostile at the time you bring your complaint, then it doesn’t matter that it started 20 years ago?” said Justice Ruth Bader Ginsburg. “This notion of one year [a raise is] 2 percent, and the other person got 3 percent, you don’t really have an effective claim unless it builds up to the point where there is noticeable disparity.”

Justice Samuel Alito asked Ledbetter attorney Kevin Russell whether it was necessary to show that a company intended to discriminate when a paycheck was issued during the 180-day EEOC charge period.

“No,” Russell said. “The execution of a prior discriminatory decision constitutes a present violation of Title VII.” Russell said companies are responsible for knowing whether they have been giving disparate pay based on an employee’s sex.

The attorney representing Goodyear argued that courts have ruled a claim of intentional discrimination is limited to a 180-day time frame in which a case is filed.

“No one at Goodyear took Miss Ledbetter’s sex into account during the charge filing period in deciding what to pay her,” said Glen Nager, Goodyear’s counsel. “What Goodyear did was it said, ‘We are looking at the pay rate contained in our payroll system and applying those rates as they are mandated for all our employees, male or female.’ “

But Ledbetter says the payroll system was skewed against women—something she didn’t discover until she received a copy of Goodyear’s pay scales anonymously in the mail.

“I’m very disappointed a large company would do this,” she told reporters after the oral argument. “I didn’t have any idea I was getting paid so much less. Once [pay] gets out of line, you can never get it back in line, which I learned much too late.”

An employment lawyer says companies must keep payroll records for one year or so, depending on the statute. If plaintiffs can reach back decades to make pay discrimination claims, it would put the company at a disadvantage in gathering evidence and witnesses to defend itself.

“The rationale and documentation behind those decisions may be long gone,” says Debra Friedman, an attorney with Cozen O’Connor in Philadelphia. “Employers are in a position of having to defend against stale claims.”

If the lawsuit clock can be turned back to when an original discriminatory decision was made, long before the 180-day limitation, companies might face big costs.

“It could open the floodgates for long-term employees to bring pay claims,” Friedman says.