In a five-four decision, Ledbetter v. Goodyear Tire & Rubber Co., Inc., 127 S.Ct. 2162 (May 29, 2007), the United States Supreme Court held that Title VII’s statute of limitations to file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) begins to run when a discriminatory pay decision is made and communicated to the employee and that it does not restart each time a subsequent paycheck is issued. The Supreme Court enforced the 180 day period for Ledbetter to file a charge of discrimination with the EEOC, a prerequisite to filing a Title VII lawsuit, and dismissed her sex discrimination claims as untimely. (Note: The time period to file a charge with the EEOC is either 180 or 300 days depending on corresponding state legislation).
Lilly Ledbetter brought a lawsuit alleging that several of her supervisors had in the past discriminated against her based on her gender by giving her poor evaluations which precluded her from receiving the salary increases she would have received if she received fair evaluations. By the end of her employment, her salary was substantially less than her male coworkers. After a trial on the merits, a jury found in Ledbetter’s favor despite Goodyear’s claim that the performance evaluations and resulting raises were non-discriminatory. On appeal to the Eleventh Circuit Court of Appeals, Goodyear argued that all of Ledbetter’s claims were time-barred to the extent that the pay decisions were made more than 180 days prior to her EEOC charge. The Eleventh Circuit agreed with Goodyear and reversed the jury award holding that a Title VII pay discrimination claim cannot be based on allegedly discriminatory events that occurred before the last pay decision which affected employee’s pay during the EEOC charging period, and also concluded that there was insufficient evidence to prove that Goodyear had acted with discriminatory intent in making the two pay decisions within the statute of limitations. Ledbetter appealed to the Supreme Court.
In the Ledbetter decision, the Supreme Court expanded its earlier holding in National Railroad Passenger Corporation v. Morgan, 536 U.S. 101, 114 (2002), which held that the time for filing a charge with the EEOC begins when the discriminatory act occurs. In Morgan, the Court explained that discrete acts of discrimination include termination, failure to promote, denial of transfer, and refusal to hire, and that the statute of limitations begins to run when these discrete acts occur. The Morgan Court distinguished these discrete acts from hostile working environment claims where a plaintiff may include conduct which occurred outside of the statute of limitation under the continuing violation theory as long as part of the conduct which makes up the hostile work environment claim occurred within the statute of limitations period. Ledbetter expands the Morgan ruling to hold that a "pay-setting" decision is a discrete act that occurs at a particular point in time and starts the clock on the statute of limitations. The Court rejected Ledbetter’s argument that clock should restart because the discriminatory pay decision has continuing effects each time a paycheck is issued to the employee. The Court explained, "[a] new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent non-discriminatory acts that entail adverse effects resulting from past discrimination." Ledbetter, 125 S.Ct. at 2169. Ledbetter did not file a charge over the alleged discriminatory pay decision within 180 days of the pay decision, and the fact that paychecks were issued to her during the 180 days "cannot breathe life into prior, uncharged discrimination."
In response to the decision, several members of Congress have announced an intent to introduce legislation that would reverse the effects of the Court’s decision.
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