So far only one of the cases on the U.S. Supreme Court
2006-2007 docket directly involves an employment issue,
but it is an important question concerning limits on how
far a court can look into the past to find
discriminatory pay decisions.
Title
VII of the Civil Rights Act of 1964 prohibits employment
discrimination on the basis of race, religion, gender,
and national origin, and requires victims of
discrimination to file a claim within either 180 days or
300 days of the discriminatory act, depending on state
law. But what if the disparate pay is received during
the statutory limitations period, but is the result of
discriminatory pay decisions that occurred outside the
limitations period?
In a suit against the Goodyear Tire & Rubber Co., Lilly
Ledbetter, a floor manager supervising tire production
at a plant in Gadsden, Alabama, alleged that the company
paid her and her female colleagues less than it paid
men. Ledbetter
was hired in 1979 as a supervisor at Goodyear’s tire assembly
department. At that time, her wages the same as those
of Terry Amberson, a male employee working by her side.
But in 1998, Ledbetter discovered her annual salary was
$15,000 less than Amberson’s. In fact, she was being
paid less than all her male counterparts in the tire
assembly department – even recent hires with far less
on-the-job experience.
She filed a sex discrimination charge with the Equal
Employment Opportunity Commission in March 1998 and sued
Goodyear in November 1999. Goodyear claimed that under
the 180 day statute of limitations of Title VII
Ledbetter could only go back 180 days to challenge any
pay decision made. The trial court, however, allowed
Ledbetter to present evidence of discrimination going
back to 1979 and the jury returned a $3.5 million award
(including punitive damages) against Goodyear. The
judge reduced the award to $360,000 and Goodyear
appealed. The appeals court held that Ledbetter could
only go back to her last regular salary review to allege
bias and that decision showed no gender or age bias so
the damage award was thrown out.
It is
now before the Supreme Court to determine whether
employees must file a claim within 180-300 days from the
time when the employees’ salary or wages are set, rather
than from when the employees receive the
discriminatorily low pay. In the Ledbetter case
the court said the claim must be filed within 180-300
days after the employer makes the decision that sets the
employee’s salary or wages, even if the employer
implements that decision in making discriminatorily
small paychecks up to the time of the claim. Other
courts, however, have held that the time for filing a
charge begins to run on the date when the allegedly
discriminatory paycheck is tendered to the employee,
even if the salary decision setting that pay occurred
more than 180 or 300 days before. Under this
interpretation, a new statute of limitations begins to
run each time an employee is tendered a paycheck.
This is
a technical issue but in lawsuits alleging pay
discrimination it makes a huge difference as to how far
the courts can reach back to find and correct
discrimination. If the Supreme Court rules in favor of
the employer here, it will mean that courts may not look
into the distant past to find a discriminatory pay
decision. It will only look at salary decisions made
within the 180 or 300 day time limit (or the decision
just previous to it). On the issue of damages, if the
Court accepts the employer’s argument that the only
thing that is actionable is the decision to set pay,
then the employee could be limited to recovering only
the discrepancy in pay that occurred in the 180 or 300
days before the filing of the lawsuit. This would
severely limit back pay awards.
Cases Refused
The
Supreme Court did decline to hear two cases appealed to
it involving sexual harassment in the workplace. One
case, from Tennessee, involved the standard for
determining employer liability when the harassment is
perpetrated by a co-worker. The other case, from
Georgia, raised the question of whether the alleged
harasser could be held individually liable for his
sexual harassment when he was the company’s president,
sole director, and sole shareholder. The lower court
said no and the Supreme Court turned down the appeal.
For what it’s worth, in both of these sexual harassment
cases which the Court refused to review, the employer
prevailed at the lower level.
If you have
any questions regarding the Pay Discrimination any other human
resources topic, please contact Jack Lipovac at (515)
221-1718 or
lipovacj@hr-onesource.com.
