Pay Discrimination Claims Under Title VII of the Civil Rights Act: A Legal Analysis of the Supreme Court's Decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc.

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This report discusses Ledbetter v. Goodyear Tire & Rubber Co., Inc., a case in which the Supreme
Court considered the timeliness of a sex discrimination claim filed under Title VII of the Civil
Rights Act, which prohibits employment discrimination on the basis of race, color, religion, sex,
or national origin. In Ledbetter, the female plaintiff alleged that past sex discrimination had
resulted in lower pay increases and that these past pay decisions continued to affect the amount of
her pay throughout her employment, resulting in a significant pay disparity between her and her
male colleagues by the end of her nearly 20-year career. Under Title VII, a plaintiff is required to
file suit within 180 days after an alleged unlawful employment practice has occurred. Although
the plaintiff in Ledbetter argued that each paycheck she received constituted a new violation of
the statute and therefore reset the clock with regard to filing a claim, the Court rejected this
argument, reasoning that even if employees suffer continuing effects from past discrimination,
their claims are time barred unless filed within the specified number of days of the original
discriminatory act. Legislation that would supercede the Ledbetter decision by amending Title ^th
VII has been introduced in the 111 Congress. One of the bills, H.R. 11, passed the House of
Representatives on January 9, 2009. A companion bill, S. 181, has been introduced in the Senate,
and it has been reported that the chamber will vote on the legislation during the week of January

12, 2009.

Backgr ound ..................................................................................................................................... 1
Title VII and Filing Deadlines for Discrimination Claims..............................................................1
The Supreme Court’s Decision........................................................................................................2
Effect of the Decision......................................................................................................................4
Author Contact Information............................................................................................................5

n June 2007, the Supreme Court issued its decision in Ledbetter v. Goodyear Tire & Rubber ¹
Co., Inc., a case that involved questions about the timeliness of claims filed under Title VII
of the Civil Rights Act, which prohibits discrimination in employment on the basis of race, ²I

color, religion, sex, or national origin. In a 5-4 vote decision, the Court rejected the plaintiff’s
argument that each paycheck she received reflected a lower salary due to past discrimination and
therefore constituted a new violation of the statute. Instead, the Court held that “a new violation
does not occur, and a new charging period does not commence, upon the occurrence of
subsequent nondiscriminatory acts that entail adverse effects resulting from the past ³
discrimination.” As a result, the Court held that the plaintiff had not filed suit in a timely manner.
Although the decision may limit some pay discrimination claims based on Title VII, individuals
may still sue for sex discrimination that results in pay bias under the Equal Pay Act. However, the
Court’s decision may make it more difficult for employees to sue for pay discrimination under
Title VII.

From 1979 until 1998, Lilly Ledbetter worked as a supervisor for the Goodyear Tire & Rubber
Company. Although Ledbetter initially received a salary similar to the salaries paid to her male
colleagues, a pay disparity developed over time. By 1997, the pay disparity between Ledbetter
and her 15 male counterparts had widened considerably, to the point that Ledbetter was paid
$3,727 per month while the lowest paid male colleague received $4,286 per month and the
highest-paid male colleague received $5,236 per month.
In 1998, Ledbetter filed a charge of discrimination with the Equal Employment Opportunity
Commission (EEOC) alleging that Goodyear had unlawfully discriminated against her on the
basis of her sex in violation of Title VII. According to Ledbetter, her current pay was
discriminatorily low due to a long series of decisions reflecting Goodyear’s pervasive
discrimination against female managers in general and Ledbetter in particular. A jury found in her ⁴
favor, and the district court entered judgment for backpay and damages, but the appellate court ⁵
reversed. The Supreme Court granted review in order to resolve disagreement among the
appellate courts regarding the proper application of the time limit for filing claims in Title VII ⁶
disparate treatment pay cases.

Under Title VII, it is an “unlawful employment practice” for an employer to discriminate “against
any individual with respect to his compensation ... because of such individual’s race, color,

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religion, sex, or national origin.”⁷ Individuals who want to challenge an employment practice as
unlawful are required to file a charge with the EEOC within a specified period—either 180 days ⁸
or 300 days, depending on the state—“after the alleged unlawful employment practice occurred.”
The question that arose in the Ledbetter case was how to determine precisely what types of
activities constitute an unlawful employment practice for purposes of starting the clock on the
filing deadline. Ledbetter argued that two different employment practices could qualify as having
occurred within the 180-day charging period preceding the filing of her EEOC claim: (1) the
paychecks that were issued to her during that period, each of which she alleged constituted a
separate act of discrimination, or (2) a 1998 decision denying her a raise, which she contended
was unlawful because it perpetuated the discriminatory pay decisions from previous years. In
contrast, Goodyear argued that Ledbetter’s claim was time barred because the discriminatory acts
that affected her current pay had taken place prior to the 180 days that preceded the claim
Ledbetter filed with the EEOC. The Supreme Court granted review to resolve the dispute.

Ultimately, the Supreme Court ruled in favor of Goodyear, holding that Ledbetter’s suit was time
barred because no unlawfully discriminatory acts had taken place within the 180-day charging
period. In rejecting Ledbetter’s claim on statutory grounds, the Court majority relied heavily on
the principle that Title VII claims alleging disparate treatment require evidence of discriminatory
intent. Because there was no evidence that Goodyear had acted with discriminatory intent when it
issued the paychecks Ledbetter received during the charging period or when the company had
denied her a raise in 1998, the Court found that Goodyear had not engaged in an unlawful
employment practice during the specified time period. As a result, the fact that Ledbetter may
have been suffering from the continuing effects of past discrimination was not sufficient for her to ⁹
establish a claim within the statutorily mandated filing period.
In issuing its decision, the Ledbetter majority relied on a series of precedents in analogous ¹⁰
employment discrimination cases. For example, one such case, United Air Lines, Inc. v. Evans,
involved a female flight attendant who was not granted seniority when she was rehired despite the
fact that she had originally been forced to resign when she got married. Although the Court
agreed that the company’s discriminatory policy had a continuing effect, that effect was not ¹¹
sufficient to establish a present violation. Similarly, in Lorance v. AT&T Technologies, Inc., the
Court rejected a challenge to a discriminatory seniority system because the complaint had been
filed when the discriminatory effect was felt, rather than within the charging period established by
the original discriminatory act, namely the adoption of the seniority system. In light of these and
other precedents, the Court concluded:
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Of primary concern to the Court was the question of discriminatory intent. In general, claims such
as Ledbetter’s, which allege unlawful disparate treatment, must demonstrate discriminatory
intent. According to the Court, allowing Ledbetter to shift the intent associated with the
discriminatory pay decisions to later paychecks would have the effect of imposing liability in the ¹³
absence of the required intent. The Court also appeared concerned that allowing Ledbetter’s
claim to proceed would undermine Title VII enforcement procedures and filing deadlines, which
were designed in part to protect employers from defending against discrimination claims that are
long past. According to the Court, Title VII’s short filing deadline “reflects Congress’ strong
preference for the prompt resolution of employment discrimination allegations through voluntary ¹⁴
conciliation and cooperation.”
The Court also rejected Ledbetter’s reliance on Bazemore v. Friday,¹⁵ a pay discrimination case
involving employees who were, prior to enactment of Title VII, separated into a white branch and
a black branch, with the latter group receiving lower salaries. Although the Bazemore Court held
that an employer who adopts a discriminatory pay structure violates Title VII whenever it issues a
paycheck to disfavored employees, the Ledbetter Court distinguished the two cases, arguing that
the paychecks in Bazemore reflected the employer’s ongoing retention of a discriminatory pay
structure—a current violation of the statute—while the paychecks in Ledbetter reflected the ¹⁶
continuing effect of an isolated, past violation of the statute. Finally, although the EEOC has
interpreted Title VII to allow challenges based on discriminatory pay each time a paycheck is ¹⁷¹⁸
received, the Court declined to defer to the agency’s interpretation.
In contrast, the dissent in Ledbetter strongly disagreed with the majority’s analysis. According to
the dissent, treating the actual payment of a discriminatory wage as an unlawful employment
practice would be more faithful to precedent, would better reflect workplace realities, and would
be more consistent with the overall purpose of Title VII. Specifically, the dissent argued that the
Court’s holding was inconsistent with the result in Bazemore, contending that Bazemore
recognized that paychecks that perpetuate past discrimination constitute a fresh instance of ¹⁹
discrimination every time they are issued. The dissent also drew an analogy between pay
discrimination claims and sexual harassment hostile work environment claims, which involve a
series of discrete acts that recur and are cumulative in impact. Since hostile work environment
claims may be filed even when some of the discrete acts that form the basis for a claim have
taken place outside of the charging period, the dissent would have allowed Ledbetter’s claim to ²⁰
proceed as well.

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The dissent also distinguished pay bias claims from other types of employment discrimination,
arguing that pay discrimination is fundamentally different from other types of employment bias.
For example, employees, who are generally aware when they suffer adverse employment actions
related to promotion, transfer, hiring, or firing, may not know they have suffered pay
discrimination, particularly because salary levels are often hidden from the employee’s view and
pay disparities become apparent only over time. As a result of these differences, the dissent
argued that the precedents upon which the Court relied were inapplicable because those cases ²¹
involved easily identifiable acts of discrimination. Finally, the dissent criticized the majority’s
opinion as inconsistent with the overall anti-discrimination purpose of Title VII.

The Court’s decision in Ledbetter is likely to affect the workplace in several different ways. First,
employees may have a more difficult time bringing pay discrimination claims under Title VII. If
employees bring pay discrimination claims early in order to meet the statutory filing deadline,
they may have difficulty proving discrimination if the pay disparity remains small. If employees
bring pay discrimination claims later, however, then they may not be able to meet the filing
deadline. As a result of this dilemma, employers may experience an increase in pay
discrimination claims being filed against them, since some employees may file claims in order to
meet the deadline even in cases where discrimination is unclear.
It is also important to note that the Ledbetter decision affects more than just pay bias cases
involving sex discrimination. Because Title VII applies to discrimination on the basis of race,
color, national origin, sex, and religion, many other classes of claimants are affected by the
decision. Furthermore, the Ledbetter case may also affect pay discrimination under parallel
employment discrimination statutes that are patterned on Title VII, such as the Age
Discrimination in Employment Act (ADEA), the Rehabilitation Act of 1973, or the Americans
with Disabilities Act (ADA). Employees who file pay discrimination claims alleging race or age
discrimination, for example, may be more negatively affected by the decision than employees
who allege sex discrimination because the latter group still has recourse under the Equal Pay Act
(EPA). The EPA, which prohibits discrimination on the basis of sex with regard to the
compensation paid to men and women for substantially equal work performed in the same ²²
establishment, does contain a statute of limitations for filing claims but has, thus far, been
interpreted in such a way that each issuance of an unequal paycheck is treated as a new ²³
discriminatory act.
In addition, the Ledbetter decision has implications for Congress. Since Ledbetter was decided on
statutory grounds, legislators who disagree with the Court’s interpretation may introduce
legislation clarifying that unlawful employment practices under Title VII include each issuance of
a paycheck that reflects a discriminatory compensation practice. For example, the Lorance
decision, cited as precedent by the Ledbetter majority, was subsequently superceded by Congress ²⁴
in the Civil Rights Act of 1991. After the Ledbetter decision was handed down, several bills that

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would have amended Title VII in light of the opinion were introduced in the 110^th Congress, but
only H.R. 2831, which passed the House in July 2007 but which did not survive an effort to
invoke cloture in the Senate, was the focus of significant legislative action. Currently, two ^th
companion bills—H.R. 11 and S. 181—have been introduced in the 111 Congress. The House
passed H.R. 11 on January 9, 2009, and it has been reported that the Senate will vote on the
legislation during the week of January 12, 2009.
As passed by the House, H.R. 11 would clarify that the time limit for suing employers for pay
discrimination begins each time they issue a paycheck and is not limited to the original
discriminatory action. This change would be applicable not only to Title VII of the Civil Rights
Act, but also to the Age Discrimination in Employment Act (ADEA), the Rehabilitation Act of

1973, and the Americans with Disabilities Act (ADA).

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