Lilly Ledbetter, the U.S. Supreme Court, and President Obama

Pamela Kingsley,

$3,843,041.93.This was the initial verdict–including punitive damages–for Lilly Ledbetter in her Title VII lawsuit against former employer, Goodyear Tire & Rubber (See our Winter 2007 Newsletter).Lilly began working for Goodyear in 1979.Her pay was comparable to her male counterparts. When she later received poor performance evaluations because of unlawful gender discrimination, her pay dropped in comparison.When she retired in 1998, her salary was substantially less than her male colleagues.

The United States Supreme Court (the “Court”) ruled, five to four, that Title VII’s timely-filing requirement limited Lilly’s claim to intentional acts of unlawful discrimination that had occurred within the 180-day period before she filed her charge with the Equal Employment Opportunity Commission (“EEOC”).Because the discriminatory acts had occurred over a period of time before the 180-day period, the Court ruled against Lilly.Ledbetter v. The Goodyear Tire & Rubber Co., 550 U.S. 618 (2007).

While a majority of the Court said “no” to Lilly, a majority of the November 4, 2008 voters said “Yes” to later “Lillies” by electing a new Congress and President who could and did change the law.The first bill signed by Barack Obama as President was the Lilly Ledbetter Fair Pay Act of 2009. What does it really mean?Why all the hoopla surrounding the Presidential signing?

The Act’s coverage goes beyond Title VII discrimination (based on an “individual’s race, color, religion, sex, or national origin”).It also applies to “any charge of discrimination under any law,” including disability and age discrimination.Yet the two-year period for which a claimant can recover back-pay remained unchanged by Congress.So where was the change?

The key change is how far back a claimant may go for the requisite act of discrimination.In Lilly’s case, the Court ruled that Lilly’s pay rate during the 180-day period before her EEOC claim was “facially nondiscriminatory and neutrally applied,” even if it was influenced by unlawful discrimination that had occurred years before.Changing that, the new law provides that

an unlawful employment practice occurs . . . when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

42 U.S.C. S 2000e-5(e)(3)(A) (emphasis added).Thus, each time a disparate paycheck issues that is traceable to an intentional act of unlawful discrimination, no matter how far back, the 180-day clock resets.

Because an employee can still recover for only two years of back-pay, some employers may feel comfortable with a little discrimination “here and there.”But—just as I had cautioned back in 2007—laws change.Coupled with the new Administration’s actions in bolstering enforcement and prosecution, employers need to be vigilant in assessing their policies, as written and practiced.