May 29, 2007

Today the Supreme Court issued one decision of interest to the business community, in which it limited the ability of employees to bring Title VII disparate-treatment pay discrimination claims based on assertions of discrimination that occurred more than 180 days in the past. A full description of the case follows.

Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074 (previously discussed in the June 26, 2006 docket report). Title VII of the Civil Rights Act of 1964 requires that an individual wishing to challenge an allegedly discriminatory employment practice first file a charge with the Equal Employment Opportunity Commission (“EEOC”); the statute also imposes a limitations period, under which a plaintiff generally must file that charge within 180 days of when the “alleged unlawful employment practice occurred.” 42 U.S.C. § 2000e-5(e)(1). Lilly Ledbetter, a former employee of Goodyear Tire, alleged that she received poor work evaluations because of her sex and, therefore, was denied raises to which she was entitled. Ledbetter conceded that those actions took place more than 180 days before her charge was filed with the EEOC. She argued, however, that her charge was timely because she received paychecks within the applicable time period that would have been larger absent discrimination; she contended that each paycheck marked a separate act of discrimination. The Court granted certiorari to decide the proper application of the limitations period in a Title VII disparate-treatment pay case.

With Justice Alito writing for five justices (Ginsburg, Stevens, Souter, and Breyer dissenting), the Court held that the time period for filing a Title VII lawsuit is triggered by a discrete act of alleged intentional discrimination, and that it does not start anew with each subsequent act merely because those subsequent acts “entail adverse effects resulting from the past discrimination.” Only a new “discrete” act of discrimination constitutes a fresh violation that restarts the charging period. Applying this rule to the plaintiff, the Court held that, because she did not claim intentional discrimination during the charging period, her claims were time-barred. “[C]urrent effects [of past discrimination] alone cannot breathe new life into prior, uncharged discrimination.” To hold otherwise, the Court reasoned, would shift discriminatory “intent associated with the prior pay decisions” to “a later act that was not performed with bias or discriminatory motive.”

The majority rejected the dissent’s argument that a pay discrimination claim is like a hostile work environment claim, for which cause to suspect discrimination develops over time. In a hostile work environment, there exists a succession of harassing acts, each typically not actionable on its own; in a pay claim, by contrast, each pay decision is independently identifiable and actionable. The Court thus aligned its approach to pay discrimination claims with its approach to other “discrete” acts of discrimination, such as termination or failure to promote, for which a Title VII plaintiff is required promptly to file and process an EEOC charge. See United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977); Delaware State College v. Ricks, 449 U.S. 250 (1980); Lorance v. AT&T Technologies, Inc., 490 U.S. 900 (1989); National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002). The Court held that the policy of repose is as important in pay discrimination cases as it is in these other cases: Because pay discrimination will usually turn on evidence relating to intent and because “the passage of time may seriously diminish the ability of the parties and the factfinder to reconstruct what actually happened,” courts must actively protect against stale pay claims.

Today’s decision represents a victory for defendants in a wide variety of industries litigating Title VII claims, and will make it more difficult for a plaintiff to plead a disparate treatment complaint on the basis of events occurring outside the 180-day limitations period.