Ledbetter v. Goodyear Tire & Rubber Co., Inc.
2007 U.S. LEXIS 6295, 550 U.S. 618, 167 L. Ed. 2d 982 (2007)
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Rule of Law:
The statute of limitations for a Title VII pay discrimination claim begins to run at the time the discriminatory pay-setting decision is made and communicated, not with each subsequent paycheck that reflects the effects of that past discrimination.
Facts:
- Lilly Ledbetter began working for Goodyear Tire & Rubber Company in 1979 at its plant in Gadsden, Alabama.
- For most of her career, Ledbetter worked as an area manager, a position held almost exclusively by men.
- Goodyear determined raises for salaried employees like Ledbetter based on supervisors' performance evaluations.
- Over many years, Ledbetter received poor performance evaluations that she alleged were motivated by sex discrimination.
- As a result of these evaluations, her pay raises were smaller than those given to her male colleagues.
- By the end of her career in 1998, Ledbetter was being paid significantly less per month than all of her male counterparts with similar or less seniority.
Procedural Posture:
- In March 1998, Lilly Ledbetter submitted a questionnaire to the Equal Employment Opportunity Commission (EEOC) and filed a formal charge in July 1998.
- After taking early retirement, Ledbetter sued Goodyear in the U.S. District Court, alleging, among other things, a Title VII pay discrimination claim.
- A jury at the trial court level found in favor of Ledbetter on her pay discrimination claim and awarded her backpay and damages.
- Goodyear, as appellant, appealed to the U.S. Court of Appeals for the Eleventh Circuit, arguing that Ledbetter's claim was time-barred.
- The Eleventh Circuit reversed the trial court's judgment, holding that a pay discrimination claim could not be based on any pay decisions made outside the 180-day EEOC charging period.
- The U.S. Supreme Court granted Ledbetter's petition for a writ of certiorari.
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Issue:
Does the issuance of a paycheck that is affected by a prior, time-barred discriminatory pay-setting decision constitute a new and separate 'unlawful employment practice' under Title VII, thereby restarting the 180-day statute of limitations for filing an EEOC charge?
Opinions:
Majority - Justice Alito
No. The issuance of a paycheck reflecting a past discriminatory pay decision is not a new unlawful employment practice. A pay-setting decision is a 'discrete act' of discrimination, and the EEOC charging period begins when that discrete act occurs and is communicated to the employee. The Court reasoned that subsequent paychecks are merely the present effects of a past, time-barred discriminatory act, not new violations. This holding is consistent with precedents like United Air Lines, Inc. v. Evans and National Railroad Passenger Corp. v. Morgan, which distinguish between a discrete discriminatory act and its later, continuing effects. To allow a claim based on the present effects of past discrimination would be to 'breathe life into prior, uncharged discrimination' and would undermine the statute of limitations' purpose of protecting employers from stale claims where evidence of discriminatory intent may have faded.
Dissenting - Justice Ginsburg
Yes. Each paycheck that delivers less pay to an employee for a discriminatory reason is a new and actionable wrong under Title VII. The dissent argued that pay discrimination is fundamentally different from discrete acts like termination or failure to promote because it is often cumulative, insidious, and difficult for an employee to detect immediately. Pay disparities accumulate in small increments over time, and employers often keep salary information confidential, preventing employees from realizing they are victims of discrimination. The dissent contended that pay claims have a closer kinship to hostile work environment claims, which are based on the cumulative effect of individual acts. Treating each paycheck as a new violation aligns with the precedent in Bazemore v. Friday and the broad remedial purpose of Title VII.
Analysis:
This decision significantly narrowed the ability of employees to bring pay discrimination claims under Title VII by strictly applying the 'discrete act' rule to pay-setting decisions. It rejected the 'paycheck accrual' theory, placing a substantial burden on employees to quickly identify and challenge any discriminatory pay decision within the short 180-day filing period, even if the full impact of the discrimination is not immediately apparent. The ruling was highly controversial and prompted a direct legislative response. In 2009, Congress passed the Lilly Ledbetter Fair Pay Act, which effectively overturned this decision by amending Title VII to clarify that the statute of limitations for discriminatory compensation claims resets with each new discriminatory paycheck.
