Lilly M. Ledbetter v. Goodyear Tire & Rubber
88 Empl. Prac. Dec. (CCH) 42,411, 421 F. 3d 1169, 98 Fair Empl. Prac. Cas. (BNA) 418 (2005)
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Rule of Law:
Under Title VII, a disparate pay claim requires a plaintiff to prove a discrete, intentionally discriminatory pay-setting decision occurred within the 180-day statutory filing period. The continued issuance of paychecks that are merely the effects of past, time-barred discriminatory decisions does not constitute a new, actionable violation for each paycheck received.
Facts:
- Lilly Ledbetter began working as a supervisor for Goodyear Tire and Rubber Company in 1979 at its Gadsden, Alabama, plant.
- Goodyear determined managerial salaries through an annual merit-based review system where supervisors would rank their employees and recommend raises.
- Throughout her career, particularly from 1992 to 1996, Ledbetter's supervisor, Mike Tucker, consistently gave her poor performance rankings compared to her male peers.
- These lower rankings resulted in Ledbetter receiving smaller pay raises than her male colleagues over many years.
- Ledbetter's last pay raise was in December 1995, setting her monthly salary at $3,727.
- By the end of 1997, Ledbetter was earning significantly less than all fifteen male Area Managers in her unit; the lowest-paid male earned 15% more, and the highest-paid earned 40% more.
- In early 1998, a new manager, Kelly Owen, decided not to give Ledbetter a raise for 1997 performance, ranking her near the bottom of her peers. Three low-ranking male managers were also denied raises.
Procedural Posture:
- Lilly Ledbetter filed an EEOC questionnaire on March 25, 1998, and a formal charge in July 1998, alleging sex-based pay discrimination.
- On November 24, 1999, Ledbetter sued Goodyear in the U.S. District Court for the Northern District of Alabama for violations of Title VII and other statutes.
- At trial, a jury returned a verdict in favor of Ledbetter on her Title VII disparate pay claim, recommending backpay and awarding compensatory and punitive damages.
- Goodyear renewed its motion for judgment as a matter of law, arguing Ledbetter's claim was time-barred because she presented no evidence of discriminatory intent within the 180-day EEOC filing period.
- The district court denied Goodyear's motion but remitted the total award to $360,000, which Ledbetter accepted.
- Goodyear, as appellant, appealed the district court's denial of its motion for judgment as a matter of law to the U.S. Court of Appeals for the Eleventh Circuit.
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Issue:
Does a Title VII pay discrimination claim require proof of an intentionally discriminatory pay-setting decision within the 180-day statutory limitations period, or is the continued receipt of paychecks reflecting past discrimination sufficient to make the claim timely?
Opinions:
Majority - Tjoflat
Yes, a Title VII pay discrimination claim requires proof of an intentionally discriminatory pay-setting decision within the 180-day limitations period. The Supreme Court's decision in National Railroad Passenger Corp. v. Morgan established that pay-setting decisions are 'discrete discriminatory acts,' each of which starts a new clock for filing a charge. The continuing violation doctrine does not apply to discrete acts, meaning the mere receipt of paychecks reflecting a past discriminatory decision does not render a claim timely. Therefore, a plaintiff cannot challenge pay decisions made outside the limitations period. The court determined that Ledbetter could only challenge the two pay decisions proximate to her EEOC filing: the 1997 decision not to consider her for a raise and the 1998 decision to deny her a raise. The court found no reasonable jury could conclude either of these specific decisions was motivated by sex discrimination, as Goodyear provided legitimate, non-discriminatory reasons for both (an impending layoff for the 1997 decision and poor performance rankings for the 1998 decision) which Ledbetter failed to prove were pretextual.
Analysis:
This decision significantly narrowed the scope for bringing timely pay discrimination claims under Title VII by rejecting the 'paycheck accrual' rule, which treated each paycheck as a new discriminatory act. It shifted the focus from the ongoing effects of pay disparity to the discrete, underlying pay-setting decision, placing a heavy burden on employees to recognize and challenge discriminatory pay decisions within the short 180-day window. This ruling created a circuit split and was highly controversial, as pay disparities often become apparent only over a longer period. The decision was ultimately reversed by the U.S. Supreme Court, and that reversal subsequently led to the enactment of the Lilly Ledbetter Fair Pay Act of 2009.
