The Supreme Court's Ledbetter Decision Narrows the Time Frame for Employee Wage Discrimination Complaints, While the EEOC Issues Expansive Guidelines on the Treatment of Caregivers

Supreme Court Refuses to "Breathe Life" Into Stale, Uncharged Discrimination Claims

In a 5-4 decision, the United States Supreme Court held that the lasting effects of past discrimination are insufficient to "restart the clock" for filing an EEOC charge, thereby eliminating the possibility of employees filing pay discrimination claims against their employers based on pay decisions that were made years ago. In the case of Ledbetter v. Goodyear Tire and Rubber Co., the Court strictly construed the 180-day time limit that employees have to bring pay discrimination claims under Title VII of the Civil Rights Act of 1964, which, according to Supreme Court Justice Ruth Bader Ginsburg — author of the dissenting opinion — effectively "immunize[s] forever discriminatory pay differentials unchallenged within 180 days of their adoption."

Factual Background and History of the Case

Lilly Ledbetter began her career with Goodyear Tire and Rubber at its Gadsden, Alabama, plant in 1979, working as a Production Supervisor. In 1985, Ledbetter was promoted to Area Manager, a position she maintained until 1998. In November 1998, Ledbetter accepted an offer of early retirement. Several months prior to her retirement, on March 25, 1998, Ledbetter filed a charge of discrimination with the EEOC, alleging that she was paid substantially less than her male counterparts for the same type of work because of sex discrimination. Once she received her right-to-sue letter from the EEOC, Ledbetter filed a lawsuit against Goodyear in the United States District Court for the Northern District of Alabama.

Evidence presented at trial by Ledbetter showed that in 1997 she was the only woman working as an Area Manager and her salary was less than the lowest paid male in the same job and department. While Goodyear did not dispute the fact that Ledbetter had been paid less than men doing the same work at the plant, it argued that her salary was the result of the company's neutral, performance-based merit system. During her employment with Goodyear, salaried employees at the plant were given or denied raises based on annual performance evaluations, which were based on certain production data, subjective impressions of the employee's work and reports by performance auditors. Ledbetter asserted that her performance rankings did not accurately reflect the true quality of her work.

At trial, Ledbetter alleged that several of her supervisors from the past had given her poor work evaluations because she was female, and as a result, her pay had not increased as much as it would have had she been evaluated in a nondiscriminatory manner. For instance, she testified that early in her career her direct supervisor threatened to give her poor evaluations if she did not yield to his sexual advances. The same supervisor continued to ask her out, and when she finally told him no, her evaluations got worse, which ultimately affected any potential pay increases.

After deliberations, the jury returned a verdict in favor of Ledbetter, finding that she had been paid an unequal salary because of her sex. The jury awarded Ledbetter over $3.5 million in damages: $223,776 in backpay, $4,662 for mental anguish and $3,285,979 in punitive damages. Goodyear challenged the District Court's judgment in an appeal to the U.S. Court of Appeals for the Eleventh Circuit, arguing that Ledbetter's EEOC charge had not been filed in accordance with the time limitations established by Title VII.

Title VII provides that it is unlawful to discriminate "against any individual with respect to his compensation . . . because of such individual's . . . sex." An individual wishing to challenge an employment practice under this provision, however, must first file a charge with the EEOC. Such a charge must be filed within 180 days "after the alleged unlawful employment practice occurred" (this period is typically extended to 300 days where the employee "dual files" a charge with the EEOC and a state or local EEO agency). If the employee does not submit a timely EEOC charge, then the employee may not challenge that practice in court. The Eleventh Circuit reversed the judgment of the District Court, holding that Ledbetter could only challenge discriminatory pay decisions that were made within the 180-day limitations period established by Title VII, and the evidence presented by Ledbetter failed to prove that Goodyear acted with discriminatory intent in making the only two pay decisions that occurred within that period.

The Supreme Court's Decision

Following the Eleventh Circuit's decision, Ledbetter sought relief from the Supreme Court, presenting the following issue for review:

Whether and under what circumstances a plaintiff may bring an action under Title VII alleging illegal pay discrimination when the disparate pay is received during the statutory limitations period, but is the result of intentionally discriminatory pay decisions that occurred outside the limitations period.

At the outset of its analysis, the Court stressed the importance of "identifying with care" the specific discriminatory practice at issue that serves to trigger the time delay for the employee to file her claim with the EEOC. Ledbetter conceded that if the unlawful employment practice in a disparate pay case is the pay-setting decision (and only that decision), then the violation occurs at the time of that decision and the limitations period runs from that date. However, she argued that each paycheck she received that was lower than it otherwise would have been because of her sex is a discriminatory act as defined by Title VII, even if the sex-based disparity was caused by a decision that was made years earlier.

The Court rejected Ledbetter's argument, stating that if it accepted her reasoning, it would have to "jettison the defining element of the legal claim on which her Title VII recovery was based," i.e., discriminatory intent. Ledbetter did not assert that the relevant Goodyear decision makers acted with actual discriminatory intent when they issued her checks during the 180 days before she filed her charge or when they denied her a raise in 1998. Instead, she maintained that the discriminatory acts that occurred in the past had continuing effects that served to perpetuate the consequences of forbidden conduct and make her EEOC charge timely.

Quoting one of its earlier opinions, the Court reiterated that "[a] discriminatory act which is not made the basis for a timely charge . . . is merely an unfortunate event in history which has no present legal consequences." The Court explained that Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. However, she failed to do so, and the Court held that the paychecks that were issued to her during the 180-day period prior to her filing her EEOC charge were insufficient to "shift intent from one act (the act that consummates the discriminatory employment act) to a later act that was not performed with bias or discriminatory motive." Thus, the Court affirmed the Eleventh Circuit's judgment.

What This Means for Employers

The Ledbetter decision is certainly a positive ruling for employers across the nation. Employers may take comfort in the fact that the Court effectively eliminated the possibility of employees relying on Title VII to resurrect old pay decisions alleged to be discriminatory on the theory that each paycheck starts the statute of limitations anew. However, because the statute of limitations under the Federal Equal Pay Act is two years (three years if willful) and many states' human rights laws have substantially longer statutes of limitation, employers still should be vigilant about ensuring fair pay practices as plaintiffs will be able to pursue similar claims under other statutory schemes.

EEOC Guidance on Caregiving

On May 23, 2007, the federal Equal Employment Opportunity Commission ("EEOC") released its Enforcement Guidance entitled "Enforcement Guidance: Unlawful Disparate Treatment of Workers with Caregiving Responsibilities." Though the Guidance is not binding law, it is relied upon and considered persuasive by the EEOC, state human rights agencies, and many state and federal courts. The new Guidance became effective immediately upon its release on May 23.

In the introduction of the new Guidance, the EEOC notes that workers who have caregiving responsibilities may be subjected to harassment and to disparate treatment discrimination in the workplace. The Guidance states that the EEOC is not creating a new protected category of workers, but rather is providing examples of situations in which the treatment of a caregiving employee may violate existing antidiscrimination laws — in particular, Title VII of the Civil Rights Act of 1964 ("Title VII") and the Americans with Disabilities Act of 1990 ("ADA").

The Guidance provides examples of six discrete categories of circumstances in which an employer's treatment of a caregiving worker may violate Title VII or the ADA, including:

  1. Disparate treatment of female caregivers, based on sex-based stereotypes;
  2. Disparate treatment and stereotyping of pregnant workers;
  3. Disparate treatment of male caregivers, based on sex-based stereotypes;
  4. Disparate treatment of women of color who are caregivers;
  5. Disparate treatment of a worker who has caregiving responsibilities for an individual with a disability; and
  6. Harassment resulting in a hostile work environment for a worker who has caregiving responsibilities.

The Guidance notes that determining whether a challenged action constitutes unlawful disparate treatment of a female caregiver based on her gender will depend upon the "totality of the evidence," all of which must be viewed in context. Examples of relevant evidence in this analysis include, but are not limited to:

  • Any disparities in treatment between female workers with caregiving responsibilities, and those without caregiving responsibilities or males with caregiving responsibilities;
  • Whether male caregivers received more favorable treatment than female caregivers;
  • Disparate treatment of pregnant workers evidenced by statistics or changes in their working conditions; or
  • Whether the employer's action deviated from its standard practice or internal policy.

The Guidance provides several examples of situations in which it would conclude that the employer had violated the law. Many of the situations involve the employer's use of stereotypes in making a decision. For example, assuming that a married woman has, or will have children, and will therefore become a caregiver is a stereotypical assumption. If the employer chooses not to hire her for that reason, but hires males who are married, there could be a violation of Title VII, based on gender. The Guidance also discusses stereotyped assumptions about a caregiver's work performance, dedication, availability, and the like. The EEOC notes that even "benevolent" stereotyping is unlawful — for example, assuming that a working mother would not be willing to relocate to another city, even though the move would be a promotion.

In discussing disparate treatment of pregnant workers, the EEOC notes that a woman should not be forced to choose between having a child and having a job. Pregnancy-related inquiries in the hiring process, assumptions about a pregnant employee's ability to do the job, or pregnancy testing as part of the hiring process are all improper behaviors. An employer's stereotyped assumptions about a pregnant employee's dependability and its refusal to make modifications to a pregnant employee's job duties are examples of unlawful discrimination against pregnant workers.

Discussing disparate treatment of male workers with caregiving responsibilities, the EEOC notes that the stereotype is often a presumption that males do not have as many domestic responsibilities as do their female counterparts. An employer's denial of part-time work or a parental leave to a male caregiver, when such schedules or leaves have been allowed for female caregivers, may constitute disparate treatment of a male caregiver based on his gender, if the denial was motivated in whole or in part by stereotypes about males who work part time or take childcare leaves (e.g., less dedicated, less ambitious).

In discussing the disparate treatment of women of color with caregiving duties, the EEOC focuses on disparities between the way they are treated in comparison to other caregiving employees.

As many employers know, the ADA prohibits discrimination against a person with a disability, who has a history of having had a disability, who is perceived as having a disability, and who is associated with a person with a disability. The latter category is the one specifically addressed in this new Guidance. An employer that refuses to hire a person because his/her spouse is disabled and the employer assumes that the individual would have to use frequent leave would likely violate the ADA.

The discussion of hostile work environment harassment focuses on the employer's discriminatory treatment of workers with caregiving responsibilities. Berating such a person for fulfilling his/her duties, complaining that such duties put too much of a burden on others, and similar comments may ultimately be severe and pervasive enough to create a hostile work environment. Requiring the caregiving employee to follow procedures not applicable to non-caregiving employees may be discriminatory and, if severe enough, harassment.

The overriding message of the Guidance is that employers must not engage in stereotypical thinking in the treatment of caregiving candidates and employees. The Guidance emphasizes that the EEOC will consider "all relevant evidence" and that there does not need to be any direct evidence of employer animosity toward caregivers. It is a fact that in some situations, the caregiving responsibilities of an employee do impact his or her employer. However, before employers take any action to address the impact that the caregiving is having on the workplace, they may want to analyze the proposed action and motivations to ensure that they do not violate Title VII and/or the ADA.

The Guidance is available for viewing at http://www.eeoc.gov/policy/docs/caregiving.html.