On May 29, 2007 the US Supreme Court held that courts cannot consider claims of discriminatory pay based on decisions that occurred prior to the deadline to file a charge with the Equal Employment Opportunity Commission (EEOC).

In Ledbetter v. Goodyear Tire & Rubber Co., Inc., Lilly Ledbetter began working as a supervisor in Goodyear's Gadsden, Alabama plant in 1979. Goodyear increased managerial salaries through annual merit-based raises using supervisor recommendations. Ms. Ledbetter alleged that in the 1980s and early '90s, her supervisor gave her poor evaluations based upon her gender and her rejection of his sexual advances, and that consequent pay decisions led to her lower salary. She claimed that these decisions resulted in her being the lowest paid manager at the time she filed her EEOC questionnaire in March 1998. She alleged that she was receiving less pay than the 15 other area managers, all of whom were male, with the lowest-paid male earning 15 percent more than she.

Ms. Ledbetter's last salary review was in February 1998, at which time she was denied an increase. She did not allege that the decision to deny her an increase in 1998 was based upon gender discrimination; rather, she claimed that the disparate pay she was receiving was the result of intentionally discriminatory pay decisions that occurred outside the limitation period and that each paycheck was a new act of discrimination, as it carried forward the effects of prior discriminatory decisions.

For Title VII discrimination claims to be timely, the claimant must file an EEOC charge within 180 days (or 300 days in states that provide for dual filing of charges) after the alleged unlawful practice occurred. Goodyear argued Ms. Ledbetter could sue only on discrete pay-related decisions made within the 180 days prior to filing the charge. In a 5-4 decision, the Supreme Court agreed with Goodyear, rejecting Ms. Ledbetter's argument that Goodyear's nondiscriminatory conduct during the 180-day charging period gave present effect to discriminatory conduct outside of that period. By strictly construing the statute of limitations period for bringing charges of pay discrimination, the Supreme Court recognized the employer's need for prompt notice of charges of discrimination in order to be able to adequately investigate and respond to charges. The Court emphasized that disparate treatment claims require evidence of discriminatory intent. As there was no allegation of a discrete occurrence of discriminatory intent during the period for filing a charge, the Court refused to bootstrap prior unlawful acts that were not pursued in a timely way.

The Court's decision has spurred a reaction on Capitol Hill, with several Congressional Democrats vowing to propose legislation that will establish an extended timeline for filing of pay discrimination charges. The decision may motivate employees to commence litigation in state court under state law, where states have more favorable limitation periods, avoiding federal court and Title VII