Before bringing a discrimination lawsuit against an employer, employees must file a charge with the Equal Employment Opportunity Commission (“EEOC”) within 180 days from the date of the alleged discrimination (300 days if the employee is filing a charge for a violation of both federal and state or local antidiscrimination laws). Question: When an employee claims that the basis for discrimination is wage-related, does the 180-day time period begin to run on the date the employer made the pay-setting decision and communicated it to the employee, or does it begin anew with each paycheck that refl ects the allegedly discriminatory decision? 

The U.S. Supreme Court recently answered this question in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 127 S. Ct. 2162 (2007): the limitations period for filing an EEOC charge of pay discrimination begins to run on the date a discrete discriminatory decision involving pay is made, and does not restart each time the employee receives a paycheck affected by that prior discriminatory act.

Lilly Ledbetter, a Goodyear employee, fi led an EEOC charge of sex discrimination alleging that each paycheck she received carried forward intentionally discriminatory disparities in pay from pay-setting decisions made over the course of her career. She claimed that, after nearly 19 years of service, she was earning less than the lowest-paid man in her department. She argued that each paycheck refl ected the company’s discriminatory intent to pay her less than her male counterparts, and therefore each paycheck she received initiated a new 180-day period to fi le an EEOC charge.

The Supreme Court disagreed, holding that each pay-setting decision is a discrete act, and that the period for filing an EEOC charge begins when that act occurs, and does not renew with each subsequent payment. An EEOC charge, filed after 180 days from the date the allegedly discriminatory pay decision is made and communicated to the employee, is therefore untimely.

Congress is already taking steps to overturn the Ledbetter decision. On July 31, the U.S. House of Representatives passed the Lilly Ledbetter Equal Pay Act of 2007, which would restart the 180-day clock each time a paycheck is issued. On July 20, the U.S. Senate introduced similar legislation in the Fair Pay Restoration Act of 2007.