In a 5-4 decision issued this week, the Supreme Court declined to afford special treatment to Title VII disparate treatment pay discrimination claims, insisting instead that such claims are time-barred unless they are based on intentionally discriminatory pay decisions that occurred no more than 180 days (300 days in some states) prior to the filing of the EEOC charge. See Ledbetter v. Goodyear Tire & Rubber Co., ___ U.S. ___ (2007) (available at 2007 WL 1528298). The mere act of issuing a paycheck does not constitute a separate chargeable violation, even if that paycheck gives present effect to past discrimination, because “current effects alone cannot breathe life into prior, uncharged discrimination,” the Court held. Slip op. at 9.

Title VII of the Civil Rights Act of 1964 makes it an “unlawful employment practice” to discriminate “against any individual with respect to his compensation … because of such individual’s … sex.” 42 U.S.C. §2000e-2(a)(1). An individual asserting a claim under this provision must first file a charge with the Equal Employment Opportunity Commission (“EEOC”) within a specified period (either 180 or 300 days, depending on the state) from the date of the alleged discrimination. 42 U.S.C. §2000e–5(e)(1). Failure to file a timely EEOC charge bars the employee from challenging that practice in court. 42 U.S.C. §2000e–5(f)(1).

Lilly Ledbetter was employed by Goodyear from 1979 through 1998. In 1998, Ledbetter filed a formal charge of sex discrimination with the EEOC, alleging that Goodyear had discriminated against her throughout her employment by paying her less than her male colleagues. She asserted that she had received several poor performance evaluations during her employment because of her sex, and that those discriminatory evaluations were used to determine her rate of pay, pursuant to Goodyear’s performance-based pay system. The district court allowed Ledbetter’s Title VII claim to proceed to trial, where the jury awarded her backpay for her entire employment period, compensatory damages, and punitive damages. The Eleventh Circuit Court of Appeals reversed on the ground that Ledbetter’s Title VII claim was time-barred, because the alleged discriminatory pay decisions had occurred more than 180 days before Ledbetter had filed her EEOC charge. The Supreme Court granted certiorari to resolve a split among the Courts of Appeals as to the application of Title VII’s limitations period to disparate-treatment pay cases.

Justice Alito, writing for the majority, noted that Ledbetter did not contend that Goodyear had acted with discriminatory intent within the charging period (i.e., within 180 days of the filing of her 1998 charge). The discriminatory acts in Ledbetter’s case were the gender-based poor evaluations, and it was undisputed that she never filed a charge of discrimination within 180 days of any of the discriminatory evaluations that she claimed led to her lower pay. The Court flatly rejected Ledbetter’s argument that the allegedly discriminatory pay decisions outside the charging period were given “present effect” by the issuance of current paychecks reflecting her lower rate of pay: The EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination.1

Slip op. at 8–9 (relying on Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002); Lorance v AT&T Tech., Inc., 490 U.S. 900 (1989); Delaware State College v. Ricks, 449 U.S. 250 (1980); United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977)).

The Court further explained that to shift the alleged discriminatory intent from Goodyear’s earlier pay decisions to its later, facially neutral conduct in applying the performance-based pay system would be to “effectively eliminate the defining element of [Ledbetter’s] disparate-treatment claim,” and would defeat Congress’s clear intent to promote “voluntary conciliation and cooperation” in discrimination cases by adopting a short limitations period. Slip op. at 10–11.

In reaching its conclusion, the Court distinguished its decision in Bazemore v. Friday, 478 U.S. 385 (1986), and disagreed with the EEOC’s interpretation of that decision. Slip op. at 13–16, 23–24 n.11. While Ledbetter argued that Bazemore had adopted a “paycheck accrual rule” in pay discrimination cases, the Court explained that Bazemore involved a facially discriminatory pay structure that paid some employees less than others because of their race; thus, the employer engaged in a new act of intentional discrimination each time it issued a paycheck based on that racially discriminatory pay structure. 2 Ledbetter, slip op. at 13–16.

In dissent, Justice Ginsburg urged that pay discrimination cases should be viewed differently because “[p]ay disparities often occur, as they did in Ledbetter’s case, in small increments; cause to suspect that discrimination is at work develops only over time.” Dissent at 2–3. In response, Justice Alito wrote that “what Ledbetter alleged was not a single wrong consisting of a succession of acts. Instead she alleged a series of discrete discriminatory acts, . . . each of which was independently identifiable and actionable, . . . [and] a timely EEOC charge must be filed with respect to each discrete alleged violation.” Slip op. at 19–20 (emphasis in original).