Ledbetter, Lilly v. Goodyear Tire & Rubber Co. (05/29/2007)

Question presented: Whether a plaintiff asserting a disparate pay claim under Title VII against an employer that periodically reviewed and re-established her pay under a facially neutral compensation system may challenge pay decisions prior to the last decision immediately preceding the start of the statutory limitations period?

By Valerie Dowdle, Medill News Service

Lilly Ledbetter was almost 60 years old and on the verge of retiring when she first caught on that she was being shortchanged at work by what her lawyer called a "good old boys" network.

An anonymous letter turned up out of the blue and revealed to Ledbetter she was making substantially less money than male co-workers at the Goodyear tire plant where she worked.

A federal jury would later find she was owed almost $225,000 in back-pay over her 19-year career.

It was 1979 when Ledbetter was hired as a supervisor at Goodyear's tire assembly department in Gadsden, Alabama. During the first weeks she spent on the job, her wages were exactly on par with those of Terry Amberson, a male employee working by her side.

As in any corporation, Goodyear employees' wages are hush-hush, so Ledbetter didn't know her first paychecks matched her co-workers' paychecks. She just assumed they did.

But by 1998, when the anonymous note turned up, Ledbetter's annual salary was lagging $15,000 behind Amberson's. In fact, she was being paid less than all her male counterparts in the tire assembly department, even recent hires with far less on-the-job experience.

Ledbetter filed a discrimination charge with the Equal Employment Opportunity Commission less than a month after receiving the letter, but it was already too late. Title VII of the 1964 Civil Rights imposes a six-month limitations period on discriminatory acts, preventing her from even bringing the claim to court.

But the fiery mother of two just wasn't content to see the injustice she says she bore go unanswered. In November 1998, Ledbetter filed suit to determine and recoup her losses.

At trial in the Northern District of Alabama, Ledbetter's lawyers emphasized the disparity between her salary and those of males doing the same job. Two female employees took the stand, offering their own tales of woeful wages, further evidence of a gender-related pay gap in the Gadsden plant.

Such a clear difference between the wages of the sexes could only result from intentional discrimination, Ledbetter's lawyers argued.

Goodyear's lawyers countered with evidence that Ledbetter's poor job performance was to blame.

The company, they argued, took pains to prevent prejudice when handing out raises. In 1982, the Gadsden plant implemented a system that made good raises contingent on good work. Each department manager was tasked with annual evaluations of the employees under his or her supervision.

Based on objective performance measurements and with each employee's input, the managers ranked each worker in relation to the others. The managers would then recommend raises for those who deserved them.

In practice, the record showed, all but the bottom of each year's barrel got raises. Consistently ranked among the worst, Ledbetter was skipped over for raises year after year. She was scheduled for lay-offs three times in 10 years.

In 1995, Ledbetter received her biggest raise, a 7.85 percent whopper, thanks to two performance-based awards from the recommending manager. But according to Goodyear, the awards were only granted to hoist her salary to a more respectable level.

And Goodyear had a trump card. Title VII's timely-filing rule meant Ledbetter's evidence was limited to events that took place after Sept. 26, 1997, or 180 days prior to her EEOC charge. The rule is meant to foster quick, efficient claim resolution and protect companies from being slapped with lawsuits from long ago.

Still, Ledbetter prevailed and was awarded nearly $4 million dollars in pay and punitive damages, which the judge reduced to $360,000.

"I was just as good as any of my peers," Ledbetter told the Birmingham News shortly after the verdict was handed down. "I kept believing they would recognize the job performance as it really was and the right thing would be done."

But her vindication did not last. Goodyear appealed, and the 11th Circuit Court of Appeals' unanimous opinion tossed out the award and dismissed Ledbetter's complaint altogether.

Citing the 2002 Supreme Court decision in National Railroad Passenger Corp. v. Morgan, Judge Gerald Tjoflat wrote Ledbetter's Title VII claim must stem from some discriminatory act, either the issuance of an insufficient paycheck or a manager's raise recommendation. Either way, the act had a 180-day expiration date.

Because she filed her initial EEOC complaint in March 1998, her claims before Sept. 26. 1997, were time-barred. Tjoflat concluded two decisions affecting Ledbetter's pay fell within the limitations period, but she had failed to prove at trial that either was guided by gender animus.

Moreover, Tjoflat wrote, individual illegal acts that occurred before the limitations period began cannot be aggregated and introduced to demonstrate intent or to broaden the scope of damages.

Ledbetter's petition for a writ of certiorari was granted on June 26, 2006.

The justices were being asked to decide whether the limitations period for a disparate pay claim can be extended or disregarded.

"The decision below is wrong," argued Ledbetter's lawyers in the petition. "The Title VII limitations period does not provide an employer license to continue pay discrimination in perpetuity whenever an employee fails to immediately challenge the initial pay decisions."

In an amicus brief, the EEOC contended each inadequate paycheck Ledbetter received amounted to a discriminatory act actionable under Title VII, notwithstanding the time limitation.

The controversy arose in the wake of National Railroad Passenger Corp. v. Morgan, a 2002 Title VII case in which the plaintiff brought claims of a hostile work environment. The limitations period had run out, but the Supreme Court carved out an exception.

"Hostile environment claims are different in kind from discrete acts [of discrimination like disparate pay]," Justice Clarence Thomas wrote for the majority. "Their very nature involves repeated conduct."

He went on: "The 'unlawful employment practice' therefore cannot be said to occur on any particular day. It occurs over a series of days or perhaps years and in direct contrast to discrete acts, a single act of harassment may not be actionable on its own."

Before Morgan, the circuits were split on this issue, with a clear majority choosing to allow these retroactive claims.

But Morgan muddied the water. Due to its focus on the aggregation of separate occurrences that are not, on their own, unlawful, it confused whether the aggregation of separate illegal actions can be grounds for a retroactive claim.

In their petition to the Supreme Court, Ledbetter's lawyers pointed to the 2nd and D.C. circuit courts, which considered and rejected the idea that a plaintiff can never bring a Title VII claim based on discriminatory decisions that took place outside the limitations period.

Paul Secunda, an employment law expert and professor at University of Mississippi, believes the Supreme Court will affirm the 11th Circuit judgment.

Secunda said he thinks the Court will require a plaintiff like Ledbetter to state a claim within the time period because "the unlawful employment practice can be said to occur on particular days as opposed to over a series of days or years."

Such an outcome would provide a clear, bright-line rule and help foster judicial efficiency in hearing and disposing of Title VII cases, Secunda explained.

On the other hand, said Secunda, "Such a decision would probably also hamper other interests served by Title VII, such as the eradication of discrimination from society and providing a remedy for those who have actually suffered discrimination."

On May 29, 2007, a divided Supreme Court upheld the 11th Circuit’s decision, finding that the limitations period for a disparate pay claim cannot be extended or disregarded.

“Current effects alone cannot breathe life into prior, uncharged discrimination,” Justice Samuel Alito wrote for the majority.

“Ledbetter should have filed an E.E.O.C. charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. She did not do so, and the paychecks that were issued to her during the 180 days prior to the filing of her E.E.O.C. charge do not provide a basis for overcoming that prior failure.”

While acknowledging that the 180-day deadline is “short by any measure,” Alito reasoned: “This short deadline reflects Congress’s strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation.”

Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy joined Alito in the majority. Justice Ruth Bader Ginsburg, writing for the dissenters, noted: “the ball is in Congress’s court,” and urged lawmakers “to correct this parsimonious reading of Title VII.”

Ginsburg, who was joined by Justices Stephen Breyer, John Paul Stevens and David Souter, expressed her displeasure with the majority’s holding by taking the unusual step of reading the dissenting opinion from the bench.

The majority’s decision “is totally at odds with the robust protection against workplace discrimination Congress intended Title VII to secure,” Ginsburg asserted, adding: “In our view, this court does not comprehend, or is indifferent to, the insidious way in which women can be victims of pay discrimination.”

Professor Secunda of the University of Mississippi criticized the majority opinion and seconded the dissent’s call for legislative clarification.

“This decision is inconsistent with the purposes of the Title VII to both make victims of discrimination whole and to eradicate employment discriminatory practices from society at large,” Secunda noted, adding: “It leads to an absurd situation where employees either must bring pay claims prematurely when there is not enough evidence that there has been unlawful pay discrimination or wait to a later time when there exists more substantial evidence of pay discrimination and be barred from bringing such claims by the statute of limitations.”