Recap: Ledbetter v. Goodyear on 11/27

The following argument recap was written by Rae Woods of the Stanford Supreme Court Litigation Clinic. Her preview of this case is here.

On Monday, the Supreme Court heard argument in Ledbetter v. Goodyear Tire and Rubber Co. (No. 05-1074). The question presented in Ledbetter is whether and under what circumstances a plaintiff may bring an action under Title VII of the Civil Rights Act of 1964 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. Petitioner Lilly M. Ledbetter contends that the statutory time period for bringing a claim begins anew each time the employee receives a paycheck based on an prior discriminatory decision, while respondent Goodyear Tire and Rubber Company argues that the statutory time period ends 180 days after the original intentionally discriminatory pay decision is made.

Kevin Russell of Howe & Russell argued on behalf of petitioner. Justices Kennedy and Scalia began by asking Mr. Russell why pay decisions should be treated differently than promotion decisions. Justice Scalia viewed the underlying message for both decisions to be the same: “you’re not going to be moved up to a higher pay level.” Mr. Russell responded that promotions are distinguishable because an employee knows immediately that someone was chosen over her and can determine whether sex discrimination played a role in the decision, while it is difficult for an employee to know how her pay compares to that of her colleagues. Justice Ginsburg, who strongly supported petitioner during the argument, also added, “you really don’t have an effective [disparate pay] claim unless it builds up to the point where there is a noticeable disparity.”

Justice Breyer revealed his apparent support for petitioner early through questions intended to clarify that Ledbetter’s back-pay damages would still be limited by the statute to two years. As he put it, “it isn’t going to open up tremendous liability for fifteen or twenty years” of wrongful acts.

Despite the statutory restriction on damages, Chief Justice Roberts and Justice Alito were clearly troubled at the idea of hauling employers into court to litigate pay decisions that occurred decades earlier, without their knowledge, simply because they issued a paycheck to an employee who had been discriminated against in the past. Justice Alito asked whether present intent to discriminate was necessary. When Mr. Russell explained that it was not necessary because “[t]he execution of a prior discriminatory decision constitutes a present violation,” Chief Justice Roberts posed a hypothetical in which an employee waited fifteen years to file a claim based on one discriminatory pay decision that had “a ripple effect into the current 180-day period.” Mr. Russell told Chief Justice Roberts that such a claim would indeed be timely under those circumstances, though the employer would also have “an awfully good laches defense.” The Chief Justice countered with a new hypothetical in which the discriminatory act was committed forty years prior but the employee just discovered it, thereby destroying the employer’s laches defense.

Justice Kennedy focused on agency issues – that is, a scenario in which a change in ownership of the company resulted in employer B unknowingly continuing the pay disparity originally set in motion by employer A. Justice Alito also appeared concerned on this issue, questioning whether Title VII would be violated by an employer who did not “periodically review[] the entire pay record of every employee to make sure that there has never been an uncomplained [sic] of act of discrimination at any point in the past that would have a continuing present effect on the amount of money that the employee is paid.” Mr. Russell responded that failure to do so would not constitute a violation, although he admitted employers would have an incentive to conduct such reviews. Nevertheless, Mr. Russell asserted, “it’s not unfair to the employer to say that so long as you base present pay on long past decisions it’s your responsibility to make sure that the present pay is not discriminatory.”

Before sitting down, Mr. Russell reminded the Court that the EEOC hears thousands of discrimination claims each year and recommended the Court defer to the EEOC’s expert opinion if it finds that neither the statutory language nor precedent govern the issue.

Glen D. Nager of Jones Day argued on behalf of respondent. At the beginning of his argument, the justices focused on whether a cause of action exists when an employer knows of prior discrimination and its present decision is necessarily based on some prior decision that was discriminatory. Justice Stevens asked Mr. Nager whether a company that decides to maintain the status quo is violating Title VII if it knows of a company policy in place twenty years ago that paid women twenty percent less than male employees. Justice Ginsburg pointed out that the record indicates Ledbetter’s supervisor knew her lower pay rate was the result of sex discrimination. Mr. Nager replied that “knowledge is a necessary condition, but it’s not a sufficient condition” for establishing intentional discrimination. Instead, issuance of a paycheck does not expose the employer to liability, he argued, unless it has a “present-day intention” to illegally discriminate.

Justice Kennedy asked, “[h]ow is that consistent with the statement in Bazemore that the employer has a duty to eradicate past discrimination?” Mr. Nager responded, “[t]here is no contemplation in that case that that duty would require an employer to investigate discrete employment decisions made in years gone by that weren’t made the subject of a timely charge.” He went on to argue that “when the charge filing period passes and no charge is brought, the employer is entitled to treat that past act as if it was a lawful act.” “[E]ven if they know it was in fact originally an unlawful act?,” asked Justice Souter. “Yes,” said Mr. Nager, distinguishing between present purposeful discrimination and present knowledge of past discrimination that is knowingly carried forward.

Justice Breyer expressed concerns over several areas of respondent’s argument—including how to determine when limitations periods should be tolled because an employee is unaware of discrimination through no fault of her own, how to define a discrete act as opposed to a pattern, and how to distinguish Ledbetter from Bazemore.

Assistant to the Solicitor General Irving Gornstein argued on behalf of the United States as an amicus curiae in support of respondent. Mr. Gornstein outlined three reasons to reject petitioner’s argument. First, he argued that Evans, Ricks, and Lorance control the result by holding that “the employee cannot circumvent the limitations period by challenging conduct within the limitations period on the grounds that it is the result of a prior act of intentional discrimination that was not timely challenged.” Second, Mr. Gornstein claimed that adopting petitioner’s view would create a special rule for pay cases that lacks support in the statutory language. Finally, he argued, “it would undo the statute of limitations in pay cases,” allowing “an employee [to] wait until the end of their [sic] career . . . and then challenge current pay on the basis of past acts that took place a long time ago.”

Responding to a barrage of questions from Justice Ginsburg, Mr. Gornstein asserted, “what Title VII says is that you have 180 days to challenge a discrete pay decision. If you do not do that, you cannot come back later, years later, four years later, six years later, or here at the end of her career, and challenge every pay decision that’s been made up until then on the grounds that intent, it was intentionally discriminatory and continues to have ongoing effects.”

Justices Scalia, Souter, and Ginsburg asked Mr. Gornstein why the Court should listen to the Solicitor General rather than the EEOC. He explained that the EEOC’s position is based on its reading of Bazemore and the Court does not give deference to the EEOC under Skidmore.

In rebuttal, Mr. Russell argued “[t]he fact that the discriminatory intent was formed outside the limitations period doesn’t make the present payment of a disparate wage because of sex any less intentionally discriminatory.” He also reminded the Court that the rule he advocated has been working: “[o]ur rule is simple to administer and has been administered for decades in the lower courts and it’s the rule that the EEOC itself has chosen in construing the ambiguous aspect of the statute.”

From the questioning, it appears that Justices Ginsburg, Breyer, Souter, and Stevens will back petitioner, and Chief Justice Roberts and Alito will back respondent. Justice Thomas, as is often the case, was silent, making it difficult to gauge whether his previous work at the EEOC will affect his decision. Justices Scalia and Kennedy could go either way on this one.

[Disclosure: Kevin Russell, attorney for the petitioner, is a partner at the firm Howe & Russell, which is associated with this web site.]