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.]
This really isn’t my area, and I generally don’t like thashing around in civil rights cases, but this case has a fun statutory interpretation dimension as a hook for me, and even if it didn’t, I guess I just find this case preposterous. The statute answers the question: any conduct that isn’t undertaken within 180 days of Ledbetter’s filing in July ‘98 is off the table.
Even assuming that Bazemore stands for the proposition petitioner claims it does, and even assuming it survives Morgan — which could, at very least, be taken to refine that proposition — I don’t see how it makes any sense against the background of the statute’s plainly limited filing period for each individual pay packet to constitute a clock-starting breach. It seems to me that what the petitioner’s asking the court to do — or rather, what it’s saying the court already decided in Bazemore and wants it to reaffirm — eviscerates the 180-day filing period demanded by the statute. I mean, it makes a mockery of it - if the court buys this rule, instead of the clock starting to tick at the time that “the alleged unlawful employment practice occurred,” 42 U.S.C. § 2000e–5(e)(1), the clock never starts ticking, unless or until the employee leaves the company, or shortly thereafter. And under that interpretation, as Kevin conceded at oral argument, it makes no difference whether the person who originally made the decision is long gone; it doesn’t even matter if the company is under totally new ownership. I mean, I was just absolutely staggered by Kevin’s affirmation — for that matter, I could scarcely believe my eyes reading the brief — of the Chief Justice’s suggestion that under petitioner’s argument, it wouldn’t be enough even for a new owner “to come in and even up everybody … [I]f you see that the women are making 20 percent less than the men you don’t escape liability by paying everybody the same going forward, because perhaps if nondiscriminatory decisions had been made the women would have making 20 percent more than the men. You have to go back and revisit every pay decision or you’re exposed to liability for current pay.”
Nor can I me see how any of this squares with Justice Stevens’ opinion for the Court in Mohasco Corp. v. Silver, wherein Justice Stevens sung the praises of the statute of limitations:
Mohasco 447 U.S. at 825-6.
This case just seems absolutely crazy to me. The petitioner seems urging a construction that basically reads the statute of limitations out of Title VII, or at very least, the petitioner wants to uncouple the point at which the clock starts running from the intentionally discriminatory act which, I had thought, must lie at the foundation of any successful Title VII claim. I can’t see how it possibly makes sense to consider cutting a cheque - an act wholly untethered from the decision for how much it will be worth - to be itself a discrete violation, and even if it did, any such claim would evaporate after any pay review in which there was no suggestion of bias.
-Simon Dodd
Comment by Simon — November 29, 2006 @ 3:45 pm
Regarding Simon’s comment above, I think it is first important to note that disparate pay is just one of the unlawful employment practices Title VII prohibits, and that the operation of the 180-day statute of limitations on other practices, such as unlawful hiring, firing, etc., is not in dispute in this case.
With regard to disparate pay, however, there are two arguably “crazy” interpretations this case requires the Court to choose between. One is that the “unlawful employment practice” is the payment of discriminatory wages, in which case the 180-day statute is limited to the situation in which the aggrieved employee has left her job. The other is that the “unlawful employment practice” is the decision to pay discriminatory wages, in which case it is effectively impossible to make out a disparate pay claim under Title VII, because it is extremely unlikely that an employee would know and have grounds to challenge that decision as discriminatory within 180 days, for all the reasons discussed in the briefs.
The question, then, is which interpretation is less crazy? Is it less crazy to think that Congress created a 180-day statutory period, but then made its application to disparate pay cases fairly weak? Or is it less crazy to think that Congress outlawed discrimination “with regard to compensation,” but then made it effectively impossible for plaintiffs to get into court to complain of that discrimination?
I think the former is the clearly the less crazy interpretation of Title VII, even just on its face. But this conclusion is particularly strong when you consider that the very same Congress that passed Title VII also passed the Equal Pay Act just the year before, and under the Equal Pay Act disparate pay claims begin to run with payment of discriminatory wages, not with the decision to pay discriminatory wages.
(Disclosure: I helped with the briefing of this case on behalf of petitioner as a participant in the Stanford Law School Supreme Court Clinic.)
Comment by Scott Reents — November 29, 2006 @ 6:41 pm
Scott,
Well, you say that the operation of the statute of limitations in other cases isn’t at issue, but I’m not so sure.
As you note, Title VII prohibits several unlawful employment practices, most of which are defined in 42 U.S.C. § 2000e–2(a): an employer can’t fail (or refuse) to hire, fire or promote a person, or make decisions about their pay and benefits, purely on the basis of, inter alia, their gender. It would be inconsistent to construe Title VII in such a manner that the clock starts running at one point for one kind of violation, and at another point for any other. The problem is precisely that your argument will accomplish this inconsistency.
Disparate pay (which I would understand to be paying two different people different amounts of money for doing the same job), per se, is not forbidden by Title VII. See 42 U.S.C. § 2000e–2(h) (”it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment … provided that such differences are not the result of an intention to discriminate because of … sex”) (emphases added). What Title VII forbids is discrimination because of the person’s “race, color, religion, sex, or national origin.” A Title VII suit for firing someone because of their gender specifically couples the lawsuit to a wilfully discriminatory act: the decision to fire the person was taken, and it was made because of their gender. The clock starts running when the decision is made (or, arguably, when the person is notified).
Your argument, if I understand it correctly, would be that while most of those violations take place at a definite moment in time, a “discrete event,” but when an employer decides to discriminate in a pay decision, while that event is also located at a definite point in time, poisons the well, and thereafter, every sip is a violation. I don’t know about you, but I don’t get a paycheque any more; there are two entities (and I mean entities, not individuals) involved in my being paid every month: our payroll computer, and the bank’s computer that it connects to. I don’t believe that software is capable of sexual discrimination, Scott, unless it’s programmed to do so. But the point is that there are no decisions made in my getting paid every month. Cutting a cheque is an action wholly divorced from the determination of how much that cheque is worth. What you’re trying to do is to establish that it is not only the wilfully discriminatory act that creates a cause of action, but also the subsequent nondiscriminatory events that flow from that act, which I just don’t buy. Preventing that kind of rolling, ongoing liability seems to me to be precisely the purpose of having a time window in which claims may be filed. (That’s something that I can’t get past here: Congress enacted a filing period, and you want to eviscerate that limitation).
In the event of any other kind of discrimination under Title VII, you have 180 days to file after the discrimination ocurred, not 180 days after any event that can be traced back to a discriminatory event. Hence, your construction is precisely to read inconsistency into the statute by uncoupling the 180 day period from the discriminatory event. And moreover, Congress did not originally enact a 180 day filing period; the 1964 Act required a 90 day filing period. The expansion of the filing period to 180 days is the progeny of Section 4(a) of the Equal Employment Opportunity Act of 1973, 86 Stat. 103, a decision Congress made after several years of the practical operation of Title VII. If by “180 days” Congress had actually meant “whenever,” or if it decided that it was unfair to require timely filing of claims, why would it simply have doubled the filing period in the 1973 Act?
As regards the Equal Pay Act, I can’t really speak to that, because I’m insuffiently familiar with it. But what’s your counterargument to counsel’s point that it makes sense to treat this area any different from the Equal Pay Act because they are two different statutes, and “[i]n a Title VII case, in an intentional discrimination case, the question is whether or not there is an act that is motivated by gender during the charge filing period[,] [but] [t]hat is not an element of the plaintiff’s cause of action in an Equal Pay Act case.” In the latter, “all the plaintiff has to do is allege they are performing equal work to a male, and that they are paid differently. And it’s that cause of action that triggers the statute of limitations in an Equal Pay Act case,” Tr. of Oral Arg. 31-32?
Comment by Simon Dodd — December 1, 2006 @ 5:19 pm
Simon,
Thanks for your thoughtful comments. What it boils down to is this: is the “unlawful employment practice” the payment of a discriminatory wage, or the decision to pay a discriminatory wage? All else flows from this. If it is the decision, then the payment of wages are mere effects of that discriminatory act. If it is the payment, then each is a separate discriminatory act, a “discrete event” as you say, which is separately actionable, and starts the statutory clock running. Your argument assumes the conclusion, that the decision that is the discriminatory act, and that the paycheck accrual rule can only be justified based on a “poisoning the well” sort of argument. That is not our argument at all. Our argument is that there are strong analytical, customary and historical reasons to think that Congress intended each discriminatory paycheck to be considered its own discrete discriminatory act.
I recognize the appeal of the idea that an intentionally discriminatory act only takes place at the time of the decision to discriminate, and not at other times. But I don’t think this is the way that the law generally treats discrimination. To take a famous example, the schoolchildren in Brown could claim present acts of discrimination against them, even though the decision to segregate schools took place many years before, outside the limitations period.
Now, you can distinguish Brown in various ways, but the point is that the accrual of a discrimination claim is not necessarily tied to the decision to discriminate. And further, that it is typically the case that claims arising out of illegal periodic payments (such as wages) generally accrue with each payment, and not with the decision to make illegal payments (see FLSA, price fixing, EPA, etc.). So while it is the case that such laws also have statutory periods, it is also the case that they quite often allow litigation of claims relating back to decisions many years outside the statutory period.
Comment by Scott Reents — December 3, 2006 @ 4:58 pm