More on Today’s Decision in Ledbetter

The following analysis is by Tejinder Singh, a student at Harvard Law School and a summer associate at Akin Gump. Last year, as a summer associate at Howe & Russell, he assisted in the preparation of the petitioner’s brief in this case.

Title VII of the Civil Rights Act prohibits employment discrimination on the basis of “race, color, religion, sex or national origin.” Employees suing under Title VII must (as relevant here) bring their claims no more than 180 days after “the alleged unlawful employment practice occurred.” In a 5-4 decision, authored by Justice Alito, the Supreme Court today delivered a victory for employers in discriminatory pay cases by holding that the unlawful decision to set an employee’s pay, rather than the subsequent issuance of a paycheck reflecting the earlier discrimination, counts as the “unlawful employment practice” for purposes of triggering Title VII’s limitations period.

[Note: For a more complete discussion of the facts, procedural posture, and the arguments in the briefs, see SCOTUSBlog’s argument preview here. For oral argument details, see the recap here.]

Petitioner Lilly Ledbetter worked for nineteen years at respondent Goodyear Tire & Rubber Company’s plant in Gadsden, Alabama. At the end of her career, her salary – the product of a series of annual raise decisions, ostensibly based on merit – was significantly (between fifteen and forty percent) lower than her male counterparts. Ledbetter filed an EEOC charge alleging, inter alia, sex discrimination with regard to her pay. She then sued in the U.S. District Court for the Northern District of Alabama, where she prevailed.

The Eleventh Circuit reversed, holding that Ledbetter’s current low pay did not justify reaching back to challenge pay decisions that occurred years ago. Instead, the Eleventh Circuit held, plaintiffs may only challenge pay decisions within the limitations period. Finding that no jury could conclude that either of Ledbetter’s last two pay decisions was intentionally discriminatory, the Eleventh Circuit dismissed her claim.

Today the Supreme Court agreed with the Eleventh Circuit that Ledbetter’s claim was time-barred. Emphasizing that discriminatory intent is the “central element” of any disparate treatment claim, the Court distinguished between past discriminatory acts (pay decisions) and the present effects of those acts (paychecks), and concluded that “current effects alone cannot breathe life into prior, uncharged discrimination.” Instead, the majority held, Ledbetter should have challenged the intentionally discriminatory pay decision within 180 days of the discriminatory pay decision itself. The Court deemed controlling its prior decision in United Airlines v. Evans (and its progeny), in which the Court held that a flight attendant who had been dismissed on the basis of marital status but was then later rehired without being restored to her former seniority level had no claim against the airline because the unlawful practice occurred when she was discharged, rather than when her seniority was decided according to facially neutral rules. The Court distinguished its decision in Bazemore v. Friday, which held that “[e]ach week’s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII,” by cabining it to cases in which the pay structure itself is discriminatory, i.e. where the official pay guideline is that blacks are to be paid less than whites.

The majority expressed a concern that if the Court were to adopt a contrary rule, “a single discriminatory pay decision made 20 years ago [that] continued to affect an employee’s pay today” could give rise to a suit, “even if the employee had full knowledge of all the circumstances relating to the 20-year-old decision at the time it was made.” Although the Court acknowledged that the 180-day limitations period is “short by any measure,” these concerns with repose for employers, with the quick resolution of employment suits, and with the need to weed out stale claims permeated the Court’s opinion.

In a relatively rare dissent from the bench, Justice Ginsburg – joined by Justices Breyer, Souter, and Stevens – argued primarily that pay discrimination cases are more analogous to hostile environment claims (which build up over time) than to firings, denials of promotion, or other “discrete acts” that should give rise to immediate suit. She emphasized that pay decisions build on each other over time, that information about pay disparity may not often be readily available until several pay decisions have been made, and that the intent to discriminate is still there as long as an employer knowingly perpetuates past discrimination.

In Justice Ginsburg’s view, the need to further the broad remedial purpose of Title VII outweighs any potential prejudice to employers: “Congress never intended to immunize forever discriminatory pay differentials unchallenged within 180 days of their adoption.” Moreover, she noted, the courts of appeals (with the approval of the EEOC) have generally relied on Bazemore to apply Ledbetter’s proposed rule, and in any event employers have access to an array of equitable defenses – such as laches – to deter strategic delay. Finally, she contended, the Court’s decision is likely to strip many racial and religious minorities of the ability to redress the effects of pervasive historical discrimination.

Because (as Justice Ginsburg noted), eight circuits have – until today – applied the Bazemore rule to disparate pay claims, the Court’s decision may have a substantial effect on disparate pay suits, effectively precluding relief under Title VII for a large number of potential litigants whose salaries are the products of past discrimination. However, the Court left for another day the question of a “discovery rule” that would toll the limitations period until employees discover (or should discover) the unlawful pay decision, thereby leaving open the possibility that employees will bring claims alleging that they learned of discriminatory pay decisions only when they receive notice of the decision, perhaps in the form of a paycheck.