On June 12, the House Education and Labor Committee held a hearing on the Supreme Court’s ruling in the Ledbetter v. Goodyear Tire and Rubber employment discrimination case. The hearing focused on whether Congress should amend Title VII of the Civil Rights Act of 1984 (P.L. 88-352) to extend the period of time individuals have to sue for wage discrimination.
Chair George Miller (D-CA) said, “The Supreme Court’s ruling in Ledbetter v. Goodyear is a painful step backwards for civil rights in this country. It makes it more difficult for workers to stand up for their basic rights at work. That is unacceptable.” Rep. Miller added, “Despite the fact that the jury found Goodyear guilty of discrimination, a sharply divided Supreme Court, in a five-to-four opinion, decided that while Ms. Ledbetter was discriminated against, her claim was made too late. Title VII requires an employee to file an Equal Employment Opportunity Commission [EEOC] charge within 180 days of the unlawful employment practice. Ms. Ledbetter filed within 180 days of receiving discriminatory pay from Goodyear. But a slim majority of the Supreme Court found that, because Ms. Ledbetter did not file within 180 days of a discriminatory decision to write those discriminatory paychecks, her time had run out. She could not recover anything. Goodyear owed her nothing…Reason and justice demand a different result.”
“At issue is Title VII of the Civil Rights Act of 1964, which makes it unlawful to discriminate on the basis of gender with respect to compensation,” said Ranking Member Howard “Buck” McKeon (R-CA). “This is a principle upon which all of us agree, without a doubt. At the same time, the law provides that an individual wishing to challenge an employment practice under this provision must first file a charge with the [EEOC]. This challenge must be filed within either 180 or 300 days, depending on his or her state of employment, after the alleged unlawful employment practice occurred. If an employee does not do so, he or she may not challenge that practice in court. This is the crux of why the Supreme Court delivered the ruling it did.” Rep. McKeon added, “The fact is, what we are setting out to do is not an easy task. To simply put in place a policy that would overturn Ms. Ledbetter’s case is one matter. However, the impact of our actions if we take any will extend far beyond that. Our task is to determine whether current law provides enough balance to treat employees and job providers fairly with respect to discrimination claims. And if we reach the conclusion that it does not a conclusion that I believe remains an open question we’re faced with the challenge of ensuring that a legislative fix does not tip that balance too far in one direction or another.”
Lilly Ledbetter, plaintiff in the Supreme Court case, said, “After I filed my EEOC complaint and then filed a lawsuit, I was finally able to get the whole picture on my pay compared to the men’s. It turned out that I ended up getting paid what I did because of the accumulated effect of pay raise decisions over the years. In any given year, the difference wasn’t that big, nothing to make a huge fuss about all by itself. Some years, I got no raise, when others got a raise. Some years I got a raise that seemed okay at the time, but it turned out that the men got bigger percentage raises. And sometimes, I got pretty big percentage raises, but because my pay was already low, that amounted to a smaller dollar raise.” Ms. Ledbetter continued, “The result was that at the end of my career, I was earning $3,727 per month. The lowest-paid male was getting $4,286 per month for the same work. The highest-paid male was making $5,236. So, I was actually earning 20 percent less than the lowest-paid male supervisor in the same position.
Ms. Ledbetter added, “Although the trial judge agreed that the jury’s verdict was amply supported by the evidence at trial, he had to reduce the punitive damages and mental anguish award to the $300,000 statutory cap. The Supreme Court took it all away, even the back pay. They said I should have complained every time I got a smaller raise than the men, even if I didn’t know what the men were getting paid and even if I had no way to prove that the decision was discrimination. They said once the 180 days passes after the pay decision is made, the worker is stuck with unequal pay for equal work under Title VII for the rest of her career and there is nothing illegal about that under the statute.” She concluded by saying, “What happened to me is not only an insult to my dignity, but it had real consequences for my ability to care for my family. Every paycheck I received, I got less than what I was entitled to under the law. The Supreme Court said that this didn’t count as illegal discrimination, but it sure feels like discrimination when you are on the receiving end of that smaller paycheck and trying to support your family with less money than the men are getting for doing the same job. And according to the Court, if you don’t figure things out right away, the company can treat you like a second-class citizen for the rest of your career. That isn’t right.”
Wade Henderson, president and chief executive officer of the Leadership Conference on Civil Rights, said, “The outcome in Ledbetter is fundamentally unfair to victims of pay discrimination. By immunizing employers from accountability for their discrimination once 180 days have passed from the initial pay decision, the Supreme Court has taken away victims’ recourse against continuing discrimination. Moreover, the Court’s decision in Ledbetter ignores the realities of the workplace. Employees typically don’t know much about what their coworkers earn, or how pay decisions are made, making it difficult to satisfy the Court’s new rule.” Mr. Henderson continued, “Workers know immediately when they are fired, refused employment, or denied a promotion or transfer, but norms of secrecy and confidentiality prevent employees from obtaining compensation information. As Justice Ginsburg points out, it is not unusual for businesses to decline to publish employee pay levels, or for employees to keep private their own salaries. The reality is that every time an employee receives a paycheck that is lessened by discrimination, it is an act of discrimination by the employer. The harm is ongoing; the remedy should be too.”
Mr. Henderson added, “The impact of the Court’s decision in Ledbetter will be widespread, affecting pay discrimination cases under Title VII affecting women, and racial and ethnic minorities, as well as cases under the Age Discrimination in Employment Act [P.L. 90-202], involving discrimination based on age, and under the Americans with Disabilities Act [P.L. 101-336], involving discrimination against individuals with disabilities.”
Neal Mollen, an attorney at Paul, Hastings, Janofsky, and Walker, LLP, and representing the U.S. Chamber of Commerce, stated, “The Chamber strongly supports equal employment opportunity for all and appropriate mechanisms to achieve that important goal.” Mr. Mollen said, “The rule emanating from Ledbetter is simple: if an employee believes that he or she has been treated discriminatorily by an employer, that matter should be raised internally and then with the EEOC (or similar state agency) promptly and confronted forthrightly. Only in this way can the process of investigation and voluntary cooperation and conciliation be expected to work. When disagreements and disputes in the workplace fester and potential damage amounts increase, compromise and cooperation become far more difficult.”
In addressing Title VII’s 180 day statute of limitations, Mr. Mollen said, “The Court had repeatedly held that the statute’s limitations period begins to run when the alleged discriminatory decision is made and communicated, not when the complainant feels the consequences of that decision. For the Court to overrule this precedent or for Congress to supersede this settled law with legislation would promote instability and confusion in the law. Finally, and perhaps most importantly, the Ledbetter decision recognized the profound unfairness inherent in a limitations rule that would permit an individual to sleep on his or her rights for years, or even decades, before raising a claim of discrimination. To defend itself against a claim of discrimination, an employer must be in a position to explain first to the EEOC and the charging party, and perhaps later to a jury the reasons it had for making the challenged decisions. To do so, it must rely on the existence of documents and the memories of people, neither of which is permanent. If a disappointed employee can wait for many years before raising a claim of discrimination, as Ms. Ledbetter did in this case, he or she can ‘wait out’ the employer, i.e., ensure that the employer is effectively unable to offer any meaningful defense to the claim. That, the Court properly held, is patently unfair…Statutes of limitation are an expression of society’s principled, collective judgment that it is unfair to call upon a defendant to answer serious charges when placed at such a disadvantage. A rule that ‘refreshes’ the period of limitation with every paycheck received to permit a challenge to every decision that contributed to current pay cannot be squared with this important societal value.”
In discussing the effect of the Supreme Court’s ruling on women’s salaries, Deborah Brake, professor of law at the University of Pittsburgh, stated, “Working women whose pay gradually and imperceptibly declines in relation to their male colleagues, so as to produce an ever-widening gender wage gap over time, are likely to find their Title VII claims foreclosed by the Ledbetter rule. Each pay decision typically builds on the prior one, and unless corrected, discriminatory pay decisions are perpetuated and magnified by subsequent percentage-based adjustments. In this way, even if an employee is aware of a modest disparity between her pay and that of her colleagues, relatively minor disparities are likely to go unquestioned for some time, until the disparity becomes too large to ignore. By that time, however, under Court’s ruling, the employee will have lost long ago the right to complain under Title VII.”
Ms. Brake added that, “[u]nder the Court’s ruling, an employee must quickly complain of suspected pay discrimination within 180 days of when the discriminatory decision was made and communicated, or lose forever the right to challenge the resulting pay discrimination. However, in a cruel Catch-22, an employee who complains to her employer too soon, without an adequate factual and legal foundation for doing so, could find herself in an even worse position. If the employee quickly brings the suspected pay discrimination to the attention of her employer, and in the unfortunate event that the employer responds with retaliation, the employee could find herself out of a job and with no legal recourse…The…standard…creates serious legal risks for an employee who complains too soon. But on the other hand, if the employee waits more than 180 days after she first suspects an initial discriminatory pay decision, so as to be sure that she has an adequate legal and factual basis for alleging pay discrimination, she loses her ability to challenge the continuing discrimination in pay under Title VII, even if the discriminatory pay gap continues to suppress her pay and increases over time. Thus Ledbetter punishes an employee for waiting too long to challenge pay discrimination.”
