Ledbetter v. Goodyear Tire & Rubber Co. (05-1074)


Oral argument: November 27, 2006

Appealed from: United States Court of Appeals, Eleventh Circuit (Aug. 23, 2005)

Lilly Ledbetter sued her employer, Goodyear Tire and Rubber Company, under Title VII of the Civil Rights Act of 1964, alleging illegal pay discrimination. Prior to filing suit, Ledbetter filed a complaint with the Equal Employment Opportunity Commission, as required under Title VII, and thereby set the statutory period of her suit to 180 days before she filed the complaint with the Commission. At trial, Ledbetter relied on evidence of allegedly discriminatory salary reviews that occurred before the statutory period to prove that the amount of the paychecks that she received within the statutory period were discriminatorily low. The jury found that Goodyear had paid Ledbetter a lower salary because of unlawful sex discrimination, in violation of Title VII. Goodyear appealed, arguing that Title VII’s statutory time period should limit Ledbetter’s evidence to the two incidents of allegedly discriminatory conduct that occurred within the statutory period. Further, Goodyear argued that it did not illegally discriminate against Ledbetter during either incident. The Eleventh Circuit agreed, and dismissed the case. The Court’s decision in this case will affect employees’ ability to file equal pay claims under Title VII, as well as employers’ ability to defend themselves against such claims.

Questions Presented

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.

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Issues

Whether a claimant alleging illegal pay discrimination under Title VII of the Civil Rights Act of 1964 may use evidence of an allegedly discriminatory act from outside the statutory time limit to prove that pay she received within the statutory period was illegally discriminatory.

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Facts

Lilly Ledbetter began working at Goodyear Tire and Rubber Company’s Gadsden, Alabama tire plant in a supervisory role in 1979. Ledbetter v. Goodyear Tire and Rubber Co., 421 F.3d 1196, 1173 (11th Cir. 2005). In 1992, she began working at the plant’s Radial Light Truck (“RLT”) section as one of four salaried Area Managers, supervising shifts of hourly workers who operated the machines used to manufacture tires. Id. at 1172. Ledbetter testified that, of the approximately eighty other Area Managers that Goodyear employed while she worked at the plant, only two were women. Brief for Petitioner at 7.

The Goodyear plant determined annual salary increases based on individual performance reviews conducted by salaried employees’ supervisors at the end of each year. Ledbetter, 421 F.3d at 1172. In such a review, the supervisor evaluated the salaried employee’s performance, ranked the performance against that of other salaried employees, and then recommended a salary increase within a range established by Goodyear guidelines. Id.

Ledbetter’s supervisor ranked her performance “at or near the bottom” of the other Area Managers almost every year between 1992 and 1997, and awarded her either a modest raise or no raise each year. Id. at 1173. Ledbetter’s supervisor did not complete a performance review or consider her for a raise in 1997 because Goodyear planned to lay her off. Id. at 1174. However, Goodyear did not lay her off. Id.During 1997, Ledbetter’s salary was fifteen percent lower than the lowest paid male Area Manager and forty percent lower than the highest paid Area Manager. Id. at 1173. In 1998, her supervisor again ranked her performance during 1997 near the bottom of the Area Managers, and denied her a raise. Id. at 1175. In January, 1998, Ledbetter began working in a manual labor role as a Technology Engineer. Brief for Petitioner at 3-4. In November, 1998, she accepted early retirement. Ledbetter, 421 F.3d at 1175.

In March 1998, Ledbetter filed a Questionnaire under Title VII of the Civil Rights Act of 1964 with the Equal Employment Opportunity Commission (“EEOC” or the “Commission”), and in July she filed a formal charge of discrimination, alleging, among other charges, that “she had received a discriminatorily low salary as an Area Manager because of her sex.” Id. These acts set a statutory time limit that restricted future litigation under Title VII to incidents that had occurred within 180 days prior to the date she filed the Questionnaire. Id. at 1178. In November, 1999,,,, Ledbetter filed suit against Goodyear in the United States District Court for the Northern District of Alabama, alleging that Goodyear’s unlawful salary practices resulted in discriminatorily low paychecks, which she had received within the 180-day statutory period. Id. at 1180–81. In presenting her case, Ledbetter relied on evidence that showed that when she began working at Goodyear in 1979, she was paid the same salary as a male employee with the same job title, but by 1998 was paid forty percent less than that employee. Id. at 1176. Additionally, Ledbetter presented evidence that “persons having control over her pay” early in her career at Goodyear displayed “discriminatory animus toward women.” Id. at 1180. The jury found that Goodyear had violated Title VII because it was “more likely than not” that Goodyear paid Ledbetter a lower salary because of her sex. Id.at 1176.

Goodyear appealed to the United States Court of Appeals for the Eleventh Circuit, arguing that Title VII’s statutory period restricted Ledbetter’s equal pay claim to incidents that occurred within 180 days of the date she filed the questionnaire with the Commission. Id. at 1177. Therefore, Goodyear claimed, Ledbetter’s claim was restricted to her supervisor’s decision not to conduct a performance review during 1997 and to her supervisor’s denial of a raise in 1998. Id. at 1176. Additionally, Goodyear argued that no reasonable jury could have found that these incidents were illegally motivated by sex discrimination. Id. The Eleventh Circuit agreed with Goodyear on both points and dismissed Ledbetter’s case.

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Discussion

Under Title VII of the Civil Rights Act of 1964, it is unlawful for an employer to discriminate with regard to race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2. In most states, when an employee such as Ledbetter feels that she has been subject to discrimination, she has 180 days to file a charge with the EEOC. National R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 109 (2002). Under certain circumstances, the Commission will later permit the employee to bring a civil action against the employer, 42 U.S.C. § 2000e-5(f)(1), but the action is limited to unlawful “occurrences” within the 180-day statutory period before the charge was filed with the Commission. Morgan, 536 U.S. at 109.

The Supreme Court has noted that although “occurrences” can be easily pinpointed in cases such as “failure to hire,” delineating the “occurrences” for other types of discrimination claims can be more difficult. Id. at 114–15. For instance, a charge of “hostile work environment” requires looking past the 180-day statutory period to incorporate all of the actions that form the hostile environment. Id. at 117. Likewise, accusations of pay discrimination can pose problems, since there is both the occurrence of the pay decision and the occurrence of each paycheck. The Court has held that each paycheck is a separate occurrence; thus each is a separate wrong if the determination of the pay rate was discriminatory. Bazemore v. Friday, 478 U.S. 385, 396 (1986).

In Bazemore, however, the paychecks ruled to be unlawful stemmed from one concededly discriminatory pay rate decision made prior to the enactment of Title VII and long before the filing of the charge, Id. at 391, whereas the paychecks that Ledbetter contends are discriminatory are the product of an initial pay determination plus many subsequent pay assessments resulting in approval or denial of percentage raises, Ledbetter, 421 F.3d at 1173–75. The Eleventh Circuit held that in examining past pay decisions for discrimination, Ledbetter could only look at the one occurrence within the 180-day statutory period and the most recent occurrence preceding the period. Id. at 1178.

Ledbetter now argues that the Eleventh Circuit’s rule violates the purpose of Title VII because unless an employee recognizes a pay discrepancy and reports it from the outset, she may be “condemned to perpetually unequal pay for equal work.” Brief for Petitioner at 14. Ledbetter points out that in most instances employees do not have immediate access to others’ pay rates, and that discrepancies may not become apparent until used as the basis for percentage raises, as they were in her case. Id. at 14.

Goodyear contends that because the neither the district court nor the Eleventh Circuit found that the most recent pay decisions were discriminatory, Ledbetter’s complaint is time-barred. Brief for Respondent at 8–9. In Goodyear’s view, one of the primary purposes of choosing a short statutory period for Title VII charges was to encourage prompt compliance and reduce litigation, especially on stale charges. Id. at 13. To allow Ledbetter to look back past the statutory period would defeat this purpose and would run contrary to the rule that a complainant must show a current instance of purposeful discrimination, not simply a current policy applied indiscriminately to the results of past discrimination. Id. at 21.

The outcome of the case will clearly impact both employers and employees in the context of employment discrimination actions. Should the Supreme Court affirm the Eleventh Circuit’s decision, employees will be prohibited from many Title VII claims, because they simply will not have an opportunity to appreciate the discrimination promptly enough to file a timely charge. Brief for Petitioner at 14. This may happen because an employee simply does not know how her salary contrasts with a co-worker’s, or because the difference in initial salary is not obvious until it is compounded by percentage raises. Id. at 14. Employees would have to become more conscious and suspicious of discrepancies in pay, and may tend to file charges more readily in order to preserve their right to later suit.

In contrast, should the Court hold that Ledbetter is allowed to look back past the statutory period, the purposes of the timely-filing requirement would be partially inhibited. As a result, employers would lose the benefit of repose that comes with time. Instead of safely considering past actions to be lawful once the statutory period has run, employers would need to remain prepared for a suit on those actions until their results have completely dissolved.

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Analysis

Title VII of the Civil Rights Act of 1964 prohibits employer discrimination “against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2. An individual may report an incidence of such discrimination by filing a charge with the Equal Employment Opportunity Commission (“EEOC” or the “Commission”). 29 C.F.R. § 1601.7. In a state without its own agency authorized to grant relief for unlawful employment discrimination, an individual must file the charge with the Commission within 180 days of the occurrence of the alleged unlawful practice. 42 U.S.C. § 2000e-5(e)(1); Morgan, 536 U.S. at 109. When a charge is filed, the Commission notifies the employer within ten days and then begins an investigation of the charge. 42 U.S.C. § 2000e-5(b). Under certain circumstances, if the charge against the employer is not resolved or litigated by the Commission, an individual may later bring a civil action against the employer. 42 U.S.C. § 2000e-5(f)(1).

When an individual brings a subsequent civil action for unlawful employment discrimination, the suit is limited to incidences of discrimination occurring within the statutory period, in most cases 180 days, prior to the filing of the charge. Morgan, 536 U.S. at 109. The delineation of the statutory period is clear in cases of discrete acts, such as a forced resignation or failure to promote. Id. at 114. In such cases, each discrete occurrence starts the statutory clock running, so to speak, and permits an individual 180 days within which he or she may file a charge for that discrete act. Id. at 113.

However, not all unlawful employment discrimination is evidenced by easily identifiable discrete acts; hostile environment claims necessarily involve repeated conduct. Id. at 115. Each discrete act may not be sufficient for a charge of unlawful discrimination, but combined, “the entire hostile work environment encompasses a single unlawful employment practice.” Id. at 117. In such cases, then, the Court recognizes the irrationality of limiting civil action to the 180-day period before the filing of the charge, and instead allows civil action on the entire hostile work environment, on all acts that together give rise to the single claim. Id.

Discrimination in pay rates falls somewhere between the two extremes of easily identifiable discrete acts and unlawful practices comprising many lesser acts. In Bazemore v. Friday, the Court held that when a practice of pay discrimination based on race became unlawful on the effective date of Title VII, the continuation of that practice meant that “[e]ach week’s paycheck . . . [was] a wrong actionable under Title VII. . . .” 478 U.S. at 396.

Goodyear argued in the Eleventh Circuit that although each paycheck might be considered an actionable wrong, the pay decisions to be considered in determining the unlawfulness of the pay rate producing the check should be limited to those made during the 180-day statutory period. Ledbetter, 421 F.3d at 1177. The Court of Appeals held instead that when a pay rate is periodically reviewed, the individual seeking to show an affirmative instance of discrimination may look beyond the 180-day statutory period, but only to the most recent pay assessment before the period began. Id. at 1178.

Ledbetter now argues that the Eleventh Circuit’s decision diverges too radically from the Bazemore ruling and from the spirit of Title VII itself. Brief for Petitioner at 14. Under the Eleventh Circuit’s rule, Ledbetter contends, an employee is penalized for giving the employer the benefit of the doubt or for failing to recognize an initial pay disparity until it is made the basis for a percentage raise. Id. at 14. Ledbetter maintains that simply looking to the most recent pay assessment before the 180-day period is insufficient, because even if the most recent decision is not discriminatory—perhaps a valid denial of a raise—the basic pay rate may still be a product of earlier discrimination. Id. at 21.

Ledbetter argues that Bazemore places an obligation on employers to eliminate any portion of a pay rate that is based on past discrimination, no matter how long in the past the discriminatory act of determining the rate took place, and regardless of any intervening non-discriminatory pay assessments. Id. at 21. Furthermore, Ledbetter maintains, the language of Title VII itself focuses on the consequences of the discriminatory act, here the wage itself, not simply on the decision to discriminate. Id. at 23.

Ledbetter views the prospect of harm from the Eleventh Circuit’s rule as very real; she notes, for instance, the minimal likelihood of an employee’s willingness to file a charge against her employer for discrimination within the first six months on the job. Id. at 25. Also, an employee may not immediately acknowledge discrimination for what it is, especially when pay assessments and raises are based on a facially neutral “merit” system. Id. at 27.

Ledbetter also contends that the EEOC and many federal circuits, including the Eleventh Circuit itself until the decision at hand, followed her interpretation of Bazemore and allowed plaintiffs to reach back past the statutory period in finding pay discrimination. Id. at 29–32.

Goodyear counters with the purpose of Title VII’s timely-filing clause: to reduce litigation, especially on stale claims, and to encourage prompt compliance with the non-discrimination statute. Brief for Respondent at 13. Furthermore, Goodyear asserts, Bazemore is more limited than Ledbetter claims. Id. at 27. In Bazemore, the Court stressed the importance of the continuing discrimination, whereas Ledbetter, unable to find continuing discrimination, wants to base her charges on discrimination in the distant past. Id. at 27. Goodyear argues that Ledbetter misstates the holding of Bazemore when she suggests it allows a claimant to prove discrimination solely by reference to acts outside the statutory period; the correct reading of Bazemore is that claims of current, intentional discrimination are not barred because the discrimination began before the effective date of Title VII. Id. at 28.

Additionally, Goodyear emphasizes decisions such as United Air Lines, Inc. v. Evans, in which the Court held that present circumstances that proceed from a past discriminatory act are not necessarily discriminatory; an employer is permitted to consider lawful any act that does not result in filing of a charge within the statutory period. 431 U.S. 553, 558 (1977). According to Goodyear, Ledbetter has raised a claim based on the present “inevitable consequences” of an act that occurred well before the statutory period, but on which Ledbetter could have filed a charge in a timely fashion. Brief for Respondent at 21. Goodyear points to evidence in the record that Ledbetter knew of differences in her pay and that of some male supervisors as early as 1992, and that she was familiar with the EEOC filing process. Id. at 37.

Ledbetter’s claim that her low pay is a present consequence of a long-past discriminatory act is also invalid, argues Goodyear, because Ledbetter has no evidence that Goodyear continued to rely on the prior pay level “because of’ instead of “despite” the alleged past discrimination. Id. at 21. Rather, Goodyear’s “Pay for Performance” raise scheme, enacted in 1982, was completely neutral on its face, applying equally to both men and women; Ledbetter simply did not qualify for the raises in most years due to her poor work reviews. Id. at 21.

As for Ledbetter’s request that the Court construe the timely-filing requirements of Title VII more broadly, Goodyear contends not only that such a change would run counter to the purpose of the rule, but that the reasons Ledbetter offers for such a change are not to be trusted. Id. at 13, 36. Goodyear notes that Ledbetter did receive the same starting salary as other male supervisors and that she was occasionally given larger percentage raises than others, which would seem to undercut Ledbetter’s statement of the harm she might have suffered through use of percentage raises based on an initially discriminatory base salary. Id. at 36. Furthermore, Goodyear reiterates that Ledbetter could have filed a charge in 1992 when she learned of the pay discrepancy, but that the law also contains its own protections, such as estoppel, for instances when the defendant has intentionally concealed the plaintiff’s basis for complaint. Id. at 38.

Although the Supreme Court’s holding in this case will not greatly affect Title VII remedies, as the statute itself already limits back pay to the two years prior to the filing of a charge, the decision will have a substantial effect on the limits of civil liability for compensation decisions by employers. See 42 U.S.C. § 2000e-5(g). If the Court affirms the Eleventh Circuit’s decision, employers will be freed from worries about liability for long-ago pay discrimination, provided that they are careful to regularly assess in a non-discriminatory fashion. Employers who take care that future pay decisions are made lawfully will be relieved from threat of civil litigation regarding decisions made in the distant past. On the other hand, individuals who may wish to litigate using Title VII will need to take great care to keep a close watch on any possible pay discrepancies and to file charges on anything remotely suspicious within the 180-day window, instead of waiting to see if the suspicions are played out in future decisions or adjustments.

If the Court rejects the Eleventh Circuit’s reasoning, however, and holds that plaintiffs such as Ledbetter can look to any past discriminatory pay decision connected by a steady stream of paychecks, plaintiffs in the future will be free to litigate pay discrimination far past the time of the pay decision, and even after numerous non-discriminatory decisions have been made. This will allow the employee greater flexibility in acquiring knowledge about and assessing discrimination, and will permit an individual to give an employer the benefit of the doubt when suspicions first arise. For the employer, however, such a holding would mean a constant awareness that lawsuits may arise for decisions long-past, even though discrimination has not been present in pay decisions for many years.

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Conclusion

At its core, this case illuminates a fundamental tension between employers and employees in the context of employment discrimination: employers want to limit how far back in time employees may look for evidence of employment discrimination, while employees might not discover that evidence until long after the discrimination has occurred. If the Supreme Court rules in favor of Goodyear, employees will need to be more vigilant about possible discriminatory conduct by their employers, since they will need to report it within 180 days in order to preserve a Title VII claim. If the Court rules in favor of Ledbetter, employers will be liable for discriminatory conduct over the entire course of their employees’ careers, even if employers deliberately set up mechanisms such as annual salary reviews to limit their liability. Although it may make sense from the standpoint of enforcing Title VII to require prompt reporting of discriminatory conduct, the Court may nevertheless rule in favor of Ledbetter in order to put the burden of preventing discrimination on the more powerful party.

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Authors

Written by: Kelly Cooke & Heidi Guetschow

Additional Sources

Law about... Employment, Employment discrimination