Ledbetter v. Goodyear Tire and Rubber: Supreme Court Discriminates Against Pay Discrimination

Author(s): Micheal Shah
Synopsis: In the Ledbetter case, a sharply divided court held that the statute of limitations on a pay discrimination claim may run even before the employee knows about the violation. Justice Ginsburg characterized the majority's interpretation of Title VII as "cramped" and "parsimonious." Rick Levine tells you why he agrees.

The May 29, 2007 decision of the U.S. Supreme Court in Ledbetter v. Goodyear Tire and Rubber Co. Inc. (PDF, 356KB) (No. 05-1074) generated not only a substantial splash in the media, but the public reading of a dissent from the bench by Justice Ruth Bader Ginsburg. The Ledbetter holding is potentially extremely significant, though more significant in some states than others, and likely less significant in California than in many other states.

The facts of Ledbetter are straightforward and not particularly exotic.
Lilly Ledbetter went to work at Goodyear’s Alabama plant in 1979. Employees in her job category earned raises based in large part upon their supervisors’ evaluations of their performance. Ledbetter claimed, and the jury found, that during the course of her employment (though not for the several years prior to her early retirement in 1998), several supervisors gave her poor evaluations due to her sex. As a result, she failed to get pay increases that she should have (and would have) gotten had her sex not been considered. Over time, since subsequent raises were a function of then current pay rates, her pay level slipped substantially as against comparable male coworkers. The Court’s majority, comprised – not surprisingly – of Chief Justice Roberts and Justices Alito (who wrote the majority decision), Scalia, Kennedy and Thomas, noted, in passing, that Ledbetter “did not realize for some time that she had been victimized,” but found that fact immaterial.

The Majority’s Opinion
Indeed, the majority opinion hardly engages the facts of the specific case before it at all. Instead, it engages in the sort of exercise familiar to first year law students, but hardly anyone else, in order to reach a decision that appears utterly policy driven. The majority stresses the fact that the offense (discrimination in violation of Title VII of the 1964 Civil Rights Act) requires an intent to discriminate. The majority points out that the violation comprises two elements: “an employment practice, and discriminatory intent.” Once the two elements combine to produce an effect (intent to discriminate, followed by the bad review that results in the lower raise), the violation is complete. Just because the negative impact on the victim is compounded over subsequent years because her lower payrate guarantees an ever increasing disparity between her pay and that of her male co-workers, the fact remains – in the majority’s view – that the discrete offense (the initial combination of elements that comprise the violation) happens at a discrete point in time and subsequent natural effects are not themselves fresh violations. Thus, the statute of limitations (six months to file in the EEOC) begins to run when the violation is complete and expires six months later, whether the disadvantaged employee knows about the discrimination or not. This occurs even if the practical effect of the initial discrimination is that the employee is making only pennies less than her similarly situated coworkers.

The majority’s decision will appeal to two classes or people; law professors and employers. It will appeal to employers for obvious reasons. It will appeal to law professors because of the majority’s exceptional legal literalism and refusal to consider, or even discuss some very obvious policy implications of its decision. Justice Ginsburg’s dissent, not surprisingly, focuses on precisely the issues the majority ignores.

The Dissent
Justice Ginsburg wrote for herself and Justices Stevens, Souter and Breyer. In other words, all the justices lined up precisely where one would have expected them to. Justice Ginsburg pointed out the inconvenient facts that the majority ignored. Ms. Ledbetter, by her final year with Goodyear, was making 87% of her lowest paid male coworker’s pay, and 71% of her highest paid male coworker’s pay, despite equal seniority. Ms. Ledbetter’s pay disparity built up over years in small increments, none of which by themselves, would have suggested that she initiate an EEOC claim – even if she knew what her male colleagues were making, which she did not. Indeed, as is often the case with salary information, what her colleagues were making was “hidden” from her. Further, Justice Ginsburg found the majority’s decision at odds with certain precedents. Bazemore v. Friday is a 1986 case in which the Court – unanimously – held that a North Carolina state agency discriminated when, after merging what had been separate “white” and “Negro” branches that had different pay scales for their employees, continued the prior pay scales after merger, thus perpetuating pay discrimination on the basis of race. The majority, forced to deal with Bazemore by Justice Ginsburg’s dissent, purported to distinguish the case by noting that the original discrimination on Bazemore was “facial” (i.e., apparent on the face of the pay scale itself), and therefore, when each paycheck was cut, the agency had to know (and intend) that it was continuing to discriminate.

Justice Ginsburg also pointed out that the Court had previously recognized a distinction, for statute of limitations purposes, between “fully communicated discrete acts” of discrimination like termination, failure to hire or failure to promote, and discrimination that develops over time by increment, where each individual increment – taken by itself – is not actionable either for legal or practical reasons. Two examples are sexual harassment, where “isolated” instances are insufficient to create a “pervasively” hostile environment, and pay disparities that start small and mount up. The majority did not spend a lot of time on this point, merely reiterating that the violation was complete when the intention was joined by some discriminatory action, regardless of how small. In the majority’s view, pay discrimination is not like sexual harassment, just like hidden pay discrimination is not like “facial” pay discrimination.

The real world policy implications of the majority’s holding (for those of us in the “reality based” community) were not lost on Justice Ginsberg. She noted that if an employer can keep discriminatory pay practices under wraps for six months, that employer is home free. There is no federal remedy. The other side of that coin is that a worker who has the slightest suspicion that she may be the subject of discrimination – even though it is impossible to know – risks losing her remedy if she tries to work it out in the workplace instead of filing an administrative and or judicial action. This result discourages discussion and mediation between employer and employee and increases the load of both meritorious and non-meritorious claims in the agency and the courts.

Ultimately, Justice Ginsburg characterizes the majority’s interpretation of Title VII as “cramped” and “parsimonious.” Pretty strong language from this justice – particularly when read from the bench.

The implications are several. First, Justice Ginsburg urges Congress to address and correct the “cramped” interpretation of the majority. Should a Democrat win the White House, and Democrats retain the Congress, in 2008, it is highly likely that the majority’s decision in Ledbetter will be undone. For those looking for tendencies in the post-Renquist, post-O’Connor Court, the evidence is mounting that Justice Kennedy is no “swing-man.” He is increasingly part of the right wing, as evidenced first by his late-term abortion decision (the health of the mother is of no import), and now by his endorsement of Justice Alito’s gutting of Title VII in pay discrimination cases. The line-up is five-to-four, rather than four-to-four, with Justice O’Connor casting the deciding vote in these political (or, if you prefer, “public policy”) cases. We will be living with this reality for several more years.

For those of us in California, there is every reason to believe that our Supreme Court (or our legislature, if necessary) will vitiate the effect of Ledbetter, either by specifically holding that every discriminatory pay check – regardless of how far back the original sin – is a fresh violation, or that the statute of limitations for violation of the Fair Employment and Housing Act’s anti-employment discrimination provisions will not begin to run until the plaintiff knew or should have known of the discriminatory action.