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June 14, 2007

Law prof decries Supreme Court decision

In a 5-4 decision rendered last month, the U.S. Supreme Court limited an employee’s ability to sue employers for pay discrimination.

Ledbetter v. Goodyear Tire & Rubber Co. centered on the application of the 180-day deadline for filing a discriminatory pay complaint under Title VII of the federal Civil Rights Act of 1964.

According to a Pitt legal expert, the Ledbetter decision gutted the heart of Title VII by causing untenable burdens on employees and circumventing Title VII’s discrimination protections.

“I think it is not an overstatement to say the Supreme Court’s decision in Ledbetter just turned Title VII into empty rhetoric as it applies to pay equality,” said Pitt law professor Deborah Brake, whose research focuses on sex discrimination. The decision also undermines incentives for employers to prevent and correct pay discrimination, she maintained.

In November, Brake and her colleague, Joanna Grossman, a Hofstra Law School professor, co-authored an amicus curiae brief in the Ledbetter case on behalf of the National Partnership for Women and Families and 23 other national advocacy groups. Brake and Grossman also have published a response criticizing the Supreme Court’s decision on FindLaw, an online legal journal.

In addition, Brake testified this week before the U.S. House of Representatives education and labor committee about the potential adverse effects of the decision.

Brake’s written testimony to the committee stated, in part, “The court’s ruling is untenable for many reasons and can only exacerbate the gender wage gap. … A discriminatory pay decision is likely to create a permanent sex-based disparity in pay because annual reviews and salary adjustments typically carry forward the prior salary as a baseline. Left uncorrected, even a relatively minor initial pay disparity will expand exponentially … even if subsequent raises are determined in a nondiscriminatory fashion.”

The initial complaint was filed in 1998 with the Equal Employment Opportunity Commission (EEOC) by Lilly Ledbetter, a 20-year employee and the lone female production supervisor at a Goodyear plant in Gadsden, Ala. Ledbetter sued Goodyear, claiming that the large disparity between her pay and that of male co-workers primarily was based on gender discrimination compounded over years.

A jury awarded Ledbetter $3.5 million, which was reduced to $360,000 in accordance with Title VII’s damage cap.

Goodyear appealed, and the 11th Circuit Court of Appeals reversed the decision, holding that the statute required Ledbetter to file her EEOC complaint within 180 days of the alleged illegal employment practice. The appeals court further said her claim was time-barred with respect to all pay decisions made before the 180-day period of limitations.

In writing the Supreme Court’s majority decision, Justice Samuel Alito sided with Goodyear, rejecting Ledbetter’s argument that each discriminatory paycheck violated Title VII. The court held that “a pay-setting decision is a discrete act that occurs at a particular point in time” and that the statutory period for filing an EEOC claim begins when that discrete act occurs.

“This short deadline reflects Congress’s strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation,” Alito stated.

But Justice Ruth Bader Ginsburg, who wrote the court’s dissenting opinion, disagreed sharply. “In our view, this court does not comprehend, or is indifferent to, the insidious way in which women can be victims of pay discrimination,” Ginsburg said, reading parts of her dissent from the bench — a rare occurrence at the Supreme Court.

The majority’s opinion in Ledbetter, Ginsburg maintained, means that “any annual pay decision not contested [within 180 days] becomes grandfathered, a fait accompli beyond the province of Title VII ever to repair.”

Pitt’s Brake commented, “You can see from Justice Ginsburg’s perspective that this is the kind of case she used to take and win [as a trial lawyer]. This really is straightforward sex discrimination: A jury in rural Alabama found that this woman, who was the only female manager at Goodyear, had been underpaid because of her sex. For the court’s ruling to take away the jury’s verdict from this woman and set a precedent that makes it next to impossible for a woman to use a Title VII remedy to get at pay discrimination, that’s going to make Justice Ginsburg very mad.”

Brake said the Congressional hearing this week clearly was convened in response to the Ledbetter decision “and specifically Justice Ginsburg’s dissent, where she says the ball is now in Congress’s court.”

Unlike when the Supreme Court interprets the Constitution and the only corrective processes are for the court to overrule itself or for states to pass a constitutional amendment, when Congress believes the court has interpreted a statute incorrectly, legislators can provide a remedy, Brake pointed out.

“And it is a remedy. When the court gets it wrong, as I strongly believe it did in this case, Congress can fix it,” Brake said. “That’s happened before. It happened in 1991 in response to a string of Supreme Court decisions that had a narrow and stingy focus in interpreting a number of our civil rights laws, including Title VII.”

In fact, one of those decisions that was, in effect, overruled by Congress in 1991 is the Lorance v. AT&T decision, which, Brake said, ironically Justice Alito relied on in the Ledbetter decision.

“The Lorance decision, too, was very stingy, essentially telling women that if you wanted to challenge a discriminatory seniority system you need to challenge it essentially the moment it was adopted,” Brake said. “But, of course, women waited until it applied to them and affected their own seniority and then sued. And the Supreme Court said, ‘Too late. Even if it was discrimination, there’s no remedy now.’ But Congress overruled that [position].”

Alito held that Lorance only applies to discriminatory seniority systems and not pay discrimination, Brake said.

“In the brief I co-authored on behalf of Lilly Ledbetter, one of our arguments was that what’s going on here is exactly what went on in Lorance: Women are challenging discrimination when it’s being applied to them and continues to be applied to them,” Brake maintained. “To put the burden on the employee to challenge it at the first instant that it happens is completely unrealistic, when it’s a pattern of discrimination that continues to affect them and affects them more each time any pay decision is made.”

Moreover, she said, the onus is on the individuals who are being discriminated against, even if they have no knowledge of that discrimination, since employers rarely disclose company-wide salary information.

“That makes no sense, and perverts Title VII,” Brake said. “Everything Congress has said, and even prior Supreme Court decisions say, is that Title VII has two big goals: One is to prevent discrimination and get employers voluntarily to correct for it and deter it, and two, is to provide remedy and relief to individuals when they’ve suffered discrimination. Both of those goals are completely thwarted by this decision.”

Brake said an argument for more wage transparency that she and Grossman made in the amicus brief was among a number of their arguments cited by Ginsburg.

“There is a study that shows one-third of private sector employers have official policies not to disclose your salary to anybody else, which actually is illegal under other laws,” Brake said. Many more companies have unofficial policies of confidentiality, and there are informal pressures on employees to keep quiet about personal wages, she added.

Another problem exacerbated by the Ledbetter decision is its undermining of employers’ incentive to correct pay inequities, Brake said. “One of the really perverse effects of this decision is that now there is no incentive for an employer to do any kind of proactive pay-equity studies, to look at whether there’s gender equity and to take actions to correct any gender pay gap,” she said. “Why would they do that? The risk is by opening it up that would count as a new pay decision and, if they don’t completely correct it, a new claim can be made within 180 days. There’s actually an incentive not to do it.”

But perhaps most troubling is the dilemma the court’s decision creates for employees who must file a charge alleging pay discrimination within 180 days of when it begins, or forever lose the right to challenge it, she said. “An employee who complains to her employer too soon, without an adequate factual and legal foundation for doing so, may find herself out of a job and with no legal recourse for the retaliation. It’s a Catch-22,” Brake said.

Employees also can be victims of retaliation by co-workers, she noted. “There are the social costs of claiming discrimination — the ostracism, the label of ‘troublemaker’ — these pressures mean that even when [employees] perceive discrimination, they don’t do anything about it. The vast majority never complain,” Brake said.

“It really is a maze that has been created for employees with this decision and there’s no good way out of it,” she continued. “I think that’s what makes the case really strong for Congress, that these are the kinds of arguments about fairness that are going to resonate with Congress. And I’m optimistic. It’s a good sign they’re holding a hearing this quickly.”

One of Brake’s recommendations is extending the statute of limitations under Title VII beyond 180 days. “The norm for these kinds of issues is much closer to two years,” she said.

She also would like to see Congress redefine when the complaint-filing clock starts ticking. “The applicable statute of limitations is 180 days. But 180 days from when?” Brake asked. “There are three possibilities: One, as the court held in Ledbetter, is from the day of the pay decision that sets a discriminatory wage; two, from the day an employee learns her pay is discriminatory — called the ‘discovery rule’ — or, three, from the date of any paycheck that contains an amount affected by a prior discriminatory pay decision — deemed the ‘paycheck accrual rule.’”

The court declined to even consider whether a discovery rule might be applied, a legal choice that baffled Brake, and it flatly rejected the paycheck accrual rule, even though the court had endorsed such an approach in prior cases.

Winning an employment discrimination case, even before the Ledbetter decision, was a long-shot, Brake noted. “Empirical research by legal scholars in the last few years has shown that employment discrimination claims, generally, are extremely hard to win and that the success rates are much lower than for other kinds of actions,” she said.

Scholars also have documented a genuine hostility in the federal courts to employment discrimination cases, with too many of these claims not even reaching juries, she added.

“What the Ledbetter decision says to me about this Supreme Court is that it is continuing and adding to that hostility,” Brake said. “This ruling is disappointing and it shows a real hostility to civil rights that is troubling. It also disregards the realities of the workplace and that does not bode well for other areas of the law.”

—Peter Hart

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