Labor & Employment Law Articles

Lilly Ledbetter Fair Pay Act

On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act.  This law reverses the Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Co. which held that allegations of wage discrimination had to be filed within 180 or 300 days (depending on the state) after the first instance of wage discrimination.  The new law permits charges to be filed within the 180/300 day time frame after each instance that an employee receives compensation that is based on discriminatory motives.

Lilly Ledbetter worked for Goodyear Tire and Rubber Company from 1979 until 1998.  During much of this time, salaried employees at the plant were given or denied raises based on their supervisors' evaluation of their performance.  In March 1998, Ledbetter submitted a questionnaire to the EEOC alleging certain acts of sex discrimination; in July of that year she filed a formal EEOC charge; and in November 1998, Ledbetter commenced this action, in which she asserted, among other claims, a Title VII pay discrimination claim. 

At trial, Ledbetter introduced evidence that during the course of her employment several supervisors had given her poor evaluations because of her gender, that due to these evaluations her pay was not increased as much as it would have been if she had been evaluated fairly, and that as a result of these decisions she lost over $200,000 in wages and benefits that her male counterparts received.  The jury found for Ledbetter and awarded her backpay and damages.

The Court of Appeals for the Eleventh Circuit reversed, holding that Ledbetter's pay discrimination claim was time barred with respect to all pay decisions made prior to September 26, 1997--that is, 180 days before the filing of her EEOC questionnaire.  (Under Title VII, an individual wishing to challenge an employment practice under this provision must first file a charge with the EEOC within either 180 or 300 days, depending on the state—in Alabama, where Ledbetter worked, it was 180 days.)  The Court of Appeals then concluded that there was insufficient evidence to prove that Goodyear had acted with discriminatory intent in making the only two pay decisions that occurred within that time span.  Ledbetter appealed, and the United States Supreme Court granted certiorari.

In a narrow 5-4 decision, the Supreme Court explained that the EEOC charging period is triggered when an unlawful practice takes place.  If an employer engages in a series of acts, each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.  Ledbetter contended that each paycheck she was issued during the charging period was a separate act of discrimination.  The Supreme Court disagreed.  Instead, the Supreme Court found that the paychecks only gave present effect to discriminatory conduct that occurred prior to the charging period.  The Supreme Court held that those effects alone could not breathe life into prior, uncharged discrimination.  The Supreme Court reasoned that Ledbetter should have filed an EEOC charge within 180 days after each prior allegedly discriminatory pay decision was made and communicated to her.

On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act, reversing the Supreme Court’s decision in Ledbetter.  The law retains the 180/300 day time frame under Title VII, but now the clock will renew each time the employee receives compensation that is based on a discriminatory decision by the employer.  Thus, when an employee receives a final paycheck or severance payment, or when the beneficiaries receive payment from an employer-provided pension or life insurance plan, even years after the retirement of the employee, the individual or beneficiary has another 180/300 days to file a complaint.