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The Lilly Ledbetter Fair Pay Act makes it easier to sue for unlawful employment discrimination

Congress passed the LLFPA to reverse the Supreme Court’s 2007 holding in Ledbetter v. Goodyear Tire and Rubber Co., Inc.    In that case, Justice Alito led a 5-4 majority in concluding that Ledbetter could not sue Goodyear under Title VII of the Civil Rights Act of 1964 for gender based pay discrimination that she had experienced for almost twenty years because she did not file her charge within six months of the original decision (made decades earlier) to pay her less than her male counterparts.

Factual Background

 Lilly Ledbetter worked as an area supervisor at a Goodyear plant in Alabama from 1979 until she retired in 1998.  Initially, her salary was comparable to male employees performing the same work.  Over the years, however, her pay rate slipped in comparison to male employees with equal or less seniority.  At the end of her time at Goodyear, Ledbetter was the only female area manager and received $6,000 – $18,000 less annually than her male peers.  All told, over the course of her career, Ledbetter lost over $200,000.00 in pay and benefits as a result of this gender discrimination.

Trial Verdict for Ledbetter

Ledbetter filed charges with the Equal Employment Opportunity Commission in 1998.  At trial, Ledbetter’s former supervisor testified that Ledbetter’s salary fell below Goodyear’s minimum threshold for the area manager position.  One woman who had previously worked as an area manager testified that her salary was less than the employees she supervised.  Ledbetter testified that the plant manager told her that the “plant did not need women, that [women] didn’t help it, [and] caused problems.”  A jury found in favor of Ledbetter, concluding that Goodyear discriminated against her based on her gender in violation of Title VII.

Jury Verdict Overturned

Goodyear appealed the jury’s verdict and argued that Ledbetter’s suit was time-barred because she had not filed charges with the EEOC within 180 days of the initial decision to pay her less than her male counterparts – that decision was made shortly after she started working at Goodyear.

Title VII of the Civil Rights Act of 1964 requires that employees alleging discrimination file charges with the EEOC within 180 days (or 300 days, depending on the state) of the employer’s discriminatory act.  Goodyear argued that its discriminatory act was its initial decision to pay Ledbetter less than her peers.  The Eleventh Circuit Court of Appeals sided with Goodyear and overturned the verdict.

Supreme Court Affirms

A sharply divided Supreme Court agreed with the Eleventh Circuit’s analysis and affirmed the reversal of judgment.  Justice Ginsburg wrote a strongly worded dissent that pointed out that Ledbetter, like many victims of pay discrimination, did not even know of the pay disparities with her male peers until she concluded her employment.  The majority’s holding essentially required Ledbetter to file discrimination charges at a time during which she was not even aware that discrimination had occurred.  Justice Ginsburg concluded her blistering dissent by inviting Congress to amend Title VII to reverse the majority’s decision.

Congressional Responds with LLFPA

Congress responded to the Supreme Court’s decision by passing the LLFPA, which overturned the decision by amending Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act.  The amendments explicitly state that an employer commits a discriminatory act each time it pays wages pursuant to a discriminatory policy.  The LLFPA limits the back pay damages an employee can receive for such discrimination, however, to the two years preceding the employee’s filing of a charge.  With Ledbetter at his side, President Obama signed the LLFPA into law in January 2009.

How have courts interpreted the Act?

Courts have widely held that the LLFPA applies to all forms of discrimination covered by Title VII, not just gender discrimination.

However, courts have struggled and differed on the question of what constitutes a pay decision sufficient to qualify as a discriminatory act under LLFPA.  For example, the Supreme Court held that African American firefighters could sue the City of Chicago on the basis of a discriminatory promotion test, because Chicago committed a discriminatory act each time it administered the test – not just when it originally conceived of the test.  On the other hand, courts have also held that the decision not to promote an employee does not qualify as a discriminatory act under LLFPA, nor does the failure to award tenure.