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SUPREME COURT RULES IN EMPLOYER'S FAVOR IN TITLE VII PAY BASED DISCRIMINATION CLAIM

On May 29, 2007 the U.S. Supreme Court issued a 5-4 opinion emphasizing the importance of administrative filing deadlines in Title VII discrimination claims and stressing that the deadlines apply equally to claims involving discrimination in "termination, failure to promote, denial of transfer, [and] refusal to hire" brought under Title VII, as well as claims involving disparate treatment affecting pay. Title VII requires that in order to file a timely claim under Title VII, claimants must file a charge with EEOC within 180 days "after the alleged unlawful employment practice occurred." In states that have Section 706 agencies, like Tennessee's Human Rights Commission, the filing requirement has been extended to within 300 days of the last occurrence of the alleged unlawful employment practice.

The plaintiff in Ledbetter v. Goodyear Tire & Rubber Co., Inc., had worked as a salaried employee for Goodyear Tire & Rubber Company from 1979 through 1998. Salaried employees were given or denied raises based on their supervisors' evaluations of employee performance. Plaintiff Ledbetter first filed an EEOC questionnaire in March, 1998 and later filed a formal charge in July. In November 1998, Ledbetter took an early retirement and filed suit, alleging, among other things, that her employer the Equal Pay Act on 1963 and had discriminated against her under Title VII. The district court granted the employer summary judgment on Ledbetter's Equal Pay Act and other claims, but permitted the Title VII claim to proceed to trial. At trial, plaintiff introduced evidence showing that during the course of her employment she had been given poor performance evaluations by several supervisors due to her gender, which resulted in her pay not increasing at the same rate as her male co-workers. By the end of her employment, Ledbetter claimed, her income was significantly lower than any of her male colleagues. Goodyear countered by demonstrating that the evaluations were nondiscriminatory, but the jury found for the plaintiff, awarding her back pay and damages.

Goodyear appealed, contending that plaintiff's pay discrimination claim was time barred with respect to any pay decisions made prior to September 26, 1997, or 180 days prior to her filing the EEOC questionnaire and that no discriminatory act occurred after that date. The 11th Circuit reversed the trial court, finding that a Title VII pay discrimination claim cannot be based on any pay decision that occurred prior to the last pay decision that affect the employee's pay during the EEOC charging period. The appeals court further found that Goodyear had not engaged in any discriminatory actions from 1997, forward, with respect to pay decisions affecting the plaintiff.

The only issue that Ledbetter raised before the Supreme Court was whether a Title VII plaintiff, who alleged illegal pay discrimination can recover when the intentionally discriminatory acts affecting pay occurred outside the limitations period, but the effects, or disparate pay, continued through the limitations period. The Supreme Court rejected plaintiff's argument, which was based on Bazemore v. Friday, 478 U.S. 385 (1986) and a number of analogous statutory provisions, that her claim should be treated differently because it involved pay and required analysis under the "paycheck accrual rule," where each paycheck, even if not accompanied by a discriminatory intent, triggers a new EEOC charging period during which a claimant may timely challenge any prior discriminatory action that affected the amount of pay, regardless of how long ago the discriminatory act occurred. Reiterating the importance of statutes or regulations of repose and that the "existence of past acts and the employee's prior knowledge of their occurrence ... does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed," the Court found that Ledbetter's 1998 EEOC charge was too late to require consideration of the employer's acts occurring beyond the 180 day EEOC filing period.

Based on the holding in this case, Tennessee employers should be mindful if employees' salaries are tied to performance, the evaluations must be nondiscriminatory and not consider the individual employee's gender, race, faith, age or disability. Because Tennessee has established the Tennessee Human Rights Commission, the time in which employees in this state may file a claim with the administrative agency is 300 days, which is considerably longer than the otherwise mandated 180 days.


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