Jottings By An Employer's Lawyer

Thursday, May 31, 2007

Payday Blues at the Supreme Court

I was out of town deposing when the Supreme Court issued its opinion Tuesday in Ledbetter v. Goodyear Tire & Rubber Co. (5/29/07) [pdf], which means in today's world of competitive blogging all hopes of any quick analysis were long gone by the time I read the decision. So rather than recreate the discussions, let me point you to a good summary of various commentary at SCOTUSblog. For a legal criticism check out Professor Secunda's thoughts at Some Reflections on the Ledbetter Decision. For a rebuttal, see Professor Runkel's response. My firm's take on the decision which also talks about the impact on OFCCP policy can be found here.

I suppose I had not taken this case seriously enough as I am somewhat surprised at the heat that it is drawing. I would have been extremely surprised if it had come out any other way. If it had, it would have been disastrous for employers (although not their lawyers).

Professor Secunda starts with what he says is the critical question: "under Morgan, is pay discrimination a discrete act like a termination or failure to promote or is it more like a cumulative series of individual events like hostile work environment sexual harassment?" He argues that Justice Ginsburg (the cumulative view) has the better of the argument. I see it differently. In a hostile environment case, a single action may or may not be actionable depending on what happens later. See for example, Clark County School District v. Breeden, U.S. (2000).

However, if an employer makes a decision about pay based on gender, it is clearly actionable even if the amount of damage is small or it is hard to know that it is discrimination at the time. The latter two facts do not change the actionable nature of the event, and once you have an actionable event the time limit starts.

The "hard to discover" argument really would be more appropriately addressed in the context of whether there should be a "discovery rule" in discrimination cases. The Court clearly notes (footnote 10) that question is not before them:

We have previously declined to address whether Title VII suits are amenable to a discovery rule. National Railroad Passenger Corporation v. Morgan, 536 U. S. 101, 114, n. 7 (2002). Because Ledbetter does not argue that such a rule would change the outcome in her case, we have no occasion to address this issue.

A few other points from the commentary, some theoretical, others more practical-

  • I was interested in Linda Greenhouse's comment in the New York Times that if Justice O'Connor had been on the Court instead of Justice Alito, who authored the majority opinion, she "would almost certainly have voted the other way, bringing the opposite outcome." Interestingly two commentors on the Scotus Blog took her to task noting that Justice O'Connor had dissented in Morgan on the relevant point, and it is unlikely that she would have reversed herself.

    Since before reading either Greenhouse's article or the comments, I had made a similar statement to a reporter who called for my thoughts on Ledbetter, I checked out the dissent and see where the commentors are coming from. I am not sure that I am convinced however that if she had been on the Court the out come might not have been different; probably not a complete reversal, but some "middle way" which might well have done nothing more than muddied the waters. Like the outcome of Ledbetter or not, one thing we can all agree on — it is clear, a quality whose value is often overlooked.

  • I also have noted the lack of commentary on how there is in fact a statute that is designed specifically for Lebetter's problem — the Equal Pay Act which is one year older than Title VII and focuses exclusively on discrimination in pay based on gender. As the majority notes that claim was not time barred, Ledbetter urged it and lost, but did not appeal it. The dialogue between Justice Ginsburg and Ledbetter's counsel on this issue is instructive.

    JUSTICE GINSBURG: Why didn't you ask for the equal pay claim? As I understand the magistrate judge he said, yes, you had made it across the first hurdle, you had a prima facie case. You showed that you're a woman, and you're getting this and all the men are getting much higher. But the employer has come forward with any other factor other than sex and the other factor is that, your inadequate performance.

    MR. RUSSELL: We should have objected to the failure to reinstate the Equal Pay Act claim. We didn't; we didn't think it was that important at the time because we still had the Title VII claim.

    Thanks to Chris McKinney at the HR Lawyer's Blog for the link to transcript of oral argument.

    Justice Ginsburg's sole retort in her dissent is that Title VII is not limited to sex, so today's decision will impact those who bring race, religion and national origin claims. But differences in remedial statutes is not limited to those two — for example § 1981 allows uncapped damages for discrimination based on race without any administrative procedures (meaning a racial victim of pay discrimination would have four years to bring a claim), but there is no § 1981 claim for gender discrimination. If a statute needs addressing, perhaps it should be the Equal Pay Act which specifically focuses on compensation, not Title VII.

  • More practically speaking, my rule of thumb is that any legal argument, such as Justice Ginsburg's, which argues that the dangers of adopting it can be cured by the appropriate application of the doctrine of laches — relying on the proposition that "no sensible judge would tolerate such inexcusable neglect," is written by a judge who is far removed from the reality of everyday litigation.

  • Finally, although it makes no real difference except to make the arguments against the decision on the grounds that people will not know that they are discriminated against less doomworthy, the press has not frequently enough pointed out that more than half of the states have deferral agencies which means the time period for filing a claim is 300 days not 180 (or as pointed out above, 4 years if based on race).

    And for those who claim that employers will hide their discrimination by prohibiting employees from talking about their wages — they may do so, but they do it in violation of another law, the National Labor Relations Act. They of course also risk extending the statute of limitations under other equitable doctrines of "waiver, estoppel and equitable tolling."

Maybe there was more to say about the case than I thought.

Update: The NYT's editorial page really goes off the hyperbolic deep end in their desire to paint the Supreme Court as evil doers — Injustice 5, Justice 4:

The Supreme Court struck a blow for discrimination this week by stripping a key civil rights law of much of its potency. The majority opinion, by Justice Samuel Alito, forced an unreasonable reading on the law, and tossed aside longstanding precedents to rule in favor of an Alabama employer that had underpaid a female employee for years. The ruling is the latest indication that a court that once proudly stood up for the disadvantaged is increasingly protective of the powerful.

I think most employers and their lawyers would be surprised to know that Title VII has been stripped of its potency or can figure out which "long standing precedents" were "tossed aside." If the NYT's wants to object on policy grounds — fine — but notwithstanding the impassioned and certainly deeply held views of Justice Ginsburg and the three who joined her dissent, an attempt to paint this as some wacky right wing reading of the law is off the mark.

It's a clever headline, but far from accurate or helpful.

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I agree with your take. The other problem, it seems to me, with Ginsburg's laches argument is that it's not clear that she's even applying it correctly.

If each paycheck represents a new act of discrimination, then where's the laches? Even if one is suing 20 years after the original discriminatory pay change, one would only be suing a few weeks after one's last paycheck.
The Court did not address the issue that would make much of this a non-issue -- specifically, whether a "discovery rule" should apply to these kinds of claims.

I'm not sure how the courts would fashion such a rule in this context, but it does seem unfair - given a lot of employers' policies attempting to prohibit employees from discussing their relative comp., etc. - to hold that a plaintiff has to file suit within 300 days of a compensation decision that they might not/probably don't know is actionable at the time it is made and discussed with them.

Even more unfair, this case involved someone whose raises were smaller. I can't imagine that she knew or should have known that she was getting hosed from the first time they gave her a raise.
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