What Comes After Ledbetter? An Update

The following is an expanded version of a piece written earlier for this blog. The author is Donald R. Livingston, a partner with Akin Gump. Prior to joining the firm, he was general counsel of the Equal Employment Opportunity Commission. This version of the article originally appeared in BNA’s “Employment Discrimination Report,” and is reprinted with permission.

On April 19, 2007, in the case of EEOC v. Kovacevich “5” Farms, a federal judge in California refused the defendant’s request to limit an Equal Employment Opportunity Commission lawsuit under Title VII of the 1964 Civil Rights Act to claims on behalf of females who were last subjected to discrimination no earlier than 300 days before the applicable EEOC charge was filed. The employer had thought it preposterous that EEOC would seek remedies for women who had been refused hire as many as five years before the charge. But EEOC argued that no limitation period was applicable. Under EEOC’s contention, where a “continuing violation” exists, the limitation period is coextensive with the period of the discrimination. Thus, EEOC would be able to recover for any injury that occurs during the existence of the pattern or practice of discrimination regardless of how long ago the injury occurred. An EEOC trial lawyer publicly trumpeted the court order as the first to clearly allow pattern or practice claims that fall outside of the charge filing period. That is a point not apparent from EEOC’s briefings to the federal court.

EEOC’s efforts to eliminate a statute of limitations for cases asserting a pattern or practice of discrimination was dealt a setback May 29, 2007, when the U.S. Supreme Court issued its opinion in Ledbetter v. Goodyear Tire & Rubber Co. As in Kovacevich “5” Farms, Ledbetter deals with the concept of continuing violations, one of most tangled areas in employment law. While Ledbetter puts the future of the ruling in Kovacevich in doubt, it may be seen by some courts as stopping short of conclusively precluding such outcomes.

The factual landscape in Ledbetter is foggy, which is understandable considering that the claim spans two decades. We know from the court record that by March 1998 when Lillie Ledbetter filed her administrative charge of sex discrimination against Goodyear with EEOC she had worked for Goodyear for more than 19 years. We also know that, with the exception of 1995, her annual rankings and percentage pay increases were comparatively low from 1993 thorough 1996. But the court record tells us nothing of her performance rankings or pay raises during her first 12 years. However, it seems that the cumulative effects of past pay decisions had significant current consequences for Ledbetter. By the end of 1997, she was making 15 percent less than the lowest-paid male with the same job title.

Ledbetter sued in November 1999. She asserted that throughout her career she received disparate pay because of her sex, in violation of Title VII. Relying on Bazemore v. Friday, she challenged each annual pay raise decision over the full term of her employment on the theory that it affected her paychecks within the 180-day period for filing her EEOC charge. Goodyear defended on the ground that Ledbetter was precluded from challenging pay decisions that occurred more than 180 days before she filed her charge.

The issue before the Supreme Court was whether an employee can recover for the current effect of prior pay decisions that were made and communicated to the employee outside of the statute of limitations period. Ruling for the employer, the justices held that the paychecks Ledbetter received during the charge-filing period did not provide a basis for a challenge to discriminatory pay decisions made and communicated to her earlier. As the court explained, “current effects alone cannot breathe life into prior, uncharged discrimination.”

The decision seems straightforward, and should change the result in Kovacevich “5” Farms. EEOC’s lawsuit in that case “cannot breathe life” into the claims of individuals who seek to challenge hiring decisions made years before any charge of discrimination was filed. However, it is doubtful that Ledbetter will bring order to the perplexing doctrine of continuing violations. For one thing, the doctrine has proven resilient; for another, plaintiffs will use seeds from Ledbetter to argue for Ledbetter‘s negation.

The resilience of the doctrine is shown by the fact that the Supreme Court seemed to have caged it in 1977 in the case of United Airlines v. Evans. Evans held that the “continuing violation” concept cannot be used to challenge discriminatory conduct that occurred beyond a limitations period. Although Evans seemed clear when it explained that a plaintiff cannot challenge “a discriminatory act which is not made the basis for a timely charge,” what followed was a series of lower and Supreme Court opinions on continuing violations (continuing right on through Kovacevich “5” Farms) that revived what one employment treatise has called “arguably the most muddled area in all of employment discrimination law.” Then came Bazemore v. Friday. In 1986, the Supreme Court held that a salary system that perpetuates the effects of pre-Title VII discrimination is an actionable “continuing violation” each time a pay check is delivered. That holding reversed the lower courts, which–relying on Evans–had determined that the plaintiffs’ claim of discrimination in pay was untimely because the lesser pay resulted from discriminatory decisions made before Title VII was applicable to the employer.

In 2002, in National R.R. Passenger Corp. v. Morgan, the Supreme Court again explained that “discrete discriminatory acts are not actionable if time barred, even when they are related to acts alleged in timely filed charges.” But EEOC and other plaintiffs continued to argue that Evans (and now Morgan) is subject to a Bazemore exception, which applies in cases where current pay is depressed because of past discriminatory salary-setting decisions. Ledbetter seems to have eliminated the exception, except when an employer adopts a facially-discriminatory pay structure and retains the structure into the limitations period. According to the court, such an employer “can surely be regarded as intending to discriminate on the basis of race as long as the structure is used.”

Yet Ledbetter possibly does not end the matter for all cases. Rather, the vitality of the “continuing violations” doctrine post-Ledbetter appears to depend on how the lower courts choose to interpret Ledbetter‘s obtuse footnote 10:

We have previously declined to address whether Title VII suits are amenable to a discovery rule. … Because Ledbetter does not argue that such a rule would change the outcome in her case, we have no occasion to address this issue.

This note may be a response to concerns expressed by the dissenting justices that the 180-day charge filing period often will not provide sufficient time for an individual to have reason to believe that he or she experiences discrimination in pay. The dissent observes that, because comparative pay information often is hidden from employees and pay discrimination often occurs in small increments, it may take multiple pay decisions before an individual has cause to suspect discrimination.

Note 10 arguably leaves the door open for courts to sustain otherwise stale claims based on an assertion that the circumstances of a particular case did not provide the claimant with sufficient information to believe that discrimination occurred. Thus, we face another decade (or more?) of inconsistent and contradictory court decisions, some of which will carve away at Ledbetter. Hopefully, these decisions will recognize that the rationale for a statute of limitations is particularly applicable in employment discrimination cases, where claims are usually brought on circumstantial evidence and relevant statutes encourage the prompt resolution of disputes; and where, in class cases, individual claimants benefit from presumptions that often require the employer to disprove discrimination. Proving the existence of non-discriminatory reasons for ancient employment decisions may be near impossible when witnesses are dead, lost, or subject to memories faded by time.

So, what comes after Ledbetter?