THE LILLY LEDBETTER FAIR PAY ACT:

Employers may be charged  with discrimination

even where the alleged discriminatory act is years old

and well beyond the 180 day limitations period

On January 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act into law.  The Ledbetter Act overturns a 2007 Supreme Court decision, Ledbetter v. Goodyear Tire and Rubber Co.  In that case, the Court ruled that nearly all of Lilly Ledbetter’s claims of sex discrimination were barred by the 180 day limit to file a claim.  The Act reverses this decision and allows employees to charge their employers with discrimination even where the alleged discriminatory act(s) occurred sometimes years or even decades prior to the filing of the charge.

Lilly Ledbetter worked for Goodyear Tire and Rubber from 1977 until 1998 when she took early retirement after she was denied a raise and scheduled for layoff.   After she retired, she filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC).  Her charge alleged that she was discriminated against in employment evaluations and associated raises throughout her twenty years of employment because of her sex, in violation of Title VII of the Civil Rights Act of 1964. 

Under current law, an employee who wishes to charge his or her employer with discrimination under Title VII must do so within 180 days of the discriminatory act (i.e. termination, denial of pay raise, demotion etc.).  The argument in front of the Supreme Court centered upon the 180 limit to file a claim.  In Ledbetter’s case, nearly all of the alleged discriminatory acts occurred well beyond the 180 day limitation period, sometimes years and even decades prior.  In an attempt to circumvent the 180 day limitation period, Ledbetter argued that the paychecks she received within the 180 period prior to her charge, including her 1998 raise denial, triggered a new EEOC charging period and “refreshed” the limitation period for all prior discriminatory pay acts, in effect extending the limitations period for years beyond the 180 days.

The Supreme Court disagreed with Ledbetter’s argument, stating that the statute of limitations period is not “refreshed” for past discriminatory pay decisions every time she receives a new paycheck.  The Supreme Court explained that a limitation period serves to protect employers from the burden of defending claims arising from employment decisions that are long past.

Under the new law, Congress adopted Ledbetter’s theory.  The Act makes clear that each “discriminatory” paycheck received is a new act of discrimination that “resets” the 180 day limit to file a claim for all past related pay discrimination. 

The Lilly Ledbetter Fair Pay Act puts employers on notice that they may be faced with discrimination claims where the alleged “discriminatory act” may have occurred years and years ago.