Pay Based Discrimination to be Treated as a Continuing Violation

Scott E. Schaffer, Esq. • April 1, 2009

On January 29, 2009 President Obama signed his first piece of legislation, the Lilly Ledbetter Fair Pay Restoration Act of 2009. The new law reverses the U.S. Supreme Court’s decision in Ledbetter v. Goodyear, which held the deadline for filing a pay discrimination charge is measured from the date of the initial discriminatory pay decision. Now the deadline will be measured from the date of any subsequent paycheck received following such discriminatory decision. In effect, the Act recognizes a continuing violation theory that resets the deadline for filing a claim each time an employee receives a paycheck affected by a prior discriminatory decision. This makes it much easier for employees to bring pay discrimination claims.

The Ledbetter case gained a great deal of attention during the recent presidential campaign. Ms. Ledbetter worked for Goodyear for almost twenty years. After being laid off she filed a claim of gender based pay discrimination. A jury awarded her $223,776 in back pay. The employer appealed claiming that any decision impacting her pay rate was made more than 180 days prior to the date she filed her complaint, and therefore her complaint was untimely. The U.S. Supreme Court agreed and stated that a pay-setting decision is a discrete act that triggers the period to file a charge. Justice Ginsburg, in dissent, argued that each ongoing wage payment infected by discrimination constitutes a separate discriminatory act for purposes of the filing deadline.

Congress agreed with Justice Ginsburg’s position and passed the Ledbetter Act, which amends Title VII, the ADA, the Rehabilitation Act of 1973, and the ADEA to provide that the charge filing period begins when either: (1) a discriminatory compensation decision is made, (2) a person becomes subject to the decision, or (3) a person is affected by an application of the decision. The new Act covers not only gender discrimination, but race, national origin, religion, age, and disability based discrimination as well.