The U.S. Supreme Court's 2007 Term: Disparate Pay and Union Dues Issues

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Throughout the year, CCH asked recognized experts in the field of labor and employment law for their thoughts on decisions of the U.S. Supreme Court in the labor and employment arena. CCH welcomes the opportunity to share their observations with readers of the Labor Law Journal.

LEDBETTER v. GOODYEAR TIRE & RUBBER CO.

The U.S. Supreme Court's decision that employees cannot bring Title VII disparate pay claims that allege discrimination occurring outside the statutory limitations period, even when a paycheck is received during that same limitations period,1 provoked a strong response from groups on both sides of the issue. Business groups applauded the decision, calling it fair. Women's rights groups criticized the decision, calling it a step backward for working women.

Affirming the Eleventh Circuit's opinion,2 the Supreme Court explained that "treating pay discrimination as a discrete act, limited to each particular pay-setting decision," the unlawful employment action at issue is the employer's decision regarding the pay differential, not the subsequent issuance of paychecks reflecting that differential. In so holding, the High Court emphasized the distinction between past acts of disparate pay, which occur when employers make adverse pay decisions, and the present effects of those acts, which are found in employees' paychecks, when concluding that Lilly Ledbetter should have challenged Goodyear's alleged intentionally discriminatory pay decision within 180 days of the decision itself.

The controversial 5-4 decision was written by Justice Alito and was joined by Chief Justice Roberts and Justices Scalia, Kennedy and Thomas. Justice Ginsburg, who read a summary of her dissent from the bench, filed the dissenting opinion in which Justices Stevens, Souter and Bryer joined.

Is this really a setback for employees?

When asked how big of a setback the decision is for employees, Professor of Law Charles B. Craver responded that Ledbetter is a significant setback for employees who are illegally underpaid. "Due to the secrecy of salary information and the subtle ways in which salary differentials are generated, employees rarely learn of discriminatory differentials until many months, or even years, after they begin," he said.

At a minimum, Craver hopes the Supreme Court would not begin the running of the limitations period until employees have enough information to know they are victims of unlawful discrimination. Even with this standard, however, he thinks it is unclear how easy it will be to prosecute such lawsuits, since employees often become suspicious of discrimination but fail to take action until they are certain it is taking place.

Civil rights attorney Lynne Bernabei believes the decision makes the pursuit of Title VII disparate pay claims more difficult and thinks that's why there's been such a strong public reaction, based on the strong dissent and the very strong reaction from Congress, that what we're seeing is a sort of disgust with the Supreme Court and how far it has gone against employee rights.

She also believes Ledbetter will spur a repeat of Congress' action in 1991 when Title VII was amended to overturn several Supreme Court rulings that limited the civil rights statutes. According to Bernabei, Congress is beginning to look at all these decisions and is trying to fortify the rights they have already said in legislation employees should have, which the Supreme Court has disregarded. "I think this decision is going to mobilize people who are saying: 'The Supreme Court has really gone off the Reservation.' We need Congress to say: 'No, this is what these laws really mean.'"

Bernabei also speculated that Ledbetter would impact workplace conduct. She felt the decision would give employers a great incentive to hide payroll information so that any, even intentional discrimination, would not be discovered until too late to be actionable. …