The Third Circuit Court of Appeals has issued an important decision limiting the scope of the Ledbetter Fair Pay Act, which was passed in 2009 in response to the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber, Co., Inc. In short, the Fair Pay Act provides that “in pay discrimination matters,” the statute of limitations is tolled each time an individual is “affected by application of a discriminatory compensation decision.” In other words, if a female employee is not given the same pay raise as her male colleagues because of her gender, every time she receives a paycheck thereafter serves to toll the statutory period. Indefinitely.
Since its passage, the Act has been a source of legitimate concern for employers, who worry that they will be called to explain a decision made many years earlier by a former supervisor under different policies or pay practices, etc. The Third Circuit’s decision in Noel v. Boeing Co. puts some of those concerns to rest.
Noel claimed that he had not been promoted in September 2003 as a result of unlawful discrimination. Therefore, he would have had to have brought a charge of discrimination with the EEOC or Pennsylvania Commission within 300 days of the decision. But Noel waited to file his charge until March 2005, about a year too late, according to the defendant-employer and the trial court, which dismissed Noel’s failure-to-promote claim. Noel appealed, arguing that the Act tolled the limitations period and saved his claim.
He argued to the appellate court that, each time he received his paycheck, he was being subject again to the effects of the decision not to promote him in 2003. The Third Circuit did not agree, finding that the Act can toll the period only for claims involving pay discrimination–not for a claim alleging failure to promote. The court also explained what it considers to be a true pay-discrimination claim for the purposes of the Act. Specifically, the plaintiff must be alleging that he or she received less pay for doing equal work and that the difference was due to a discriminatory bias.
The decision is an important one for employers. Although the application of the Act remains unsettled to some degree, this case at least eliminates one type of claim from an indefinitely extended statute of limitations.
Noel v. Boeing Co., No. 08-3877 (3d Cir. Oct. 1, 2010).