3d Circuit: Untimely Failure-to-Promote Claim Is Not Saved by Ledbetter Fair Pay Act

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).

Lilly Ledbetter Fair Pay Restoration Act Has Been Signed Into Law

President Barack Obama this morning signed the first bill of his presidency, a piece of legislation known as the Lilly Ledbetter Fair Pay Restoration Act that makes it easier for workers to sue after discovering what they believe to be pay discrimination.  For a bit more detail about the potential ramifications of the new law, see Lilly Ledbetter Fair Pay Act Will Become First Pro-Labor Legislation of 2009, Equal Pay Becomes Front Runner as Lilly Ledbetter Act Takes Center Stage, Equal Pay: Fair Pay Restoration Act Voted Down in Senate, More Fodder for the Fair Pay Debate, or A New Day for Employers.

Lilly Ledbetter Fair Pay Act Will Become First Pro-Labor Legislation of 2009

The Lilly Ledbetter Fair Pay Act of 2009 has passed the Senate and could be on President Obama’s desk within days.  The wage-discrimination statute, Senate Bill 181, reverses a decision by the U.S. Supreme Court in 2007, which narrowly defines the time period during which an employee can file a claim of wage discrimination.  This may be the first piece of legislation signed by the new President.  Obama has been a strong advocate for the legislation.  Lilly Ledbetter, the plaintiff in the lawsuit that inspired the legislation, was invited to the inauguration.

The bill was approved during the first week of the new congressional session, perhaps indicative of the momentum behind the expected pieces of labor legislation.shutterstock_2935217

In Ledbetter v. Goodyear Tires, the case at the center of the legislation’s history, the Court held that the discriminatory act, which starts the clock running on the time period to file a claim, occurs at the time of the discriminatory decision.  In other words, in a failure-to-promote claim, the date of the promotion decision is the date when the clock begins to run.  Ledbetter argued that the clock would begin to run each time a new paycheck was issued because each paycheck represented a new discriminatory act–the unequal payment of wages.  Ledbetter claimed that she did not know that she had been getting paid less than her male counterparts until a note was left in her mailbox at the end of her 19-year career with the company. 

Opponents of the law contend that it will effectively eliminate a statute of limitations period and could result in increased filings of unmeritorious lawsuits.  Employers will be hard pressed to “disprove” the decision- making process involved in a pay raise issued 20 years earlier. 

A middle ground, offered by Republican Senator Kay Bailey Hutchinson would have started the time period when the employee knew or had reason to know that discrimination was occurring.  Hutchinson said her alternative would protect both employee and employer. 

The alternative was rejected by women’s-rights advocates, as the issue has become one largely divided on gender lines.  Women’s-rights groups argue that the law is necessary to protect women from continued unequal pay.  Very little has been mentioned about the fact that the Ledbetter bill would apply to other protected classes, such as race, ethnicity, and national origin–not just gender.

What Other Great Minds Have to Say

Several e-law bloggers have already issued their insights on the legislation, so have a look at some of these posts to learn more about the ins and outs of what may be the first pro-employee legislation passed in 2009:

John Phillips at The Word on Employment Law, Fair Pay Act Ready to Become Law

Michael Moore at the PA Labor and Employment Blog, Ledbetter Fair Pay Act passed by Senate and awaiting Obama Signature

Jon Hyman at the OH Employment Law blog, Ledbetter passes Senate – President’s signature is next

Frank Steinberg at the NJ Employment Law Blog, Ledbetter Act Passes Senate

Ross Runkel at LawMemo, Lilly Ledbetter Fair Pay Act of 2009 awaits President’s Signature 

Dennis Westlind at The World of Work, Senate Passes Lilly Ledbetter Bill 61-36

Dan Schwartz at the CT Employment Law Blog, Lilly Ledbetter Fair Pay Act of 2009 Passes Senate, 61-36; President Will Sign

Tracing the Story Back to the Beginning

And to read about the bill since its inception, see the following posts:

Equal Pay Becomes Front Runner as Lilly Ledbetter Act Takes Center Stage

Equal Pay: Fair Pay Restoration Act Voted Down in Senate

More Fodder for the Fair Pay Debate

A New Day for Employers


Employers should stay tuned to what may be the first in a series of legislation that advocates for employees to the disadvantage of businesses.

More Fodder for the Fair Pay Debate

The debate about equal pay is bound to continue in light of pending legislation like the Fair Pay Act and the Paycheck Fairness Act, which was passed by the House on July 21, 2008. Here are the nuts and bolts every employer should know about these important new developments.

The Fair Pay Act

The Fair Pay Act seeks to end wage discrimination against those who work in female-dominated or minority-dominated jobs by establishing equal pay for equivalent work. Under the Fair Pay Act, employers could not pay jobs that are held predominately by women less than jobs held predominately by men if those jobs are equivalent in value to the employer. The bill also protects workers on the basis of race or national origin. The Fair Pay Act makes exceptions for different wage rates based on seniority, merit, or quantity or quality of work.

The Paycheck Fairness Act

The Paycheck Fairness Act seeks to strengthen the Equal Pay Act of 1963.  The bill expands damages under the Equal Pay Act and amends its very broad fourth affirmative defense. In addition, the Paycheck Fairness Act calls for a study of data collected by the EEOC and proposes voluntary guidelines to show employers how to evaluate jobs with the goal of eliminating unfair disparities.

Ledbetter Fair Pay Act / Fair Pay Restoration Act

Another interesting piece of pay-related legislation to watch is the Lilly Ledbetter Fair Pay Act / Fair Pay Restoration Act, which seeks to amend the Civil Rights Act of 1964 and other anti-discrimination laws to clarify at which points in time discriminatory actions qualify as an “unlawful employment practice.”  The Fair Pay Restoration Act seeks to change the results of Ledbetter v. Goodyear Tire & Rubber.  (For more information about the Ledbetter decision, see Equal Pay: Fair Pay Restoration Act Voted Down in Senate). 

Under the Fair Pay Restoration Act, an unlawful discriminatory act is committed when a discretionary compensation decision is adopted, when an employee becomes subject to the decision, or when an individual is affected by the application of a decision, including each time compensation is paid.   This is inapposite to Ledbetter, where the U.S. Supreme Court held that employees cannot challenge ongoing pay discrimination if the employer’s original discrimination decision occurred more than 180 days before the most recent discrimination, even when an employee continues to receive paychecks that have been discriminatorily reduced for some time. The law further states that individuals may receive back pay as compensation for discrimination that occurred up to two years preceding the filing of a charge.

Equal Pay: Fair Pay Restoration Act Voted Down in Senate


The Lilly Ledbetter Fair Pay Act was proposed as a measure to increase the length of time in which employees could file claims for unequal pay based on discrimination. Currently, under Title VII of the Civil Rights Act of 1964, employees have up to 300 days to file a claim from the date of the discriminatory act. Under the Equal Pay Act, claims of pay discrimination based on gender can be filed up to two years after the discriminatory act.

The Lilly Ledbetter proposal generated signficant debate. Opponents saw the bill as preventing employers from closing the door on equal-pay claims because employees would no longer have a hard and fast deadline for filing claims. Advocates saw the bill as a safeguard to ensure that those who were subject to unequal pay but who had no way of learning of the discrimination would not lose their claims on a technicality.

Senate Republicans killed the bill in a 56-42 vote on Wednesday, April 23. Senator John McCain, who stated that he opposed the bill but favors fair pay for women, was campaigning in New Orleans, so he was not present for the vote. Senators Barack Obama and Hillary Clinton both voted in favor of the bill.

Equal Pay Becomes Front Runner as Lilly Ledbetter Act Takes Center Stage

The National Women’s Law Center is promoting Equal Pay Week with Blog for Fair Pay Day today.

Equal Pay Week marks the point in 2008 when the average woman’s wages catch up with what the average man earned in 2007. Women’s earnings are still on average only 77% of men’s. The site has a compilation of blog postings (and a “vlog” posting) about the equal pay issue, and a link for readers to use to urge their senators to vote in favor of the Lilly Ledbetter Fair Pay Act. That’s the law designed to reverse the Supreme Court’s ruling that imposed a very short statute of limitations on equal pay claims. The vote may be as soon as next Wednesday, April 23.

Senator Ted Kennedy issued a press statement yesterday voicing his opinion in favor of the Act.

Equal pay is a tricky issue, but one in which the EEOC and OFCCP have both taken an interest of late. The OFCCP advises federal contractors to conduct self-audits of their pay practices. I can attest that a self-audit is a difficult task because so many factors can influence pay and most employers do not track information about training, education, starting pay, etc., in their HR information system.

Whether you are for or against the Ledbetter Act, now is the time to make your opinion known.