Employment Law Decisions from the Supreme Court of the United States

By: Laura A. Candris, Esquire lac@muslaw.com

Ledbetter v. The Goodyear Tire & Rubber Co., Inc. is one of the most important employment decisions of the U.S. Supreme Court in recent years. In Ledbetter, the Court ruled (5-4) that each decision about an employee’s pay is a “discrete act” and that any Title VII claim based on such a decision must be filed with the EEOC within the same short period (300 days in Pennsylvania, but 180 days in some other states) allowed for filing other Title VII claims. Importantly, the Court rejected Ledbetter’s arguments — and the rulings of a number of federal courts of appeals - that she and other claimants have 180 (or 300) days from any paycheck resulting from a pay-setting decision to file an EEOC charge, even if that decision was made years earlier.

During most of Ledbetter’s career at Goodyear, pay increases were granted or denied based on performance evaluations. Shortly before she retired, Ledbetter filed an EEOC charge alleging that years earlier, her supervisor gave her poor evaluations because of her sex and, consequently, she was paid significantly less than any of the men holding the same job. Thus, Ledbetter claimed intentional gender discrimination. Ledbetter did not claim that Goodyear adopted its performance-based pay system in order to discriminate on the basis of sex or that it applied the system to her discriminatorily during the period allowed for filing EEOC charges or that Goodyear failed to communicate its allegedly discriminatory pay decisions to her at the time.

In its May 29, 2007 opinion, the Court made clear that old acts of intentional discrimination cannot be the basis for new claims under Title VII, even when the effects of such discrimination continue. However, the Court also pointed out that if an employer uses a discriminatory pay structure, then each paycheck based on that structure violates Title VII and triggers a new EEOC filing period. Additionally, the Court observed that the Equal Pay Act (“EPA”) –- which has a much longer claim-filing period - does not require proof that any pay discrimination was intentional or require a filing with the EEOC. Justice Alito, who wrote the majority opinion, observed “[i]f Ledbetter had pursued her EPA claim, she would not face the Title VII obstacles she now confronts.” Justice Ginsberg, writing for the dissenting justices, solicited Congress to overturn the decision legislatively.

While the Ledbetter decision offers employers valuable protection from stale claims of intentional discrimination under Title VII, its benefits are limited because it does not affect other types of Title VII claims or claims under other federal or state statutes, and it may be legislatively overturned. Consequently, employers should continue diligently to monitor the design and administration of their pay systems to prevent intentional and adverse impact discrimination and reduce the incidence of claims.

Other decisions of interest.
In Long Island Care at Home, LTD v. Coke, the Supreme Court upheld a Department of Labor regulation which provides that persons employed to work in private homes providing companionship services for the aged or infirm are exempt from the minimum wage and overtime pay provisions of the federal Fair Labor Standards Act (“FLSA”), even when the employer who pays them is an entity, not the family or household using the services. This ruling means that home healthcare agencies and entity employers of workers providing these services need not comply with the FLSA with respect to workers. Employers must still comply with any state or local laws requiring overtime pay or setting a minimum wage for such workers.

In Davenport v. Washington Education Association the Court ruled that, while unions representing public workers may assess fees against nonmember workers covered by collective bargaining, states may require such unions to obtain authorization from those workers before using their fee money for election purposes.

In Beck v. PACE International Union, the Court reiterated its prior decisions that terminating a single-employer pension plan is a decision of the employer and not subject to the fiduciary obligations under the Employee Retirement Income Security Act (“ERISA”). The Court also ruled that merger with a multi-employer pension plan is not a permitted method of terminating a single-employer defined benefit pension plan. As a result, an employer which is considering terminating a defined benefit pension plan is not required by ERISA to consider a proposal by the union to merge the single employer plan with a multi-employer plan.

For more information about these cases and their impact, contact Laura A. Candris at lac@muslaw.com or 412-456-2891.