WASHINGTON–A Supreme Court decision today limiting a worker's ability to sue an employer for pay discrimination that stems from decisions made long ago is good news for businesses, a legal expert said.

Debra Friedman, an attorney with the Cozen O'Connor law firm in Philadelphia, which does insurance and labor law litigation, said employers will face less uncertainty regarding potential discriminatory pay claims as a result.

“It is a favorable ruling for employers,” said Ms. Friedman, adding that the high court's opinion would provide “certainty for employers that they won't be facing stale claims” based on pay decisions.

In the case at issue, Ledbetter v. Goodyear, Lilly Ledbetter worked at a Goodyear plant in Alabama between 1979 and 1998. Toward the end of her employment, she filed suit against the company arguing pay discrimination under Title VII, a federal law barring discrimination on the basis of gender, race, religion or national origin.

Goodyear countered, however, that Ms. Ledbetter's claims did not meet the statute of limitations for a discrimination suit under Title VII or 180 days since the act of discrimination, and the high court agreed in a 5-4 decision.

Ms. Friedman explained that an earlier case, Amtrak v. Morgan, played a key role in the decision. In the Morgan case, the court determined that “discrete acts,” which Ms. Friedman said are effectively “anything you can identify” such as hiring, firing, promotions or pay decisions, are subject to the 180-day limit, whereas a claim of a “hostile work environment” would fall under a looser statute.

Ms. Ledbetter sought to claim that each paycheck issued after a discriminatory pay decision should constitute a new and separate discrete act, or that a 1998 decision denying her a raise should be considered as a discrete act because it carried forward an earlier discriminatory act, but the majority of the high court disagreed.

“Both of these arguments fail because they would require us in effect to jettison the defining element of the legal claim on which her Title VII recovery was based,” the court said in its opinion, which was authored by Justice Samuel Alito.

That opinion noted further that Ms. Ledbetter did not allege discrimination in either the continued issuing of her paycheck during her employment or in the denial of her raise in 1998, but only claimed that they perpetuated an earlier discriminatory act.

In a dissenting opinion, Justice Ruth Bader Ginsburg argued that the nature of pay decisions makes the 180-day limit unfair.

“The court's insistence on immediate contest overlooks common characteristics of pay discrimination,” she noted in a dissent agreed to by Justices John Paul Stevens, Stephen Breyer and David Souter.

“Pay disparities often occur, as they did in Ledbetter's case, in small increments; cause to suspect that discrimination is at work develops only over time. Comparative pay information, moreover, is often hidden from the employee's view,” she wrote.

To the question at hand, she said, there are two answers. In one, the initial decision is considered the sole discrete act and is considered separate from all prior and subsequent salary decisions. The other considers the payment of a discriminatory salary infected by sex-based discrimination” as an unlawful employment practice.

“The court adopts the first view” in the majority opinion, she said, “but the second is more faithful to precedent, more in tune with the realities of the workplace, and more respectful of Title VII's remedial purpose.”

The ultimate effect of the ruling, Ms. Friedman explained, is that it clarifies exactly what exposure an employer has to a claim of discrimination under Title VII regarding a previous pay decision.

“It does bring a lot of certainty,” she said.

The court's ruling could have an effect beyond the federal system as well, Ms. Friedman noted. While state antidiscrimination laws “are not required” to follow the federal version, she noted that many state courts “frequently look to how Title VII is interpreted” in formulating their own opinions.

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New High Court Ruling Called Good For Business

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