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Justices Hear Both Sides of Wage Discrimination Case

November 27, 2006 at 12:00 AM EST
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RAY SUAREZ: Lilly Ledbetter worked for the Goodyear Tire and Rubber Company for 19 years. When she retired in 1998, Ledbetter got an anonymous letter saying she had been paid significantly less than her male colleagues doing the same work.

Ledbetter sued, charging Goodyear with wage discrimination. A jury ruled in her favor, but the verdict was thrown out on appeal. The case made its way to the Supreme Court today.

Here to tell us about it is NewsHour regular Marcia Coyle of the National Law Journal.

And, Marcia, Title VII of the federal code says you can’t pay women less for the same work just because they’re women. So how did this end up in the high court?

MARCIA COYLE, National Law Journal: OK. Title VII of the Civil Rights Act of 1964, as you know, bars discrimination in employment on the basis of race, color, gender, national origin and religion. But it also has a requirement that you must bring your charge of discrimination within 180 days of the illegal employment practice that you are challenging.

Ms. Ledbetter, even though she won a jury verdict in her favor, lost on appeal to Goodyear because the appeals court found that her claim was filed too late, that it was not brought within the 180-day period.

The claim is that there were a series of discriminatory decisions made about her pay over the years. She feels that each paycheck is the illegal employment practice and the 180-day clock starts running with each paycheck.

Goodyear argues that that is not the illegal employment practice; it’s when the discriminatory decision is made. They argue that her claim involving her last paycheck that was filed — that she received during the 180-day period — there was no intentional discrimination, so there was no Title VII violation. You cannot look outside of that 180-day period to prove Title VII violation.

RAY SUAREZ: So let’s see if I understand this. Goodyear is arguing that, in order to have a case, Ms. Ledbetter would have had to have taken them to court in her first six months on the job?

MARCIA COYLE: Well, either the first six months or within six months of whenever the discriminatory pay decision was made.

RAY SUAREZ: The decision to pay her less because she’s a woman?

MARCIA COYLE: Yes. That’s correct.

Timing of the lawsuit

RAY SUAREZ: All right. Well, what did the justices hear from the two arguments today?

MARCIA COYLE: Well, Ms. Ledbetter's attorney was first up at the podium. And the justices pretty much were focused on the practical aspects of each side's arguments.

Ms. Ledbetter's attorney, Kevin Russell, was saying wage discrimination is different from -- for example, you lose a promotion because the employer discriminates on the basis of your sex. Wage discrimination is something that an employee may not know has occurred with his first or second or even third paycheck. As Justice Ginsburg pointed out later in the argument, wage disparity can be small over a period of years, and it takes a while until it becomes noticeable.

So he argued that this is not like loss of a promotion. It's not one-shot discrimination. When you have a series of discriminatory pay decisions, there's a ripple effect, and that's felt in every paycheck.

RAY SUAREZ: And it takes longer for then six months for those ripples to play themselves out.

MARCIA COYLE: Exactly. The chief justice, John Roberts, asked, "Well, what if the discriminatory decision was 15 years ago? Can 15 years later the employee challenge his or her paycheck on the basis of that long-time-ago decision?" And Mr. Russell said, yes, because of that ripple effect.

But employers are not without defenses. There is a concept in the law known as latches, which means it's way too late, and the courts could still throw out the claim on that basis.

On the other side, Goodyear and the Bush administration take a very hard line here. They're saying there has to be intentional discrimination within that 180-day period or your claim is not timely and you're out. They argue, to the court today, that we've got a statute of limitations. The 180-day period is designed to encourage employees to come forward promptly and to give notice to employers.

Ms. Ledbetter, they contend, is reading that statute of limitations out of the statute, and that's really not the role for the court.

Possible effects of the decision

RAY SUAREZ: So, in effect, the Bush administration, through the solicitor general's office, was siding with Goodyear. But isn't there a federal agency designed to handle complaints of exactly this kind?

MARCIA COYLE: There is, and that's a very interesting aspect to this case. The Equal Employment Opportunity Commission is charged by law with implementing Title VII. And the EEOC, as it's known, has consistently over the years taken the same position as Ms. Ledbetter has, and also the majority of lower courts have taken that position.

There's a policy argument here for Ms. Ledbetter, and that is that, if an employee can't challenge a paycheck discrimination that reaches back over several years or even longer, that is the result of a series of discriminatory decisions, you're going to be enshrining discriminatory pay systems. Employees just won't be able to challenge them, if they're locked into that 180-day period.

Goodyear also has a policy argument, and that is, "Well, if you go with what Ms. Ledbetter says, employers could then be forced to defend themselves against a decision that was made 20 years ago, even 10 years ago, when the decision-maker may have left the company, documents may be gone, evidence is stale." So it's a difficult balancing act.

RAY SUAREZ: Now, this argument heard today will set in stone or, you know, in precedent anyway, legal precedent, discriminatory pay cases for more than just gender discrimination, right?

MARCIA COYLE: Absolutely. What the court has to say about wage discrimination will also apply -- what it has to say about the statute of limitations, that 180-day clock, will also apply to wage discrimination, not just on the basis of sex, but on the basis of race, color, religion, national origin.

It will possibly also affect wage claims brought under the Americans with Disabilities Act and the Age Discrimination in Employment act, because they have very similar statutes of limitations in those laws. It will affect millions of employees and thousands of employers who are covered by Title VII, both in the private and public sector.

RAY SUAREZ: So an argument with big repercussions. We'll talk to you again when the decision comes down. Thanks, Marcia.

MARCIA COYLE: That would be great. Thank you.