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The U.S. Supreme Court, with its newest justice, Samuel A. Alito Jr., leading the way, has undergone a sea change in its approach to employment law this term, taking an axe to the protections afforded by Title VII of the Civil Rights Act of 1964, the federal law prohibiting discrimination in the workplace, and greatly restricting employees’ rights to seek redress for pay discrimination. The court’s decision in its most important employment case, and its failure to decide two others on the merits, will likely lead to far more litigation for both employers and employees in this area of the law. In Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007), the most significant employment case of the term, the court abandoned long-standing Supreme Court precedent regarding pay discrimination and, relying primarily upon a case which had been superseded by an act of Congress, held that each particular salary-setting decision by the employer is discrete from prior and subsequent decisions and must be challenged by filing a charge with the Equal Employment Opportunity Commission (EEOC) within 180 days or lost forever. This is so, even if the effects of the initial discriminatory decision were not immediately apparent to the worker and even if each new pay check perpetuates the discriminatory pay. The facts of the Ledbetter case are not unusual in the American workplace. Lilly Ledbetter, a supervisor at Goodyear’s Gadsen, Ala., plant, introduced evidence that, during the course of her employment, several supervisors had given her poor evaluations because of her sex; that as a result of these evaluations, her pay was not increased as much as it would have been if she had been evaluated fairly; and that these past pay decisions continued to affect the amount of her pay throughout her employment. Toward the end of her job tenure, Ledbetter was being paid significantly less than any of her male colleagues. As Justice Ruth Bader Ginsburg added in her dissent, for most of Ledbetter’s almost 20 years of employment at Goodyear, she worked as an area manager, a position largely occupied by men. Initially, her salary was “in line” with the salaries of men performing substantially similar work, but over time the pay discrepancy between Ledbetter and her 15 male counterparts was stark. The jury found for Ledbetter on her Title VII claim and awarded her back pay and damages. The 11th U.S. Circuit Court of Appeals reversed, finding her claim time-barred. In her appeal to the Supreme Court, Ledbetter argued that her paychecks were unlawful because they would have “been larger if she had been evaluated in a nondiscriminatory manner prior to the EEOC charging period,” and that “each paycheck that offers a woman less pay than a similarly situated man because of her sex is a separate violation of Title VII with its own limitations period, regardless of whether the paycheck implements a prior discriminatory decision made outside the limitations period.” Ledbetter also argued that, under the framework of National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), pay discrimination was more like a hostile work environment claim, where the harm resulted from the cumulative effect of many individual acts, rather than a discrete and easily identifiable act such as a termination or failure to promote. According to Ledbetter, and consistent with the holdings of Morgan and Bazemore v. Friday, 478 U.S. 385 (1986), when a wrong occurs over a period of time, a claim is timely filed and the entire course of conduct considered as long as an act contributing to the claim (e.g., a paycheck tainted by past discrimination) occurs within the filing period. Focus on pay decisions only In a 5-4 decision authored by Alito, the Supreme Court rejected Ledbetter’s claims and affirmed the 11th Circuit. The court held that each pay-setting decision was a discrete act of discrimination similar to a firing and, therefore, Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. Finding no intentionally discriminatory conduct during the charging period, the court dismissed the arguments of both Ledbetter and the dissent, stating “current effects alone cannot breathe life into prior uncharged discrimination.” Id. at 2164. In so holding, the court’s conservative bloc imposed a significant limitation on workplace protections for victims of discriminatory pay, which will automatically bar the courthouse doors to all employees whose inequitable pay has resulted from discriminatory acts that occurred outside the 180-day charge-filing period, even if the employees did not know of the discrimination at the time the pay decision was made. Although the court attempted to distinguish its holding in Ledbetter from its holding in Bazemore, the Ledbetter decision effectively rejects Bazemore, as well as the widely accepted “paycheck accrual rule,” which provides that each paycheck that reflects the initial discriminatory act resets the clock on the limitations period. More broadly, while past Supreme Court decisions construing the rights and obligations of employers and employees under Title VII have attempted to steer a middle course, putting the burden on both parties to take appropriate measures to eradicate workplace discrimination, not so anymore. Now, business interests � with the full support of the Bush administration, which filed a brief on behalf of the employer disavowing the long-standing position of the EEOC on the paycheck accrual rule � have successfully prevailed on the court to adopt a cramped interpretation of Title VII which is wholly incompatible with the statute’s broad remedial purposes. Remarkably, the court’s decision makes explicit its policy preference to protect employers from the burden of defending against wage claims brought too long after the initial discriminatory pay decision, even if the employer continues to derive a benefit from paychecks that are discriminatorily depressed. Ginsburg, writing a sharply worded dissent, a summary of which she read aloud from the bench, criticized the majority for ignoring congressional intent, the court’s own precedent in Bazemore and the reality that pay disparities often occur in small increments, leading to suspicion only over time that discrimination has occurred. Noting that Ledbetter “charged insidious discrimination building up slowly but steadily,” and that Goodyear kept salary information confidential, the dissent viewed pay disparities like Ledbetter’s to have “a closer kinship” to hostile work environment claims than to charges of a single episode of discrimination, as distinguished in Morgan. According to Ginsburg, the majority decision gives employers a legal pass for knowingly perpetuating past acts of pay discrimination making them “a fait accompli beyond the province of Title VII to ever repair.” Noting that the ruling is incompatible with Title VII’s broad remedial purpose, the dissent concluded by stating that “the ball is Congress’ court.” Id. at 2178, 2188. The Ledbetter decision resulted in an uproar among many civil rights and employee advocates, leading to a bill proposed in the House of Representatives titled the “Ledbetter Fair Play Act of 2007.” Senator Hillary Clinton, D-N.Y., has promised to introduce similar legislation in the Senate. Until any such legislative action is passed, however, the effects of the Ledbetter decision will be far-reaching, not only for employees, but for employers as well. As a result of Ledbetter, plaintiffs’ lawyers will likely counsel clients to file EEOC charges for every undesirable event in the workplace as it occurs, lest they risk having claims dismissed as time-barred and being forced to endure a discriminatory wage structure in perpetuity. They will also counsel their clients to request underlying information about pay decisions related to their salaries and that of their comparators, or for the defendant to conduct a pay equity review. Not only will such requests be time consuming and otherwise burdensome to employers, they also could have important legal consequences for employers. It could be argued that such requests constitute “protected activity” for purpose of Title VII retaliation claims. Employers that refuse to provide this information may face claims that their refusal constitutes an adverse employment action. Because employees now must file charges before they have a basis to conclude that discrimination has occurred, Ledbetter may force a re-examination of the current rule prohibiting retaliation claims absent a good-faith belief in the illegality of the conduct opposed. Further, Ledbetter will likely result in future litigation on the application of the “discovery accrual rule” to Title VII. That rule provides that discovery of the injury, rather than other elements of the claim, begins the statute of limitations clock running. The majority acknowledged that the court has never decided “whether Title VII suits are amenable to a discovery rule.” Id. at 2177 n.10. Although not argued in Ledbetter, future plaintiffs will surely argue that they were not actually aware of the sex-based or race-based pay disparity at the time the decision was made. A discovery accrual rule would look to the fact that a plaintiff did not have knowledge sufficient to start the clock running on a claim. Because pay information is typically confidential, with disciplinary action often threatened for accessing or discussing salary information, this argument may prove fertile for litigants seeking a more equitable result. Similarly, if an employer denies an employee the facts necessary to investigate a suspicion of pay discrimination or misleads the employee about the existence of the claim, plaintiffs may argue the application of equitable remedies such as estoppel or tolling, even in the absence of a formal accrual discovery rule. The court in Ledbetter has seemingly steered an unwise course of action, that will require employees to file charges each and every time they have a suspicion of pay inequity � even if its based on the flimsiest of reasons � in order to preserve their claims. When business groups stop to consider the negative ramifications of this decision, they might well join Ginsburg’s call to Congress to reverse it. Just as the holding of Ledbetter will likely result in additional litigation, so too will the court’s failure to reach the merits of its other employment cases this term. One of the most closely watched cases of the term, EEOC v. BCI Coca-Cola Bottling Co. of Los Angeles, 450 F.3d 476, 487-88 (10th Cir. 2006), cert. dismissed, 127 S. Ct. 1931 (2007), left both employers and employees short of the victory that each sought in a case that was to decide a split among the circuits on the issue of employer liability for so called “cat’s paw” actions. The court accepted certiorari to decide the issue of employer liability for the bias of a person who affected a challenged employment decision but was not the formal decision-maker. Because Coca-Cola withdrew its appeal, and the Supreme Court has since declined certiorari on subsequent “cat’s paw” cases, this issue will continue to be hotly litigated. Likewise, in Office of Senator Mark Dayton v. Hanson, 127 S. Ct. 2018 (2007), the court declined to reach the merits of an appeal involving claims brought under the Congressional Accountability Act by a former employee in the senator’s office, alleging that he was terminated in violation of several federal employment laws. Senator Mark Dayton, D-Minn., sought dismissal on the grounds that forcing him to defend against the plaintiff’s allegations would contravene the immunity provided to him under the speech and debate clause of the U.S. Constitution. Both the district court and the D.C. Circuit denied his motion. The Supreme Court held that it had no jurisdiction to hear the interlocutory appeal, since the lower courts had not commented on the constitutionality of the Congressional Accountability Act. With no definitive ruling, the merits of the issue will likely continue to arise. Impact of ‘Twombly’ One additional case from the court’s term deserves short mention, as it may affect employment cases going forward. In Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), an antitrust case, the Supreme Court abrogated the 50-year-old standard for notice pleading from Conley v. Gibson, 355 U.S. 41 (1957), that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” The court stated that “after puzzling the profession for 50 years, this famous observation has earned its retirement. The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard.” Id. at 1969. It held that a plaintiff must demonstrate a plausible, not just a conceivable, entitlement to relief, in order for his or her complaint to survive a 12(b)(6) motion. It is unclear to what extent Twombly will affect employment cases. There is nothing in the decision to suggest that its holding is limited strictly to the antitrust context, as opposed to all civil cases. On the other hand, the court specifically indicated that its decision in Swierkiewicz v. Sorema N.A., 122 S. Ct. 992 (2002) � holding that a plaintiff in an employment discrimination complaint is not required to make out a prima facie case in order to survive a motion to dismiss � was still good law. Lisa J. Banks and Debra S. Katz are partners with Katz, Marshall & Banks in Washington, where they specialize in employment law and civil rights matters.

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