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In an employment discrimination suit alleging unequal pay, the statute of limitations does not begin to run on the day the worker’s salary is set because every paycheck is a separate alleged act of discrimination, a federal appeals court has ruled. In Cardenas v. Massey, a unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals revived a suit brought by a Mexican-American man who said he was paid less than white workers who performed the same job in New Jersey’s Administrative Office of the Courts. U.S. Circuit Judge Dolores K. Sloviter found that Gerard Cardenas should have been allowed to pursue the claim because suits alleging unequal pay are almost always covered by the “continuing violation” doctrine. And in a second significant ruling, Sloviter found that U.S. District Judge Garrett E. Brown Jr. erred when he dismissed Cardenas’ hostile environment claims on the basis of a Faragher/Ellerth defense. Sloviter’s decision offers important clarifications on the defense — named after the U.S. Supreme Court’s 1998 decisions in Faragher v. Boca Raton and Burlington Industries Inc. v. Ellerth. The ruling shows that the defense is a fact-intensive one and may not provide defendants with a quick win if factual disputes exist that must be resolved by a jury. Brown found that Faragher/Ellerth required dismissal of the suit because Cardenas failed to take advantage of the complaint procedures available for New Jersey court workers who believe they are being harassed. But Sloviter, in an opinion joined by U.S. Circuit Judges Richard L. Nygaard and Jane R. Roth, found that there were several factual disputes that, if decided in Cardenas’ favor by a jury, would show that the defense did not satisfy the Faragher/Ellerth test. Sloviter also found that Cardenas could defeat the Faragher/Ellerth argument by showing that the harassment he suffered led to “tangible employment action.” “If Cardenas convinces a jury that he was victimized by a hostile work environment … it is certainly possible that the same jury would find that the hostile environment was severe enough to have precipitated Cardenas’ resignation, i.e., a constructive discharge,” Sloviter wrote. But even without proof of tangible employment action, Sloviter found that Brown’s decision to grant summary judgment for New Jersey on the basis of the Faragher/Ellerth defense was “premature.” Although Cardenas did delay before filing a formal complaint and later rejected alternative positions that were offered to him, Sloviter found that there was also evidence that Cardenas had complained informally to several officials, including the EEO officer, who refused to do anything without a formal complaint. “In these circumstances, Cardenas’ reluctance to file a formal complaint for fear of aggravating the situation or branding himself a troublemaker might not have been unreasonable,” Sloviter wrote. Cardenas also argued that the published anti-discrimination policy and complaint procedure was insufficient to satisfy the Faragher/Ellerth test. He claims investigators declined to reinterview him when he insisted that his lawyer be present but instead adopted his alleged harasser’s explanation for ethnic slurs. He also complained that the report of the investigation into his complaint was issued seven months after he submitted his detailed discrimination allegations. During that period, he said, he was forced to continue working under the supervision of two harassers. As for the alternative positions he was offered, Cardenas claims that they either amounted to a demotion or required him to continue working under the same bosses. STATUTES OF LIMITATIONS Sloviter also found that Judge Brown erred in his analysis of the statute of limitations when he dismissed Cardenas’ disparate pay claim. Cardenas was hired in January 1990 as the manager of the Office Systems Unit in the Information Systems Division of the Administrative Office of the Courts. The suit alleges that every prior worker to hold the same post was a white, non-Hispanic male and that Cardenas was initially offered the job at a lower pay scale than his predecessor. Even after significant success in the job, Cardenas claims, he was denied raises and promotions because of the ethnic bias of his supervisors. Brown found that Cardenas’ wage discrimination claim was subject to three separate limitations periods since he sued under Title VII, Section 1981 and the New Jersey Law Against Discrimination. Section 1981 claims are subject to a two-year statute of limitations. For the LAD claims, a two-year statute of limitations also applies to claims whose “operative facts” occurred after July 27, 1993, while LAD claims based on events occurring before that date are subject to a six-year statute of limitations. And Title VII claims must be filed first with the EEOC within either 180 days or 300 days of the allegedly illegal employment practice; the plaintiff must also file suit within 90 days of receipt of a right-to-sue letter from the EEOC. Brown found that because Cardenas’ disparate pay claims stemmed from his initial pay grade classification, they accrued when he began working. As a result, Brown found that the statute of limitations had run under all three laws. To sue under Title VII, Brown said, Cardenas should have filed a complaint with the EEOC by July 29, 1990. The Section 1981 claim should have been filed by January 1992, and the LAD claim should have been filed by January 1996. Cardenas’ lawyers argued that under the continuing violations doctrine, each paycheck he received constituted a separate discriminatory act. Brown disagreed, citing a trio of decisions from the U.S. Supreme Court — Lorance v. AT&T Technologies Inc. in 1989, Delaware State College v. Ricks in 1980 and United Airlines Inc. v. Evans in 1977. Under those cases, Brown said, the continuing violations doctrine was inapplicable because Cardenas described his paychecks as “consequences” of his pay grade and did not allege that the court system’s pay-grade structure was facially discriminatory. Sloviter disagreed, saying: “We believe that is too narrow a reading of the facts and the law.” In Evans, Sloviter said, the alleged discrimination was forcing the plaintiff to resign when she married, and the justices rejected the plaintiff’s argument that she suffered new discrimination when she was rehired because she was denied seniority. Instead, the Court held that no present violation existed because the seniority system, its adoption and its operation were nondiscriminatory. In Ricks, the employer denied a professor tenure and gave him a “terminal” one-year contract. The tenure denial was outside the statutory period, but the plaintiff’s final day of employment was not, and the plaintiff argued that his discharge was a continuing violation. The high court disagreed, finding that it was “a delayed, but inevitable, consequence of the denial of tenure.” The Lorance plaintiffs were demoted under a facially neutral seniority system that they claimed was adopted with a discriminatory purpose. The justices found that the seniority system, which was adopted outside the limitations period, was not subject to the continuing violation doctrine since it was part of a collective bargaining agreement. Instead, they said, the statute of limitations began to run on the date the agreement was reached. Sloviter found that in all three cases, the Court held there was no continuing violation where the effects of prior discriminatory acts, but no actual discrimination, occurred within the limitations period. “The Evans-Ricks-Lorance line of cases bars claims where the relevant aspect of the employment system (such as promotion, seniority, or termination) is facially neutral, and any discrete discriminatory conduct took place and ceased outside the period of limitations,” Sloviter wrote. But that line of cases does not bar claims that are based on conduct which is alleged to have “continued to discriminate unlawfully each time it was applied,” Sloviter found. Cardenas’ claim, she said, is that the decision not to promote him, or increase his wage level to one appropriate to his skills, was made on an ongoing basis. “The facially neutral system analysis of Evans, Ricks and Lorance is thus inapposite,” Sloviter wrote. Instead, she said, the more pertinent Supreme Court decision is the 1986 decision in Bazemore v. Friday, where the Court reversed the dismissal of a Title VII disparate pay claim on statute of limitations grounds and held that each of the plaintiffs’ paychecks constituted a distinct violation of the right of each to nondiscriminatory compensation. The Bazemore Court wrote: “Each week’s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII.” The 3rd Circuit adopted the same reasoning in Miller v. Beneficial Management Corp., a 1992 decision that revived a suit brought under the Equal Pay Act. In Cardenas’ case, lawyers from the EEOC filed a friend-of-the-court brief urging the 3rd Circuit to reverse Brown’s application of the statute of limitations to Cardenas’ Title VII claim. “Both Bazemore and Miller contemplate that an individual may challenge allegedly discriminatory wage payments so long as one such payment falls within the limitations period,” EEOC attorney Jennifer S. Goldstein wrote. Goldstein argued that if Brown’s decision were allowed to stand, it “would frustrate enforcement of Title VII by improperly insulating current discriminatory conduct from challenge under the statute.” Brown had ruled that Miller was not controlling because it analyzed the statute of limitations under the Equal Pay Act, whereas Cardenas sued under Title VII. Sloviter disagreed, saying “application of the continuing violations doctrine is not dependent on which statute gives rise to the plaintiff’s claim.” And the Supreme Court’s decision in Bazemore, she said, concerned a Title VII claim.

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