The U.S. Supreme Court is currently considering a case of great importance to employers, Ledbetter v. Goodyear Tire & Rubber Co., Inc. It will decide when the statute of limitations begins to run under Title VII of the Civil Rights Act of 1964 (as amended) (“Title VII”) for certain types of disparate pay claims.

Most employers have compensation systems that are nondiscriminatory on their face. However, even a lawfully designed system can be used as a tool for intentional discrimination if the evaluator misuses the process. Ledbetter presents the issue of whether the statutory clock begins to run when an employer utilizing a lawfully designed compensation system makes an allegedly illegal pay decision or whether the clock runs anew each time an employer issues a paycheck reflecting the allegedly discriminatory pay decision. The result will impact an employer’s potential liability for intentional pay discrimination under Title VII.

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