In 2009, President Obama signed the Lilly Ledbetter Fair Pay Act. This law overturned a U.S. Supreme Court decision concluding that Title VII's limitations period barred a pay discrimination claim where the plaintiff alleged that the current salary discrepancy resulted from biased employee evaluations resulting in salary decisions conducted years ago. The Ledbetter Act makes each new paycheck that reflects the prior discriminatory decision a new discriminatory act, restarting the period for filing an EEOC Charge.
Since the Ledbetter Act was enacted, plaintiffs have attempted to use it to bootstrap varying claims of workplace discrimination that otherwise would be time barred. Last week, the Fifth Circuit Court of Appeals refused to apply the Ledbetter Act to a failure to promote claim. In Noel v. The Boeing Company, the plaintiff alleged that he was passed over for promotion in 2003 due to his race and national origin. However, he did not file an EEOC Charge until 2005, well beyond the applicable 300-day filing period. The district court dismissed his claim based on this limitations issue.
On appeal, the plaintiff argued that the Ledbetter Act revived his claim, because the failure to promote him in 2003 negatively affected his pay through the date he filed his EEOC Charge. The Fifth Circuit rejected this contention, affirming dismissal of the claim. First, the court noted that the plaintiff's EEOC Charge and his subsequent lawsuit never mentioned pay discrimination. This issue was not raised until appeal.
Second, the Fifth Circuit distinguished between a discriminatory promotion decision, and discriminatory compensation decisions. By its terms, the Ledbetter Act only applies to decisions by employers that directly involve compensation. While a promotion decision would in most cases also result in higher pay, this was only an indirect effect of the allegedly discriminatory promotion decision. Boeing never reviewed the plaintiff's salary, or made any alleged discriminatory decisions that directly impeded the plaintiff's compensation.
This case is the second federal appellate court to refuse to apply Ledbetter to anything other than straight pay discrimination claims. Most decisions by employers could be argued to affect employee compensation. These courts concluded that applying Ledbetter to other types of employment claims would essentially remove the statutory limitations period from Title VII.