November 28, 2006

"Pay is a complicated thing."

Linda Greenhouse elegantly explains a difficult Supreme Court case about the lingering effects of long-ago job discrimination:
Is each new paycheck, reflecting a salary lower than it would have been without the initial discrimination, a recurring violation that sets the [statute of limitations] clock running again? Or does the passage of time, without fresh acts of intentional discrimination, render the initial injury a nonevent in the eyes of the law?...

[T]he E.E.O.C. ... has long applied what is known as the “paycheck accrual rule,” under which each pay period of uncorrected discrimination is seen as a fresh incident of discrimination. So although the 180-day limit applies to discrete actions like a discriminatory refusal to hire or failure to promote, it does not, in the view of the federal agency charged with administering the statute, prevent lawsuits for the continuing effects of past discrimination in pay.

But the Bush administration has disavowed the commission’s position....

When Justice Antonin Scalia asked, “Why should we listen to the solicitor general rather than the E.E.O.C.?”...

Justices Ruth Bader Ginsburg and Stephen G. Breyer appeared most sympathetic to Mr. Russell’s argument. Justice Breyer commented at one point that “there will be probably a significant number of circumstances where a woman is being paid less, and all she does is for the last six months get her paychecks and she doesn’t really know it because pay is a complicated thing.” It could take “even a year for her to find out,” he said.

Chief Justice John G. Roberts Jr. appeared the most skeptical, several times raising the question of how employers could shoulder the burden of defending long-ago pay decisions.

“It could be 40 years, right?” Chief Justice Roberts asked Mr. Russell, adding, “I mean, if it happened once 20 years ago, you have a case that you can bring” under the plaintiff’s analysis.
The case is Ledbetter v. Goodyear Tire and Rubber Company Inc.

16 comments:

Simon said...

If I'm understanding this correctly, there's a statute of limitations on claims under Title VII, and the claimant is trying to go around the fact that she failed to file a claim within the timeframe envisioned by the statute of limitations by claiming lingering aftereffects. That is, although she can't claim for the poisoned tree, she's trying to claim for the poisoned fruit. I mean, I'm not familiar enough with this material, but if there is a statute of limitations, and the court finds that this person can still bring a claim even though time expired long ago, aren't they effectively deleting the statutory time limit for claims to be brought? the very fact that Congress imposed a time limit for claims suggests that she has to file for the initial discriminatory action, and if the door closes, well, that's too bad. If you analyze that from the perspective of the claimant, it seems a little unfair, insofar as she's basically going to have to be told "sorry, you didn't file in time," but that seems to be the result one has to infer Congress imposed by creating a timeframe in which claims can be brought.

I will have to do some research, but basically, for me, absent countervailing precedent, if Congress imposed a limited timeframe for claims to be brought, that's the end of the case. That's dispositive, to me.

Simon said...

Here's the briefs in the case and the oral argument transcript. You see, this is a perfect example of what I was talking about the other day, how an eclectic blog with everything on one page can draw the reader's interest to areas they would normally ignore. I normally have less than nil interest in civil rights cases, but this one has a fun statutory interpretation angle to come at it from...Which means I now feel interested enough to wade through a hundred-odd pages of briefs and an hour of transcript. *Sigh*

Anonymous said...

I think the reason this case is a tough one is that the EEOC's position is not necessarily contrary to the intent of Congress.

In a Title VII case, the limitations period begins to run from the time an "adverse employment action" was taken or (through the exercise of reasonable diligence) discovered. It is usually easy to spot the adverse employment action--a firing, demotion, denial of promotion, etc. But in pay cases, the question is whether the initial decision to set the employee's pay is the only adverse employment action, or is each subsequent paycheck at the lower rate an adverse employment action? I think the EEOC may well have the better of this argument in that a distinct harm—caused by discrimination—is realized every time an employee gets a paycheck that would have been larger but for the original discriminatory decision.

On the other hand (as Greenhouse quotes the Chief Justice as observing) a key purpose of the statute of limitations is thwarted if an employee can bring a claim many years after the decision to set the employee's pay rate was made. In such cases it will be extremely difficult for employers to defend themselves.

I haven't read the argument transcript, but I have a hard time imagining a majority ruling against the EEOC (whose interpretations are entitled to deference), when the result in some cases will be to immunize discriminatory pay decisions from challenge even as they continue to cause clear adverse treatment indefinitely.

After all, it is an adverse employment *action* that is the triggering factor, not a *decision* to implement discrimination in the future. In other words, the EEOC might just have the better of the textualist analysis as well. Wouldn’t want to bet on the outcome of this one, though.

Birkel said...

jeff d,

That's why some jurists (e.g. Scalia) tend to shy away from the Congressional intent arguments. It's nearly impossible to disentangle the intent of a body with 535 members who have various reasons for their votes -- including log rolling which has nothing to do with their support for a particular statutory construction.

But hey, that would make the Courts less powerful if the, you know, elected legislature were empowered to write laws the Court was bound to follow.

dick said...

This strike me as a real damned if you do, damned if you don't situation. If the courts go with the law they will be tarred with the brush that they don't care for the little guy, only the corporations, and that is what happens when you get conservatives. If they go with the plaintiff, they will be accused of legislating from the bench.

I agree with the one who says he would not like to bet on the outcome of this one.

Simon said...

"That's why some jurists (e.g. Scalia) tend to shy away from the Congressional intent arguments."

“Intent is elusive for a natural person, fictive for a collective body.” F. Easterbrook, Text, History and Structure in Statutory Interpretation, 17 Harv. J. L. & Pub. Pol. 61, 68 (1994). It's not universally agreed amont textualists that congressional intent is totally irrelevant (see, e.g., C. Nelson, What is Textualism? 91 Va. L. Rev. 347-418 (2005); J. Manning What Divides Textualists from Purposivisits? 106 Colum. L. Rev. 70-111 (2006)), but from my perspective, Manning's question would be answered by saying that purposivists are interested in what a reasonable legislator might have intended, while textualists are interested in what a reasonable person - whether they were a member of the legislature or not - would have understood the statute's text to say. And in this case, it simply could not be clearer that a reasonable person reading the plain language of the statute would conclude that Congress adopted a fairly rigorous timetable for Title VII actions, an interpretation bolstered by Congress' 1972 decision to extend from 90 days to the present period of 180, see 86 Stat. 104-105.

As I understand it, the petitioner's argument is that this issue is decided by Bazemore v. Friday, 478 U.S. 385 (1986), which they characterize as holding that the clock on the statute of limitations begins running anew "with each disparate paycheck even if the disparity arose out of discriminatory pay decisions made years earlier." Brief for Pet. at 13. I'm not sure that Bazemore really does stand for that proposition, even assuming it survived intact National Railroad Passenger Corporation v. Morgan, 536 U.S. 101, but to the extent that it does (which is unclear), it should be overruled. As Justice Stevens wrote for the court in Mohasco:

"By choosing what are obviously quite short deadlines [in Title VII], Congress clearly intended to encourage the prompt processing of all charges of employment discrimination ... [I]n a statutory scheme in which Congress carefully prescribed a series of deadlines measured by numbers of days ... we may not simply interject an additional ... period into the procedural scheme. We must respect the compromise embodied in the words chosen by Congress. It is not our place simply to alter the balance struck by Congress in procedural statutes ... [S]trict adherence to the procedural requirements specified by the legislature is the best guarantee of evenhanded administration of the law."

Mohasco Corp. v. Silver, 447 U.S. 807, 825-6 (1980). Congress placed a statute of limitations on Title VII claims, and while that limitation may be unfair, unreasonable or even a little silly, it is unmistakably clear. The rule that the petitioners urge is in open collision with the statute, insofar as it would do away with the statute of limitations: under the petitioner's desired rule, an employee can recover damages for the employer's conduct at any time while they remain with the company. Instead of starting the clock at the time of the discriminatinatory event, the petititoner would have the court adopt a rule which starts the 180-day clock at the date of the employee's last paycheque with the company if and when they leave. That is unmistakably at odds with the statute, even if, dubitante, it really is the holding of Bazemore.

The only question of any relevance is whether discriminatory conduct was engaged in by the company 180 days before Ledbetter filed suit. At very best, that is an open question; "[h]aving decided that the jury could not have found petitioner’s most recent pay raise decisions discriminatory, the court of appeals looked no further. 'Because she failed to carry her burden of coming forward with sufficient evidence to permit a reasonable jury to find that either of those decisions was a pretext for sexual discrimination, the district court should have granted Goodyear judgment as a matter of law.' Brief for pet. at 12. I agree with that decision; "Title VII "precludes recovery for discrete acts of discrimination or retaliation that occur outside the statutory time period ... [a discrete] discriminatory act 'occurred' on the day that it 'happened.' A party, therefore, must file a charge within either 180 or 300 days of the date of the act or lose the ability to recover for it." Morgan, supra. I would affirm the judgment of the Court of Appeals, or at very least, vacate and return to the district court to determine if any legitimate violation really did occur within the 180-day period.

dougjnn said...

Well Ms. Althouse, what’s YOUR inclination on this? Not asking for a legal brief, but rather a starting gut reaction, based on what you know off the top of your head.

Mine would be to sort of split the baby. That is, I wouldn’t consider each new paycheck to be an automatic re-enactment of the initial discriminatory pay decision (which a gather isn’t in dispute). But on the other hand, I would infer knowing rr-enactment fairly easily. If there’s evidence that the corporation actually DID know that they lower pay was based on long ago but still embedded discrimination, then I think it DID have a duty to go back and remedy the situation. Or at least do it for all paychecks going forward, with a time limited cause of action for the plaintiff for failure to makeup past pay (as opposed to resetting the rate going forward.)

Simon said...

Doug,
I think there's a couple of problems with that position. I mean, if I'm reading you right, you're advancing the argument that each pay review wherein the employer fails to remedy the initial discrimination could be treated as a separate clock-starting violation. That's an awful lot better than the rolling paycheque standard, but it's not problem-free.

First, it presumes that the person conducting the review is necessarily aware of the initial discrimination; I doubt that Ledbetter’s personnel file contains a note for future reviewers: “Hiring memorandum – we’re going to deflate this employee’s starting wage, since she’s a chick”. Second, even assuming manifestly clear intent to discriminate, even at the distance of several years, you're still missing any clear standard for determining what remedial action the review board should take if it does become aware of initial discrimination.

Still, that's certainly better than what the petitioners are advancing. To adopt the view that the clock begins anew with every pay packet received deprives the statute of limitations of coherent content. It is an "elementary canon of construction that a statute should be interpreted so as not to render one part inoperative." Mountain States Tel. & Tel. v. Pueblo of Santa Ana, 472 U.S. 237, 249 (1985); Colautti v. Franklin, 439 U.S. 379, 392 (1979). If the court buys this rule, instead of the clock starting to tick at the time that “the alleged unlawful employment practice occurred,” 42 U.S.C. § 2000e–5(e)(1), the clock will start to tick at the time the employee leaves the company, or shortly thereafter.

Revenant said...

If you were denied a raise because of discrimination that is pretty clearly a continuing offense -- the number of paychecks times the amount of the denied raise, with interest, equals the harm done to you.

If you were denied a *promotion* or a new job, however, it is a lot less clear. A promotion isn't a windfall -- it involves more responsibility as well as more pay. If you were denied a promotion 20 years ago you've spent the last 20 years being paid less than you could have been -- but you've also spent that 20 years doing less for the company than you would have been. It isn't clear that the company owes you the money for a job you never actually *did*. And since you didn't actually have to perform the work necessary for that higher salary, it isn't clear that you actually suffered real monetary damages either.

Simon said...

Revenant,
Imagine a situation where Jim spends twenty years working for Amalgamated Widgets, getting paid every month. The guy who first hired him died years ago, and the company has changed hands multiple times since then. None of the original management staff are still with the company, and the personnel records are total junk. Now suppose that Amalgamated Widgets is bought out, and after a couple of months, Jim’s fired, without significant alternative work prospects in town. Under the rule the petitioner wants, that the clock starts anew every time the poisoned tree bears any kind of fruit, Jim now has between 180 days and 210 days (depending when in the month he gets laid off relative to when his next pay cheque arrives) to go to EEOC and claim that every paycheque he’s ever received over a twenty year period is tainted by the discrimination at the moment that he was hired – money that he recover from the new owners. I mean, that sounds like an absurd situation, it's precisely the sort of thing that a statute of limitations is supposed to prevent - but it isn’t hard to imagine it arising under this rule, and the petitioner says that's just fine. Tr. of Oral Arg. at 11.

I mean, I think you have to approach this from the angle of, what does the statute say, not what's fair for these particular litigants. If there was no statute of limitations, then Goodyear would get reamed on punitive damages, since a jury has already found that the tree is poisoned. So the real question here is whether youo construe the 180 day period as being measured from the root or from the fruit, and the latter interpretation basically makes a nullity of it. You'd be holding that what Congress meant to say wasn't "180 days", it was "whenever." And if that's a stupid result, you know, and it may well be, we have a nice, new, friendly Democratic congress that can expand or even junk the 180 day limitation -- at incalculable cost to the economy, insofar as if the limitation is abolished, or the rule urged by petitioners adopted, no company should ever buy any other company ever again, since doing so apparently opens them to a flood of Title VII claims.

jaed said...

What about splitting the difference? Allow the claim based on a 180-day old paycheck but limit relief to paychecks received during the statutory time period, on the theory that claimant has let everything older than that - including the original decision - pass based on failure to file a claim timely.

This leads to some weirdness in that the purported original decision to pay less is no longer part of the legal picture. But at least it limits the incentive to file extremely late claims.

Anonymous said...

I think there are a couple misconceptions floating around here.

First, no matter how this case comes out, the 180-day period is going to be operative. The best the employee can do is recover the difference between her actual wage and the higher wage she should have gotten with respect to paychecks received within 180 days of filing her charge with the EEOC. Under no circumstances may she recover 20 years' worth of damages. Those paychecks received more than 180 days ago are clearly barred by the statute of limitations.

The issue in Ledbetter is more narrow: can the employee recover for getting unfairly low pay this pay period, when the decision that caused the lower pay in this pay period was made some time more than 180 days ago?

The result turns on whether you consider every separate paycheck an act of discrimination or whether you consider only the original decision to be an act of discrimination. As I posted previously, I think the EEOC has a slightly better argument because the decision itself does not become an "action" until it is implemented. Crazy as it sounds to have one decision result in separate “employment actions” every pay period, I think that is the best interpretation of the statute.

The other misconception, I think, is that it matters whether the personnel issuing today's paycheck happen to know about the discrimination that took place some time in the past. Title VII applies to the employer as an entity. If it made a discriminatory decision in 1995 and implemented that decision in 2005, it has committed a discriminatory act in 2005, regardless of whether the 2005 personnel themselves harbored discriminatory animus. Title VII doesn't care which particular agents of an employer discriminated as long as someone did.

There's no question that a ruling in favor of the EEOC will make things hard on employers, but I don't think it's correct to say that the are decades worth of back pay at stake.

Simon said...

Jeff,
"There's no question that a ruling in favor of the EEOC will make things hard on employers."

"Hard" might be an understatement. It will mean that every time you buy a new company, you have to throw out their entire pay schema and search the records for any indicia of bias. And even that might not be enough: at oral argument, petitioner conceded that the Chief Justice was correct to suggest that under the rule you're talking about, "it's not enough ... for [a new owner] to come in and even up everybody? I mean, if you see that the women are making 20 percent less than the men you don't escape liability by paying everybody the same going forward, because perhaps if nondiscriminatory decisions had been made the women would have making 20 percent more than the men. You have to go back and revisit every pay decision or you're exposed to liability for current pay." Tr. Oral Arg. at 21. I mean, it's bad enough for a company when you're just talking about lingering effects of bad previous decisions, but the kind of liability you're talking about exposing new owners to, and the hoops they would have to jump through to avoid it, are mind-boggling.

In any event, though, I don't realy want to get bogged down in the minutiae of this, because I don't want to imply that we should be engaging in some elaborate "balancing of harms" test between effects on business vs. fairness to litigants. I mean, that's interesting enough to yack about, but it misses the point. That's not how the court should be disposing of this case. This case turns on when the clock on the statute of limitations starts running down, and I am at a loss to see how yours is "the best interpretation of the statute" when it basically defeats (or at least, mortally wounds) the statute of limitations. What you're going to do is to basically uncouple the point at which the clock starts from the intentionally discriminatory act which, as I understand it, must lie at the foundation of any successfull Title VII claim. Just establishing that she wasn't paid the same as her colleagues doesn't get her anything without intent, see 42 U.S.C. § 2000e–2(h) ("it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment ... provided that such differences are not the result of an intention to discriminate because of ... sex"), and even taking at face value petitioner's own claims, Goodyear's compensation package varied depending on performance, merit, tenure and so forth. See Brief for Pet. at 4 ("in 1997 ... petitioner’s salary was less than the lowest paid male in the same job and department, and substantially less than men with equal or less seniority ... The pay discrepancy between petitioner and her male counterparts ranged from fifteen to forty percent."") (citations ommitted) (emphases added). I can't see how it possibly makes sense to consider cutting a cheque - an act wholly untethered from the decision for how much it will be worth - to be itself a discrete violation, and even if it did, any such claim would evaporate after any pay review in which there was no suggestion of bias.

The difficulty you've got, I think, is that you're kind of stuck for want of a line, which - as I read the record - is precisely the dilemma the 11th Circuit tried to resolve. See Brief for pet. at 10-11. You surely can see that it's an absurd result for a new company that comes in and just maintains the pre-existing pay grades to be exposed to any kind of liability, but once you've uncoupled the statute of limitations from the actual intentional act of discrimination and decided that each attainted paycheque issued, obviously that logic doesn't depend on who's underwriting the cheque. So if you adopt the logic that each paycheque is itself a violation, then you're forced to the absurd result that a new owner, who themselves have committed no discriminatory act, buys themselves 180 days of extra liability each time they do payroll, itself an inherently nondiscriminatory act.

In short, you either have to set the line at the act itself, or you end up with a completely absurd result that follows from the logic of that position. And having done so, I might add, you will have eviscerated the statute's plain and absolutely unmistakable requirement for claims to be filed within 180 days of the infraction having taken place.

Ann Althouse said...

dougjnn said..."Well Ms. Althouse, what’s YOUR inclination on this? Not asking for a legal brief, but rather a starting gut reaction, based on what you know off the top of your head."

I tried to think of an opinion before posting and the truth is I just don't know. There are strong arguments on both sides. It doesn't answer the question posed in the case, but maybe we need to have the statute amended to draw a better line that takes account of the problems that both sides here present. Meanwhile, Scalia's idea of deferring to the EEOC might be a good move.

Simon said...

Ann,
I thought Chevron deference applied only "[w]hen a challenge to an agency['s] construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress," Chevron, 467 U.S. at 866, which is to say, "courts will accept an agency's reasonable interpretation of the ambiguous terms of a statute that the agency administers," Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 Duke L.J. 511. Is that really the case here? I mean, it might open to door to Chevron if the meaning of the phrase "[a] charge under this section shall be filed within one hundred and eighty days after the alleged unlawful employment practice occurred" in § 2000e–5(e)(1) is thought so ambiguous to be a "gap left open by Congress," but that seems clear enough on its face, a fortiori after Morgan.

Simon said...

I don't know if there is any merit to this line of reasoning or not, but let me present it here, with the caveat that I advance it purely for discussion, and without endorsing it.

Congress reaffirmed the limited time period for claims to be filed in revising Title VII's statute of limitations from 90 days to 180 days in Section 4(a) of the Equal Employment Opportunity Act of 1973, 86 Stat. 103. At least one chamber of Congress did so under the explicit understanding that the 180 day peiod was chosen to mirror a similar provision in the National Labor Relations Act, 29 U.S.C. § 626(d) ("No civil action may be commenced by an individual under this section until 60 days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission. Such a charge shall be filed ... within 180 days after the alleged unlawful practice occurred"). See H. Rep. 92-238, reprinted 1972 USCAAN at 2175. That being the case, is there an in pari materia argument that, even if one thinks that the Statute of Limitations in Title VII is ambiguous (whhich, to be clear, I do not, so this line of reasoning is moot), we could look at how courts have construed the statute of limitations in NLRA, as amended by ADEA?

If so, although some circuits have held that EEOC itself may proceed with an investigation even the underlying charge of age discrimination is untimely, see, EEOC v. American & Efird Mills, Inc., 964 F.2d 300 (4th Cir. 1992) EEOC v. Tire Kingdom, 80 F.3d 449 (11th Cir. 1996), those cases speak to whether the EEOC may investigate, not whether "civil action may be commenced by an individual," which is the action governed by § 626(d)(1). On the contrary, as to that question, the courts have held that actions that are not timely filed under § 626(d) (which, to confuse matters, was amended by ADEA, meaning that most actions of the kind we're looking at here are under ADEA not NLRA) must be dismissed. See Colgan v. Fisher Scientific Co., 935 F.2d 1407, 1413-15 (3d Cir. 1991) (en banc); O'Neil v. New York Times Co., __ F.3d __ (1st Cir. 2005).

If you've not bought any of my previous reasoning, is there any merit in this, alternative approach?