Pay Equity:
Are Women Still Being Run Over in the Workplace?

By Tamara Lytle

The 11-year legal odyssey that took tire company overnight supervisor Lilly Ledbetter from an Alabama plant floor to the U.S. Supreme Court will have a major impact on employment discrimination law.

Ledbetter won her argument that she had been paid substantially less than her 15 male counterparts at Goodyear Tire & Rubber Company, but the Supreme Court ruled 5–4 that she had not filed her claim in time. The decision sparked outrage among the public and in Congress because Ledbetter had no way of knowing she was underpaid until an anonymous note tipped her off at the end of her nearly 20-year tenure.

Congress acted. On January 29, 2009, President Barack Obama signed into law the Lilly Ledbetter Fair Pay Restoration Act, the first bill he signed just nine days after his inauguration. Now the statute of limitations begins anew with each paycheck an employee receives that is lower due to discrimination. That means workers who are unfairly treated, but are unaware of the discrimination at the time it occurred, still have recourse later after they find out.

Law firms around the country are holding seminars to sort out the new law. Employers are bracing for a wave of lawsuits. And several cases already in the pipeline likely will illuminate how far the Supreme Court believes Congress meant to go with the law.

But the person who is not affected by the law is Ledbetter. At 71, Ledbetter worries about whether she will have to go back to work to pay her bills. She can rattle off the cost of each utility bill with the air of someone on shaky financial ground. And the death of her husband in December means the Goodyear pension she believes is unfairly low must now carry even more of the financial burden.

The Ledbetter Act did not restore anything for her. Not the more than $3 million a jury originally awarded her, which was knocked down quickly by a judge because of caps. Not the company retirement benefits and Social Security check that all would have been higher if she were paid the same as the men at her level. And not the dignity she said she lost in finding out her years of work and many hours of overtime were repaid with discrimination.

“I will always feel like a second-class citizen as far as Goodyear is concerned,” Ledbetter says in an interview. “It’s really humiliating to know you have worked and given so much to a company and not be rightfully compensated.”

Ledbetter won plaudits like performance awards at work. But she was paid $3,727 a month, while men in the same job earned between $4,286 and $5,236 monthly. She wanted to work several more years, but after she filed a complaint with the U.S. Equal Employment Opportunity Commission (EEOC), the company moved her to a job where she was required to move heavy Hummer tires without a hoist. She felt forced out and retired at age 60.

The Supreme Court ruled that Ledbetter’s claim under Title VII of the Civil Rights Act of 1964 was too late because she had not filed it within 180 days of the discrimination.

Those statutes of limitations are crucial for providing predictability in the legal system, according to Andrew M. Grossman, senior legal policy analyst at the conservative The Heritage Foundation. Without strict statutes of limitations, companies will have to face cases about “perceived slights” that happened so long ago they no longer have all the evidence they need to defend themselves. “For businesses, it’s a litigation tax. More money will have to be spent to pay for lawsuits that may not have merit to them.”

And in what already is a bad economy, that means less money can be spent to hire workers, he says.

But lawyers who represent employees say the Supreme Court decision would have gutted civil rights protections. Companies could simply bar workers from talking about their salaries with colleagues so that discrimination would stay undetected until after the statute of limitations run out—as it did in Ledbetter’s case, says Richard T. Seymour, a plaintiffs’ attorney who has specialized in employment discrimination law for 40 years.

“Instead of equal pay for equal work, you have a system of ‘no one can tell what we do so no one can complain about what we do,’” Seymour says.

A Roller-Coaster and a Challenge
Ledbetter had ridden a roller-coaster of emotions and outcomes, from that first anonymous note to her lower court victory, to the Supreme Court loss on May 29, 2007. But on that day, something clicked as a reporter described Justice Ruth Bader Ginsburg’s dissent that called on Congress to undo the majority opinion.

“Congress never intended to immunize forever discriminatory pay differentials unchallenged within 180 days of their adoption,” Ginsburg wrote. “Goodyear continued to treat Ledbetter differently because of sex each pay period, with mounting harm.”

Ledbetter decided she had lost her battle but could win a larger war.

“When she challenged Congress, she was challenging me. And I was ready to go,” Ledbetter says. She set off on multiple trips to Washington, D.C., to lobby Congress. She spoke at Obama’s Democratic nominating convention, watching tears fill the eyes of women in the audience as she told her tale. And eventually, she brought her two children and three of her grandchildren to the East Room of the White House when Obama signed the law that bears her name.

“Ledbetter was a seminal case in opening the eyes of a country to ongoing problems of pay discrimination and the suffering it causes to everyday people,” says Marcia D. Greenberger, founder and copresident of the National Women’s Law Center which backed Ledbetter’s case.

The Ledbetter law is likely to affect both new employment discrimination filings and some cases already in the courts. It is also part of a changed political environment for employment discrimination cases.

Debra Millenson, a principal at The Millenson Law Firm that represents management, says there likely will be more cases going forward that would have been thrown out because of statutes of limitations, and there will be a spate of employment cases that test the parameters of the law.

“I don’t think they were intending to open up all of employment law,” Millenson says. “But there are plaintiff’s attorneys who are sitting back, licking their chops and saying, ‘Let’s go.’”

How Filings Will Be Affected
The Ledbetter law is a welcome gust to plaintiffs’ lawyers who had been sailing into a headwind.

Employment discrimination plaintiffs fare worse in federal courts than other types of plaintiffs, according to a study which appeared in the Winter 2009 issue of the Harvard Law & Policy Review.

Employment discrimination cases, once the most prevalent type of case in federal court, saw a “startling drop” in the number of cases disposed of in federal court every year after 1999, according to the study titled “Employment Discrimination Plaintiffs in Federal Courts: From Bad to Worse?”

Plaintiffs have gotten the message that their chances in federal court are poor and now are filing fewer suits, says Stewart J. Schwab, coauthor of the study and dean of the Cornell University Law School. The number of federal employment discrimination cases peaked at 23,722 in 1998 and dropped to 15,007 by 2007. Schwab doubts the cause is less discrimination, since EEOC charges have stayed constant.

Between 1979 and 2006, plaintiffs won just 15 percent of jobs cases, compared with 51 percent of other types of suits.

“After a while there’s a feedback loop. The employees themselves—and certainly their attorneys—start to realize it’s unlikely to win these cases. That’s why we suspect they went down,” Schwab says.

Those slim chances for plaintiffs continue at the appeal level. Defendants—often companies—win 41 percent of jobs cases on appeal that they had lost at the lower level. Plaintiffs—the employees—win just 9 percent of the cases they had lost. That is a much wider disparity than for nonjobs cases, the study states.

Advocates for workers blame the courts’ tilt toward companies in the labor–management balance on eight years’ worth of appointments by former President George W. Bush.

But the trend toward more conservative and more pro-
management courts is not completely responsible, says Millenson, who recently moderated the American Bar Association panel “The Lilly Ledbetter Fair Pay Restoration Act: Better Enforcement or Invitation to Litigation.”

The EEOC is better now at prioritizing which workers’ cases have the best chances of winning. Companies use that information to settle more of those cases, while the weaker plaintiffs’ cases end up in court. The EEOC also has stepped up mediation, Millenson says, which means many of the closer cases are disposed of before going to court.

The courts have refused to become superpersonnel agencies, says Hope B. Eastman, chair of the employment law practice group at Paley Rothman, chair of the board of directors of the American Employment Law Council, and past president of The College of Labor and Employment Lawyers. Eastman, who represents management, says many employment discrimination cases don’t fit under Title VII but are brought by employees who feel wronged and don’t know where else to turn.

Whether the Ledbetter law affects the number of filings may end up being hard to separate from the impact of the recession. Schwab says the economic downturn will increase the number of workers who file employment cases because many people who lose their jobs will have trouble finding another position. “I don’t think that means they will be more successful,” he says, just more willing to file.

On the other hand, Greenberger says she expects the tight economy will mean more people being discriminated against, but not necessarily more court cases as people who still have their jobs are afraid to risk them with a lawsuit.

Summary Judgment
Employment cases also are thrown out of court more often, according to several recent studies.

Joseph A. Seiner, assistant professor at the University of South Carolina School of Law, says he looked at about 500 cases and found that employment cases are now being tossed out on motions to dismiss. Bell Atlantic Corp. v. Twombly has been applied to employment discrimination cases, he says, with the result that the bar is higher on what cases can survive in the court system. Under Twombly, judges are requiring plaintiffs to present “enough facts” for a plausible claim, a higher standard than previously.

Seymour and others also say more cases are being thrown out under summary judgment. Millenson says she isn’t sure the Ledbetter law will change that trend. “The courts feel they are overloaded,” she says. “They hate these cases because they take up so much time.”

Seymour recently looked at all 145 employment discrimination cases that had summary judgments between September 1, 2008, and November 16, 2008. Of that number, employers won summary judgment in 122 cases. But nearly one-fifth of them were later overturned, a sign, according to Seymour, that too many close cases are being thrown out.

“There’s something dead wrong with the system,” Seymour says. “The judges aren’t giving enough intellectual weight to the importance of the public policy in favor of civil rights. There’s a culture under which people don’t get trials. It strikes me that it’s not healthy.”

Many cases that were dismissed under summary judgment now get a second chance under the Ledbetter law.

That’s not necessarily a great thing, Eastman says. “No employer in this day and age sets out to discriminate. We’re not talking about sending pregnant women home and putting nooses in lockers. We’re talking about multifaceted pay issues, which are often subjective and now will require employers to look at individual decisions affecting pay that were made long ago. I don’t think it’s good to make the workplace into a more litigious place, especially where witnesses and documents may long ago have disappeared.”

If the courts interpret the Ledbetter Act broadly, it will upend the employment discrimination enforcement system and lead to numerous suits. “I think we’re going to have a lot more litigation, and litigation over practices that are long over and should have been challenged earlier,” Eastman says. “And what’s the point of that?”

Impact on Current Cases
The Ledbetter law applies to cases that were in court as of May 28, 2007, or later. (Ledbetter’s case had already finished its trip through the court system.)

Congress acted, according to the law, because the Supreme Court decision “significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades.”

Legal experts say that before Congress’ action, they were seeing a major impact from the Ledbetter Supreme Court decision. Ledbetter was cited in 347 federal cases, as of January 2009, according to the liberal group Alliance for Justice.

The new law applies to discriminatory pay claims under Title VII, as well as to bias under the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, and the Rehabilitation Act of 1973.

Cases involving systemic discrimination already were covered by Bazemore v. Friday, but the High Court said Bazemore did not apply to Ledbetter. “Bazemore’s rule is that an employer violates Title VII and triggers a new EEOC charging period whenever the employer issues paychecks using a discriminatory pay structure,” the Court ruled in Ledbetter. The Bazemore case, decided in 1986, involved an intentionally discriminatory pay structure, the Court said. Ledbetter’s case did not claim a system of discrimination but an individual application of discrimination against her.

Bazemore and the 1977 case United Air Lines, Inc. v. Evans had been contrasting pillars of employment discrimination law precedent. In Evans—involving a flight attendant who was forced to quit because she got married but later was hired back without the benefit of her previous seniority—the Court held that a “continuing violation” cannot be used to challenge discriminatory conduct that occurred outside the statute of limitations period. That case was a key to the Supreme Court’s decision against Ledbetter.

Now the Ledbetter law says an illegal employment practice happens “each time wages, benefits, or other compensation is paid” based on a discriminatory policy. Attorneys on both sides of employment law are waiting to see whether that other compensation means pensions, too.

In a pension case decided 7–2 by the Supreme Court in May—AT&T Corp. v. Hulteen—the Court sided with the employer.

In that case, Noreen Hulteen and other AT&T workers took time off after childbirth before the 1978 Pregnancy Discrimination Act (PDA) that mandated companies to treat maternity leaves like other disability leaves. AT&T reduced the workers’ seniority upon which their pension benefits were based years later. Hulteen and the others argued that even though penalizing them was legal before the PDA was passed, it is not legal for the company to penalize their pensions now. AT&T said the system was legal at the time and cannot be retroactively made illegal. Other large employers have agreed, saying the pension system will be destabilized if it’s possible to rewrite history by changing the factors that determine a worker’s pension amount.

Hulteen’s attorneys quickly seized on the Ledbetter law.

Two weeks after the Ledbetter law was signed, Hulteen’s attorneys filed a brief saying a discriminatory seniority system affects pensions in the same way that Ledbetter’s discriminatory performance evaluation affected her pay. “By its terms, the LLFPA declares that every payment that gives effect to a prior ‘discriminatory compensation decision or other practice’ constitutes a new unlawful employment practice,” the brief says. That new compensation decision—to base Hulteen’s pension on the discriminatory seniority system—is not absolved by the fact that the seniority system was legal when she took her maternity leave.

AT&T argued that the Ledbetter law “does not permit suit based on the present effects of conduct that was lawful when it occurred.” The High Court agreed, saying AT&T had a valid seniority system that was not discriminatory when it was adopted, so the Ledbetter law did not apply. “AT&T’s pre-PDA decision not to award Hulteen service credit for pregnancy leave was not discriminatory, with the consequence that Hulteen has not been ‘affected by application of a discriminatory compensation decision or other practice,’” the majority opinion states.

Millenson had predicted that sort of ruling, saying the Court has traditionally been deferential to collective bargaining and seniority systems.

Meanwhile, many cases will end up in settlement as both sides want to avoid the uncertainty of an unsettled new law, according to Seymour.

Seymour says employment law experts are waiting to see what “other practice[s]” in the Ledbetter Act mean. The new law states that an unlawful act occurs “each time compensation is paid pursuant to the discriminatory compensation decision or other practice….” Does that mean, Seymour asks hypothetically, that a system to give recent college graduates extra pay would run afoul of age discrimination laws? Or that extra compensation for physically fit workers (who lower health care costs) would discriminate against the disabled?

Millenson wonders whether the act will apply to nonmonetary cases that later affect pay. For instance, if you are denied a promotion and then cannot be considered for a higher paying job later, would a long–ago decision subject companies to lawsuits? Other attorneys wonder if being denied extra training might mean a suit by an employee who later loses out on a promotion because of the lack of training.

Eastman says employment discrimination statutes of limitations were based on the theory that requiring workers to come forward quickly with their complaints gives companies the opportunity to fix the problem right away.

One Ledbetter law impact that employers fear is that a looser statute of limitations will mean cases brought that involve long-ago decisions where records and testimony are no longer available to support the validity of the companies’ pay decisions. Millenson warns employers to save documents.

“In theory, if you took it to a logical conclusion, you could never throw away any paperwork regarding an employment decision,” she says. “I don’t think that’s what Congress intended.”

But Schwab of the Cornell University Law School says the burden of proof remains on the plaintiff. “I think the Ledbetter Act will mean more cases brought,” he says. “But whether the overall success rate will go up much because of Ledbetter, I kind of doubt it. It still remains difficult to prove discrimination that took place long ago.”

Changing Political Environment
Greenberger hopes the Ledbetter law will cut a wide swath. “The hope is the resounding rejection of the reasoning of the Ledbetter decision…. and Congress’ clear and prompt correction demonstrating its intent will nip in the bud those kinds of arguments that were beginning to affect all kinds of discrimination cases across the country.”

Greenberger hopes the high-profile status of the Ledbetter case will put employers on notice that the public is watching and they better not discriminate. That sort of voluntary compliance, she says, is “at the heart of our legal system.”

Employment law could be affected by the political atmosphere as much as the Ledbetter law. Obama could end up making appointments not only to the Supreme Court but also to the appeals courts, lower courts, and the EEOC. Those nominees are likely to come with far different philosophies than those appointed by Bush.

Schwab says the full impact of Obama’s influence will depend on factors such as the philosophy of the judges the president is replacing and on whether he has four years or eight to make his mark.

Grossman of The Heritage Foundation also sees the Ledbetter Act as just the beginning of a new mood of political generosity toward labor instead of management. “It shows a lot of plaintiff attorneys have really gotten organized and have a lot of supporters on the Hill,” Grossman says. “The Ledbetter Act was really the first example of that.”

Other moves on Capitol Hill would increase damages, weaken other statutes of limitations, weaken alternative dispute resolution requirements, and ease the requirements for standing in federal court.

The proposed Paycheck Fairness Act, which passed the House of Representatives, is the next step for employee advocates, including the Obama White House. It would allow unlimited punitive damages for pay discrimination and make class action suits easier to bring. It bars retaliation against workers who ask or talk about pay rates within their company. And the courts could require a company to adopt an alternative business practice that does not lead to pay disparities between men and women. That subjects businesses to too much government interference and leaves them open to expensive litigation, according to opponents.

The bill is just one of many proworker proposals that worry businesses.

“These have an enormous effect on businesses’ abilities to defend themselves in discrimination lawsuits,” Grossman says. “They can put forward Ledbetter-like individuals to make the case there is unfairness. But the effect on business is enormous. More money will have to be spent to pay for lawsuits that may not have merit to them.”

14 Penn Plaza LLC v. Pyett may be the next one where Congress intervenes to upend a Supreme Court decision in favor of a company, he says.

In that case, some New York City night watchmen sued for age discrimination. But their union, which had agreed to Penn Plaza’s decision to replace the workers with a different contractor, declined to press the case. The Supreme Court decided 5–4 that the men cannot file suit claiming their individual civil rights because the union contract requires arbitration instead of lawsuits.

Grossman says the current political climate means Congress likely will try to overturn the Penn Plaza decision, too. “They’re picking off Supreme Court decisions, one by one,” he says. “Employers need to be vigilant and need to understand the fast-changing nature of the law.”

Millenson says companies need to do a better job of making their case that laws that make it easier for plaintiffs to win in court can hurt their ability to hire workers.

“There is a cost to compliance with all these laws and regulations. [Employers] need to be much more alert and prepared to articulate what the impact is on employment and jobs and their own viability,” Millenson says.

Greenberger hopes that the uproar over Ledbetter’s Supreme Court loss—and the forceful congressional action—will send a message to the Court. Already, she noted, the Court sided with a worker in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee. In that case, city worker Vicky Crawford was originally denied the protection against retaliation that is afforded to employees who claim sexual discrimination. Crawford was asked whether she had been harassed by a supervisor and said she had. The lower court said she was not protected because she had not proactively filed a complaint but had only responded to an inquiry. The Supreme Court sided with Crawford, saying she was entitled to protection by opposing the discrimination, even if she did it in response to a question instead of by filing a complaint.

The Agony of Victory
Ledbetter is thankful for the things her legal journey had brought her: A dance with Obama at the inaugural ball, letters from neighbors and strangers alike thanking her for fighting for others, and a law she hopes will benefit other workers.

But sometimes she thinks of what might have been if she hadn’t faced discrimination—the better colleges her kids might have attended, the 401k she wouldn’t have had to empty so soon, and a retirement not overshadowed by worries about having to sell her brick ranch house or going back to work in her 70s. Her husband, Charles, who fielded calls, answered e-mails, and was a linchpin in her battle, did not live to see the White House ceremony. After two years of fighting cancer, his heart failed in December after kissing Ledbetter goodbye and sending her off to New York for a television interview.

She is left with one big question.

“I’m heartened by the outpouring and the interest in the case. [But] this is really overdue,” she says, noting that laws against discriminating against women and minorities passed in the 1960s. The U.S. Bureau of Labor Statistics estimates that women earn 79 cents for every dollar a man earns on average for fulltime work.

“Why in 2009 are we struggling to try to get equal pay?”

Tamara Lytle is a freelance reporter in the Washington, D.C., area. She was a correspondent and Washington bureau chief of the Orlando Sentinel between 1997 and 2008.