Monday, September 14, 2009

Ledbetter Act Revives 3d Circuit Pay Discrimination Claim

GavelVia Ross Runkel at Employment Law Memo comes news of a case revived through the Ledbetter Act, Mikula v. Allegheny County of Pennsylvania. Mary Lou Mikula was hired in 2001, and in 2004, discovered that she was paid less than a male manager that she thought did substantially equal work. She wrote a memo to her boss, asking for a title change and raise equal to the salary of the male manager. The boss sent the memo on to HR, but no one ever responded to Mikula's request. In 2005, she asked again, and in 2006, she filed an internal complaint and in federal court, an Equal Pay claim. In August of 2006, the HR department sent her a letter stating that her allegations of discrimination were unfounded and her rate of pay fair. She filed a charge with the EEOC within 300 days of that letter. When she received a right to sue letter, she amended her EPA complaint to add the Title VII claim.

On summary judgment, the district court found the Title VII claim to be time barred under Ledbetter because the discrimination occurred when she was hired in 2001. Even applying a discovery rule, her charge was fired more than 300 days after she discovered the disparate pay in 2004. While the case was pending on appeal, one she brought pro se, the Ledbetter Act was signed into law. The court of appeals held that it did not apply, however, finding Mikula's request for a raise and the denial not to be pay decisions or "other practice[s]" which would give rise to a cause of action. Mikula retained counsel and filed a petition for rehearing, which the court granted.

On rehearing, the court held that Mikula's claim was timely as to paychecks that she received 300 days before filing her EEOC charge and that the failure to answer a request for a raise qualifies as a compensation decision--the result is the same as if the request were denied. The court reaffirmed that the investigation report does not constitute a compensation decision or other practice, though, reasoning that it did not want to create a disincentive for employers to investigate discrimination.

The result is basically the right one here, but I'm not sure the reasoning the court used was quite right. The court of appeals interpreted the Ledbetter Act to treat each paycheck as a separate and discrete act of discrimination, such that backpay for a paycheck received before the 300-day window could not be awarded. That's not precisely how the Act should work. The section that provides for a rule on when the cause of action occurs provides that

an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when . . . an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a [original] decision or other practice.

So, as the court held, as long as one paycheck was paid in the 300-day window, the plaintiff has a cause of action for discrimination in pay. But each paycheck isn't totally discrete, either. When it comes to remedy, the Act provides,

(B) In addition to any relief authorized by section 1977A of the Revised Statutes (42 U.S.C. 1981a), liability may accrue and an aggrieved person may obtain relief as provided in subsection (g)(1), including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.

That sounds to me like a modified continuing violation view of pay discrimination, a modification to the principle in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002) and Bazemore v. Friday, 478 U.S. 385 (1986) that pay discrimination (even when dealing with paychecks) is a discrete discriminatory act rather than a continuing violation.

Hat Tips: Ross Runkel, PS

MM

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