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Stopwatch Justice

The Supreme Court's new time limit on sex-discrimination cases may cap damages in the giant Wal-Mart suit; some plaintiffs may lose out.

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Last Trade:Change:
Industry:
Consumer Goods
Primary executive:
Robert J. Keegan,
Summary:
The Company is a manufacturer of tires and rubber products. It also manufactures and markets several lines of power transmission … View More

Just how far-reaching was it?

Sound and fury broke out when a bitterly divided U.S. Supreme Court imposed strict limitations on sex-discrimination cases in the workplace.

The justices voted 5-4 that employees cannot bring claims for discrimination in pay under federal civil rights laws unless they file within 180 days after their pay is set.

Immediately, four Democratic senators—Hillary Clinton of New York, Tom Harkin of Iowa, Edward Kennedy of Massachusetts, and Barbara Mikulski of Maryland—said they would quickly introduce legislation to remove the technical hurdle created by the ruling in Ledbetter v. Goodyear Tire & Rubber Co.

The senators were following up on a suggestion from Justice Ruth Bader Ginsburg, who, in a biting dissent, lamented that "the ball is in Congress's court" to overturn the ruling.

But what, if anything, does the decision mean for sex-discrimination cases currently in the courts—particularly the mother of them all, the Wal-Mart class action suit with more than 2 million plaintiffs?

In a narrow sense, based on these two particular sets of claims, the Supreme Court decision didn't render the Wal-Mart case moot. But it could impose a limit on the damages plaintiffs can recover from the company and even disqualify some plaintiffs entirely.


The Ledbetter case centered on a claim of intentional discrimination. Lilli Ledbetter, who worked as a supervisor at Goodyear's tire plant in Gadsden, Alabama, from 1979 to 1998, alleged that several supervisors had given her poor evaluations, which led to lower pay increases than those of her male colleagues.

But the Wal-Mart suit alleges that the company engaged in a broad "pattern and practice" of discrimination over time, culminating in an "adverse impact" on women who worked there for many years.

"The Supreme Court hasn't answered the question on what the standard is in a pattern and practice case," said Brad Seligman of the Impact Group in San Francisco, the public interest law firm that represents the Wal-Mart women.

The central issue in the Wal-Mart case has been whether the group could stand together as plaintiffs in a class action, given the sheer number of women who have worked in the stores.

In February, a federal appeals court in San Francisco affirmed a lower court ruling that they could proceed to trial. Wal-Mart moved to challenge that ruling with the entire panel of judges on the United States Court of Appeals for the Ninth Circuit, which hasn't yet announced whether it will take the case.

While the Ledbetter decision does not, by itself, derail the Wal-Mart suit, Seligman said that in a "worst-case scenario" the ruling might limit the plaintiffs' time frame for collecting damages. The class action goes back to December 26, 1998, but some claims could be based on pay decisions made prior to the beginning of the class period.

Richard Samp of the Washington Legal Foundation, which has filed friend of the court briefs on behalf of Wal-Mart, expects as much: "It could well be that certain members of the class will have their claims time barred. There are already people talking about that," he said.

Based on the Ledbetter decision, defense lawyers around the country are busy preparing motions to dismiss individual claims. Louis A. Rodriques, co-chair of the labor and employment group at Bingham McCutchen, is one of them.

His law firm, which represents companies sued by workers, is already trying to get several cases thrown out of court based on the Ledbetter decision.

He said that many courts allowed pay discrimination claims to proceed long after an allegedly discriminatory pay decision, on the theory that each new paycheck with lower pay "was a kind of separate wrong."

There may be a certain logic in that. Rodriques noted that pay decisions in the workplace are often closely guarded secrets, but pointed out that the court's decision does hew to precedent, which is also important.

In her dissent, Justice Ginsburg cited a law review article suggesting that one-third of private-sector employers have adopted rules prohibiting employees from discussing their wages with one another.

Rodriques said he basically agrees with Ginsburg but believes the majority rendered the right decision in putting pay discrimination claims on the same footing with cases involving demotions and terminations, in which workers were required to file claims within the tight 180-day timeline. (In the numerous states that have a fair employment agency, including employment hubs such as New York and California, the rule is 300 days.) 

"The fact is, women have just as much of a difficult time learning whether they are being promoted or demoted or terminated as they do about pay decisions," Rodriques said. He added that he thinks creative lawyers will seek to work around the Supreme Court decision on behalf of plaintiffs.

Rodriques pointed out that the majority rejected Ledbetter's contention that her claims fell under the 1986 Supreme Court case Bozeman v. Friday, in which the court held that each paycheck issued by an employer with a "discriminatory pay structure" could be treated as a new act of discrimination, giving the employee a new start in the 180-day race.

That case involved the North Carolina Extension Service, which in the early 1960s separated its employees into a "white branch" and a "Negro branch," with the latter getting lower pay. Rodriques said plaintiffs' lawyers will probably try to tailor new cases to fit this precedent.

Piper Hoffman, a lawyer with Outten & Golden of New York, a prominent plaintiffs firm, said employees should look to the more liberal state and local laws to get out from under the Ledbetter ruling.

For instance, New York City law is very generous to employees. It allows them three years to bring a pay discrimination claim and has an explicitly broader definition of what constitutes discrimination.

As the motions to dismiss keep coming, the National Employment Lawyers Association is calling on the "best minds" in its organization to come up with practical tips for its members.

"Our members are going to have to deal with Ledbetter until Congress fixes the problem," said Terisa Chaw, N.E.L.A.'s executive director.


 


 



 

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