D.C. Circuit Court Of Appeals Holds That Lilly Ledbetter Fair Pay Act Does Not Include Failure To Promote Claims Under The ADEA

D.C. Circuit Court Of Appeals Holds That Lilly Ledbetter Fair Pay Act Does Not Include Failure To Promote Claims Under The ADEA

The United States Court of Appeals for the District of Columbia Circuit recently became the first federal appellate court to weigh in on the meaning of “other practices” under the Lilly Ledbetter Fair Pay Act of 2009 (“Ledbetter Act”). In Schuler v. PriceWaterhouseCoopers, LLP, Case No. 08-7115 (D.C. Cir. Feb. 16, 2010), the D.C. Circuit Court of Appeals held that the Ledbetter Act’s language prohibiting pay discrimination based on “other practice[s]” does not include failure to promote claims.

In 2007, the United States Supreme Court held that pay discrimination claims were time barred beyond the designated administrative charge filing period. In other words, a plaintiff or claimant could only sue based on pay decisions made within the 180 or 300 day period prior to filing the necessary administrative charge. See Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). In 2009, Congress sought to overturn this judicial decision and passed the Ledbetter Act. The Ledbetter Act amends the Civil Rights Act of 1964 stating that the 180-day statute of limitations for filing an equal pay claim resets with each new discriminatory paycheck. Therefore, discriminatory pay decisions made years before are still fair game if the employee files his or her charge of discrimination within 180 days (or 300 days in jurisdictions with state fair employment practice agencies that may process the charge) of his or her last paycheck. Section 4 of the Ledbetter Act provides, in pertinent part:

[A]n unlawful practice occurs, with respect to discrimination in compensation in violation of this Act, when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to a discriminatory compensation decision or other practice, or when a person is affected by application of a discriminatory compensation decision or other practice …

The Ledbetter Act specifically applies to most anti-discrimination employment laws, including the Age Discrimination in Employment Act (“ADEA”).

In Schuler, the plaintiffs were employed in the Washington, D.C. office of PriceWaterhouseCoopers (“PwC”). Both filed suit under the ADEA and state and District laws, claiming they had been discriminatorily passed over for partnership because of their age. The district court dismissed most of Schuler’s claims as untimely, because he had failed to file a charge of discrimination with the EEOC or District fair employment practices agency within 300 days of the partnership decisions. On appeal, Schuler argued that the Ledbetter Act saved his claims because the decision not to promote him was an “other practice” … “intertwined with a discriminatory compensation decision.” According to Schuler, he received significantly less pay than he would have had he been promoted to partner. PwC argued that an employee’s claim that he was paid less than another employee for doing similar work was distinguishable from an employee’s claim that he was not promoted due to age discrimination.

The D.C. Circuit agreed with PwC’s argument, holding that “a discriminatory failure to promote is actionable regardless of whether it affects an employee’s compensation.” Schuler, 2010 U.S. App. LEXIS 2998, *10. The Court explicitly stated that “we do not understand ‘compensation decision or other practice’ to refer to the decision to promote one employee but not another to a more remunerative position.” Id. at *11. In interpreting the Ledbetter Act’s provisions, the Court opined that Congress’s intent in overturning the 2007 Ledbetter opinion “strongly suggests the statute is directed at the specific type of discrimination involved in that case and not to other unspecified types of discrimination in employment.” Id. at *12. The Court further held that its opinion in no way nullifies the “other practice” language found in the statute—rather, an examination of the Ledbetter case explains what Congress is purportedly referring to with “other practice[s].” Ledbetter dealt with discriminatory performance appraisals that were the direct basis for determining the plaintiff’s rate of pay. According to the D.C. Circuit, it is these sorts of “other practices”—those which are directly linked to discriminatory compensation decisions—that are the basis of the Ledbetter Act’s protections.

The D.C. Circuit’s opinion is a relatively narrow view of the scope of the Ledbetter Act, defying the projections of many commentators. It remains to be seen how other Courts of Appeals will interpret this statute. In other jurisdictions, “other practices” may include additional types of discriminatory decisions, including failure to promote.