Supreme Court Decision Jeopardizes Pay Equality

By Lisa Grafstein

You get your first paycheck at a new job and, not one to be shy, you ask the coworker in the next cubicle how much he makes. It turns out you are making fifty cents less per hour doing the same work. Do you literally make a federal case out of it? Under the Supreme Court’s decision this term in Ledbetter v. Goodyear Tire, maybe you should. If you don’t, you may be forever barred from claiming pay discrimination, no matter how much you may have lost in wages over time.

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex or national origin. Using Title VII, employees may challenge workplace discrimination, including pay discrimination. Since the Supreme Court’s 1986 unanimous decision in Bazemore v. Friday, it was understood that pay discrimination occurs each time an employee receives a paycheck that reflects a discriminatory pay structure. In Bazemore, employees brought race discrimination claims based on pay disparities that had begun before the enactment of Title VII, and continued after the enactment. The Court rejected the argument that the plaintiffs could not sue because the discrimination began before Title VII because “[e]ach week's paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII.” The “paycheck rule” recognized that pay discrimination is not a single, distinct act like a firing or refusal to hire; rather, it is often hidden and cumulative.

In the 5-4 Ledbetter decision, the Court rejected the ‘paycheck rule’ and determined that a case for pay discrimination under Title VII must be brought within 180 days of the discriminatory pay decision. In Ms. Ledbetter’s case, that meant that the pay discrimination she was unaware of during the first 18 years of her employment, and that resulted in her eventually making about 75 percent of what her male coworkers made, would not be remedied, even though it affected her pay every week.

After Ledbetter, Title VII no longer provides a real remedy for pay discrimination. Even when an employee discovers discrimination in time, small pay differentials would rarely be enough to cause her to take action. As Justice Ginsberg stated in her dissent, “[s]mall initial discrepancies may not be seen as meet for a federal case, particularly when the employee, trying to succeed in a nontraditional environment, is averse to making waves.” Yet, even minor disparities will increase exponentially over time. By the time the difference is significant, the time for pursuing a remedy will have passed.

We all know the statistic that women make 70 cents for every $1 a man makes. What makes this statistic hard for many of us to understand is that we simply do not believe that an employer would start two employees out on the same job at such disparate wages. The reality is that the gender gap in pay—for individuals or women as a group—was not created overnight; it is the result of incremental, compounded differences over time.

The Court has imposed an unrealistic interpretation of Title VII. If the Supreme Court is unwilling to interpret Title VII in the context of the real workplace, Congress must take steps to correct the Court’s unworkable interpretation. Some members of Congress have vowed to repair the loophole the Supreme Court has created in Title VII, and undo the Supreme Court’s interpretation of the statute.

As Justice Ginsberg noted in her dissent: “Once again, the ball is in Congress’ court.”

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Grafstein is a private practice attorney in Raleigh.