Archive for March, 2009

The Lilly Ledbetter Fair Pay Act: Paycheck Discrimination Claims Get A Longer Life

Wednesday, March 18th, 2009

By R. Joseph Leibovich
Shuttleworth Williams, PLLC
(901) 328-8269
jleibovich@shuttleworthwilliams.com

The first bill President Obama signed into law shortly after taking office was the Lilly Ledbetter Fair Pay Act of 2009. The law was specifically designed to nullify a Supreme Court decision, and to extend the reach of potential claims regarding disparate pay discrimination claims under Title VII of the Civil Rights Act (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act (“ADA”) and the Rehabilitation Act.

History

The legislation was triggered by the United States Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007). Lilly Ledbetter (“Ledbetter”) worked at a manufacturing facility as a salaried employee from 1979 through 1998. In March 1998 she filed a charge with the EEOC alleging discrimination based on her gender. After retiring in November 1998, Ledbetter filed a charge of discrimination with the EEOC. Ultimately, she filed a lawsuit under Title VII and under the Equal Pay Act (“EPA”). The EPA claim was dismissed by the trial court, while the Title VII claim went forward.

Ledbetter alleged that decisions regarding pay were based on supervisor evaluations, and that during the course of her employment, she was given negative evaluations due to her gender. The jury awarded her backpay and damages.

The case went through the appellate process, and ended up at the United States Supreme Court. The issue before the Court involved a statutory requirement for claims under Title VII. Specifically, Title VII requires that before a plaintiff may file a case in court, that individual must file a charge of discrimination with the EEOC. The individual must file that charge within 180 days of the alleged discriminatory act (or, in states such as Tennessee where there is also a state law protecting the same rights, the filing period is extended to 300 days).

In Ledbetter’s case, the negative evaluations in question took place more than 180 days before she filed her charge.

The issue was whether or not a new 180 day period commenced with each paycheck, or whether the evaluations represented “discrete acts” of discrimination from which the 180 day began to run.

The Ledbetter Court held that the pay system, which was based on supervisor recommendations, was not established for discriminatory purposes. Therefore, the Court reasoned that the supervisors’ recommendations stood as discrete acts. Since these acts occurred more than 180 days prior to the charge, the Court ruled that Ledbetter’s claim was not timely.

The Lilly Ledbetter Fair Pay Act of 2009

This decision, along with a strongly worded dissent by Justice Ginsburg, set legislative wheels in motion. The Lilly Ledbetter Fair Pay Act was initially shot down in the Senate in 2008, but was re-introduced, and ultimately passed the House and Senate in January 2009 as The Lilly Ledbetter Fair Pay Act of 2009. President Obama signed the bill into law days after that.

The law explicitly legislatively reverses the Ledbetter decision. Under the law, each paycheck triggers a new 180 (or 300) day period within which to file a charge of discrimination when the amount of the paycheck is affected by a discriminatory reason. This is a reintroduction of the “paycheck accrual rule” that the EEOC and most federal courts of appeals had applied prior to the Ledbetter decision.

The law does not only apply to discrimination based on gender. It applies to all categories protected by Title VII, the ADA, the ADEA and the Rehabilitation Act.

Under the Act, back pay of up to two years is recoverable where the acts earlier than 180 (or 300) days prior to the charge are similar or related to the acts within the statutory period.

The Act was enacted so as to retroactively apply to May 28, 2007 forward.

It is important to note that this law does not affect the Equal Pay Act, which is separate from Title VII. The EPA does not require the filing of an EEOC charge. In Ledbetter, the plaintiff’s EPA claim had been dismissed on summary judgment and she did not pursue that issue in appeals.


What Does This Mean to Employers?

The Act gives Title VII claims a significantly longer shelf life. Actions from the distant past can continue to haunt employers for as long as an individual draws a paycheck. In an effort to potentially limit liability, employers should look at how compensation decisions have been made. Where there has been subjectivity that could have been influenced by discriminatory intent, employers should consider make sure individuals’ compensation is not inequitable or influenced by discrimination. By fixing past mistakes now, employers can possibly break the links of the chain 180 (or 300) days after the appropriate changes are made.

The articles published in this blog are for informational purposes only, and are not intended to be legal advice or a solicitation for legal services. For specific legal questions and issues, you should contact an attorney of your choice.

Amendments to the Americans With Disabilities Act – Putting Teeth Back Into the ADA

Wednesday, March 11th, 2009

By R. Joseph Leibovich
Shuttleworth Williams, PLLC
(901) 328-8269
jleibovich@shuttleworthwilliams.com

President George H.W. Bush signed The Americans With Disabilities Act (“ADA”) into law in 1990.  The law was designed to eradicate employment discrimination against qualified individuals with a disability.

What Congress likely did not anticipate in the passage of the ADA is that the key issue that would end up being argued about in the courts is whether or not an individual does or does not have a disability.

In the years following the passage of the ADA, lawsuits began to make their way through the court system that focused on the issue of disability.

In 1999, the United States Supreme Court issued decisions in three cases that have become known as “the Sutton trilogy”. These cases all had an enormous impact on the ADA.

In Sutton v. United Airlines, 527 U.S. 471 (1999) the Supreme Court reviewed a case involving twin sisters who were denied employment with United Airlines due to their severe myopic vision. However, when the women wore glasses, they could see fine. The Supreme Court held that whether or not an individual is disabled under the ADA should be determined in such individual’s mitigated state. In other words, since the myopia was mitigated by glasses, the individuals were deemed by the Court to not be disabled. The other two Sutton trilogy cases also held that a court must look at an individual in their mitigated state to determine if they have a disability under the ADA.  Murphy v. United Postal Service Inc., 527 U.S. 516 (1999) involved an individual taking blood pressure medication, while Albertsons, Inc. v. Kirkingburg, 527 U.S. 555 (1999) dealt with person with monocular vision who was able to mentally compensate in the use of his vision.

In 2002, the Supreme Court decided another case which employers saw as a victory in the ADA arena. In Toyota Motor Mfg. v. Williams, 534 U.S. 184 (2002), the Court looked at a case of an individual with tendonitis and bilateral carpal tunnel syndrome which she claimed restricted her ability to do her job. The Court held this was not an impairment under the ADA, and added “to be substantially limited in performing manual tasks, an individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people’s daily lives. The impairment’s impact must also be permanent or long-term.” The Court noted that although someone may be unable to perform a class of jobs, if they could do activities central to one’s daily life – such as taking care of personal hygiene and household chores – such individuals would not qualify under the ADA.

Between the Sutton trilogy and Williams, employers were able to much more easily prevail in summary judgment motions arguing plaintiffs were not qualified individuals with a disability under the ADA.

In 2008, Congress passed the ADA Amendments Act of 2008 (“ADAAA”), which went into effect January 1, 2009. Among the stated purposes of the ADAAA was to legislatively overturn Sutton and Williams, and to focus on employers’ obligations more than on whether or not an individual has an impairment.

The ADAAA specifically states that the definition of “disability” should be broadly construed. As part of this broad construction, the Act states that an impairment limiting one major life activity need not limit other major life activities to be deemed an impairment. Furthermore, an individual can still be deemed to have a disability, even if the condition is episodic in nature or is in remission.

Furthermore, the ADAAA includes a non-exclusive laundry list of things that constitute “major life activities”.  These include caring for oneself, manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.  Additionally, the ADAAA lists majorly bodily functions that can trigger coverage, including, but not limited to:  normal cellular growth, immune system, digestive system, bowel, bladder, reproductive system, neurological system, brain, respiratory system, circulatory system, and endocrine system.

The ADA and ADAAA prohibit discrimination against individuals “regarded as” having a disability.  The ADAAA, however, presents employers with potential problems.  Under the ADAAA, discrimination is prohibited against someone who is regarded as having a physical or mental impairment, whether or not the impairment limits or is perceived to limit a major life activity.  Commentators disagree on what the impact of this provision of the ADAAA will have.  Disability rights advocates argue this merely resets the ADA to its original intended purpose.  Others, however, argue that this is a vast expansion of coverage, and that there will be a flood of litigation from indviduals who claim they are regarded as having a disability, regardless of how inconsequential that perceived disability may be.   One point the ADAAA does clarify in relation to “regarded as” cases is that an employer is not required to provide a reasonable accommodation for perceived impairments.  Such accommodations remain legally necessary for actual disabilities.

Congress shot down the Sutton trilogy in the ADAAA, which states that a determination of disability shall be made without regard to mitigation, such as medication, medical supplies, or behavioral or neurological adaptations to a condition. Ordinary glasses and contact lenses, however, may still be taken into account for this purpose.

The ADAAA prohibits employers from utilizing hiring criteria related to uncorrected vision unless such requirements are job related and consistent with business necessity, and the Act mandates that the EEOC issue new regulations consistent with the ADAAA.

What does this mean to employers?

Employers need to be aware of these significant changes.  Hiring, discipline, and termination decisions must be made on an individualized basis.  Employers should be very cautious that they do not actually or arguably discriminate against individuals with actual or perceived disabilities.  One area to watch closely is how courts will deal with the new “regarded as” standards.   There is a very real possibility that this could become a growing area in employment litigation cases.

Employers must realize that they will not have as easy a time prevailing in ADA cases as they have in previous years. Employers should utilize proper hiring, discipline, and termination practices in conjunction with other best practices regarding such things as proper record keeping and accurate employee evaluations if they want to avoid getting bitten by the new teeth the ADA has recently grown.

Joe is presenting a free webinar on the ADAAA on March 18, 2009 at 2:00 p.m. Central time. Click here to sign up.

The articles published in this blog are for informational purposes only, and are not intended to be legal advice or a solicitation for legal services. For specific legal questions and issues, you should contact an attorney of your choice.