Court Defines Limitations on Ledbetter Act

When the district court ruled against Emmanuel Noel's failure-to-promote claim on the grounds that he had missed the filing deadline, he cried Ledbetter. But to no avail: In October, the 3rd Circuit affirmed the district court's ruling in Noel v. Boeing Co., holding that the Lilly Ledbetter Fair Pay Act's scope is limited strictly to discriminatory compensation claims.

At issue in Noel is the scope of the Ledbetter Act, which passed in 2009. The Act says that if an employee is not receiving "equal pay for equal work," as a consequence of an employer's discriminatory employment decision, then each paycheck is a discrete discriminatory action that, in effect, restarts the clock under Title VII's requirement that a complaint be filed within 300 days of a discriminatory act.

Noel, a black Haitian worker, tried to apply this argument to his case, which involved his claim that two white workers were promoted to higher pay grades while he was not.

"The district court found that his claims were time barred because he didn't file his EEOC [Equal Employment Opportunity Commission] claim in the 300-day period from the failure to promote in 2003," says Maria Greco Danaher, a shareholder at Olgetree Deakins. "So [on appeal] he claims that, under the Fair Pay Act, this 2005 charge is timely because the 300-day statute of limitations starts up again every time he got a paycheck that reflected this company's discriminatory failure to promote."

Unfortunately for Noel, the 3rd Circuit ruled that in order to qualify under the Ledbetter Act, the claim must be one of unequal pay for very similar work. Pay discrepancies based on legitimate reasons, such as promotions, aren't covered -- even if the legitimate reason for the unequal pay is the result of a discriminatory employment decision, the court said.

"Discriminatory compensation is basically paying different wages or benefits to similarly situated employees for equal work," Danaher explains. "It's not promoting one employee over another to a better paying position. The Fair Pay Act only comes into play if the complaint is based on pay disparity."

Pay Grade Promotions

The facts of the case involve Boeing's practice of offering highly coveted off-site assignments, which came with per diem allowances, higher pay grades and, in some cases, promotions while on assignment. According to the union contract, these assignments were made based on skill and ability, with seniority coming into play only as a tiebreaker.

Noel began working for Boeing in 1990 as an aircraft mechanic and, after an off-site assignment in 1991, went more than a decade without another off-site assignment. That streak was broken in November 2002, however, when Noel was selected to work on a project in Amarillo, Texas. As a result of the assignment, his pay grade was raised from 7 to 8, and he received a $57 per diem. Two white employees, who Noel says were junior to him, were also sent to Amarillo and were eventually promoted to pay grade 11, which Noel saw as discrimination.

"Noel claimed only that he didn't receive a pay grade promotion that two other white employees received," explains Ken Yerkes, chairman of Barnes & Thornburg's Labor and Employment Law Department. "His claim was that because of not getting promoted, he was paid less, and therefore the court should treat his claim as a compensation claim."

By the time Noel finally took his issue to the EEOC in 2005 and filed suit in 2006, he was well outside of the 300-day filing deadline under Title VII. The Federal District Court for the Eastern District of Pennsylvania rejected the case for being filed too late, and Noel responded with an appeal, claiming that the Ledbetter Act meant the district court had erred in its ruling.

Congressional Intent

Noel tried to argue that his claim was covered based on the language in Ledbetter that said its purpose was to "clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes" (emphasis added). According to Noel, Boeing's failure to promote qualified under the "other practice" language of the Fair Pay Act and, therefore, the statute of limitations to file his complaint restarted with each paycheck that reflected the discriminatory act.

"Noel isn't complaining that someone is getting paid more than he for the same work that he's doing," Danaher says. "He's complaining that he should have been up there with [the white employees who were promoted] at the Level 11, and that's not what this Fair Pay Act is about."

The 3rd Circuit ruled that Congress didn't intend for the "other practice" language to cover discriminatory employment decisions. In fact, Seyfarth Shaw partner Camille Olson says Congress went through pains to make it clear that that was not its intent. The purpose of the Ledbetter Act, she says, is to recognize that in cases of disparate, discriminatory pay for equal work, employees may not be aware the discrimination is occurring within 300 days of the first instance and that different administrative standards should apply.

"If Congress intended to say that an unlawful employment practice occurs every time a discriminatory employment decision is made or adopted that affects somebody's pay, that's what the act would say, but it doesn't say that," she says.

Kayleigh Roberts

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