Ledbetter Act revives previously dismissed discrimination cases

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October 8, 2009

Ledbetter Act revives previously dismissed discrimination cases 

Allison Torres Burtka

Since the Lilly Ledbetter Fair Pay Act was signed into law in January, it has allowed several previously time-barred employment discrimination cases to proceed. Recently, two such claims were reinstated.

Last month, the Third Circuit reversed a lower court's decision—and its own earlier decision—that a gender discrimination claim was untimely. (Mikula v. Allegheny Co. of Pa., 2009 WL 2889742 (3d Cir. Sept. 10, 2009) (per curiam).)

Mary Lou Mikula sued her employer for violating Title VII, alleging that it ignored her requests for a pay raise. While her case was pending, the Supreme Court decided Ledbetter v. Goodyear Tire and Rubber Co., which held that the limitations period for filing a Title VII claim was triggered by the allegedly discriminatory pay decisions—but not by paychecks. (550 U.S. 618 (2007).) The district court dismissed Mikula's claim as time-barred under Ledbetter.

While Mikula's appeal was pending, Congress passed the Ledbetter Act, which repudiates the Ledbetter decision and says that each allegedly unequal paycheck an employer issues serves as a new discriminatory act.

Last March, the Third Circuit affirmed the district court's decision, but in May, after Mikula argued that her claim was the same as a "classic paycheck accrual" case, the Third Circuit agreed to rehear the case.

"Despite our earlier decision, we now hold that the failure to answer a request for a raise qualifies as a compensation decision because the result is the same as if the request had been explicitly denied," the court said.

The Washington, D.C.-based National Women's Law Center, which represents Mikula, has been monitoring cases affected by the Ledbetter Act. "We found that courts were implementing it as it should be, generally," said Fatima Goss Graves, vice president for education and employment at the organization.

Stephen Bruce, a D.C. lawyer agreed that the act seems to be working as it should.

Bruce represents Wayne Tomlinson, who sued his employer over changes to its pension plan. El Paso Corp. changed its plan from one based on a final-average-pay formula to one based on a cash-balance formula, and Tomlinson said the change discriminated against older employees.

The district court dismissed the case as untimely. The Ledbetter Act was signed into law shortly afterward, and Tomlinson moved to amend the court's judgment. The defendants argued that the act did not apply to pensions.

The court reversed its earlier decision. Judge Walker Miller wrote: "The act covers 'wages, benefits, or other compensation,' which appears to include employer contributions to a pension plan. It provides that a discriminatory act occurs when an individual is 'affected' by the application of a discriminatory compensation decision or other 'practice,' which could plausibly include the accrual of pension benefits." (Tomlinson v. El Paso Corp., 2009 WL 2766718 (D. Colo. Aug. 28, 2009).)

Bruce said he believes this is the first time the Ledbetter Act has been applied in a pension case.

Before the act, "plaintiffs with perfectly legitimate claims were seeing their cases being dismissed," Graves said. "The fact that you're seeing these cases being reviewed shows why it's important that it was passed."

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