Supreme Court Ruling on Pay Discrimination Led Congress to Pass New Law

Lilly Ledbetter worked as a supervisor at a Goodyear tire plant in Gadsden, Alabama for nearly 20 years on overnight shifts. She earned a Top Performance Award in 1996, but an anonymous note later revealed she was paid significantly less than male supervisors with equivalent or lesser seniority. Her male counterparts earned between $4,286 and $5,236 monthly; Ledbetter earned $3,727.

Ledbetter filed a complaint with the Equal Employment Opportunity Commission, alleging sex-based pay discrimination under Title VII of the Civil Rights Act. Goodyear subsequently reassigned her to a position involving heavy tire lifting. She retired shortly after. Because her retirement benefits were calculated based on her lower salary, Ledbetter said the disparity would affect her finances for life.

A jury found in Ledbetter's favor and awarded approximately $3.5 million in back pay and damages, later reduced to $360,000 under statutory caps. Goodyear appealed, arguing that Title VII requires discrimination claims to be filed within 180 or 300 days of the unlawful employment practice. Ledbetter contended that each discriminatory paycheck reset the deadline. An appellate court disagreed, ruling that the limitation period began when the pay-setting decision was made, not when paychecks reflecting that decision were issued. The case reached the Supreme Court.

In a 5-4 decision, the Court affirmed the appellate court's ruling. Justice Samuel Alito wrote for the majority that prior Supreme Court precedent established that the clock starts running when a discriminatory act occurs. Because the discriminatory act in Ledbetter's case was the initial pay-setting decision, the limitations period began then, not with each subsequent paycheck. Alito noted that denials of promotion or hiring decisions differed in form but not substance for statute of limitations purposes.

Justice Ruth Bader Ginsburg dissented. She argued that pay discrimination differs from discrete employment actions like terminations or promotion denials because it operates invisibly over time. Employees typically cannot discuss salaries due to workplace confidentiality policies, making discrimination difficult to detect. A worker might receive raises while remaining underpaid relative to male counterparts, with no way to verify the disparity until years later. Ginsburg pointed to evidence supporting Ledbetter's discrimination claim: her pay had fallen below the minimum for her position, one evaluator had expressed bias against women, other female employees testified to lower pay, and a plant manager had made statements suggesting women were detrimental to operations.

Ginsburg stated that the majority's interpretation of Title VII exposed a technical escape for employers who kept pay differences secret. She argued Congress enacted the statute to remedy workplace discrimination, and she invited legislators to correct what she viewed as an overly narrow reading. "The ball is in Congress' court," she wrote.

Ledbetter responded by engaging with congressional leaders. Two years later, in 2009, Congress passed the Lilly Ledbetter Fair Pay Act as President Barack Obama's first legislative signature. The law amended Title VII to provide that the limitations period resets with each discriminatory paycheck, adopting the rule Ginsburg had argued the statute should have required. Obama stated at the signing ceremony that the law upheld "one of this nation's first principles: that we are all created equal."

The legislation implemented Ginsburg's legal argument but came too late for Ledbetter herself, who never recovered the lost wages. Ginsburg kept a framed copy of the act in her chambers. The outcome illustrated how a Supreme Court dissent can serve as a roadmap for legislative action when justices frame their disagreement as a matter the elected branches could address.