Sunday, May 31, 2009

Does the Ledbetter Act Extend Failure to Promote Claims?

A May 21, 2009 Eastern District of Pennsylvania decision has held that the recently enacted Lilly Ledbetter Fair Pay Act does not apply to failure to promote claims.  Rowland v. Certainteed Corp., 2009 WL 1444413 (E.D. Pa. 2009).

The Ledbetter Act essentially removes the statute of limitations for employment discrimination claims in limited circumstances:
with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to a discriminatory compensation decision or other practice, or when a person is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
29 U.S.C. sec. 626(d)(3).  In plain English: If you're still getting paid less as a result of a "past discriminatory compensation decision or other practice" then you may file suit even after the ordinary  statute of limitations has run.
In Rowland v. Certainteed, the Court differentiated Ms. Rowland's claim from Ms. Ledbetter's claim (the basis for the Ledbetter Act):
Ledbetter's claim was based on allegations of discriminatory pay . . . . Here, Rowland's failure to promote claim is not based on a discriminatory compensation claim. Furthermore, her argument would eliminate any statute of limitations with respect to reporting discrimination to the appropriate agency, a change in law not found in the Ledbetter Act.
This holding underscores an emerging split among district courts over whether the Ledbetter Act applies to failure to promote claims... or does it? An earlier case from the Southern District of Mississippi applied the Ledbetter Act to a denial of tenure claim. Gentry v. Jackson State University, 2009 WL 1097818 (S.D. Miss. 2009).  The cases can be reconciled, however, upon closer examination of the language used by the Court in Gentry:
[P]laintiff has asserted that the denial of tenure also denied her a salary increase and hence was a compensation decision. Accordingly, the court concludes that it cannot grant summary judgment on the limitations basis urged by [Jackson State University].
The distinction emerges as a pure failure to promote claim (not extended) versus a failure to promote which would affect compensation (extended). This distinction would be consistent with the language of the statute ("discriminatory compensation decision"). As a promotion almost necessarily includes a compensation adjustment, however, this distinction may be illusory. As Pennsylvania Law Weekly reports (subscription required), in Rowland:
[P]laintiffs attorney Ayesha Hamilton of Lansdale, Pa., argued that the language of the Ledbetter Act, and its revision of the term "unlawful employment practice," should be read broadly to apply to failure-to-promote claims because the denial of a promotion also directly affects compensation.
It's therefore not really clear whether there is a distinction or a split.  I'm sure it's only a matter of time before the Circuits get involved.  Will they resolve this potential split or just widen the gap?  We'll see, but for now plead carefully!