iA recent case from the Circuit Court of Appeals for the District of Columbia offers guidance on how courts might apply the provisions of what is commonly known as the Lilly Ledbetter Fair Pay Act of 2009 (Ledbetter Act). The pertinent part of the case, Schuler v. PricewaterhouseCoopers, LLP, No. 08-7115, 2010 WL 522345 (D.C. Cir. Feb. 16, 2010), involved an effort by the plaintiff Harold Schuler (Schuler) to use the Ledbetter Act to revive a claim of discrimination under the Age Discrimination in Employment Act (ADEA) based on Schuler's having been passed over for promotion to partner at PricewaterhouseCoopers (PwC) in 1999 and 2000.
The Ledbetter Act provides in part:
An unlawful practice occurs, with respect to discrimination in compensation in violation of [in this case, the ADEA], [1 (a)] when a discriminatory compensation decision or [(b)] other practice is adopted, [2] when a person becomes subject to a discriminatory compensation decision or other practice, or [3] when a person is affected by application of a discriminatory compensation decision or other practice…
Plaintiff Argues Decision Not To Promote Is "Other Practice" Under Ledbetter Act
Schuler argued that the decision not to promote him was an "other practice" intertwined with a "discriminatory compensation decision." This was because as a result of the decision not to promote, Schuler received significantly less compensation than he would have as a partner. In response PwC distinguished between the claim by an employee that he was paid less than another employee for doing similar work and Schuler's claim that he should have been promoted to a higher paying position. (The former situation was the genesis of the sex discrimination claim brought by Lilly Ledbetter in which she argued that she was paid significantly less than her male colleagues because of discriminatory performance reviews, a claim characterized by the U.S. Supreme Court as one of "pay discrimination." Ultimately, her claim for sex discrimination under Title VII was determined untimely by the U.S. Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007) because Ledbetter filed her charge of discrimination too long after the decisions about her compensation (based on the discriminatory performance reviews) were made. The decision in the Ledbetter case was the basis for Congress' passage of the namesake Ledbetter Act. The purpose of the Act was to overturn the Supreme Court's decision so as to allow a timely claim under any of the three circumstances enumerated in the quote above from the Act.
Employer Successfully Argues Otherwise
According to PwC, being paid less than another employee doing similar work is "clearly discrimination in compensation and covered by the [Ledbetter Act]." In contrast, a claim that one should have been promoted to a position paying higher compensation is not covered by the Ledbetter Act. In Schuler's case, if promotion is not covered by the Ledbetter Act, his ADEA claims based on failure to promote him in 1999 and 2000 were untimely and thus barred. The court sided with PwC, and pointed out that for Schuler to benefit from the Ledbetter Act, he had to bring a claim involving "discrimination in compensation" and had to point to a "discriminatory compensation decision or other practice." The court framed the question to be decided as whether Schuler brought such a claim by contending PwC did not make him a partner because of his age. The court then held that Schuler's claim involved neither quoted element.
Court Explains Its Ruling
According to the court, "discrimination in compensation" within the meaning of employment law "means paying different wages or providing different benefits to similarly situated employees." It does not mean "not promoting one employee but not another to a more remunerative position." The court in Schuler stated that Congress' drafting and passing of the Ledbetter Act "specifically to overturn Ledbetter strongly suggests the statute is directed at the specific type of discrimination involved in that case and not to other unspecified types of discrimination in employment." Indeed, the court in Schuler saw the Ledbetter case as providing an example of a discriminatory "other practice" involving giving an employee a poor performance evaluation based on her sex (or it could have been some other unlawful basis) and then using the evaluation to determine the employee's rate of pay.
As noted above, Schuler had urged that the failure to promote him to partner was the "other practice" within the meaning of the Ledbetter Act, but the court refused to interpret theAct to include non-promotion as "discrimination in compensation."
Discriminatory Promotion Decisions Still Actionable
Employers should keep in mind that the court's decision in Schuler does not eliminate the viability of promotion decisions where they are themselves based on unlawful criteria, such as age, sex, race, or other statutorily prohibited bases, if the claims resulting from those decisions are timely brought.
