Supreme Court Pay-Discrimination Ruling Stirs Debate

PAYSCALE.COM - Kristina Cowan
August 13, 2007

A ruling in one of this year’s Supreme Court cases, on discrimination in pay, has sparked a spate of reactions and surmising over what it all means for American workers and their employers.

The Supreme Court recently issued a number of decisions that have raised more than a few eyebrows. One of those Supreme Court cases, on discrimination in pay, drew the ire of some experts and lawmakers-but others have voiced their support.

The 5-4 ruling in Ledbetter v. Goodyear Tire & Rubber Co. says pay discrimination is based on a single decision, and an employee has six months from the time of that decision to file charges with the Equal Employment Opportunity Commission. If pay is lowered as a result of the decision, it’s considered an effect, and “later effects of past discrimination do not restart the clock for filing an EEOC charge,” according to the supreme court ruling. (For more on the Ledbetter v. Goodyear Tire & Rubber Co. case, see The Salary Reporter: Supreme Court Rules for Employers in Pay-Discrimination Suit.)

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Some consider the ruling a narrow interpretation of Title VII, part of the Civil Rights Act that prohibits workplace discrimination.

Justice Ruth Bader Ginsburg offered a vehement dissent, saying, “Pay disparities often occur, as they did in Ledbetter’s case, in small increments; cause to suspect that discrimination is at work develops only over time.”

Piper Hoffman, a partner with Outten & Golden, a New York-based law firm that represents employees, said the decision is wrongheaded. “It shows that this court fundamentally does not understand the American workplace and is not sympathetic to the legislative goals of Title VII, and all of that is very bad,” Hoffman said.

Hoffman said the court is encouraging workers to find out what colleagues are earning-a bad policy move. “Often that information can damage relationships in the workplace,” she explained.

Employers also might set policies against such information-sharing, Hoffman said.

“Under the National Labor Relations Act employers can’t prevent employees from organizing, like a union. But if they’re sharing their compensation information solely for their own interests, employers can have policies against that. Some already do, and I predict that many more will have such policies as a result of this decision,” she said.