Ledbetter v. Goodyear Tire & Rubber Co. (11th Cir.) Brief as amicus Sept. 14, 2005 _____________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _____________________________________________ No. 03-15264-GG _____________________________________________ LILLY M. LEDBETTER, Plaintiff-Appellee, v. GOODYEAR TIRE & RUBBER CO., INC., Defendant-Appellant. _____________________________________________ On Petition for Rehearing or Rehearing En Banc of Panel Decision Issued August 23, 2005 _____________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION IN SUPPORT OF PETITION FOR REHEARING AND SUGGESTION FOR REHEARING EN BANC FILED BY APPELLEE LEDBETTER _____________________________________________ JAMES L. LEE Deputy General Counsel LORRAINE C. DAVIS Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel PAUL D. RAMSHAW Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L St., NW, Room 7040 Washington, DC 20507 (202) 663-4737 Ledbetter v. Goodyear Tire & Rubber Appeal No.: 03-15264-GG CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT Counsel for amicus EEOC certifies that the following is a complete list of the trial judges; attorneys involved in the case; and all persons, associations of persons, firms, partnerships, and corporations having an interest in the outcome of this case: 1. Vincent J. Blackwood, attorney for amicus EEOC; 2. U. W. Clemon, United States District Judge; 3. Lorraine C. Davis, attorney for amicus EEOC; 4. Jon C. Goldfarb, and the attorneys working for or with the firm of Wiggins, Childs, Quinn & Pantazis, attorneys for plaintiff-appellee; 5. Goodyear Tire & Rubber Company, Inc., defendant-appellant; 6. Ronald H. Kent, Jr., and the attorneys working for or with the firm of Bradley, Arant, Rose and White, attorneys for defendant-appellant; 7. Lilly M. Ledbetter, plaintiff-appellee; 8. James L. Lee, attorney for amicus EEOC; 9. C. Michael Quinn and the attorneys working for or with the firm of Wiggins, Childs, Quinn & Pantazis, attorneys for plaintiff-appellee; 10. Paul D. Ramshaw, attorney for amicus EEOC; 11. Jay St. Clair, and the attorneys working for or with the firm of Bradley, Arant, Rose and White, attorneys for defendant-appellant; 12. Maury Weiner, and the attorneys working for or with the firm of Wiggins, Childs, Quinn & Pantazis, attorneys for plaintiff-appellee; and 13. Robert L. Wiggins, Jr., and the attorneys working for or with the firm of Wiggins, Childs, Quinn & Pantazis, attorneys for plaintiff-appellee. Paul D. Ramshaw Attorney TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT . . . . . . . . . . . . . . . . . . .C-1 TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . ii TABLE OF CITATIONS . . . . . . . . . . . . . . . . . . . iii STATEMENT OF INTEREST . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUE . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . 2 PANEL DECISION . . . . . . . . . . . . . . . . . . . . . . 5 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . 7 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . 15 CERTIFICATE OF COMPLIANCE . . . . . . . . . . . . . . . . .16 CERTIFICATE OF SERVICE TABLE OF CITATIONS FEDERAL CASES Bazemore v. Friday, 478 U.S. 385 (1986). . . . . . . . . . . . . . . . . passim Bazemore v. Friday, 751 F.2d 662 (4th Cir. 1984) . . . . . . . . . . . . . .10 Delaware State College v. Ricks, 449 U.S. 250 (1980) . . . . . . . . . . . .11 Forsyth v. Federation Employment & Guidance Service, 409 F.3d 565 (2d Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 14 National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002) . . . . .passim Reese v. Ice Cream Specialties, Inc., 347 F.3d 1007 (7th Cir. 2003) . .10, 15 Shea v. Rice, 409 F.3d 448 (D.C. Cir. 2005) . . . . . . . . . . . . . . .9, 14 United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977) . . . . . . . . . . . .11 FEDERAL STATUTES Title VII of the Civil Rights Act of 1964 §703(a), 42 U.S.C. § 2000e-2(a) . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF INTEREST Congress has given the Equal Employment Opportunity Commission the authority and responsibility to interpret and enforce Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Title VII prohibits covered employers from "discriminat[ing] against any individual with respect to his compensation . . . because of such individual's . . . sex . . . ." § 703(a) of Title VII, 42 U.S.C. § 2000e-2(a). The panel decision in this case holds that current sex discrimination in compensation is not actionable under Title VII unless the plaintiff can prove that the employer's most recent one or two "affirmative decisions directly affecting" the plaintiff's compensation were intentionally discriminatory. We believe that this decision is inconsistent with decisions of the Supreme Court and of this Court holding that employers have a continuing obligation under Title VII to eliminate current discrimination in compensation even if that discrimination is caused by discriminatory decisions which were made outside Title VII's charge- filing period or even before Title VII went into effect. The Commission accordingly offers the Court its views on this important issue. STATEMENT OF THE ISSUE Whether the panel's holding that current sex discrimination in compensation is not actionable under Title VII unless the plaintiff can prove that the employer's most recent "affirmative decisions directly affecting" the plaintiff's compensation were intentionally discriminatory is inconsistent with the Supreme Court's decision in Bazemore v. Friday. STATEMENT OF THE CASE Goodyear Tire & Rubber Company hired Lilly Ledbetter in 1979 as a production supervisor at its plant in Gadsden, Alabama, and in 1985 changed her title to "area manager." Under Goodyear's compensation system, area managers' salaries "were determined primarily based on a system of annual merit-based raises." Slip op. at 4-5. In theory, early each year Ledbetter's supervisors evaluated her performance during the preceding calendar year, and then decided, based on the amount of money available for raises and her relative performance ranking, whether she would receive a raise, and if so, how much. Tr. 250-61. These performance evaluations and raise decisions did not address whether the salary the employee was receiving before the raise was fair or non-discriminatory. Tr. 257 ("Whatever they [the salaries before the raises] were, they were."). In some years Ledbetter received quite low performance evaluations, but in December 1995 she received the "top performer" award – and a 7.45% raise – for her recent performance. Slip op. at 7-8. Even after that raise, however, Ledbetter's pay was still about 15% lower than the lowest-paid male area manager. Slip op. at 9-10. There were only two other women among the 80 or so area managers at the Gadsden plant during Ledbetter's tenure, and each of them was paid even less than Ledbetter. DX-1 & DX-48 (Ledbetter was paid $3451 per month in Feb. 1995 and $3727 per month in Dec. 1998); Tr. 212 & PX-98 (Robertson was paid $2728 per month in Feb. 1995); Tr. 225-28 (Burns was paid under $2400 per month in Dec. 1998). In early 1997, Pete Buchanan, Goodyear's human relations manager, instructed Ledbetter's supervisor, Jerry Jones, not to evaluate her 1996 performance because she was scheduled to be laid off soon. The next day Buchanan told Jones that Ledbetter was in fact not going to be laid off, but Jones evidently never evaluated her 1996 performance, and she received no raise during 1997. Slip op. at 9. In March 1998, Kelly Owen, Ledbetter's new supervisor, ranked her 1997 performance 15th out of the 16 area managers he supervised. Slip op. at 10. Owen, however, had become Ledbetter's supervisor only in October 1997, and thus had no personal knowledge of her performance for the first nine months of that year. Tr. 249-52, 274, 277. Moreover, Ledbetter offered evidence that: (a) in evaluating her performance, Owen relied in significant part on reports of her performance by performance auditor Mike Maudsley, reports that Goodyear failed to produce at trial (Tr. 268-69, 273-75); and (b) Maudsley had sexually harassed Ledbetter (Tr. 36-38) and told her, when she complained to him about the low performance data he recorded for her in 1997, "Well, hell, it's a lot easier to downgrade you because you're just a little female[,] and these big old guys[, the male area managers, are] going to beat up on me and push me around and cuss me, [but] you're not going to cuss back" (Tr. 41-43). Ledbetter filed a questionnaire with the EEOC in March 1998 and a charge that July. Slip op. at 11. She later sued Goodyear, alleging sex and age discrimination and retaliation. Slip op. at 12-13. The jury found for Goodyear on three of Ledbetter's claims, but for Ledbetter on her discriminatory-pay claim, awarding her about $224,000 in back pay, $4600 in compensatory damages, and $3.3 million in punitive damages. Slip op. at 13. The district court reduced the jury's award to $360,000 to conform to the statutory cap, but denied Goodyear's post-trial motion for judgment as a matter of law. Slip op. at 14. The district court held that there was sufficient evidence to support a finding that Ledbetter was paid less than Terry Anderson, a similarly situated male area manager, because of her sex. Slip op. at 14. The court noted that Anderson and the plaintiff were paid the same salary in 1979, and "the jury could reasonably have concluded that but for the gender discrimination, their salaries would have been the same up to November 1, 1998." Slip op. at 14-15. Instead, the court noted, Anderson was paid over $14,000 more than Ledbetter in 1996-1998. Slip op. at 15. PANEL DECISION A panel of this Court reversed. In its decision, the panel first addressed Goodyear's contention that, under National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), Ledbetter may not challenge any decision affecting her salary that was made more than 180 days before she filed her questionnaire. Slip op. at 17-33.<1> The panel "th[ought] it clear that pay claims of the type Ledbetter asserts are governed by that part of the Morgan decision addressing claims alleging ‘discrete acts of discrimination.'" Slip op. at 22. The panel stated, "Whether it is a pay-setting decision or the issuance of a confirming paycheck that is viewed as the operative act of discrimination, the act is . . . discrete in time, easy to identify, and – if done with the requisite intent – independently actionable." Slip op. at 22. The panel concluded: Under Morgan, therefore, Ledbetter can state a timely cause of action for disparate pay only to the extent that the "discrete acts of discrimination" of which she complains occurred within the limitations period created by her EEOC questionnaire. Any acts of discrimination affecting her salary occurring before then are time-barred. Slip op. at 24. The panel noted that many courts have held, following Bazemore v. Friday, 478 U.S. 385 (1986), that an employee can challenge her pay as discriminatory "so long as the plaintiff received within the limitations period at least one paycheck implementing the pay rate the employee challenged as unlawful." Slip op. at 26 & n.17. But, the panel stated, this does not mean that Ledbetter can challenge "every salary-related decision made during [her] nineteen-year career." Id. at 25. The panel, however, acknowledged that, if, as these cases hold, "a claim is timely only because of the continued receipt of paychecks within the limitations period, it must be that the plaintiff can point to a decision outside the limitations period as the offending act." Id. at 28. "There must, however," the panel stated, "be some limit on how far back the plaintiff can reach." Id. The panel concluded that, "at least in cases in which the employer has a system for periodically reviewing and re-establishing employee pay, an employee seeking to establish that his or her pay level was unlawfully depressed may look no further into the past than the last affirmative decision directly affecting the employee's pay immediately preceding the start of the limitations period." Id. at 29.<2> Plaintiffs can offer evidence relating to earlier events, the panel ruled, but only insofar as that evidence is relevant to show that the actionable decisions – the salary-setting decisions made during the limitations period, and (perhaps) the most recent such decision before the limitations period started – were intentionally discriminatory. Id. The panel then turned to the evidence it thought relevant to the two actions Ledbetter was allowed to challenge: the failure in 1997 to evaluate her performance and give her a raise, and the decision in March 1998 to deny her a raise again. The panel concluded that Ledbetter had failed to introduce sufficient evidence to justify a favorable jury verdict as to either of those actions. Slip op. at 33-44. It accordingly reversed the judgment and directed the district court to dismiss the case. ARGUMENT The panel held in this case that current discrimination in compensation – paying a woman now less than she would have been paid now had she been a man – is not actionable under Title VII unless the employer's most recent decisions regarding the plaintiff's compensation were intentionally discriminatory. This holding cannot be reconciled with the Supreme Court's decision in Bazemore. The plaintiffs in Bazemore alleged that the North Carolina Agricultural Extension Service violated Title VII by paying black employees lower wages than similarly situated white employees. Before August 1, 1965, the extension service had been divided into two racially segregated branches, and openly paid black employees less than it paid white employees. On that date, the service merged the two branches, but, although some adjustments were made to try to equalize salaries, the service failed to eliminate the differences between the salaries it paid its white and black employees. Discrepancies still existed in 1972, when the defendants became subject to Title VII. Bazemore, 478 U.S. at 390-91. The district court and the court of appeals in Bazemore held that the defendants did not violate Title VII by continuing to pay black employees less than similarly situated white employees because the lower wages were attributable to discriminatory decisions made before Title VII was applicable to state governments, and plaintiffs failed to prove that the defendants made any discriminatory decisions relating to the plaintiffs' compensation after Title VII became applicable to the defendant. Id. at 392-93. The Supreme Court reversed, holding that the fact "that the Extension Service discriminated with respect to salaries prior to the time it was covered by Title VII does not excuse perpetuating that discrimination after the Extension Service became covered by Title VII." Id. at 395 (emphasis in original). Rather, the Court held: Each week's paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII. The Court of Appeals plainly erred in holding that the pre-Act discriminatory difference in salaries did not have to be eliminated. Id.. at 395-96. Several years ago, the Supreme Court in Morgan clarified how Title VII's charge-filing period affects the timeliness of charges alleging two broad categories of discrimination: discrete discriminatory acts and hostile environments. The Morgan decision, however did nothing to limit or change the Bazemore rule. On the contrary, the Morgan Court, in a section of the Court's opinion joined by all nine Justices, restated and reaffirmed it: [I]n Bazemore, . . . when considering a discriminatory salary structure, the Court noted that although the salary discrimination began prior to the date that the act was actionable under Title VII, "each week's paycheck that delivered less to a black than to a similarly situated white is a wrong actionable under Title VII . . . ." 536 U.S. at 111-12 (quoting Bazemore, 478 U.S. at 395). Accordingly, the principles enunciated by the Supreme Court in Bazemore are still applicable after Morgan. Under these principles, each paycheck Ledbetter received that was lower than it otherwise would have been because of her sex is a "wrong actionable under Title VII," even if the sex-based disparity was caused by decisions made years earlier. See, e.g., Forsyth v. Federation Employment & Guidance Serv., 409 F.3d 565, 573 (2d Cir. 2005) (Title VII) ("Any [discriminatory] paycheck given within the statute of limitations period therefore would be actionable, even if based on a discriminatory pay scale set up outside of the statutory period."); Shea v. Rice, 409 F.3d 448, 452-56 (D.C. Cir. 2005) (holding, in light of Morgan's reaffirmation of Bazemore, that where Title VII plaintiff sued over a 1992 salary-setting decision that he first challenged as discriminatory in an EEO complaint filed in 2001, he can seek relief for discriminatory paychecks received during the limitations period even though they were discriminatory because of a decision made years before he complained); Reese v. Ice Cream Specialties, Inc., 347 F.3d 1007, 1010-13 (7th Cir. 2003) (holding, in light of Morgan's reaffirmation of Bazemore, that where Title VII plaintiff sued to challenge a February 1997 salary-setting decision, about which he did not file a charge until November 2000, he may seek relief for discriminatory paychecks received during the limitations period). Indeed, the holding of the panel in this case is the same as the holding adopted by the court of appeals in Bazemore, a holding that the Supreme Court rejected. The Fourth Circuit in Bazemore held that the plaintiffs could not proceed with their discriminatory-pay claims because they had failed to show that the defendants' most recent salary-setting decisions were intentionally discriminatory. Bazemore v. Friday, 751 F.2d 662, 670-74 (4th Cir. 1984) (holding that the defendants had no duty to eliminate the race-based disparity in salaries caused by pre-act discrimination, and allowing plaintiffs to challenge as discriminatory only the defendants' recent salary-setting decisions). The Supreme Court emphatically rejected this reasoning in Bazemore, stating: "The error of the Court of Appeals with respect to salary disparities created prior to 1972 and perpetuated thereafter is too obvious to warrant extended discussion . . . . The Court of Appeals plainly erred in holding that the pre-Act discriminatory difference in salaries did not have to be eliminated." 478 U.S. at 395.<3> Goodyear argued on appeal that: (a) Ledbetter was really arguing that limitations-period paychecks were discriminatory because of decisions made years earlier; (b) under United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977), and Delaware State College v. Ricks, 449 U.S. 250 (1980), her recent paychecks were merely the continuing effect of allegedly discriminatory decisions that are now time-barred; and (c) those recent paychecks are therefore not independently actionable. Goodyear 1/04 Br. at 22-33. Under Bazemore and Morgan, however, salary-setting decisions are treated differently from promotion denials and other decisions that have an effect on one's salary but are not primarily focused on one's salary level. Under Evans, Ricks, and Morgan, "[d]iscrete acts such as termination, failure to promote, denial of transfer, or refusal to hire" can be challenged only if a timely charge has been filed, even though such acts will often affect the plaintiff's salary for years to come. Morgan, 536 U.S. at 114. But under Morgan and Bazemore, if earlier salary-setting decisions were discriminatory, an employer owes a continuing duty to eliminate the resulting disparity and compensate its employees for their current labor on a non-discriminatory basis. Bazemore, 478 U.S. at 397 ("the Extension Service was under an obligation to eradicate salary disparities based on race that began prior to the effective date of Title VII") (emphasis added). Ledbetter can accordingly challenge her recent paychecks as violations of Title VII. The panel believed that Ledbetter's case is different from Bazemore because Goodyear annually reviews its employees' performance and bases its decisions about raises on those evaluations. Again, this rule is inconsistent with Bazemore and Morgan, both of which stress the employer's continuing obligation to pay its employees non-discriminatory wages, irrespective of when the decisions were made that rendered their salaries discriminatory. The mere fact that the most recent decisions affecting Ledbetter's salary may have been non-discriminatory does not absolve Goodyear of liability for continuing discriminatory wage disparities. Indeed, it is particularly inappropriate to confine Ledbetter to a challenge to the most recent annual reviews, as the panel did, because those decisions were simply reviews of her performance during the last year and determinations of the raise she merited based on that performance. They do not purport to be comprehensive determinations of the overall fairness of her current salary. See supra, p. 2. Even if those decisions were nondiscriminatory, they do not address the fairness of Ledbetter's salary at the beginning of the relevant evaluation period. Accordingly, if that beginning salary was discriminatory, any discrimination would simply be perpetuated by Goodyear's system. The panel was concerned that "there must . . . be some limit on how far back the plaintiff can reach," and resisted the idea that Ledbetter be permitted to challenge "every salary-related decision made during [her] nineteen-year career." Slip op. at 9-11. Under Bazemore, a plaintiff claiming discriminatory pay must, as Ledbetter did here, offer evidence showing that the pay she received during the limitations period was discriminatory: i.e., she was being paid less for her work during the limitations period than a similarly situated man would have been paid. What Bazemore teaches is that Ledbetter need not prove that Goodyear made a conscious decision to discriminate against her on the basis of her sex during – or just before – the limitations period. The decision to discriminate may have been made years ago – even, as in Bazemore, before such discrimination became unlawful. The issue is whether the paychecks Ledbetter received during the limitations period discriminated against her on the basis of her sex. And Ledbetter may offer evidence relevant to time-barred discriminatory decisions as "background evidence" – to show the jury how her limitations-period paychecks came to be discriminatory. See Morgan, 536 U.S. at 113 (plaintiffs may use time- barred acts "as background evidence in support of a timely claim"). If it were the case that a Goodyear manager made an openly discriminatory salary-setting decision back in 1979 (when Ledbetter was hired), and that all the company's decisions affecting her salary since then were non-discriminatory, Ledbetter could and should have challenged that 1979 decision by filing a timely charge. But her failure to do so does not deprive her of the right to seek relief for discriminatory paychecks she received in 1997 and 1998. See Morgan, 536 U.S. at 113 ("The existence of past [discriminatory] acts and the employee's prior knowledge of their occurrence . . . does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed."). Ledbetter's failure to challenge the 1979 decision in a timely fashion, however, does significantly limit the relief she can seek. By waiting to file a charge, Ledbetter lost her opportunity to seek relief for any discriminatory paychecks she received between 1979 and late 1997. See, e.g., Forsyth, 409 F.3d at 573 ("[A] claimant could only recover damages related to those paychecks actually delivered during the statute of limitations period."); Shea, 409 F.3d at 455 ("an employee may recover for discriminatorily low pay received within the limitations period"); Reese, 347 F.3d at 1010-11 (The plaintiff "wisely concedes that he cannot recover for pay periods that ended prior to the 300-day period."). Moreover, if Ledbetter unreasonably delayed challenging an earlier decision, and that delay significantly impaired Goodyear's ability to defend itself – if, for example, the person who made the challenged decision has died or is otherwise unavailable to testify – Goodyear can raise a defense of laches. See Morgan, 536 U.S. at 121-22 (discussing this defense). CONCLUSION For the reasons stated above, the Commission respectfully urges this Court to grant rehearing by the panel or by the en banc court. PAUL D. RAMSHAW Attorney VINCENT J. BLACKWOOD Assistant General Counsel LORRAINE C. DAVIS Acting Associate General Counsel JAMES L. LEE Deputy General Counsel CERTIFICATE OF COMPLIANCE To comply with the spirit of Federal Rules of Appellate Procedure 29(d) (an amicus is generally allowed to file a document half as long as the document being supported), 32(a)(7)(B) and 40 (a petition for rehearing is limited to 15 pages or 7,000 words), I certify that the body of this brief contains 3,296 words, as counted by the Microsoft Word program. Paul D. Ramshaw Attorney CERTIFICATE OF SERVICE I hereby certify that two copies of the foregoing brief were served by transmitting them on this date by overnight delivery to the following counsel of record: Jay St. Clair Kelly H. Estes Bradley Arant Rose & White One Federal Place 1819 Fifth Avenue North Birmingham, AL 35203 Robert L. Wiggins, Jr. Jon C. Goldfarb Wiggins, Childs, Quinn & Pantazis 1400 SouthTrust Tower Birmingham, AL 35203 Paul D. Ramshaw U.S. Equal Employment Opportunity Commission 1801 L Street, NW, Room 7040 Washington, DC 20507 September 14, 2005 *************************************************************************** <> <1> The alleged discrimination in this case took place in Alabama, which is a non-deferral state. <2> The panel noted that it was not holding that a plaintiff may challenge the most recent decision outside of the limitations period; rather, it held only that no plaintiff may go any further back in time than that decision. Slip op. at 18. <3> This case differs from Bazemore in only one respect, and the difference is not material. In Bazemore the defendants adopted the practice of paying discriminatory wages when there was no law prohibiting them from doing so. Here, since Ledbetter started working for Goodyear in 1979, any decision rendering her salary discriminatory would have been unlawful at the time it was made. But the Supreme Court has repeatedly held that “[a] discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed.” Evans, 431 U.S. at 558. See also Morgan, 536 U.S. at 112 (reaffirming that United Airlines “was entitled to treat [Evans’ resignation] as lawful after [she] failed to file a charge of discrimination within the charge filing period then allowed by the statute.” Therefore, the fact that in Bazemore the initial discriminatory decision was lawful, while in this case it was unlawful but time-barred, is not legally significant.