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High Court Decision May Contradict Prior Statute of Limitations Ruling

By Teresa Rider Bult, Litigation News Associate Editor – July 26, 2010

If you are confused by the similar, yet contradictory decisions coming out of the U.S. Supreme Court these days, related to firefighter testing procedures or the Title VII statute of limitations, you are not alone.


Statute of Limitations Issue Predominates
In Lewis v. City of Chicago [PDF], the Supreme Court considered—for the second time in a little over a year—the legality of a city’s firefighter testing procedures under Title VII. On its face, the case begs comparison to the 2009 high court decision of Ricci v. DeStefano, also involving firefighter testing (albeit in that case, white firefighters were the plaintiffs). However,the case is actually more properly compared to Ledbetter v. Goodyear Tire & Rubber Co., the 2007 Title VII case involving statute of limitations and continuing violation issues, which spurned debate and an eventual statutory amendment to Title VII.


In Lewis, the City of Chicago argued the firefighters’ claims were time-barred because the discriminatory decision as to how to categorize test scores of qualifying job candidates was made prior to the 300-day statutory period. The Court unanimously disagreed and found the claims were timely because the act of implementing the testing categories occurred within the statutory period.


Supreme Court Contradiction?
Some argue the ruling is directly contradictory to the Ledbetter decision by the Court only three years earlier, which held an individual’s Title VII disparate treatment claims based on pay violations were barred by the statute of limitations, because the decision related to pay practices was made outside the statutory period. Although the plaintiff in that case argued the paychecks constituted a continuing violation, which arguably tolls the statute of limitations, the Court found the act of providing a paycheck was a discrete, unintentional act and therefore did not fit within the continuing violation analysis.


The Lilly Ledbetter Fair Pay Act of 2009 (signed into law in January 2009), overruled this decision and amended Title VII so that each new discriminatory paycheck resets the statute of limitations for Title VII pay claims.


Because Lewis did not involve pay claims, the Ledbetter Act had no application to its facts. Thus, presumably, the Court could have relied upon a similar analysis to the one it used in its original Ledbetter decision to resolve the statute of limitations issues.


Intent/Disparate Impact Theory Distinguishes Case from Ledbetter
Even so, the Lewis Court chose not to rely on its prior reasoning. Instead, the Court resolved the contradiction by distinguishing the Title VII disparate treatment claims alleged in Ledbetter (and Ricci)from the class action claims brought by the Lewis plaintiffs—categorized as disparate impact claims.


Disparate treatment claims are based on intentional discrimination toward individuals, while disparate impact claims involve employment practices that might not be intended to discriminate, but in fact have a disproportionately adverse effect on minorities. These disparate impact claims typically impact a larger group of individuals and require statistical proof of such discrimination.


The Lewis Court found that the difference between these two theories boiled down to “intent.” Because disparate impact claims do not require proof of intent, the Court said, they do not require specific proof of “deliberate discrimination within the limitations period.”


Further, the Court found the statutory language used in Title VII regarding disparate impact claims supports such a distinction. More specifically, the statute states that under a disparate impact theory, the claim is initiated upon “use” of the particular employment practice that causes a disparate impact on the basis of race. Therefore, because the selection of firefighters (or the “use” of the discriminatory practice) in the Lewis case was undisputedly made within the statutory period, the claims were not barred by the statute of limitations.


Invitation for Congressional Intervention
Notably, the Lewis decision seems to invite Congress to intervene, stating “both readings of the statute produce puzzling results,” and noting that if there is a problem with interpretation of the statute, “it is a problem for Congress, not one that federal courts can fix.”


Excessive Congressional Deference or Proper, Narrow Ruling?
“This ruling seems entirely inconsistent with the Court’s prior ruling in Ledbetter,” says Anne Marie Painter, former cochair of the ABA Section of Litigation’s Employment and Labor Relations Law Committee.


“It is almost as if the Court is paralyzed by Congress’s action in overruling its Ledbetter decision, and thus goes to great pains to allow claims that should otherwise be time-barred—relying on the Ledbetter Act itself (which was not at play in the Lewis facts), rather than its own prior logic,” Painter says.


Others think such an analysis is unreasonable. “The Court made the correct decision here based on the facts before it and the reading of the statute,” says Brian Koji, Tampa, a vice-chair of the Section’s Employment and Labor Relations Law Committee.


“Disparate impact claims are clearly different from intentional disparate treatment claims, and even require a higher standard of proof,” Koji says. “Congress was clear the use of the practice was what triggered the running of the statutory period, and these facts fit squarely into what was intended by Congress,” he says.


Unpredictability Balanced Against Potential Discriminatory Practices
Between the Lewis case and the Ledbetter Act, employers are facing more unpredictability relative to legal exposure for their employment practices.


“The Ledbetter Act means that decisions employers made relative to pay practices 10 years ago could be the source of a lawsuit today, and now the Lewis decision expands that analysis from mere pay claims to disparate impact claims,” says Kimberly G. Stith, Houston, cochair of the Section’s Employment and Labor Relations Law Committee.


“Thus, while we used to tell employers they were fairly safe from Title VII claims as long as the 300 (or 180) day statute of limitations had passed, now there is absolutely no guarantee,” she warns.


“Practically speaking, that means by the time the claim is eventually filed, the employer may have no institutional memory or documentation about the decision itself—putting them between a rock and a hard place in defending,” Stith says.


Even so, Koji argues that, under the Supreme Court’s interpretation of Title VII in its current form, Congress has concluded that it is better that employers face unpredictability than to permit them to continue to benefit, potentially indefinitely, from a blatantly discriminatory practice simply because the practice was initially formulated outside the statutory period.


Keywords: Litigation, Supreme Court, Title VII, Ledbetter, statute of limitations, firefighter testing procedures


 

  • August 4, 2010 – I must be missing something. As described in the article, in Lewis, the City of Chicago that if the discriminatory rule had been in place long enough, it couldn't be challenged. Following that logic, if they had a discriminatory rule in place for long enough, firefighters would never be able to challenge it because there would have been no case or controversy until they entered the department, by which time the statute of limitations would have run. I don't think Ledbetter could be interpreted that way. To the extent it could, the Supreme Court had to fix the problem.


 

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