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As expected, the Act has generated judicial attention and increased focus by employee advocates. Plaintiffs have succeeded in proceeding with wage discrimination claims years after the alleged discriminatory acts occurred. In Gentry v. Jackson State Univ., 610 F.Supp.2d 564, 566-67 (S. D. Miss. 2009), the plaintiff was denied tenure in 2004 and filed her charge with the EEOC in 2006. The district court allowed her denial of tenure claim to proceed because plaintiff alleged it deprived her of an increase in salary. While stretching the limitations period, the court in effect construed a “discrete act” – the denial of tenure – to be a compensation decision because it denied the plaintiff a salary increase. Likewise, in Boaz v. Federal Express Corporation, 742 F.Supp.2d 925 (W.D. Tenn. 2010), the plaintiff alleged that she was being compensated less than a male employee for similar work that she performed from 2004 to 2008. During this time the plaintiff unsuccessfully attempted to be promoted to a higher pay grade. On June 12, 2008, she accepted a new position and thus the discrepancy in pay was eliminated. Thereafter, she filed a charge of discrimination April 8, 2009. The employer, characterizing her claim as a failure to promote, argued that only allegations of discriminatory conduct occurring after June 12, 2008 were timely under Title VII. The court disagreed deeming her claim to be an unequal pay claim because of the discrepancies in pay for similar work. Because she filed her claims within 300 days after receiving her last paycheck from her first position, her claims were considered timely.
Another area of uncertainty which is in a state of flux are the terms “compensation decision or other practice” and “other compensation”. In Bush v. Orange County Corr. Dep't, 597 F. Supp. 2d 1293 (M.D. Fla. 2009), the court held that plaintiffs' Title VII claims 10
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regarding demotions, alongside those involving pay reductions, were timely in light of the Act. In Mikula v. Allegheny County of PA, 583 F.3d 181 (3rd Cir. 2009), while finding the claim to be time-barred, the court determined that an employer’s failure to respond to an employee’s complaints about her failure to receive a raise was a compensation decision. In a 2011 case, Greenleaf v. DTG Operations, Inc., 2011 WL 883022 (S.D. Ohio Mar. 11, 2011), a district court in Ohio concluded that the term "other practice" in the Ledbetter Act covers "performance-based pay evaluation, business reassignments, and job classifications." In regard to “other compensation”, courts have reached varying conclusions as to what is included in this definition. Employers can be sure that plaintiffs’ lawyers will aggressively push the boundaries in this area of uncertainty.
The question most asked by employers is what can they do to mitigate their risks when they are not quite sure which acts will subject them to liability, when, or for how long.
Recommendations: Audit and regularly review your compensation policies and policies that may affect compensation such as classification policies, seniority policies, performance evaluation policies, benefits accrual policies and bonus accrual policies.
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Analyze compensation data to determine if any statistical disparities exist across gender, race and ethnic lines and make any appropriate adjustments that eliminate unexplained disparities.
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Ensure that there are clear, objective, nondiscriminatory reasons for differences in compensation.
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Develop objective criteria for performance evaluations and compensation decisions.
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Respond appropriately to all compensation-related complaints.
Train those responsible for administering performance evaluations or making any compensation related decisions.
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Latosha Dexter, SPHR Attorney, Rainey Kizer Reviere & Bell, PLC