Lilly Ledbetter worked for Goodyear Tire & Rubber Company as an area manager at a plant in Gadsden, Alabama, from 1979 until her retirement in 1998. Goodyear set and adjusted salaries through periodic, supervisor-driven evaluations. Over time, Ledbetter's pay lagged substantially behind that of comparable male managers. She alleged that biased evaluations and pay-setting decisions by her supervisors caused the disparity. In 1998, after receiving an anonymous note indicating her pay was significantly lower than male peers', she filed an EEOC charge alleging sex-based pay discrimination under Title VII. Alabama is a non-deferral jurisdiction, so Title VII's 180-day charge-filing period applied. At trial, a jury found for Ledbetter and awarded back pay and substantial compensatory and punitive damages; the district court reduced the compensatory/punitive portion to Title VII's statutory cap while awarding back pay. On appeal, the Eleventh Circuit reversed, holding that Ledbetter's Title VII claim was time-barred because the allegedly discriminatory pay-setting decisions occurred outside the 180-day filing window, and subsequent paychecks merely reflected past decisions. The Supreme Court granted certiorari.
For a Title VII compensation discrimination claim, does the EEOC charge-filing period run from each paycheck that reflects an alleged discriminatory pay decision, or from the earlier, discrete act of setting compensation when the decision was made and communicated to the employee?
Under Title VII, a plaintiff must file an EEOC charge within 180 days (or 300 days in deferral jurisdictions) "after the alleged unlawful employment practice occurred." 42 U.S.C. § 2000e-5(e)(1). Discrete discriminatory acts—such as termination, failure to promote, denial of transfer, or a compensation-setting decision—occur on the day they happen and must be challenged within the statutory period. See National R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002). The mere present effects of a past discriminatory act do not restart the limitations period. Bazemore v. Friday, 478 U.S. 385 (1986), does not treat paychecks as discrete acts where no discriminatory decision occurred within the limitations period.
The Title VII charge-filing period for a pay discrimination claim begins when the employer makes and communicates the discriminatory compensation decision. Later paychecks that simply implement that decision are not new, discrete acts that restart the filing period. Ledbetter's claim was time-barred because she did not file her EEOC charge within 180 days after any discriminatory pay-setting decision.
The Court, relying on Morgan, emphasized that Title VII's limitations period attaches to discrete discriminatory acts and not to the continuing effects of those acts. Compensation-setting is such a discrete act: the unlawful employment practice—if any—occurs when the employer decides and communicates the employee's pay. Paychecks issued thereafter are the "effects" of that earlier decision, not separate violations. The majority rejected Ledbetter's reliance on Bazemore, explaining that Bazemore involved employers who continued a discriminatory pay structure into the post–Title VII era and where at least one discriminatory decision or application of a discriminatory system occurred within the charging period. By contrast, Ledbetter could not identify any discriminatory pay-setting decision within the 180 days preceding her EEOC charge; she instead sought to aggregate past discriminatory decisions and characterize each paycheck as a fresh act of discrimination. That approach, the Court noted, would subvert Title VII's prompt-filing requirement and the certainty it provides to employers and employees. The Court also declined to adopt a general discovery rule for Title VII claims, noting that Congress set a clear temporal trigger and provided limited equitable doctrines (tolling, estoppel, waiver) for exceptional cases. Concerns about pay secrecy and the difficulty of detecting pay discrimination, the majority concluded, were policy arguments for Congress, not the judiciary. Justice Ginsburg's dissent argued that pay-setting often occurs incrementally and opaquely, such that each paycheck should be actionable because it perpetuates discriminatory compensation. She reasoned that the majority's rule undermines Title VII's remedial purpose and misreads Bazemore. The majority, however, held firm to the discrete-act framework and affirmed the Eleventh Circuit.
Ledbetter crystallized the discrete-act accrual rule for Title VII claims, restricting plaintiffs from reviving stale pay discrimination claims based solely on the issuance of later paychecks. The decision immediately impacted litigation strategy, compliance, and human resources practices concerning pay setting and documentation. Equally important, Ledbetter catalyzed the Lilly Ledbetter Fair Pay Act of 2009, which expressly provides that, for compensation discrimination claims under Title VII, the ADA, the ADEA, and the Rehabilitation Act, each paycheck, benefits payment, or other compensation event that reflects a discriminatory decision restarts the charge-filing clock (while limiting back pay to two years). For law students, the case is a foundational study in statutory interpretation, the Morgan discrete-act framework, limits of the continuing violation doctrine, and the dynamic relationship between courts and Congress in shaping employment discrimination law.
Ledbetter v. Goodyear sharply limited the accrual of Title VII pay discrimination claims by tying the EEOC charge-filing deadline to the original compensation decision rather than to each paycheck. Applying Morgan's discrete-act framework, the Court treated later paychecks as non-actionable effects of earlier decisions, rejecting a broad paycheck-accrual theory and a general discovery rule for Title VII.