Senate to Vote on Rip Van Winkle Bill

by Mike Eastman

Today, the Senate is expected to consider a bill (H.R. 2831) that will effectively eliminate the statute of limitations for many types of discrimination claims and permit plaintiffs to sleep on their rights for decades before filing "gotcha" lawsuits against employers.

The bill is an overreaction to a Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Co., Inc., that made it clear that the statute of limitations begins running when an alleged discriminatory act occurs (assuming the employee has reason to know of the decision) and does not reset every time an employee receives pay or a benefit (like a pension annuity) based on pay.

Statutes of limitation serve an important purpose in ensuring that workplace disputes are resolved in a timely manner while evidence is fresh, documents on hand, and witnesses are more likely to be available and alive (indeed, in the Supreme Court case on this issue, one of the key witnesses for the employer had passed away before trial).  Reasonable people can disagree about how long a statute of limitations should be, but there shouldn’t be any disagreement that there should be one.

This being an election year, we can expect the truth to be stretched to its breaking point during today's debate.  Perhaps the most obvious example will be the allegation that the plaintiff in the Supreme Court decision did not know of any discrimination against her until well after the statute of limitations had run.  However, as explained by Eric Dreiband, former General Counsel at the EEOC and now an attorney with Akin Gump Strauss Hauer & Feld in testimony before the Senate:

She explained [in the litigation process] that she knew by 1992 that her pay was lower than her peers and that she learned about the amount of the difference "probably about 1994 and ‘95."  In 1995, she spoke with her supervisor about her pay: "I told him at that time that I knew definitely that they were all making a thousand at least more per month than I was and that I would like to get in line."

Ms. Ledbetter did not file a charge in 1992, 1993, 1994, 1995, 1996, or 1997. Instead, she waited until July 21, 1998 to file the charge that gave rise to the Supreme Court’s decision. Her 1998 charge sought to challenge each pay decision that occurred during her 19 years of employment at Goodyear.

Because Ms. Ledbetter "knew definitely" that her pay was lower than her peers several years before she filed a charge, she could not and did not assert that the charge-filing period should be extended. The Court therefore declined to consider whether to extend the charge-filing period.

Mr. Dreiband’s testimony raises another important point lost in this debate: the fact that courts already have the authority to extend the statute of limitations if an employer hides a discriminatory act or otherwise if justice so requires.

The Supreme Court got it right when it decided this case.  However, even if one disagrees with the decision, H.R. 2831 is not the answer.  The bill does far more than simply reverse the Supreme Court decision.  For example, for the first time the bill would open up Title VII to permit suits by family members or others potentially "affected by" discrimination making it much more difficult to settle and resolve claims.  It also would apply to unintentional discrimination.  As noted in the Chamber’s Key Vote Alert:

H.R. 2831 is not limited to cases of intentional discrimination, but would also apply to cases based on the theory of disparate impact, which, with respect to compensation claims has, until now, been consistently rejected by the federal courts. Subjecting employers to such claims would literally lead to an explosion of litigation second guessing legitimate employment and personnel decisions. Nor is it clear how an employer would defend itself from such a claim without the ability to go back in time and make the types of robust statistical analyses necessary for a defense.

Such unusual expansions to civil rights laws were probably not intended when the bill was drafted, but this bill has always been about politics, not about substance - an all too common occurrence these days.