Contributed by Allison Chaplick
On November 29, 2011, the Tenth Circuit issued a decision that impacts the application of the Lilly Ledbetter Fair Pay Act to the statutory limitations period for age discrimination claims. In Almond, et al., v. Unified School District No. 501 (No. 10-3315), the court was asked to review a district court’s dismissal of two employees’ untimely claims that their demotions and subsequent salary reductions were motivated by age discrimination. The employees filed charges of discrimination in 2006, even though they had been told in 2003 and 2004, respectively, that they were being demoted for budgetary reasons with a salary reduction to become effective in 2006. So, the court was faced with interpreting when parties have to file “discrimination in compensation” claims pursuant to the Ledbetter Act.
Immediately, the court distinguished this case from “unequal pay for equal work” claims, like the one brought in the seminal Ledbetter case; what the plaintiffs were claiming in this case was that the school district’s decision to demote them was the “unlawful practice” and a new cause of action arose for limitations purposes every time they received a paycheck based upon the reduced salary. According to the plaintiffs, the Ledbetter Act expanded the terms “unlawful practice” as used in §623(d)(3) of the Age Descrimintation in Employment Act to include situations where an employer adopts a “discriminatory compensation decision or other practice” that relates to compensation. The court did not agree with the plaintiffs’ expansive interpretation of the Ledbetter Act, and based its rejection on its own interpretation of the Act, the Act’s legislative history, other federal circuit courts’ decisions interpreting the terms “other practice” and “discrimination in compensation,” and even Justice Ginsburg’s dissenting opinion in the Ledbetter case. The court thus focused not on which claims accrue under the Act, but on when those claims accrue. According to the court:
- “compensation in discrimination” claims accrue for limitation purposes “when a discrimination in compensation decision or other practice” is “adopted” or “when” someone becomes “subject to” or “affected by” its application
- “other practices” discrimination claims accrue not only when the pay setting decision takes place but also when the discriminatory employment practices that result in compensation discrimination are “adopted”
Based on its exhaustive analysis, the court held that §623(d)(3) governs the accrual of discrimination in compensation (i.e., unequal pay for equal work) claims in violation of §623(a)(1), and not the accrual of other cases alleging discriminatory hiring, firing, demotions, or transfers, and affirmed the district court’s dismissal.