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"As long as I have any choice, I will stay only in a country where political liberty, toleration, and equality of all citizens before the law are the rule." - Albert Einstein

Lilly Ledbetter Saves the Day (Again)

Posted: September 16, 2009 Filed under: Uncategorized

Appellate courts (Supreme Courts and Courts of Appeals) rarely rehear a case once a decision has been made. The rules for obtaining a rehearing are strict, and courts generally have the discretion to deny a timely request for rehearing, even if the request has merit. Even rarer than rehearing are instances in which a court changes its opinion as the result of rehearing. So, when a court grants rehearing and changes its opinion about a particular case, the decision is noteworthy. Mikula v. Allegheny County of Pennsylvania is such a case.

Decided September 10, 2009, Mikula gives full effect to Congress’s intent to overturn the United States Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 500 U.S. 618 (2007). Following Ledbetter, in which Justice Ruth Bader Ginsburg dissented and beseeched Congress to act, Congress passed the Lilly Ledbetter Fair Pay Act of 2009. The purpose of the Act was to reinstate the law regarding the timeliness of compensation claims as it was before the Ledbetter decision was handed down by the Supreme Court. Accordingly, the Act is retroactively applied to all cases pending on and after May 28, 2007, the date the Supreme Court issued its decision.

Ms. Mikula’s case was pending in the district court when the Supreme Court decided Ledbetter, so the trial judge dismissed Mikula’s pay discrimination claim on the basis of the Supreme Court’s decision. Ms. Mikula appealed, and the Third Circuit Court of Appeals affirmed that portion of the district court’s order (Mikula also asserted claims under the Equal Pay Act, a claim the Third Circuit initially sent back to the district court despite affirming dismissal of the discrimination claim). Although the Third Circuit’s original decision was made after Congress passed the Act, it initially believed that Mikula’s discrimination claim was still untimely because, it said, an unanswered request for a pay raise was not equal to “adoption of a discriminatory compensation decision.”

In a remarkable about-face, the Third Circuit wrote:

Despite our earlier decision, we now hold that the failure to answer a request for a raise qualifies as a compensation decision because the result is the same as if the request had been explicitly denied.

The court reaffirmed, however, that an employer’s report following an investigation of a discrimination claim is not a “compensation decision.” The court justified its decision in this regard by observing that making an investigation report an adverse employment action “would have the unfortunate effect of encouraging employers to ignore such complaints [of discrimination].”

The Third Circuit’s decision does not represent a complete victory for Ms. Mikula; rather, it simply means that she will have an opportunity to go forward with her case. She still must prove that the employer’s decision to deny her request for a raise was motivated by her gender.

The Lilly Ledbetter Fair Pay Act of 2009 helps Ms. Mikula because it permits her to recover for discriminatory pay practices that resulted from the denial of her request for a raise. The employer’s denials of Mikula’s requests occurred outside the applicable limitations period; therefore, without the Act, Mikula’s discrimination claim would have been time-barred. After reviewing the law of pay discrimination as it stood immediately before the Supreme Court’s Ledbetter decision, which is what the Act reinstated, the Third Circuit concluded:

Mikula’s Title VII pay discrimination claim is timely as to paychecks that she received after June 20, 2006 (300 days before she filed her EEOC charge) if they reflect a “periodic implementation” of a previously made intentionally discriminatory employment decision or “other practice.”

Admitted: Florida, Kansas, New Mexico (inactive)