MEMORANDUM

To: Clients, Friends, Forwarders and Fellow Professionals

From: Marcus, Brody, Ford & Kessler, L.L.C., LLC.

Re: Labor Law Update

Date: January 6, 2010

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Most of you probably remember the Supreme Court decision in the Ledbetter case. There, the Court determined that the statute of limitations had run on claims by a female employee against her employer because the act of discrimination (the decision fixing compensation) commenced years ago -- even though the plaintiff did not discover the discrimination until shortly before she commenced her lawsuit. The Supreme Court held that the triggering act, for purposes of the statute of limitations, was the date when the discriminatory decision was made, regardless of whether and when plaintiff discovered the facts.

That decision offended lawmakers and the public, and resulted in congressional action overturning the decision. Following the decision, Congress amended Title VII with the Lilly Ledbetter Fair Pay Act of 2009, which provided that it is an unlawful employment practice for an employer to discriminate with respect to compensation, and the wrongful conduct was defined to include "each time wages, benefits or other compensation [are] paid." This resulted in overruling the Supreme Court decision.

More recently, our New Jersey Appellate Division decided a very similar case, Alexander v. Seton Hall. In that case, the Appellate Division ruled exactly as the Supreme Court did, notwithstanding the Congressional legislation that followed the Supreme Court decision. The New Jersey case was decided under our state's Law Against Discrimination, as opposed to title VII, but the distinction is irrelevant. The issue, as framed by the court, was "whether ongoing discriminatory pay disparities during the [statute of limitations] period constitute "continuous violations" so that plaintiffs may recover beyond the limitations period based on paychecks received during the period." The facts were as follows: three long time female employees, university professors, alleged age and sex discrimination in violation of the New Jersey LAD. The pay discrimination had begun years before the complaint was filed, and Seton Hall contended that any pay discrimination was based upon a "discrete act" made years before the lawsuit and well outside the two-year statute of limitations. The Appellate Division affirmed the trial court, which concluded that "once the statutory filing period is expired the present effects of a discriminatory salary decision have no present legal significance or consequences and therefore, such a decision cannot form the basis of the charge of discrimination." The court concluded that paychecks received within two years of the filing (the relevant statute of limitations) as a result of a discriminatory pay decision occurring outside the statute of limitations could not form the basis for a claim.

It is significant that the trial judge determined that the plaintiffs had continuing knowledge of Seton Hall’s publications and "at least reasonable notice of an obligation to investigate their claims sooner." Indeed, plaintiff's alleged that "they always suspected that disparities existed" and delayed doing anything about it.

It remains to be seen whether the holding in Alexander would apply to a case where the plaintiff had no knowledge whatsoever of the discriminatory pay practice, and no reason to suspect discrimination.

Please feel free to call Todd M. Sahner, Esq. at (973) 232-0604 or MaryJane Dobbs, Esq. at (973) 232-0605 if you have any questions. You may also contact Todd M. Sahner, Esq. and MaryJane Dobbs, Esq. via email at the following addresses: tmsahner@marcusbrodylaw.com and mjdobbs@marcusbrodylaw.com.