In a rare move, the Third Circuit Court of Appeals reversed its own previous decision interpreting the newly enacted Lilly Ledbetter Fair Pay Act of 2009 (“Ledbetter Fair Pay Act”).  In so doing, the Third Circuit held that an employer’s failure to respond to a female employee’s request for a pay raise to equal that of a male colleague constituted an unlawful employment practice. 

In Mikula v. Allegheny County, the plaintiff sued Allegheny County for gender discrimination in violation of Title VII and the Equal Pay Act of 1963 after she was denied a pay raise.  Prior to filing the lawsuit in federal court, the plaintiff submitted a complaint with Allegheny County's Human Resources department, alleging gender and age discrimination due to a comparable male colleague receiving a higher salary.   After the plaintiff then received a letter from the County's Human Resources department informing her that it had concluded that her allegations of discrimination were unfounded, she filed a charge with the Equal Employment Opportunity Commission (EEOC) claiming that the County violated Title VII by paying her less than a male in her position would receive.

While the plaintiff’s action was pending in the federal district court, the United States Supreme Court decided Ledbetter v. Goodyear Tire & Rubber Co., holding that a claimant alleging discrimination based upon a pay-setting decision must file a charge with the EEOC within 300 days after the discriminatory decision was made and that the continuing effects of past discriminatory decisions do not transform a subsequent neutral employment act (such as a paycheck) into a present violation. 

Relying on the Supreme Court’s ruling in Ledbetter, the federal district court in Mikula granted summary judgment in favor of Allegheny County, holding that the plaintiff’s claim accrued in the fall of 2004 when she discovered the allegedly discriminatory pay discrepancy and was, thus, time-barred as she did not file her EEOC charge until 2007. 

The plaintiff in Mikula then appealed the decision to the Third Circuit Court of Appeals.  After the parties filed their appellate briefs, Congress passed the Ledbetter Fair Pay Act, which reversed the Supreme Court’s Ledbetter decision in that it specifically provided that an “unlawful employment practice” occurred when an individual was “affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.” 

Several months after the Ledbetter Fair Pay Act was signed into law by President Obama, the Third Circuit in Mikula nevertheless affirmed the district court’s decision, holding that the plaintiff’s claim was time-barred.

Subsequently, the Third Circuit in Mikula granted the plaintiff’s request for rehearing to revisit what effect, if any, the Ledbetter Fair Pay Act had on her case.  This time, the plaintiff reframed her argument by claiming that the County's lack of response to her raise requests qualified as discriminatory pay decisions or "other practices," and under such rationale, each paycheck that she had received was discriminatory and constituted a new violation that renewed the statute of limitation.

In reversing its previous decision, the Third Circuit agreed with the plaintiff that the County’s earlier failure to respond to her request for a pay raise constituted an unlawful employment practice.

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