In a case of first impression before the United States Court of Appeals for the Third Circuit regarding the Lilly Ledbetter Fair Pay Act of 2009 (FPA), the court ruled on October 1, 2010, that failure-to-promote claims are distinct from discriminatory-compensation claims. 

 

In Noel v. The Boeing Co., Case No. 08-3877, 2010 U.S. App. LEXIS 20217 (3d Cir. Oct. 1, 2010), Emmanuel Noel, a black Haitian national, appealed the District Court’s grant of summary judgment in favor of Boeing. Noel argued that the FPA rendered his otherwise untimely administrative filing timely, which would act to preserve his failure-to-promote claim under Title VII of the Civil Rights Act of 1964.

 

At Boeing’s Ridley Park, Pennsylvania facility, offsite job assignments were coveted among the employees, who volunteered in large part to work offsite. Those working offsite received higher pay, per diems and additional training. Noel’s first off-site assignment lasted approximately six months. He did not receive another offsite assignment until eleven years later (November 2002) when he went to work at the Bell Helicopter facility in Amarillo, Texas. He had, however, requested an offsite assignment in May 2002, but he did not receive the assignment. At the Amarillo facility, Noel received a bump in pay grade and an additional per diem. After two weeks of work at that facility, Noel received another pay raise.

 

At the same time, two Caucasian employees also were assigned to the Amarillo facility. After working there for seven months, both Caucasian employees were promoted to positions with pay grades three steps above Noel’s. Noel complained about the promotions to a union representative and a Boeing labor relations representative, alleging discrimination based on race and national origin, but he received no response to his complaints. Approximately two years later, Noel filed a charge of discrimination with the EEOC.

 

Noel claimed that Boeing violated Title VII when it failed to send him offsite in May 2002 and when it did not promote him in 2003. The District Court ruled that the Title VII claim was barred, because Noel did not file his administrative charge within the 300-day, statutory filing period. While multiple decisions were handed down on related issues, Noel appealed only the decision that he failed to administratively preserve his failure-to-promote claim. He claimed that, because of the discriminatory employment action, he received less pay than the Caucasian co-workers. He argued that the FPA makes clear that, “in pay discrimination matters an unlawful employment practice occurs each time an individual is affected by application of a discriminatory compensation decision.” Boeing’s failure to promote him, therefore, resulted in lower pay, and each paycheck started the administrative clock ticking.

 

After reviewing Noel’s allegations, the court determined that Noel pled only a failure-to-promote claim. He did not attempt to connect that claim to any resulting compensation until his brief in opposition to Boeing’s motion for summary judgment. Even there, he discussed compensation only in the context of disparate pay rates for offsite work versus Ridley Park work. And then only upon appeal did Noel attempt to connect Boeing’s decision not to promote him with a resulting lower salary. As a result, the Third Circuit concluded that Noel pled a failure-to-promote claim, not a discrimination-in-compensation claim. The question for the court then became whether a failure-to-promote claim constitutes “discrimination in compensation” under the FPA.

 

Only the D.C. Circuit had addressed this issue to date, holding that the FPA does not cover “failure-to-promote” claims. See Schuler v. PricewaterhouseCoopers, LLP, 595 F.3d 370, 375 (D.C. Cir. 2010). In agreeing with the D.C. Circuit, the Third Circuit stated that the purpose of the FPA is to provide greater protection against wage discrimination, not to provide additional protections for other types of discrimination. Based on a plain reading of the FPA, the court concluded that the FPA does not apply to a claim that an employer failed to promote an individual. The fact that many employment-related decisions, other than those decisions that establish rates of pay, have an effect on compensation does not bring those decisions within the ambit of the FPA.

 

In sum, the Noel case emphasizes the backdrop of the FPA and its intent to remedy compensation practices, recognizing that a myriad of other employment laws apply to discrete, employment decisions.

 

This information was prepared by Claudia M. Williams, a Partner in the Harrisburg office of Thomas, Thomas & Hafer LLP.  Claudia represents management in all aspects of labor and employment law.  Please contact her at (717) 441-7053 or cwilliams@tthlaw.com to discuss any questions you may have.