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No Cause Of Action Exists Under the New Jersey Law Against Discrimination (LAD) for Discrimination in Pay When Discrimination is Based on “Discrete Acts” that Occurred Outside of the Statute of Limitations

By: Thomas Paschos

Thomas Paschos & Associates, P.C.

Hassonfield, NJ

In Alexander v. Seton Hall Univ., — A.2d —, 2009 WL 4572344 (N.J. Super A.D. Dec. 7, 2009), three long-time female Seton Hall University professors alleged age and sex discrimination in pay in violation of the New Jersey Law Against Discrimination (LAD).

In the fall of 2004 and fall of 2005, Seton Hall compiled summaries of faculty information arranged by college, gender, rank, and salary. In August 2005, plaintiffs obtained copies of these summaries and claimed that they learned, for the first time, that their salaries were disproportionately lower than male, newer [and][ ] younger faculty members, holding similar positions for the same or shorter periods, although, plaintiffs admitted that they suspected this was the case. Plaintiffs filed their complaint on July 27, 2007.

The trial judge found the case of Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 127 S.Ct. 2162, 167 L. Ed.2d 982 (2007) was controlling in the present case. Pursuant to Ledbetter, an employer’s decision to set an employee’s pay or salary is a discrete act that commences the running of the limitation’s period. Therefore, paychecks received as a result of discriminatory pay decisions occurring outside of the limitations period, which merely represented a continuing impact of those time-barred decisions, cannot form the basis for plaintiffs’ complaint. The trial judge further noted that allowing plaintiffs to recover for pay decisions more than two years old would defeat the purpose of the statute of limitations, especially since plaintiffs alleged they always suspected that disparities existed. As such, the Law Division dismissed the complaint to the extent it was based on discrete discriminatory acts occurring prior to July 27, 2005 (two years prior to the filing of the complaint), and to the extent it was based upon the present impact of those acts.

Plaintiffs argued that their discrimination allegations were timely under the continuing violations doctrine, and that the doctrine applies to cases alleging discriminatory pay disparity. Plaintiff also contended that the trial court misinterpreted Ledbetter by finding that any discriminatory pay decision is a discrete act that could trigger the two-year statute of limitations. Plaintiffs also asserted that they could not have taken action before they became aware of the discriminatory pay decisions.

The question before the appeals court was whether ongoing discriminatory pay disparities during the period constitute continuous violations so that plaintiffs may recover beyond the limitations period based on paychecks received during the period. The appeals court looked to federal pay discrimination cases as a guide. The court found Ledbetter controlling in this similar pay discrimination case. The court held that [i]f each new paycheck stemming from an out-of-time discriminatory act constituted a new violation, there would be no meaningful statute of limitations so long as the plaintiffs were being paid. The court found that plaintiffs did not allege discrete acts of discrimination within the limitations period; nor did they allege facial or intentional discrimination when the disparity began. Accordingly, the court affirmed the dismissal of plaintiffs’ complaint on statute of limitations grounds.

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