On an issue of first impression in the Third Circuit whether “a failure-to-promote claim” constitutes “discrimination in compensation” as prohibited by the Lilly Ledbetter Fair Pay Act of 2009 (“FPA”) the Court of Appeals recently held that a failure to promote claim is not the same as a discrimination in compensation claim. Consequently, the plaintiff in Noel v. The Boeing Company could not avail himself of the FPA’s more flexible statute of limitations period.

By way of brief background, before a potential plaintiff can file a lawsuit asserting a violation of Title VII, a plaintiff must first file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 180 days from the date of the unlawful employment practice or 300 days in states that have human rights agencies. When compensation decisions are at issue, the FPA states that each paycheck reflecting the allegedly discriminatory compensation decision constitutes the unlawful employment practice, as opposed to the date the compensation decision was made. Thus, each paycheck received by the plaintiff serves to “restart” the statute of limitations period.

The Facts and Procedural History

Plaintiff Emmanuel Noel, a black Hatian national, started working for Boeing in 1990. On occasion, Boeing would offer its employees the ability to work offsite with greater pay and additional training. Any promotions or increases associated with an offsite assignment were limited to the period the employee was offsite. Noel and two white co-workers were assigned to the same offsite facility. In May 2003, after seven months of working at the offsite facility, Noel’s co-workers were promoted to higher-paying positions, while Noel remained in the same lower-paying position. Noel complained internally and to the union representatives about these promotions. Eighteen months later, Noel filed a charge of discrimination with the EEOC and, fifteen months after he filed the charge, he filed a Title VII complaint against Boeing in Federal Court. In his Complaint, he complained inter alia that Boeing’s failure to promote him in May 2003 constituted race and national origin discrimination in violation of the Title VII. Following a four-day bench trial, the District Court ruled, in relevant part, that Noel’s claims were time-barred because he failed to exhaust administrative remedies, as required by Title VII, by first filing an EEOC charge within 300-days after the alleged adverse employment action.

The Third Circuit’s Decision

On appeal to the Third Circuit, Noel challenged the District Court’s decision that his charge of discrimination was untimely. Specifically, he argued that because he was not promoted, he received less pay than his white co-worker and that the FPA therefore governed his claims. The Third Circuit took issue with plaintiff’s argument because he failed to specifically assert a pay discrimination claim before the District Court. Instead, his claims were purely focused on Boeing’s failure to promote him. The Third Circuit also closely examined the FPA and determined that the FPA was limited to compensation decisions and did not apply to failure to promote claims. Because the FPA did not apply, the statute of limitations period commenced once the allegedly discriminatory employment decision occurred and that, as a result, plaintiff’s claims were time-barred.

Conclusion

There is no question that the Noel decision, which determines that a discrimination claim premised on a failure to promote claim is not interchangeable with a discrimination in compensation claim, is helpful to employers in limiting the reach of the FPA. It is also worth noting that the decision follows on the heels of oral argument before the New Jersey Supreme Court in the Alexander v. Seton Hall University case. In Alexander, the New Jersey Supreme Court is considering whether to uphold the Appellate Division’s decision that the FPA does not apply to pay claims brought pursuant to the New Jersey Law Against Discrimination.