In a 5-4 decision in May, the court ruled in favor of Goodyear in a case brought by a female supervisor at a rubber plant in Gadsden, Ala., who sued the company for paying her up to $400 a month less than her male co-workers.
Under Title VII of the Civil Rights Act, workers have 180 days to file a claim of "alleged unlawful employment practice." In its decision, the court calculated that time limit from when the Goodyear supervisor, Lilly Ledbetter, received her first discriminatory paycheck, rather than her last discriminatory paycheck -- as lower courts had done. Since Ledbetter had worked at the plant for some 20 years, the top court ruled her claim came too late.
Small-business groups have hailed the decision as a victory for employers.
"Both workers and employers benefit by quickly dealing with these allegations," said Karen Harned, the executive director of the National Federation of Independent Business Legal Foundation. She said small businesses should not be required to defend themselves against allegations that occurred in the distant past.
Employers shouldn't be kept "indefinitely on the hook for employee claims of discrimination," Rep. Howard McKeon (R-Calif.) said at a congressional hearing on the issue last week.
"Such legislation would be ripe for abuse, in my opinion -- effectively allowing an employee to bring a claim against an employer decades after the alleged initial act of discrimination occurred," McKeon said.
Employee advocates say the court's decision ignores the realities of the workplace and will prevent many legitimate cases of discrimination from being heard.
"Employees typically don't know much about what their co-workers earn, or how pay decisions are make, making it difficult to satisfy the court's new rule," Wade Henderson, the president of the Leadership Conference on Civil Rights, a national coalition of civil-rights groups, told members of the committee.
Henderson said it was common practice for employers to withhold comparative pay data, while a third of private sector employers enforce rules prohibiting employees from discussing wages with co-workers.
"The reality is that every time an employee receives a paycheck that is lessened by discrimination, it is an act of discrimination by the employer. The harm is ongoing, the remedy should be, too," Henderson said.
Last year, there were more than 800 charges of unlawful, sex-based discrimination filed with the Equal Employment Opportunity Commission.