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Groesch v. City of Springfield, No. 07-2932 (7th Cir. Mar. 28, 2011)

This author is pleased to announce the return of Daily Developments in EEO Law to its new platform. I will continue to report on the comings-and-goings of federal equal employment opportunity law in this space - concentrating, as before, on developments in the U.S. Courts of Appeals - and will be joined before very long by other, extraordinary attorneys from Outten & Golden LLP, contributing in their areas of expertise.

On to news, then: The Seventh Circuit last week issued an opinion in a pay-discrimination case of spaghetti-like snarls, concerning Title VII and 42 U.S.C. § 1983 claims partially litigated in Illinois state court and presenting complicated claim-preclusion and limitations issues. The panel's key holding, which we address in this post, was to adopt the Lilly Ledbetter Fair Pay Act's "paycheck accrual" rule for equal protection claims filed under § 1983.

Groesch v. City of Springfield, No. 07-2932 (7th Cir. Mar. 28, 2011): The City of Springfield - by regulation - allows police officers who resigned the local force on good terms to reapply for work, but only at entry-level rank in terms of pay, benefits and seniority. The plaintiffs are three white officers who reapplied for employment under this regulation. After their return to work, an African-American officer (Donald Schluter) was also allowed to return to the force, but at his prior (and higher) level of pay. His return to work was paved by a special ordinance, passed by the City Council on March 28, 2000 (eleven years to the day of this decision). The recitals to the ordinance referred, in relevant part, to the city's interest in "diversity" in police rank.

Plaintiffs contend that the "Schluter Ordinance" violated their equal protection rights (a legal theory upon which, the panel carefully notes, the court expresses no "view on the ultimate merits"). The police union filed suit in state court to enjoin the ordinance, a suit that was successful at the trial level but dismissed on standing grounds on appeal. The three plaintiffs then filed a federal lawsuit in 2004 against the city on their own behalf, citing Title VII and equal protection. While the case was pending, the Supreme Court decided Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). The district court accordingly dismissed all of the plaintiffs' claims on timing and claim preclusion grounds.

The present appeal, filed in 2007, was pending when Congress passed the Ledbetter Act, which amended Title VII and other employment-related statutes to enact (among other things) a "paycheck accrual" rule, which allows a fresh claim of pay discrimination to commence with each unequal pay period. The Act, which Congress made retroactive, immediately revived the plaintiffs' Title VII claims on appeal, but presented a curious legal issue: whether the new paycheck accrual rule also applied to claims under § 1983, which was not expressly amended by the Act.

The panel holds that the Ledbetter Act requires the Court to reexamine the circuit's pay-discrimination case law under § 1983. "Appellants argue, and we agree, that in the wake of the Ledbetter Act, they should be able to rely on the paycheck accrual rule to pursue their equal protection claims that arose after dismissal of the state court action. The paycheck accrual rule avoids the problem of res judicata [with the Illinois state case] because each paycheck reflecting the allegedly discriminatory decision gives rise to a distinct cause of action. We conclude that there is no principled reason for applying the paycheck accrual theory to claims arising under Title VII but not to those arising under 42 U.S.C. § 1983." Thus, the § 1983 claims (to the extent that they were not barred by claim preclusion) were also revived.

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