AT&T Corp. v. Hulteen

The Supreme Court has agreed to decide whether maternity leave taken before the passage of the 1978 Pregnancy Discrimination Act can be considered in calculating employee pension benefits.

Noreen Hulteen took maternity leave in 1968, and was then hospitalized for a medical condition requiring surgery after giving birth. She missed a total of 240 days of work due to her pregnancy and surgery, but her employer, AT&T, gave her only 30 days of paid leave. Under company policy, by contrast, employees who took disability leave were entitled to be paid as long as they were disabled.

As a result, when Hulteen retired in 1994, AT&T set her pension benefits by excluding 210 days that it would have credited if she had initiated her leave because of any disability besides pregnancy.

In 2001, Hulteen and several other women sued AT&T, alleging that its decision to pay them smaller pensions because of their pregnancy disability leaves constituted an unlawful employment practice under the Pregnancy Discrimination Act, an amendment to Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of pregnancy and allows those on maternity leave the same coverage as other medical leave.

AT&T argued that the 1979 law cannot be applied retroactively.

But the U.S. District Court for the Northern District of California granted summary judgment on behalf of the women, finding that AT&T’s actions mirrored those that the United States Court of Appeals for the Ninth Circuit found unlawful in the 1992 case Pallas v. Pacific Bell and that “Pallas remains binding on this Court.”

A three-judge panel of the Ninth Circuit reversed the district court’s holding, contending in its 2-1 ruling that Pallas’ holding gave retroactive effect to the PDA, and that this retroactivity was impermissible in light of the Supreme Court’s 1994 decision in Landgraf v. USI Film Prods.

On rehearing en banc in August 2007, the Ninth Circuit re-instated the district court’s grant of summary judgment in favor of respondents.

On June 23, the U.S. Supreme Court accepted the case for review.

In its petition for review, AT&T pointed to a split among the various circuit courts on the issue.

"It is fundamentally unfair to employers and employees for the same national benefits plan to result in different benefits solely as a function of geography," AT&T's lawyers wrote.

The Bush administration asked the Justice Department to write a friend of the court brief urging the Supreme Court to take the case, contending that the company’s pre-1979 policy of granting less leave for pregnancy than for disability was legal at the time and can be lawfully reflected in its post-1979 pensions.

Question presented: Whether employers violate Title VII by not fully restoring service credit for pregnancy leaves taken before the 1978 passage of the Pregnancy Discrimination Act.

The Supreme Court ruled today that maternity leave taken before the passage of the 1978 Pregnancy Discrimination Act cannot be considered in calculating employee pension benefits.

Noreen Hulteen took maternity leave in 1968, and was then hospitalized for a medical condition requiring surgery after giving birth. She missed a total of 240 days of work due to her pregnancy and surgery, but her employer, AT&T, gave her only 30 days of paid leave. Under company policy, by contrast, employees who took disability leave were entitled to be paid as long as they were disabled.

As a result, when Hulteen retired in 1994, AT&T set her pension benefits by excluding 210 days that it would have credited if she had initiated her leave because of any disability besides pregnancy.
In 2001, Hulteen and several other women sued AT&T, alleging that its decision to pay them smaller pensions because of their pregnancy disability leaves constituted an unlawful employment practice under the Pregnancy Discrimination Act, an amendment to Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of pregnancy and allows those on maternity leave the same coverage as other medical leave.

AT&T argued that the 1979 law cannot be applied retroactively.

But the U.S. District Court for the Northern District of California granted summary judgment on behalf of the women, finding that AT&T’s actions mirrored those that the United States Court of Appeals for the Ninth Circuit found unlawful in the 1992 case Pallas v. Pacific Bell and that “Pallas remains binding on this Court.”

A three-judge panel of the Ninth Circuit reversed the district court’s holding, contending in its 2-1 ruling that Pallas’ holding gave retroactive effect to the PDA, and that this retroactivity was impermissible in light of the Supreme Court’s 1994 decision in Landgraf v. USI Film Prods.

On rehearing en banc in August 2007, the Ninth Circuit re-instated the district court’s grant of summary judgment in favor of respondents.

On June 23, the U.S. Supreme Court accepted the case for review.

In its petition for review, AT&T pointed to a split among the various circuit courts on the issue.
“It is fundamentally unfair to employers and employees for the same national benefits plan to result in different benefits solely as a function of geography,” AT&T’s lawyers wrote.

The Bush administration asked the Justice Department to write a friend of the court brief urging the Supreme Court to take the case, contending that the company’s pre-1979 policy of granting less leave for pregnancy than for disability was legal at the time and can be lawfully reflected in its post-1979 pensions.

On May 18, 2009, the Supreme Court reversed in a 7-2 opinion by Justice David H. Souter. Justice John Paul Stevens filed a concurring opinion.

“The benefit calculation rule in this case is fide seniority system under §703(h) of Title VII of the Civil Rights Act of 1964, 42 U. S. C. §2000e–2(h), which insulates it from challenge,” Souter wrote.

Justice Ruth Bader Ginsburg filed a dissenting opinion, joined by Justice Stephen Breyer.
“Certain attitudes about pregnancy and childbirth, throughout human history, have sustained pervasive, often law-sanctioned, restrictions on a woman’s place among paid workers and active citizens,” Ginsburg wrote. She added:

“It is at least reasonable to read the PDA to say, from and after the effective date of the Act, no woman’s pension payments are to be diminished by the pretense that pregnancy-based discrimination displays no gender bias.”

Question presented:

Whether employers violate Title VII by not fully restoring service credit for pregnancy leaves taken before the 1978 passage of the Pregnancy Discrimination Act.