AT&T Corp. v. Hulteen - 556 U.S. 701, 129 S. Ct. 1962 (2009)

Rule:

A seniority system does not necessarily violate the statute when it gives current effect to such rules that operated before the Pregnancy Discrimination Act, 42 U.S.C.S. § 2000e(k). Seniority systems are afforded special treatment under Title VII of the Civil Rights Act of 1964, reflecting Congress's understanding that their stability is valuable in its own right. 42 U.S.C.S. § 2000e-2(h). Benefit differentials produced by a bona fide seniority-based pension plan are permitted unless they are the result of an intention to discriminate.

Facts:

Petitioner and its former operating companies (collectively, AT&T) long based pension calculations on a seniority system that relied on years of service minus uncredited leave time, giving less retirement credit for pregnancy absences than for medical leave generally. In response to the ruling in General Elec. Co. v. Gilbert, 429 U.S. 125, 97 S. Ct. 401, 50 L. Ed. 2d 343, that such differential treatment of pregnancy leave was not sex-based discrimination prohibited by Title VII of the Civil Rights Act of 1964, Congress added the Pregnancy Discrimination Act (PDA) to Title VII in 1978 to make it clear that it was discriminatory to treat pregnancy-related conditions less favorably than other medical conditions. On the PDA's effective date, AT&T replaced its old plan with the Anticipated Disability Plan, which provided the same service credit for pregnancy leave as for other disabilities prospectively, but did not make any retroactive adjustments for the pre-PDA personnel policies. Each of the individual respondents therefore received less service credit for her pre-PDA pregnancy leave than she would have for general disability leave, resulting in a reduction in her total employment term and, consequently, smaller AT&T pensions. They, along with their union, also a respondent, filed Equal Employment Opportunity Commission charges alleging discrimination based on sex and pregnancy in violation of Title VII. The EEOC issued each respondent (collectively, Hulteen) a determination letter finding reasonable cause to believe AT&T had discriminated and a right-to-sue letter. Hulteen filed suit in the District Court, which held itself bound by a Ninth Circuit precedent finding a Title VII violation where post-PDA retirement eligibility calculations incorporated pre-PDA accrual rules that differentiated based on pregnancy. The Circuit affirmed. Certiorari was granted. 

Issue:

Did the employer’s pension plan, which gave less retirement credit for pregnancy than medical leave generally, violate the Pregnancy Discrimination Act (PDA), although applied only pre-PDA?

Answer:

No.

Conclusion:

A seniority system did not necessarily violate Title VII by giving current effect to rules that operated before the PDA. Although the PDA would have made it discriminatory to continue the accrual policies of the old rule, that rule was amended on the PDA's effective date to treat pregnancy and other temporary disabilities equally. The old rule was adopted to give differential treatment that, as a matter of law, was not gender-based discrimination. Since it was permissible when adopted, that seniority system was not at odds with 42 U.S.C.S. § 2000e-2(h)'s bona fide requirement and was currently the result of a permissibly different standard under § 2000e-2(h). There was no clear intent to apply the PDA retroactively. 42 U.S.C.S. § 2000e-5(e)(2) determined when a seniority system violated Title VII only if the system was adopted for an intentionally discriminatory purpose, and the employer's system was not discriminatory when adopted. The pre-PDA decision not to award service credit for pregnancy leave was not discriminatory, thus, the employees had not been affected by a discriminatory compensation decision or other practice under § 2000e-5(e)(3). The Ninth Circuit erred, and thus, its judgment was reversed.