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The Missouri Supreme Court concluded that the Federal Unemployment Tax Act, 26 U.S.C.S. § 3304(a)(12), does not prohibit a state from disqualifying unemployment compensation claimants who leave their jobs because of pregnancy, when the state imposes the same disqualification on all claimants who leave their jobs for a reason not causally connected to their work or their employer.
Petitioner, who had been on pregnancy leave from her employment pursuant to the employer's policy that she would be rehired only if a position was available when she was ready to return to work, was told when she notified the employer that she wanted to return to work that there were no positions open. She then filed a claim for unemployment benefits with the Missouri Division of Employment Security, which denied the claim pursuant to a Missouri statute that disqualified a claimant who has left his work voluntarily without good cause attributable to his work or to his employer. After the denial was upheld on administrative appeal, petitioner sought review in a Missouri Circuit Court, which held that the Missouri statute was inconsistent with the Federal Unemployment Tax Act, 26 U. S. C. § 3304(a)(12). The federal statute provided that no State, such as Missouri, participating in the federal-state unemployment compensation program shall deny any compensation "solely on the basis of pregnancy or termination of pregnancy." The Missouri Court of Appeals affirmed, but the Missouri Supreme Court reversed. Petitioner challenged the decision.
Did the Federal Unemployment Tax Act, 26 U. S. C. § 3304(a)(12), prohibit a State from disqualifying unemployment compensation claimants who leave their jobs because of pregnancy?
The Court held that the Missouri statute was consistent with the federal statute. The plain import of § 3304(a)(12)'s language was that Congress intended only to prohibit States from singling out pregnancy for unfavorable treatment and not to mandate preferential treatment. This was confirmed by both the legislative history and the Labor Department's interpretation of the statute. The focus of the statutory language was on the State's treatment of pregnancy, not the claimant's reason for leaving her job. To apply the Missouri statute, under which all persons who leave work for reasons not causally connected to the work or the employer were disqualified from receiving benefits, it was not necessary to know that petitioner left because of pregnancy. All that was relevant was that she stopped work for a reason having no causal connection to her work or her employer. Under the State's unemployment compensation scheme, pregnancy was not the "sole basis" for the decision under a natural reading of § 3304(a)(12)'s language.