Pregnancy discrimination took center stage at the country’s highest court earlier this week, when the U.S. Supreme Court issued its decision in AT&T v. Hulteen. (See my previous post about the case when the Supreme Court first granted certiorari last summer). On May 19, 2009, the Court reversed the Ninth Circuit’s decision and held that AT&T did not violate the Pregnancy Discrimination Act of 1978 (PDA) by calculating the accrual of pension benefits in a way that gives less retirement credit to employees who took pregnancy leave before enactment of the PDA than to employees who took other kinds of medical leave.
The Court rejected the plaintiffs’ argument based on the Lily Ledbetter amendments to Title VII. The Court held that the Lily Ledbetter Fair Pay Act, which made it “an unlawful employment practice … when an individual is affected by application of a discriminatory compensation decision or other practice, including each time … benefits [are] paid, resulting … from such a decision”…. [did] not help Hulteen. AT&T’s pre-PDA decision not to award Hulteen service credit for pregnancy leave was not discriminatory, with the consequence that Hulteen has not been ‘affected by application of a discriminatory compensation decision or other practice.’”
The bottom line is that there are few employers likely to be implementing retirement plans whose accrual policies pre-dated enactment of the PDA in 1978. Obviously, over time, the number of employers facing this situation will only get smaller.
Should an employer be in this situation, however, they can rest easy knowing that as long as any continuing effect of a pre-PDA retirement compensation system is pursuant to a bona fide seniority system, and not the result of an intentional employer to apply different standards of compensation, they will not be in violation of the PDA.
For those who wish to learn more, the Workplace Prof Blog and SCOTUS Blog have excellent posts covering the decision. For more general information on the ins and outs of the Pregnancy Discrimination Act, see these previous posts or take the Pregnancy Discrimination Quiz at H.R. Hero: