May 19, 2009

Supreme Court Finds No Pregnancy Discrimination in AT&T Pension Plan

Last year, the EEOC accepted more than 6,000 charges from employees alleging pregnancy discrimination. It's hard to believe, but there was a time -- just 30 years ago -- when it was considered perfectly fine for employers to treat pregnant women differently (read: worse) than everyone else. Despite the passage of Title VII in 1964, many employers continued policies that, for example, required women to stop working at a particular point in their pregnancy or provided paid time off for every conceivable reason except pregnancy and childbirth.

In a notorious 1976 case called General Electric Co. v. Gilbert, the Supreme Court upheld practices like these, finding that pregnancy discrimination was not gender discrimination because, even though only women can get pregnant, not all women do. In the Court's language, distinctions based on pregnancy don't divide the world into women and men, but into pregnant women and "nonpregnant persons." Because women are on both sides of the dividing line, the result can't be discriminatory.

Long hailed as an example of overly legalistic reasoning that misses the point -- and a reason why the Court needed at least one female member -- the Gilbert decision was quickly overturned by Congress in the Pregnancy Discrimination Act (PDA), which stated that pregnancy discrimination is a form of gender discrimination. This was too late to help many of the women who had been penalized at work in various ways for getting pregnant.  

At AT&T, for example, time women took off for pregnancy and childbirth was not fully counted as hours of service, used as the basis for calculating pensions and other benefits. While employees who took disability leave for other reasons received full credit for the entire period of their leave, employees who took pregnancy leave received a maximum credit of 30 days, later raised to six weeks. AT&T changed its policy once the PDA passed, but the women who had already been subjected to these policies continued to have their pensions calculated based on service to the company, which excluded some of their pregnancy leave.

The Supreme Court recently decided the pregnancy discrimination claims of a group of these women, in AT&T v. Hulteen. The Court found that it was legal for AT&T to continue calculating pensions on the basis of these pre-PDA policies. Even though these women continue to receive pension payments based on a discriminatory practice, the Court found in favor of AT&T, primarily because the practice was legal -- as evidenced by the Gilbert decision -- when it was in place, and the PDA was not retroactive. Justice Ginsberg dissented, arguing that AT&T's system continues the discriminatory effects of its former policy. Because the women are suffering discrimination today, in their pension checks, there is no issue of retroactivity.   

Interestingly, the AT&T decision was written by Justice Souter, whose impending retirement has led to much speculation over who -- and more generally, a person of which gender -- will be nominated to replace him. Put dissenting Justice Ginsberg in the camp of those who are hoping for another female Justice: In a recent interview with USA Today, Justice Ginsberg said that in the oral arguments in the AT&T case, some of her male colleagues revealed "a certain lack of understanding" about gender bias in the workplace. In the same interview, she called for some female company on the Court, saying "Women belong in all places where decisions are being made."    

To learn more about avoiding pregnancy discrimination, see Nolo's article Providing Pregnancy and Parental Leave.