An employer does not necessarily violate the Pregnancy Discrimination Act by paying pension benefits calculated using an accrual rule before the law took effect, even if women on maternity leave at the time received less credited service time, the U.S. Supreme Court ruled Monday, May 18.
The ruling in AT&T Corp. v. Noreen Hulteen et al. applies only to women who became pregnant before the Pregnancy Discrimination Act took effect in 1979.
Hulteen and several other AT&T employees each took partially uncredited pregnancy leave before the Pregnancy Discrimination Act became law.
According to the Supreme Court, AT&T replaced its old pension plan with a new one on the day the act took effect, providing the same service for pregnancy as it did for disabilities on a prospective basis, but not providing retroactive adjustments. The group sued, alleging discrimination under Title VII of the Civil Rights Act of 1964.
The 9th U.S Circuit Court of Appeals, sitting en banc, ruled 11-4 in 2007 that the plaintiffs were entitled to regain the lost time retroactively.
The Supreme Court, however, reversed the appeals court in Monday’s 7-2 decision. The majority held that AT&T’s pension payments are in accord with a bona fide seniority system’s terms.
Therefore, the plan is not subject to challenge under Title VII, Associate Justice David Souter wrote for the court majority.
Filed by Mark Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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