Metropolitan News-Enterprise


Monday, August 20, 2007


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Ninth Circuit Rules for Workers in Pregnancy Discrimination Case

Long-Ago Maternity Leaves Must Be Counted Towards Benefits, En Banc Panel Says




Companies that count disability leaves as service time in calculating benefits must treat pregnancy leaves the same way, even if those leaves were taken before the Pregnancy Discrimination Act of 1978 became law, the Ninth U.S. Circuit Court of Appeals ruled Friday.

In an 11-4 en banc decision, the court said that a 1991 Ninth Circuit ruling on the issue was correct, and was not overruled by a later U.S. Supreme Court decision limiting the retroactive application of statutes. The court rejected the contrary views of two other circuits.

The ruling overturns a contrary decision of a three-judge panel in the case, which was brought by four longtime employees of AT&T Corporation and their union. The women, who took pregnancy leaves between 1968 and 1976, claimed that a company policy of not counting pre-PDA pregnancy leaves in calculating service time under early retirement and pension plans, while calculating temporary disability leaves based on other conditions, violates the PDA.

The PDA provides that discrimination “because of or on the basis of pregnancy, childbirth, or related medical conditions” is treated as “discrimination on the basis of sex” under Title VII.

1979 Change

AT&T and its predecessors have given full service credit under their benefit programs for pregnancy leave since the PDA became law in April 1979. From August 1977 until then, the companies allowed 30 days’ credit for leave before delivery and six weeks after delivery.

Before that, the companies gave a maximum of 30 days’ credit for pregnancy leave, even though other forms of medical leave were not so limited.

In addition, the plaintiffs alleged, women were forced to take pregnancy leave before it became medically necessary, whereas workers who anticipated temporary disability leave were allowed to continue working until it became necessary to begin their leaves.

Also, if an employee suffered a non-pregnancy-related disability while on pregnancy leave, she could not claim credit for the period of disability, while other workers who suffered new disabilities while on leave could receive credit for the entire period of disability.

U.S. District Judge Martin Jenkins of the Northern District of California granted summary judgment in favor of the plaintiffs, holding that Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir. 1991), was controlling.

Earlier Case

The Pallas court held that pre-PDA pregnancy leaves must be treated the same as other temporary leaves in calculating benefits due in the post-PDA era. The court reasoned that actionable discrimination occurs each time the company calculates benefits based on the former policy.

In a 2-1 decision, the Ninth Circuit panel reversed, saying Pallas was “clearly irreconcilable” with  Landgraf v. USI Film Prods., 511 U.S. 244 (1994) on the issue of retroactivity.

But Judge Kim Wardlaw, writing Friday for the limited en banc court, said the two cases could be reconciled and that the three-judge panel should have followed existing circuit authority. She also concluded that Pallas was correctly decided because it is consistent with the language of, and the policy behind, Title VII and the PDA.

She noted that the PDA contains an “express legislative directive” that “nothing in section 2000e-2h of this title”—the portion of Title VII that precludes liability for unintentional discrimination resulting from bona fide seniority systems—“shall be interpreted to permit” discrimination based on pregnancy.

Courts holding that pre-PDA pregnancy leaves need not be credited on the same terms as other leaves, Wardlaw said, have relied on Sec. 2000e-2h while ignoring the portion of the PDA that provides to the contrary.

The opinion was joined by Chief Judge Mary M. Schroeder and Judges Stephen Reinhardt, Michael Daly Hawkins, Susan P. Graber, M. Margaret McKeown, William Fletcher, Raymond C. Fisher, Ronald M. Gould, Richard A. Paez, and Marsha Berzon.

Judge Pamela Rymer, who dissented from the three-judge panel opinion, joined the part of the majority opinion holding that Pallas was binding on that panel.

Judge Diarmuid F. O’Scannlain, joined by Rymer and Judges Jay S. Bybee and Consuelo M. Callahan, argued in dissent that Sec. 2000e-2(h) precludes the rule adopted by the majority. The language in the PDA quoted by Wardlaw, O’Scannlain argued, “has surface appeal [but] cannot bear the burden [the majority] attempts to place upon it.”

Congress, O’Scannlain wrote, did not intend to make Sec. 2000e-2h inapplicable to all pregnancy discrimination suits. Rather, the pre-PDA practices are valid if they were part of a “bona fide” seniority system and there was no intent to discriminate against pregnant women, the dissenting jurist argued.

The case is Hulteen v. AT&T Corporation, 04-16087.


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