Supreme Court Clears Pension Plan That Differentiated Pregnancy Leave Prior to the PDA
Today the U.S. Supreme Court held that an employer does not violate the Pregnancy Discrimination Act (PDA) if it pays pension benefits based in part on pre-PDA calculations that gave employees less retirement credit for pregnancy leave than for other types of medical leave. Click here to read the Court's decision in AT&T Corp. v. Hulteen.
The employer in Hulteen, AT&T, based its pension calculations on a seniority system based on years of service minus uncredited leave time. AT&T gave less credit for pregnancy absences than it did for other types of medical leaves. When the PDA was enacted in 1978, AT&T replaced its old plan a plan that provided the same service credit for pregnancy leave; it did not, however, make any retroactive adjustments for pre-PDA pregnancy leaves. Some female employees, including the plaintiff Hulteen, received less credit for pre-PDA pregnancy leaves, and therefore received smaller pensions.
The lower courts held that this violated Title VII; however, the Supreme Court reversed 7-2. Because AT&T's pension payments accord with the terms of a bona fide, non-discriminatory seniority system, they are insulated from challenge under Title VII §703(h). (The system was considered non-discriminatory because, prior to enactment of the PDA, an accrual rule limiting the seniority credit for time taken for pregnancy leave did not unlawfully discriminate onthe basis of sex.)
