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.)