• AT&T Corp. v. Hulteen - The Supremes Rule No Retroactive Application of the Pregnancy Discrimination Act
  • June 10, 2009 | Author: Eliza Karapetyan
  • Law Firm: Alston & Bird LLP - Los Angeles Office
  • Does the 1978 Pregnancy Discrimination Act apply retroactively?  That was the question before the U.S. Supreme Court as it reviewed the Ninth Circuit’s decision in AT&T Corp. v. Hulteen (U.S., No. 07-543). 

    “Nope.”  That was the answer the Supreme Court provided as it once again overturned the Ninth Circuit.

    In Hulteen, the Supremes reviewed AT&T’s pension calculations which, since 1914, were based on a seniority system…with an exception.  Specifically, in the 1960s and early to mid-1970s, AT&T employees on “disability” leave got full service credit for the entire periods of absence, but those who took “personal” leaves of absence received maximum service credit of 30 days.  Leave for pregnancy was treated as personal, rather than disability.

    Between 1914 and today, the social landscape has changed a bit here and there. 

    In 1978, Congress amended Title VII of the 1964 Civil Rights Act by passing the Pregnancy Discrimination Act (“PDA”) so as to make it “clear that it is discriminatory to treat pregnancy-related conditions less favorably than other medical conditions.”  Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U. S. 669, 684 (1983). 

    Following passage of the PDA, AT&T immediately ceased reducing the net service credit of women who had taken pregnancy leaves.  However, AT&T did not make any retroactive adjustments to the service credit calculations of women who had been subject to the pre-PDA personnel policies.

    Hulteen brought a class action on behalf of all female AT&T employees who took pregnancy leaves prior to the passage of the PDA.  The Ninth Circuit held that AT&T violated Title VII’s prohibition of sex-based discrimination by failing to restore service credits to female employees who took pregnancy leaves prior to the PDA’s enactment. The U.S. Supreme Court disagreed.

    Writing for the majority, Justice David Souter noted that Congress did not intend to make the PDA retroactive.  "There is no such clear intent here," Souter wrote, "indeed, no indication at all that Congress had retroactive application in mind; the evidence points the other way.  Congress provided for the PDA to take effect on the date of enactment, except in its application to certain benefit programs, as to which effectiveness was held back 180 days." 

    The U.S. Supreme Court’s decision protects employers from pregnancy discrimination claims based on actions that were considered lawful when taken, and prevents the disruption of employee benefits system as a whole.  The effect of this decision will impact any company like AT&T that continue apply pre-PDA policies to calculate pre-PDA seniority.