(press release: cdklawyers)
The United States Supreme Court recently overturned a Ninth Circuit Court of Appeals opinion when it ruled that an employer did not violate the Pregnancy Discrimination Act (“PDA”) when, prior to the PDA’s enactment, it gave less retirement credit for pregnancy leave than for other medical leave. AT&T Corp. v. Hulteen, __ U.S. __ (May 18, 2009), available at http://www.supremecourtus.gov/opinions/08pdf/07-543.pdf.
AT&T provided pension benefits based on a seniority system. Prior to the PDA’s enactment, AT&T employees on disability leave received full service credit for their absences whereas employees on pregnancy-related leave received credit for only 4-6 weeks. Following the PDA’s enactment, AT&T provided equal service credit for pregnancy leave, however, it did not retroactively adjust the service credit calculations for prior pregnancy-related absences. Four women sued to obtain increased pensions based on a recalculation of their service credits.
The Court noted that benefit differentials within a bona fide seniority system are lawful unless the differentials result from an employer’s intent to discriminate. Because AT&T’s plan was lawful when the differentials occurred, AT&T could not have intended to discriminate. Further, even though the women continue to be affected by the prior policy because their pension payments are less than their payments would be had they received full service credit for their pregnancy-related absences, the PDA was not meant to be retroactively applied.
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