07-543 AT&T Corp. v. Hulteen

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Employment
Pregnancy Discrimination Act

An employer does not necessarily violate the PDA when it pays pension benefits calculated in part under an accrual rule, applied only pre-PDA, that gave less retirement credit for pregnancy than for medical leave generally.

AT&T's benefit calculation rule is protected by §703(h), which provides: "[I]t shall not be an unlawful employment practice for an employer to apply different standards of compensation … pursuant to a bona fide seniority … system … provided that such differences are not the result of an intention to discriminate because of … sex." In Teamsters v. United States, 431 U. S. 324 , the Court held that a pre-Title VII seniority system that disproportionately advantaged white, as against minority, employees nevertheless exemplified a bona fide system without any discriminatory terms under §703(h), where the discrimination resulted from the employer's hiring practices and job assignments. Because AT&T's system must also be viewed as bona fide, i.e., as a system having no discriminatory terms, §703(h) controls the result here, just as it did in Teamsters. This Court held in Gilbert that an accrual rule limiting the seniority credit for time taken for pregnancy leave did not unlawfully discriminate on the basis of sex. As a matter of law, at that time, "an exclusion of pregnancy from a disability-benefits plan providing general coverage [was] not a gender-based discrimination at all." 429 U. S., at 136. The only way to conclude that §703(h) does not protect AT&T's system would be to read the PDA as applying retroactively to recharacterize AT&T's acts as having been illegal when done. This is not a serious possibility. Generally, there is "a presumption against retroactivity [unless] Congress itself has affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits." Landgraf v. USI Film Products, 511 U. S. 244 . There is no such clear intent here. Section 706(e)(2)-which details when "an unlawful employment practice occurs, with respect to a seniority system that has been adopted for an intentionally discriminatory purpose"-has no application because Gilbert unquestionably held that the feature of AT&T's seniority system at issue here was not discriminatory when adopted, let alone intentionally so. Nor can it be argued that because AT&T could have chosen to give post-PDA credit to pre-PDA pregnancy leave when Hulteen retired, its failure to do so was facially discriminatory at that time. If a choice to rely on a favorable statute turned every past differentiation into contemporary discrimination, §703(h) would never apply. Finally, Bazemore v. Friday, 478 U. S. 385 -in which a pre-Title VII compensation plan giving black employees less pay than whites was held to violate Title VII on its effective date-is inapplicable because the Bazemore plan did not involve a seniority system subject to §703(h) and the employer there failed to eliminate the discriminatory practice when Title VII became law.

498 F. 3d 1001, reversed.

Local effect: The opinion is consistent with governing Seventh Circuit precedent. Ameritech Benefit Plan Comm. V. Communications Workers of Am., 220 F.3d 814 (7th Cir. 2000).

07-543 AT&T Corp. v. Hulteen

Souter, J.; Stevens, J., concurring; Ginsburg, J., dissenting.

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