AT&T Corp. v. Hulteen

2009-05-18

Headline: Old pension rules that gave less credit for pregnancy are allowed to stand, as the Court upheld employers’ use of pre‑law seniority calculations, meaning some retired women keep reduced pensions.

Holding: An employer does not automatically violate the Pregnancy Discrimination Act by paying pensions based in part on a pre‑PDA accrual rule that gave less service credit for pregnancy, because such calculations are protected as part of a bona fide seniority system.

Real World Impact:

Allows employers to rely on pre‑law seniority calculations for pensions.
Leaves some retired women with permanently smaller pensions.
Limits new claims based on past pre‑PDA personnel rules.

Topics: pregnancy discrimination, pensions, seniority systems, workplace benefits

Summary

Background

AT&T, a large telecommunications employer, used seniority-based pension rules that counted years of service minus certain unpaid leave. Before 1979, AT&T gave less service credit for pregnancy leave than for other medical disabilities. Congress passed the Pregnancy Discrimination Act (PDA) effective April 29, 1979, and AT&T revised its plan prospectively but did not change past service calculations. Four women and their union filed EEOC charges and sued after receiving smaller pensions tied to those pre‑1979 rules.

Reasoning

The Court considered whether paying pensions today under calculations that relied on a pre‑PDA rule automatically violates the PDA. The majority held it does not necessarily do so because those pension calculations are part of a bona fide seniority system protected by §703(h) of Title VII. The Court relied on earlier precedent that treated lawful seniority systems as insulated from certain discrimination claims, noted Gilbert’s pre‑PDA ruling that such pregnancy exclusions were not sex discrimination at the time, and applied the presumption against retroactive application of the PDA.

Real world impact

The practical result is that AT&T (the employer) prevailed: pensions computed using lawful pre‑PDA accrual rules need not be adjusted simply because the rules caused lower benefits for pregnancy leave before 1979. The opinion notes specifics: one respondent lost seven months of credited service, two lost about two months, and another about six months. The Court also explained that later statutory amendments addressing pay timing do not change this outcome when the original decision was not discriminatory under the law then in force.

Dissents or concurrances

Justice Ginsburg dissented, arguing the PDA requires ending pregnancy‑based disadvantage for all employment purposes from its effective date and would have left the Ninth Circuit’s ruling intact; Justice Stevens concurred in the judgment while criticizing the earlier Gilbert decision.