Employer not in Violation for
Refusing to Include Pregnancy Leave
Accrued before Title VII Amendment
In AT&T v. Hulteen, the U.S. Supreme Court this week held that an employer does not necessarily violate the federal Pregnancy Discrimination Act (PDA) when it pays pension benefits calculated in part under an accrual rule – applied prior to the PDA’s enactment in 1978 – that gave less retirement credit for pregnancy than for medical leave generally.
The Court further held that the benefit calculation rule used by the employer in this case was part of a bona fide seniority system that insulated it from a Title VII challenge. Hulteen had argued that under the recently enacted Lilly Ledbetter Fair Pay Act, a discriminatory compensation practice occurs each time a transaction affecting the employee occurs, namely, the accrual of credits. The Supreme Court rejected this argument, holding that the decision to not give credit for pregnancy leave (pre-PDA) was non-discriminatory.