The Supreme Court on May 18 ruled that women whose retirement benefits are worth less because they weren’t credited for time spent on before enactment of the can’t sue to recover lost funds.
The 7-2 decision in AT&T Corp. v. Hulteen generally followed the reasoning the High Court used in its landmark Ledbetter v. Goodyear Tire & Rubber ruling: If a policy was legal at the time alleged discrimination occurred, employees can’t challenge it retroactively.
Retiring Justice David Souter wrote the majority opinion.
Some observers had worried that the AT&T case could reopen wounds closed by Ledbetter and the Lilly Ledbetter Fair Pay Act that was signed into law in its wake.
According to employment law attorney Michael Fox, of the Ogletree Deakins law firm, “What was always a long shot for a quick look at the newest employment legislation did not pan out, as the Supreme Court issued its decision without providing any guidance on how it would view the Lilly Ledbetter Fair Pay Act.”
Fox, editor of HR Specialist’s Texas Employment Law newsletter, said, “If the case had gone the other way, it is possible to imagine how it could have had broad ramifications. However, given the narrow holding of Justice Souter's opinion, its impact should be quite limited. The passage of time will limit the opportunities for seniority systems to be impacted by discriminatory practices that were legal at the time, but became illegal at a later date, which is the narrow focus of this decision.”
The case has origins that reach back 31 years. A group of AT&T employees, who had taken before the Act (PDA) became law in 1978, sued their employer for allegedly violating the law.
They said AT&T gave only partial credit toward retirement benefits for pregnancy leave but gave full credit for other medical leave. They argued that the PDA required treating their pregnancy-related time off just like other medical leave.
The federal district court originally sided with the women, but a panel of the 9th Circuit Court of Appeals overturned that decision.
Then, in a surprise move, the full 9th Circuit reversed the panel decision, concluding that AT&T violated the PDA and Title VII of the Civil Rights Act by treating pregnancy leave differently than other medical leave for retirement calculations. From there the case went on to the Supreme Court.
Impact on employers: According to employment law attorney Sandro Polledri of the New Jersey law firm Genova, Burns & Vernoia, “The Hulteen decision underscores the statutory immunity that Title VII affords to bona fide seniority systems, as long as they are not discriminatory in their structure or application.”
Polledri is the editor of HR Specialist’s New Jersey Employment Law newsletter. “For employers,” he said, “this decision shows that the immunity provision still has teeth and provides some level of protection for legitimate seniority systems and pension programs.”
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