AT&T Corp. v. Hulteen

AT&T, the petitioner, argues two basic points: firstly, that the Ninth’s Circuit’s interpretation impermissibly gives retroactive effect to the Pregnancy Discrimination Act (“PDA”) and, secondly, even if the PDA were somehow applicable to pre-PDA pregnancy leaves, any claim against AT&T is untimely, as AT&T immediately ceased its pregnancy leave policy after passage of the PDA in 1978.

Retroactivity

With regard to retroactivity, AT&T, firstly contends that its earlier policy of denying full service credit for time spent on pregnancy leaves was lawful at the time that it was operational (that is, up to Congress’ passing of the PDA in 1978). . With the passing of the PDA, AT&T adjusted its policy accordingly, giving full disability credit to women taking maternity leave. Indeed, AT&T notes that the Ninth Circuit itself held that, prior to the PDA, “the law did not require employers to treat pregnant women like temporarily disabled men.” . Moreover, AT&T dismisses the suggestion that discrimination based on pregnancy has always been barred by Title VII by looking to Gilbert, which held that “an exclusion of pregnancy from a disability-benefits plan providing general coverage is not a gender-based discrimination at all.”

Hulteen argues that Title VII in fact does apply to AT&T’s policy. Specifically,Hulteen claims that AT&T overlooks a subtle distinction between those claims that are based on current discriminatory practices and those based on currently neutral practices but which perpetuate past discrimination. AT&T’s service policy belongs in the latter grouping, according to Hulteen.Quoting Bazemore v. Friday, Hulteen notes that a discriminatory policy adopted “prior to the time it was covered by Title VII does not excuse perpetuating that discrimination after [it] became covered by Title VII.” Thus, Hulteen argues that AT&T’s service policy illegitimately perpetuates discrimination. AT&T responds by saying that Bazemore does not, in fact, govern because the AT&T policy is facially neutral, unlike the policy in Bazemore, where disparate wages were paid to similarly situated black and white workers, a policy which is actionable under Title VII. By contrast, AT&T’s seniority system does not treat employees differently. Moreover, unlike AT&T’s seniority system, the unlawful conduct indicted in Bazemore was continued by the employer after the enacting of Title VII.

Secondly, AT&T insists that its seniority system is not “facially discriminatory,” as respondents and the Ninth Circuit contend, and that the system can only be understood as “facially discriminatory” by retroactively applying the PDA. AT&T argues that the Ninth Circuit’s construal of the PDA was to “create[] a new obligation” by applying the law to earlier policy, rather than simply ceasing and correcting that earlier policy. . AT&T points out that, as a general rule, a statute shall be given retroactive effect only when there is explicit language saying as much, or when it must apply by necessary implication. There is no such language, instruction, or implication in the PDA. Indeed, the language of the PDA indicates that it is to be applied prospectively. Moreover, AT&T points out that the PDA has been held to apply prospectively by every court of appeals that has considered the issue to date, including the Ninth Circuit in Pallas. AT&T goes on to stipulate that, as its seniority system is bona fide—that is, one that is “facially neutral and lacking in discriminatory intent”—then it is not “an unlawful practice” for it to incidentally perpetuate any previous sex-based discrimination.

Hulteen counters that AT&T’s system is in fact “facially discriminatory” because it discriminates between “female employees who took leave prior to 1979 due to a pregnancy-related disability and employees who took leave prior to 1979 for other temporary disabilities.” The Supreme Court considers a “disparate-treatment claim [under Title VII]” to exist when there is “an employment practice, and discriminatory intent.” Hulteen argues that AT&T’s discriminatory act occurred at the moment when AT&T, in calculating respondents’ retirement benefits, excluded earlier pregnancy leave from their calculations. Moreover, respondents contend that “AT&T’s argument misapprehends how pension benefits operate and distorts the Ninth Circuit’s reasoning.” While seniority may have a disparate impact during an employee’s tenure, it is not until she retires that her pension will be impacted. . Thus, by relying on pre-PDA figures, AT&T carries the discrimination forward to present-day pension-setting decisions, which is illegal under the post-PDA regime. As such, the Ninth Circuit’s ruling does not “create[] a new obligation” as AT&T contends.

AT&T returns that there was no holdover act of discrimination that occurred at respondents’ retirement. Instead, AT&T’s denial of service credit was a “denial of a particular term, condition or privilege of employment,” and that the consequences were no longer actionable. Moreover, AT&T argues that its actions were not conditional or precursory, but that the date adjustments that affected respondents’ seniority and pensions were taken upon return from pregnancy leave. As such, AT&T argues that respondents were not discriminated against at the time of their retirements.

Untimeliness

AT&T further argues that, even if its handling of pre-PDA pregnancy leaves was unlawful prior to the passing of the PDA, any claim against AT&T is untimely. Looking to United Air Lines v. Evans and its progeny, AT&T notes that “present-day effects of past discrimination do not give rise to a new Title VII claim.” AT&T also looks to Lorance v. AT&T Technologies, Inc., where the Court held that a plaintiff must sue in a timely fashion, and, failing to do so, later “cannot complain of a continuing violation.”

Respondents contend that their claims are not untimely.Moreover, respondents argue that the Ninth Circuit did not seek to evade Evans, as AT&T suggests. Hulteen distinguishes this case from Evans by noting that, although Evans was fired for a sex-related issue (thus giving rise to a mature disparate-treatment claim), her suit was not over her hiring but with regard to the resetting of her employment clock following rehiring. In Evans’ case, the company’s neutral seniority policy mandated the resetting of her employment clock, thus impacting Evans immediately; by contrast, Hulteen argues that the discriminatory impact of AT&T’s tallying of workdays was not immediately tangible. As further support, Hulteen also notes that, in Lorance,the Court has also noted that a seniority system which is facially discriminatory is challengeable at any time. Finally, respondents note that Ledbetter allows that there may be times when the assembling of the necessary elements that form to create the cause of action takes more than 180 days.

Furthermore, Hulteen argues § 112 of the Civil Rights of Act of 1991, which applies to uniquely to cases of discriminatory seniority systems, provides that an intentionally discriminatory seniority system may be challenged “when the seniority system is adopted, when the individual becomes subject to the seniority system, or when a person aggrieved is injured by the application of the seniority system or provision of the system.” Hulteen, agreeing with the Ninth Circuit, understands this suit to be the very sort of cases that Congress meant to keep viable.

AT&T responds that reliance on § 706(e)(2) is doubly mistaken. Firstly, in order for recourse to be had under this statute, the challenged system must have been adopted “with the intent of for the purpose of discriminating against women.” There is no evidence of such intent, and respondents do not attempt to argue that such intent exists. Secondly, in Hughes Aircraft Co. v. United States ex rel. Schumer, the Supreme Court has made it clear that a statute that lengthens the permissible period for bringing a case may not be applied retroactively so as to revive a plaintiff’s claim.