Court Rules Old Maternity Leave Doesn't Count Toward Pension
The Wall Street Journal
Monday, May 18, 2009
-- Women who took maternity leave before it became illegal to
discriminate against pregnant women, can't sue to get their
leave time to count for their pensions, the Supreme Court ruled
The high court overturned a lower-court decision that said
decades-old maternity leaves should count in determining
Four AT&T Corp. employees who took maternity leave between 1968
and 1976 sued the company to get their leave time credited
toward their pensions. Their pregnancies occurred before
the 1979 Pregnancy Discrimination Act, which barred companies
from treating pregnancy leaves differently from other disability
AT&T lawyers said their pension plan was legal when the women
took pregnancy leave, so they shouldn't have to recalculate
their retirement benefits now. Congress didn't make the
Pregnancy Discrimination Act retroactive, they said, so the
women shouldn't get any extra money.
A majority of the justices agreed.
"A seniority system does not necessarily violate the statute
when it gives current effect to such rules that operated before
the PDA," wrote Justice David Souter, who will retire next
Justices Ruth Bader Ginsburg and Stephen Breyer dissented.
By making it
illegal to discriminate against women on pregnancy leave,
"Congress intended no continuing reduction of women's
compensation, pension benefits included, attributable to their
placement on pregnancy leave," Justice Ginsburg said.
The decision could affect thousands of women who took pregnancy
leaves decades ago and now are headed toward retirement.
A closely divided 9th U.S. Circuit Court of Appeals said that
time should count in determining pensions.
The Bush administration had urged the court to reverse the San
Francisco-based appeals court, with Justice Department lawyers
arguing that a decision favoring the women might harm other
employees who could lose expected benefits if the company can't
afford to put more money into the pension system.
AT&T lawyers said their leave policy now complies with the 1979
Pregnancy Discrimination Act, but they argued that the law
doesn't retroactively apply to old pregnancy leaves. They
also said their claims should be invalid because they didn't
make it decades ago, when the company first made the decision
Lawyers for the four women argued that each reduced retirement
check that they receive is "a fresh act of discrimination."
The Supreme Court in 2007 didn't accept that argument from Lilly
Ledbetter, who sued her company for discrimination after finding
out after almost two decades that she made less than her male
peers. The Supreme Court, in a 5-4 vote in May 2007, threw
out her complaint, saying she had failed to sue within the
180-day deadline after a discriminatory pay decision was made.
The first bill signed into law by President Barack Obama
reversed that decision by saying each new discriminatory
paycheck would extend the statute of limitations for an
additional 180 days.
The case is AT&T Corp. v. Hulteen, 07-543.