AT&T CORP. v. HULTEEN

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Case Basics
Docket No. 
07-543
Petitioner 
AT&T Corporation
Defendant 
Noreen Hulteen, et al.
Advocates
(argued the cause for the petitioner)
(Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae, supporting the petitioner)
(argued the cause for the respondents)
Term:
Facts of the Case 

Four employees sued their employer, AT&T;, alleging that the company's policy for calculating employee pension and retirement benefits discriminated against women who had taken leave time due to pregnancy in violation of Title VII of the 1964 Civil Rights Act. The AT&T; policy considered temporary disability leave as service time for the purposes of calculating retirement benefits except when the leave was taken by pregnant women. The employees argued that the policy violated the Pregnancy Discrimination Act of 1978 (PDA), which clarified that Title VII prohibits discrimination "because of or on the basis of pregnancy, childbirth, or related medical conditions." The main issue in the case was one of timing: although the employees' pregnancy leave was taken before the PDA came into effect, AT&T;'s calculation of benefits took place after. The employees argued that under the Court's decision in Pallas the time of calculation should govern the applicability of the PDA. AT&T; countered that another decision, Landgraf directly opposed Pallas and had created a "sea change" in retroactivity principles such that the PDA should not apply to pregnancy leave taken before it was enacted. The district court sided with the employees and granted summary judgment in their favor.

On appeal, the U.S. Court of Appeals for the Ninth Circuit initially reversed the lower court, agreeing with AT&T; that Pallas gave impermissible retroactive effect to the PDA. On rehearing, the full court reversed and ruled in favor of the employees, avoiding the retroactivity problem by holding that the PDA applies to the actual calculation of pension and retirement benefits regardless of when the leave itself was taken. Because AT&T; performed this calculation after the PDA had gone into effect, the denial of benefits violated Title VII.

Question 

Under the Court's decisions in Pallas and Landgraf, does a company violate the Pregnancy Discrimination Act of 1978 (PDA) and Title VII of the Civil Rights Act of 1964 by denying retirement benefits to women who took temporary disability leave while pregnant when the leave was taken before the PDA came into effect but the calculation of benefits took place after?

Conclusion 
Decision: 7 votes for AT&T, 2 vote(s) against
Legal provision: Pregnancy Discrimination Act and Civil Rights Act

No. The Supreme Court held that a company does not necessarily violate the PDA or Title VII when it denies retirement benefits to women who take a temporary disability leave while pregnant when the leave was taken before the PDA came into effect. With Justice David H. Souter writing for the majority and joined by Chief Justice John G. Roberts, and Justices John Paul Stevens, Antonin G. Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel A. Alito, the Court reasoned that since AT&T;'s seniority system was not discriminatory at its adoption, its limiting seniority credit for time taken during pregnancy did not constitute unlawful discrimination. Rather, the limitation of seniority credit for pregnant women could only violate the PDA or Title VII if AT&T;'s system had been unlawful at its adoption.

Justice Stevens also wrote a separate concurring opinion. Justice Ruth Bader Ginsburg dissented and was joined by Justice Stephen G. Breyer. She argued that AT&T; violated the PDA and Title VII when it did not discontinue reliance upon a benefit calculation system which contained pregnancy-based seniority classifications.

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AT&T CORP. v. HULTEEN. The Oyez Project at IIT Chicago-Kent College of Law. 20 October 2014. <http://www.oyez.org/cases/2000-2009/2008/2008_07_543>.
AT&T CORP. v. HULTEEN, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2000-2009/2008/2008_07_543 (last visited October 20, 2014).
"AT&T CORP. v. HULTEEN," The Oyez Project at IIT Chicago-Kent College of Law, accessed October 20, 2014, http://www.oyez.org/cases/2000-2009/2008/2008_07_543.