Wednesday, May 20, 2009

News You Can Use: SCOTUS rules against crediting maternity leave in pension calculations

The Supreme Court ruled yesterday that women who took maternity leave before the enactment of the Pregnancy Discrimination Act of 1978 don’t have a legal claim in requiring employers to apply that leave on pension accruals.

In AT&T Corp. v. Hulteen, the Supreme Court had to decide whether the telecommunication giant was correct in refusing to calculate pregnancy leave incurred prior to 1979 in determining pension benefits.

In 1968, Hulteen took pregnancy disability leave for eight months. However, when she retired in 1994, she realized her pension checks were reduced because the eight months were not calculated as service time toward her pension benefits.

By a 7-2 vote, the Supreme Court overturned a lower-court decision stating that AT&T had violated the PDA by treating pregnancy-related disability leave differently from other disability leaves.

Although PDA requires employers to accord women who take pregnancy leave the same benefit as employees who take other types of temporary disability leave, AT&T argued, in part, that the court could no longer rely on previous case laws on retroactive principles because of a recent Supreme Court decision that limits applying federal statutes retroactively.

The majority of justices agreed. “Congress provided for the PDA to take effect on the date of enactment, except in its application to certain benefit programs, as to which effectiveness was held back 180 days,” Justice David Souter wrote.

Justices Ruth Bader Ginsburg and Stephen Breyer dissented: “Congress did not provide a remedy for pregnancy-based discrimination already experienced before PDA became effective,” Ginsburg wrote. “I am persuaded by the Act’s text and legislative history, however, that Congress intended no continuing reduction of women’s compensation, pension benefits included, attributable to their placement on pregnancy leave.”

Related EBN/ coverage:
AT&T ordered to credit pregnancy leave in calculating pensions
HR policy high on Washington agenda

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