Court Lost Pregnancy-Leave Credit Can Be Regained

Employees who received less credited service time while on pregnancy leave compared with other disabled workers—before that inequality was addressed by the Pregnancy Discrimination Act of 1978—can regain that lost time retroactively, a federal appellate court has ruled.

The 11-4 decision on Friday, August 17, by the en banc court in Hulteen v. AT&T Corp. overturns a 2006 decision by a three-judge panel of the 9th Circuit U.S. Court of Appeals in San Francisco. The majority total does not include a judge who partially affirmed the majority opinion but also participated in the dissent.

The plaintiffs in the case were four current and former AT&T Corp. employees who had each taken partially uncredited pregnancy leave before the Pregnancy Discrimination Act’s 1979 effective date, and their union, the Communications Workers of America. As a result of the uncredited time, they received less favorable benefits or retirement opportunities, according to the opinion.

A district court ruled in the plaintiffs’ favor. However, the three-judge panel said in a 2006 opinion that a 9th Circuit decision in 1991 in a similar case, Pallas v. Pacific Bell, in which a plaintiff was granted the extra time, could no longer be used as precedent because of an intervening U.S. Supreme Court decision that prohibits applying federal law retroactively.

However, in its most recent decision, the court ruled that the 1991 decision was not “clearly irreconcilable” with “intervening authority.”

“A statute does not operate ‘retrospectively’ merely because it is applied in a case arising from conduct antedating the statute’s enactment, or upsets expectations based in prior law,” said the decision.

“Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment,” says the decision. “The conclusion that a particular rule operates ‘retroactively’ comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event,” said the court. “ … Pallas was premised on a discrete act, the decision to deny a retirement benefit, that gave rise to a current violation of the PDA.”

According to an AT&T spokesman, “We believe the decision is inconsistent with current law and we’re reviewing the decision to determine our next steps.”

Plaintiff’s attorneys could not be reached for comment.

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.