Pregnancy Case Demonstrates Supreme Court’s Unpredictability

In its first chance to apply a pay discrimination law that Congress approved in reaction to one of its previous rulings, the Supreme Court side-stepped the issue and potentially saved companies millions of dollars.

The decision illustrates how unpredictable the panel can be on employment law and why it is difficult to project how Sonia Sotomayor may change the court’s approach if she is confirmed by the Senate to replace retiring Justice David Souter.

Souter wrote the opinion for the 7-2 decision holding that AT&T did not violate federal pregnancy leave laws when it failed to award full seniority credit to women who left work to have children before the Pregnancy Discrimination Act went into effect in 1979. Since then, AT&T has changed its policy to be in compliance.

Noreen Hulteen, who retired after being laid off in 1994, says her pension benefits have been reduced because 210 days of her pregnancy leave were defined by AT&T as personal leave that did not count toward seniority. The PDA puts pregnancy on par with other types of leave.

The Supreme Court ruled that AT&T’s seniority calculation was legal when it was in effect prior to 1979. The court did not support Hulteen’s assertion that her current pension payments are a violation of the pregnancy law.

Lilly Ledbetter made a similar argument when she said that she suffered discrimination each time she received a paycheck from Goodyear reflecting her supervisor’s move decades ago to diminish her wages.

In 2007, the Supreme Court ruled, 5-4, that Ledbetter violated the statute of limitations by failing to file her claim within 180 days of the original discriminatory act. Earlier this year, Congress passed a bill that renews the suit deadline after each paycheck.

The Supreme Court majority in the Hulteen case held that AT&T was “insulated from challenge” because it did not intentionally discriminate in its pre-1979 seniority system.

“They took an offramp even before Ledbetter,” says Mark Meyerhoff, a partner with Liebert, Cassidy, Whitmore in Los Angeles. “It was a pretty strict reading of the law. If they got to the Ledbetter decision, the case would have turned out differently.”

It’s possible that the court considered the financial implications of ruling in favor of Hulteen, according to Sherril Colombo, a partner at Cozen O’Connor in Miami.

“It would have a potentially devastating effect on pension plans,” Colombo says. “The money has to come from somewhere. Other people would get less.”

Although he wrote the Hulteen opinion, Souter was one of the four justices who voted in favor of Ledbetter. Justice Ruth Bader Ginsburg, who urged Congress to pass the Ledbetter law to undo the court’s decision in that case, dissented from the Hulteen majority.

Sotomayor, a judge on the New York-based 2nd U.S. Circuit Court of Appeals, is likely to align with Ginsburg and other Supreme Court liberals.

“I don’t see a giant shift,” Meyerhoff says. “You might see a tick to the left. She’ll be a little more liberal than Souter, who was middle of the road, but unpredictable.”