Outten & Golden: Empowering Employees in the Workplace

AT&T v. Hulteen: A Bad Decision that Did Not Have to Be

May 21st, 2009 | Charlotte Fishman

In AT&T v. Hulteen Justice Souter authored the 7-2 majority opinion holding that AT&T’s “reliance” interest in perpetuating past pregnancy discrimination trumps the right of  Noreen Hulteen and her fellow plaintiffs to enjoy the same level of retirement benefits as other employees with the same longevity of service to the company.  This is a deeply unfair decision, contrary to the intent of Congress, and utterly unnecessary.

At oral argument Justice Souter acknowledged that the case could go either way, because there were competing lines of legal authority from which the case could be viewed.  The Court’s choice to immunize AT&T’s conduct from liability by resurrecting General Electric v. Gilbert, 429 U.S. 125 (1976), a decision overturned by Congress’ enactment of  the Pregnancy Discrimination Act of 1978, provides a vivid illustration of conservative judicial activism under the guise of  “strict” application of the rule of law.

There was nothing inevitable about this decision. Gilbert holds that denying medical benefits to pregnant women is not “necessarily” sex discrimination, not that disparate treatment of pregnant women could never be.  In fact, one year later Justice Rehnquist, who authored Gilbert, wrote the majority opinion in Nashville Gas Co. v. Satty, 434 U.S. 136 (1977) holding that burdening pregnant women by forcing them to forfeit earned seniority is sex discrimination.

In this case, AT&T’s pregnant employees were deprived of all but 30 days of seniority credit for the time they were out on pregnancy leave, while employees on leave for other disabilities forfeited none. The Court chose to characterize this disparate treatment of pregnant employees as not providing a “benefit,” permissible under Gilbert.  But it could just as easily have decided that it created a “burden” constituting illegal sex discrimination under Satty.

Another choice the Court made was to treat the case as a challenge to AT&T’s seniority system as a whole, rather than to a specific, post-PDA retirement benefit calculation. There is a vast difference, recognized by the courts, between “competitive” seniority and “benefit” seniority.  The Hulteen plaintiffs did not seek to obtain a competitive advantage over male co-workers, or any other retroactive benefit.  They merely sought equal treatment in the calculation of future compensation — retirement benefits“ to which they are clearly entitled by the explicit language of the PDA: “[W]omen affected by pregnancy….shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work…”

In holding as it did, the majority chose to “empathize” with AT&T rather than the retiring women who had already endured a lifetime of disadvantage on the job as a result of their pre-PDA pregnancy leaves.  The majority weighed speculative harm to AT&T’s “reliance” interest more heavily than Congress’ explicit, strongly worded intent to protect women from economic injury and injustice on the basis of pregnancy.

But to what end?   To establish the principle that companies may perpetuate discrimination even after Congress acts?    What the Court chooses to call a “retroactive” application of the Pregnancy Discrimination Act could just as easily be described as enforcement of the statute.

No wonder Justice Ginsburg was figuratively tearing out her hair!  There could not be a better illustration of what is at stake in the appointment of Justice Souter’s replacement nor of the need for another woman with Justice Ginsburg’s understanding of employment discrimination on the Supreme Court.  Let’s hope that Congress acts swiftly to overturn this exceedingly bad decision, in language that will finally lay to rest the ghost of Gilbert past.

About the Author: Charlotte Fishman Charlotte Fishman is a San Francisco employment discrimination attorney, and Executive Director of Pick UP the Pace.  She authored the an amicus brief for the National Employment Lawyers Association et al. in support of respondents in AT&T v. Hulteen.

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