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.

Good luck to anyone who is trying to figure out what is going on with the Gross v. FBL Financial Services case argued in the Supreme Court yesterday. I have been doing this work for three decades and I think it’s almost impossible.

The questions presented are:

1. In a “mixed-motive” age discrimination case — where both legitimate and illegitimate reasons motivated the employment decision, should the employer be permitted to avoid liability if proves that it would have taken the same action anyway?
2. What kind of evidence needs to be presented — direct or circumstantial — to prove a “mixed-motive” case?
3. Does the discriminatory reason need to be a “substantial reason” or “a motivating reason” for the employee to prevail?
4. Which party bears the burden of proof?

The answers turns on whether the Supreme Court will apply the older mixed motive analysis under Price Waterhouse v. Hopkins or the newer standard under the Civil Rights Act of 1991. (”CRA”); or (less likely) whether the Court will overrule Price Waterhouse as requested by the employer-respondent.

In the 1989 Price Waterhouse decision, the plaintiff Ann Hopkins presented direct evidence (as opposed to circumstantial evidence) that she was discriminated against when she was denied a promotion to partnership. The defendant basically said that even though it  may have discriminated,  it would have reached the same result anyway in denying Ms. Hopkins her promotion.

In it’s fractured decision,  the Supreme Court came up with a new way of proving discrimination in what it called a “mixed-motive” case.  Simply said, this new method of proof set forth a complicated and confusing burden shifting framework.

After the Price Waterhouse decision, courts began allowing employers who used illegal factors in employment decisions to avoid liability by merely showing that they would have made the same decision anyway even without considering the unlawful factor.

In other words, the unintended consequence of the decision was that employers were getting off the hook in the face of direct evidence of discrimination.

As a result, Congress overturned that portion of Price Waterhouse when it enacted the Civil Rights Act of 1991.  In so doing, it specifically lowered the standards for employees in “mixed-motive” cases.  Theoretically, the CRA  makes it easier for employees to win these cases.  Under the Act:

• the employer is not absolved of liability in “mixed-motive cases” even if it proves it would have made the same decision anyway, but damages to the employee are restricted.

• in  order to take advantage of the mixed-motive theory and shift the burden to the defendant, the plaintiff must “demonstrate” that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice

The legislation was silent as to what type of evidence (direct, circumstantial, clear and convincing, etc.) the plaintiff needed to successfully prove the illegal motivation.

The issue of what kind of evidence was required was decided by the Supreme Court inDesert Palace, Inc. v.Costa in 2003. According to that decision, Congress intended the term “demonstrate” to mean that an employee could prove his or her case bydirect or circumstantial evidence. As the Court stated:

Title VII’s silence with respect to the type of evidence required in mixed-motive cases . . . suggests that we should not depart from the “[c]onventional rul[e] of civil litigation [that] generally appl[ies] in Title VII cases.” … That rule requires a plaintiff to prove his case “by a preponderance of the evidence,” . . . by using “direct or circumstantial evidence,” Postal Service Bd. of Governors v. Aikens,460 U.S. 711, 714, n. 3 (1983).

You would think that would settle it but there’s always a wrinkle, and the wrinkle for Mr. Gross is that  the CRA applies to Title VII and does not specifically mention the Age Discrimination in Employment Act . As a result, according to FBL Financial, neither the CRA nor the Desert Palace decision apply to Gross’ case.

Paul Secunda from the Marquette University Law School Faculty Blog points out that conservative justices like Scalia, Thomas, Roberts and Alito may jump on this argument.

One argument, likely to be favored by conservative justices like Scalia, Thomas, Roberts, and Alito, is a textualist approach arguing that Congress knew what it was doing, could have expressly included the ADEA in the CRA of 1991, but chose not to for whatever reason. If we are unhappy with the current state of affairs, the argument continues, the proper approach is to allow Congress to amend the CRA of 1991 to include ADEA claims.

The flip side is that disparate treatment claims under the Age Discrimination in Employment Act (which is what this is) are always interpreted identically to claims brought under Title VII (which prohibits discrimination because of race, color, religion, sex, or national origin) on issues like the ones before the Court.

Gross’ argument is that there would be no reason not to interpret the ADEA  consistently with Title VII and no reason not to do so in this case.  That is in fact what many courts have done. (ie the Sixth Circuit Court of Appeals in Blair v. Henry Filters)

If anyone wants more, better, or different analysis of  the Gross case,  there are lots good pieces on it (SCOTUSBLOG, Ross Runkel’s Law Memo are two)

Whatever the outcome, as a practical matter I don’t think it will change the way employees and their lawyers go about proving age discrimination cases:

• Plaintiffs are going to present all the evidence they have whether it’s direct or circumstantial, or both.

• Most of us who represent employees have never seen the benefit of getting a “mixed motive” instruction even when we have direct evidence of discrimination because it’s too confusing to the jury.

• It’s just a much easier and better standard for employees in discrimination cases to have to prove by a preponderance of the evidence, whether direct or circumstantial, that age, race, sex, religion, national origin, or disability was a motivating factor in the adverse employment decision.

For sure, the decision will be interesting to Supreme Court observers to see how the justices line up on this one.  Other than that, it’s not very interesting at all, but since it’s not often that an age discrimination cases hit the Supreme Court, it’s got to be talked about even though I am the first to admit –it’s mostly academic.

Image: www.visitingdc.com

Crossposted from Ellen Simon’s blog Employee Rights Post.

About the Author: Ellen Simon is recognized as one of the foremost employment and civil rights lawyers in the United States. Ms. Simon is the owner of the Simon Law Firm, L.P.A., and Of Counsel to McCarthy, Lebit, Crystal & Liffman, a Cleveland, Ohio based law firm. She is also the author of the legal blog, the Employee Rights Post. Her website is www.ellensimon.net.

Tomorrow, March 24th, Betty Dukes and the now two million women who are members of the largest sex-discrimination class action case, Dukes v. Wal-Mart, move one step closer to victory. A panel of 11 judges of the federal Ninth Circuit Court of Appeals will hear Wal-Mart’s latest attempt to stop this case from moving forward as a class action.

In 2001 Betty Dukes and a handful of women sued Wal-Mart, charging it violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of an individual’s race, color, religion, sex or national origin. They charged that women who work at Wal-Mart are paid less than men in comparable positions despite having higher performance ratings and greater seniority. They also allege that women receive fewer promotions and when promoted they wait much longer than male employees.

Following two years of discovery, including review of over a million pages of documents (including Wal-Mart’s employee compensation data), depositions of both Wal-Mart executives and our clients, testimony of statisticians, a labor economist and a sociologist, the District Court certified the class finding that common questions of fact and law existed. The court also found that there was significant evidence of corporate-wide practices and policies of excessive subjectivity and gender stereotyping in personnel decisions. The class was certified for injunctive relief and punitive damages.

This is Wal-Mart’s third attempt to decertify the class, and it has garnered the support of large corporate interests, as well as the Pacific Legal Foundation whose amicus brief in support of Wal-Mart sums up their view of this case. Their two points are that “class certification would violate Wal-Mart’s due process rights” and that “federal courts are not the proper forum for redressing broad social justice claims or disputes between social classes.”

When broad social justice goals are embedded in the law, then courts must redress these claims. Title VII was enacted with the stated goal of eliminating the societal norm which relegated women and men of color to second class status in employment, excluding them from many jobs, paying them lower wages and subjecting them to the least desirable working conditions.

Since this action was filed Wal-Mart has put forth numerous arguments seeking to defeat class certification: the case is too big and unmanageable; plaintiffs’ claims are not typical; there is no evidence of common practices that harm the plaintiffs; and Wal-Mart’s right to due process would be violated. The case is big because Wal-Mart, with 4,259 stores, is the nation’s largest employer. Wal-Mart wants the right to defend itself against each and every woman who claims she was paid less or unfairly denied promotion opportunities.

Class actions were established as a vehicle for addressing systemic harms, and Wal-Mart and many other large businesses seek to convince the courts that justice is better served on an individual case by case basis. But given the astronomical disparity in resources between Wal-Mart and the underpaid female class members, this case presents the textbook example of why class actions have been–and still are–the only viable means of redressing systemic discrimination. A Wal-Mart employee has a better chance of winning the Lotto than garnering the resources to sue one of the largest profit-making enterprises in the world. Wal-Mart knows that if it can defeat class certification, it diminishes the likelihood it will be held accountable for its wide-spread discriminatory practices.

Until recently big business enjoyed a period of exuberance and expansion fueled by the mantra that less oversight and regulation fostered business growth and prosperity. Accounts of corporate excesses and irresponsibility (and at times criminal activity) remind us daily that an absence of regulation is not a good thing. Wal-Mart is one of the very few corporations that continues to post a profit and is performing admirably well in the rough economic environment. Our clients want Wal-Mart to succeed, and as the company’s backbone, they should be sharing in its success. They look forward to the day when every woman who works or shops at Wal-Mart knows that the Company’s financial success has not been made at the expense of its female workforce.

A Peaceful Revolution is a blog about innovative ideas to strengthen America’s families through public policies, business practices, and cultural change. Done in collaboration with MomsRising.org, read a new post here each week.

NOTE: Cross posted from Huffington Post: http://www.huffingtonpost.com/debra-a-smith/ipeaceful-revolutioni-wal_b_178260.html

About the Authors: Irma D. Herrera is the Executive Director of Equal Rights Advocates, a San Francisco based organization whose mission is to protect and secure equal rights and economic opportunities for women and girls through litigation and advocacy. Her articles on legal and cultural issues were published in the New York Times, the Washington Post, Newsday, and Ms. Magazine. Debra A. Smith has over twenty-five years experience litigating complex employment discrimination and other civil rights. Debra has been with Equal Rights Advocates since July 2001 where she continues her class action litigation, including co-counseling in the largest sex discrimination class action to date in the United States against Wal-Mart Stores, Inc. which involves more than 1.6 million low wage women workers.

Talk about the audacity of hope – who could have imagined that barely a week into office, President Obama would sign the Lilly Ledbetter Fair Pay Act and that the Supreme Court would unanimously rule that employees who report discriminatory treatment during an internal investigation are protected from retaliation by Title VII of the Civil Rights Act in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee?

But will the winds of change continue to blow when the Supreme Court considers AT&T v. Hulteen, the last case heard in 2008?

AT&T v. Hulteen raises the question: Does the Pregnancy Discrimination Act of 1978 prohibit AT&T from giving smaller pensions to women who took pregnancy leave before its passage than it gives to other retirees with the same length of service? The Pregnancy Discrimination Act amended Title VII to require that “women affected by pregnancy … shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons … similar in their ability or inability to work.”

Before 1978, it was standard practice in the telecommunications industry to treat pregnant employees differently from employees who were temporarily disabled for other reasons. Company policy forced pregnant women like Noreen Hulteen to go on leave while they were still physically able to work, and new mothers were not guaranteed immediate return to work after recovery from childbirth. Their leaves were classified as “personal” rather than “disability,” depriving them of the full seniority accrual enjoyed by employees disabled for reasons other than pregnancy. They were not permitted to shift to disability leave even if an unrelated disability extended their absence from work.

Non-pregnant employees who anticipated or suffered a period of disability were not subject to forced leave or delayed return. They received full seniority credit for the entire leave period. Upon return to work, non-pregnant employees retained the “net credited service” date that they had at the outset. By contrast, employees returning from pregnancy leave had their dates of hire “adjusted,” reducing their seniority by all but 30 days of the leave’s duration. Hulteen lost 210 days of service credit under this regime.

After the act went into effect, AT&T eliminated its discriminatory leave policies, but not the discriminatory service credit adjustments created by those policies. AT&T continued to use pregnancy adjusted net credited service dates to calculate retirement benefits after the Pregnancy Discrimination Act went into effect, and has been insisting on its legal right to do so, with mixed success, for 30 years.

Enter the Supreme Court. Twice, the 9th Circuit Court of Appeals held that AT&T’s conduct violates Title VII. The first time the Supreme Court denied certiorari. The second time, AT&T persuaded the court to take the case. At oral argument, its gamble appeared to have paid off.

In most press reports following the oral argument, the smart money was on victory for AT&T, and it was not hard to see why. Justice Anthony Kennedy is often the crucial swing vote on issues that divide liberals and conservatives. He seemed deeply troubled by the idea that a ruling in favor of AT&T’s retiring mothers could possibly, in the current economic climate, reduce pension funds available for everyone.

Still, reading tea leaves is a perilous game, and as inaugural afterglow fades, the Ledbetter Act and the Crawford opinion give rise to cautious optimism that the court’s decision in Hulteen will align more with Congress’ purpose in enacting the Civil Rights Act of 1964, than with its panic in enacting the Troubled Asset Relief Program. Here’s why.

First, the Lilly Ledbetter Fair Pay Act resolved a key issue in the case – timeliness – in Hulteen’s favor. In the words of the act: “[A]n unlawful employment practice occurs, with respect to discrimination in compensation … when an individual is affected by application of a discriminatory compensation decision or other practice.” Hulteen’s claim is timely under the Ledbetter Act because she filed a charge with the Equal Employment Opportunity Commission at the time AT&T awarded her a smaller pension than retirees with the same length of service.

Second, last week’s Crawford decision inspires hope that the justices will view the claim that Title VII permits AT&T to pay reduced pensions to women who took pre-Pregnancy Discrimination Act pregnancy leave with a skeptical eye. In Crawford, the employer argued that Title VII protects an employee who complains about discrimination on her own initiative, but not one who reports the same discrimination in the same words when her boss asks a question. Justice David Souter’s opinion rejected the employer’s position as not only wrong, but “freakish.” This is not language you hear every day from the Supreme Court.

Well, what could be more freakish than arguing that Title VII permits you to continue to calculate pensions using a discriminatory system that would violate the Pregnancy Discrimination Act if adopted today, just because it was in use when the act went into effect?

Twenty years ago, the court knew what to do with a similar argument. Speaking for a unanimous Supreme Court in Bazemore v. Friday, 478 U.S. 385 (1986), Justice William Brennan wrote: “A pattern or practice that would have constituted a violation of title VII, but for the fact that the statute had not yet become effective, became a violation upon title VII’s effective date, and, to the extent an employer continued to engage in that act or practice, it is liable under that statute.”

To be sure, Bazemore concerns paychecks, whereas Hulteen concerns pension benefits, but the fundamental equity principle is identical: Title VII was enacted to eliminate discrimination against everyone on the basis of protected status, not just those fortunate enough to enter the workforce after its effective date. Treating newly hired black employees (or newly pregnant women) the same as similarly situated others will not satisfy that statutory goal if the victims of pre-act discrimination remain in its thrall.

AT&T argues that imposing liability will upset its “settled expectation” that women who took pre-Pregnancy Discrimination Act pregnancy leaves would not receive equal benefits upon retirement. But Bazemore was decided in 1986. AT&T has already received a 30-year economic windfall by not changing its pension benefit calculation system. Now it’s time for justice.

In the words of Obama when signing the Lilly Ledbetter Fair Pay Act: “[M]aking our economy work means making sure that it works for everybody; that there are no second-class citizens in our workplaces….Ultimately, equal pay isn’t just an economic issue … it’s a question of who we are – and whether we’re truly living up to our fundamental ideals.”

And if AT&T needs a bailout, well, the Treasury Department is right down the street.

About the Author: Charlotte Fishman is a San Francisco employment attorney, a regular columnist on employment discrimination and women’s issues, and author of the National Employment Lawyers Association’s amicus brief supporting Noreen Hulteen et al. in the U.S. Supreme Court.

This article originally appeared in the San Francisco and Los Angeles Daily Journal on February 5, 2009. Reprinted with permission of the author.

Many federal laws protect the rights of working men and women, but recent Supreme Court decisions have made some of these laws a dead letter, and employers know they can violate them with virtual impunity. As a result, today’s workers are defenseless against certain blatant violations of their rights.

The most recent of these decisions, Ledbetter v. Goodyear Tire & Rubber Co. (2007), concerns Lilly Ledbetter, who tried to enforce the prohibition against gender wage discrimination in the 1964 Civil Rights Act. Ledbetter worked for the Goodyear Tire and Rubber Company from 1979 to 1998, during which period Goodyear paid her less than her male counterparts. Like most employers, Goodyear keeps salaries secret. Ledbetter learned of the discrimination only when she retired; by then the pay discrepancy had become very large. When she sued for back pay to make up for the accumulated shortfall, a 5-to-4 majority ruled that because she hadn’t complained to the Equal Employment Opportunity Commission within 180 days after the discriminatory act first occurred–when she hadn’t even known she was being discriminated against–she was entitled to absolutely nothing. At a time when women on average still earn significantly less than only a fraction of similarly qualified men, the decision creates an often insurmountable barrier to the right to equal pay.

A worker’s right to receive medical benefits through an employer’s health plan is supposed to be guaranteed by the federal Employee Retirement Income Security Act (ERISA). Supreme Court opinions have, however, interpreted ERISA as effectively pre-empting lawsuits predicated on a failure to provide those benefits. At the same time, the Court has interpreted ERISA to provide an inadequate set of federal remedies, opening, as one distinguished lower court judge put it five years ago, a “gaping wound” in the statute. Thus, if an HMO improperly denies coverage of a particular medical procedure or a hospital stay under ERISA, the patient must either pay for the procedure personally and then sue for reimbursement–a financial impossibility for most workers–or seek an emergency court order forcing the HMO to provide the needed benefits. HMO officials understand very well that both remedies are wholly impracticable for most workers.

The 4.7 million employees of state governments have lost even the possibility of enforcing their rights under such important federal laws as the Fair Labor Standards Act, which governs minimum wages and overtime; the Age Discrimination in Employment Act; and the Americans With Disabilities Act. These statutes expressly authorize state workers to sue to enforce their rights; yet in Alden v. Maine (1999), a 5-to-4 majority of the Court held that if states violate these laws, state sovereignty blocks victims from suing.

One final example: undocumented workers in the United States are legally entitled to many of the same rights as American citizens. In 2002, however, the usual 5-to-4 majority ruled that an employer who illegally fired an undocumented union organizer did not have to release back pay. Although it is technically illegal to fire any worker for joining a union, resisting sexual harassment, complaining about discrimination or receiving less than the minimum wage, after that decision no prudent undocumented worker would dare to complain because she would have no remedy if she were fired for having done so. The decision–Hoffman Plastic Compounds v. NLRB (2002)–thus encourages employers to hire undocumented workers, since they can violate the workers’ rights with impunity.

Many of these injustices could be corrected with legislation, but without a progressive Congress and president, HMOs and business groups will be able to block any significant changes. Which is another reason why the upcoming elections are so crucial.

Cross-posted in The Nation’s November 3, 2008, edition.

About the Author: Eric Schnapper is a professor of law at the University of Washington School of Law, teaching Civil Rights, Civil Procedure and Employment Discrimination.  He served for twenty-five years as an assistant counsel to the NAACP Legal Defense and Educational Fund, Inc., specializing in appellate litigation and legislative activities.