The case involved four women who took maternity leaves from AT&T between 1968 and 1976. At the time, it was lawful for employers to treat pregnancy leaves different from leaves for other sorts of disabilities.
That changed in 1978, when Congress passed the Pregnancy Discrimination Act, which made discrimination based on pregnancy-related conditions a form of sex discrimination. But the 1978 law was not retroactive, and companies were not required, for instance, to provide back pay to women who had taken unpaid leaves while their colleagues were paid for leaves for other kinds of disabilities.
The question in the case decided Monday, AT&T v. Hulteen, No. 07-543, was what should happen when companies calculate pension and similar benefits when women retire decades after taking such pregnancy leaves.
In an opinion by Justice David H. Souter, the court said the four women were not entitled to full credit for their leaves and so will receive smaller pensions.
AT&T’s pension system, Justice Souter wrote, “provides future benefits based on past, completed events that were entirely lawful at the time they occurred.” Indeed, the Supreme Court ruled, in General Electric v. Gilbert in 1976, that differential treatment of pregnancy leaves did not amount to sex discrimination.
Not requiring recalculation of pension benefits to take account of leaves before 1979, Justice Souter said, results in “predictable financial consequences, both for the employer who pays the bill and for the employee who gets the benefit.”
Justice Souter was joined by Chief Justice John G. Roberts Jr. and Justices John Paul Stevens, Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr.
Justice Ruth Bader Ginsburg, joined by Justice Stephen G. Breyer, dissented.
Justice Ginsburg said the court had “erred egregiously” in Gilbert, which she described as advancing “the strange notion that a benefits classification excluding some women (‘pregnant women’) is not sex-based because other women are among the favored class (‘non-pregnant persons’).”
She said Congress in 1978 “intended no continuing reduction of women’s compensation, pension benefits included, attributable to their placement on pregnancy leave.”
The plaintiffs, Justice Ginsburg said, “will receive, for the rest of their lives, lower pension benefits than colleagues who worked for AT&T for no longer than they did.” Indeed, she said, the logic of Gilbert brought to mind a critique of legal reasoning more generally.
“Perhaps the admonition of Professor Thomas Reed Powell to his law students is apt,” she wrote, quoting a 1974 trial court decision. “If you can think of something which is inextricably related to some other thing and not think of the other thing, you have a legal mind.”