Resource: AT&T Corp. v. Hulteen

Four employees sued their employer, AT&T, alleging that the company's policy for calculating employee pension and retirement benefits discriminated against women who had taken leave time due to pregnancy in violation of Title VII of the 1964 Civil Rights Act. The AT&T policy considered temporary disability leave as service time for the purposes of calculating retirement benefits except when the leave was taken by pregnant women. The employees argued that the policy violated the Pregnancy Discrimination Act of 1978 (PDA), which clarified that Title VII prohibits discrimination "because of or on the basis of pregnancy, childbirth, or related medical conditions." The main issue in the case was one of timing: although the employees' pregnancy leave was taken before the PDA came into effect, AT&T's calculation of benefits took place after. The employees argued that under the Court's decision in Pallas the time of calculation should govern the applicability of the PDA. AT&T countered that another decision, Landgraf directly opposed Pallas and had created a "sea change" in retroactivity principles such that the PDA should not apply to pregnancy leave taken before it was enacted. The district court sided with the employees and granted summary judgment in their favor. On appeal, the U.S. Court of Appeals for the Ninth Circuit initially reversed the lower court, agreeing with AT&T that Pallas gave impermissible retroactive effect to the PDA. On rehearing, the full court reversed and ruled in favor of the employees, avoiding the retroactivity problem by holding that the PDA applies to the actual calculation of pension and retirement benefits regardless of when the leave itself was taken. Because AT&T performed this calculation after the PDA had gone into effect, the denial of benefits violated Title VII.