NU Online News Service, May 19, 2:28 p.m.EDT

WASHINGTON–The Supreme Court ruled Monday that womenwho lost credit for employment during maternity leave before thelaw was changed cannot count their time off toward a pension.

The decision in AT&T v. Hulteen, 07-543, which hadit gone the other way could have impacted liability insurancepolicies, reverses a decision made by a divided 9th U.S. CircuitCourt of Appeals. The lower court had ruled that unpaid maternityleaves should count in determining pension.

Sherril Colombo, a partner at Cozen O'Connor, in Miami, said theruling was favorable to employers and would have had widerepercussions if it had gone the other way.

"It would have had a trickle-down effect, would have affectedemployer practices liability insurance, and potentially could haveopened up other laws for reinterpretation," she said.

The majority opinion by retiring Justice David Souter found"there is no necessary violation; and the benefit calculation rulein this case is part of a bona fide seniority system under…theCivil Rights Act of 1964, which insulates it from challenge."

Specifically, the court held that "because AT&T's pensionpayments accord with a bona fide seniority system's terms, they areinsulated from challenge under Title VII Sec. 703(h)."

The pregnancies occurred before the 1978 PregnancyDiscrimination Act, which barred companies from treating pregnancyleaves differently from other disability leaves.

The Pregnancy Discrimination Act was added to Title VII of theCivil Rights Act in 1978 to make it "clear that it isdiscriminatory to treat pregnancy-related conditions less favorablythan other medical conditions," the decision noted.

AT&T petitioned the court for review, its lawyers arguingthat the pension plan was legal when the women took maternityleave, so the company should not have to recalculate the retirementbenefits at this time.

AT&T lawyers argued that Congress did not make the PregnancyDiscrimination Act retroactive, so the women should not get anyextra money.

Commenting on the case, Ms. Colombo said the majority opinion"gave short shrift" to what she thought was the strongest argumentof the AT&T employees, that each check paid the women is afresh act of discrimination.

She added that the case had issues similar to those raised inthe May 2007 Supreme Court Ledbetter decision, that awoman who finds that she has been discriminated against in wages orbenefits must file suit within 18 months of her employment.

The Ledbetter decision was overturned by Congress andbecame the first piece of legislation signed into law by PresidentObama.

Ms. Colombo said the majority in the latest case looked atLedbetter in its decision but noted that AT&T'sdecision not to award service credit for pregnancy leave was notdiscriminatory, with the consequence that the plaintiff, NoreenHulteen, has not been "affected by application of a discriminatorycompensation decision or other practice."

Under the law reversing Ledbetter, enacted by Congressin late January, every paycheck or other compensation resulting, inwhole or in part, from an earlier discriminatory pay decision orother practice would constitute a violation of Title VII, whichguards against discrimination on the basis of race, sex, color,national origin and religion.

Ms. Colombo said one reason the court did not decide the casebased on the new law reversing Ledbetter is that it would have hadbroad impact. "An underlying argument resulting in the court'sdecision was that a ruling based on Ledbetter could have affectedeveryone's pension," Ms. Colombo said.

The majority opinion held that Sec. 703 (h) provides that, "[I]tshall not be an unlawful employment practice for an employer toapply different standards of compensation…pursuant to a bona fideseniority…system…provided that such differences are not the resultof an intention to discriminate because of…sex."

The court based its decision on the Teamsters v.United States decision, which held that a pre-Title VIIseniority system that disproportionately advantaged white, asagainst minority, employees nevertheless exemplified a bona fidesystem without any discriminatory terms under ?703(h) where thediscrimination resulted from the employer's hiring practices andjob assignments.

"Because AT&T's system must also be viewed as bona fide,i.e., as a system having no discriminatory terms, Sec.703(h) controls the result here, just as it did inTeamsters," the court said.

Chief Justice John Roberts and Justices Antonin Scalia, AnthonyKennedy, Clarence Thomas and Samuel Alito joined the majorityopinion. Justice John Paul Stevens issued a concurring opinion.Justice Ruth Bader Ginsburg issued a dissenting opinion, whichJustice Stephen Breyer joined.

In her dissent, Justice Ginsburg cited action by Congress toreverse the 1976 General Elec. Co. v. Gilbert high courtdecision which held that a classification harmful to women based onpregnancy did not qualify as discrimination "because of…sex"prohibited by Title VII of the Civil Rights Act of 1964. The rulingsaid that exclusion of pregnancy from an employer's disabilitybenefits "is not a gender-based discrimination at all."

She noted that Congress "moved swiftly to overturn Gilbert andmake plain the legislators' clear understanding that discriminationbased on pregnancy is discrimination against women."

Judge Ginsburg wrote that while the Pregnancy Discrimination Actdoes not require redress for past discrimination, "the 1978 lawdoes protect women, from and after April 1979, when the act becamefully effective, against repetition or continuation ofpregnancy-based disadvantageous treatment," she said.

"Congress interred Gilbert more than 30 years ago, but the courttoday allows that wrong decision still to hold sway," she said.

The suit by four AT&T employees sought credit in theirpension for time taken off between 1968 and 1976.