## Facts

- AT&T maintained a pension plan based on a seniority system crediting “years of service minus uncredited leave time.”
- Before the Pregnancy Discrimination Act of 1978 (PDA), AT&T credited pregnancy leave less favorably than other temporary disability leave; this practice was lawful under then-controlling precedent.
- After the PDA took effect, AT&T changed its leave policy to treat pregnancy leave like other disability leave going forward, but did not retroactively adjust service credit previously reduced for pre-PDA pregnancy leaves.
- Noreen Hulteen took pregnancy leave in 1968 and received substantially less service credit than she would have received for a comparable non-pregnancy disability leave.
- When Hulteen retired in 1994, AT&T calculated her pension using the historical service credits, reflecting the earlier pregnancy-related under-crediting.
- Hulteen and similarly situated employees, along with their union, filed EEOC charges and then sued, alleging Title VII discrimination as amended by the PDA.
- The district court found for plaintiffs; the Ninth Circuit, sitting en banc, affirmed; the Supreme Court granted certiorari.

## Issues

1. Whether Title VII, as amended by the PDA, is violated when an employer pays pension benefits calculated under a bona fide seniority system that incorporates pre-PDA service-credit rules that treated pregnancy leave less favorably than other disability leave.
2. Whether Title VII § 703(h) shields such pension payments from liability absent proof the seniority system differences resulted from an intent to discriminate because of sex.

## Decision

- The Supreme Court reversed the Ninth Circuit in a 7–2 decision.
- The Court held that AT&T’s post-PDA pension payments, to the extent they conformed to a bona fide seniority system incorporating lawful pre-PDA service-credit rules, were insulated from challenge by Title VII § 703(h).
- The Court rejected the theory that each post-PDA pension calculation constituted a new discriminatory act; it treated the reduced benefits as the continuing effects of a past, lawful accrual rule.
- Justice Stevens concurred separately.
- Justice Ginsburg, joined by Justice Breyer, dissented, viewing the post-PDA pension calculations as ongoing discrimination.

## Legal Principles

- Title VII § 703(h) permits compensation differences made pursuant to a bona fide seniority system, unless the differences are the result of an intention to discriminate because of sex.
- The PDA’s requirement of equal treatment for pregnancy-related conditions does not, without clear congressional direction, impose retroactive liability or require retroactive recalculation of benefits based on pre-PDA leave credits.
- Applying a preexisting seniority system that lawfully fixed service credits before the PDA is generally characterized as a present effect of past conduct, not a current Title VII violation, absent discriminatory intent in the seniority system’s adoption or maintenance.

## Conclusion

AT&T did not violate Title VII as amended by the PDA by calculating pensions under a bona fide seniority system that carried forward lawful, pre-PDA pregnancy-leave service credits, because § 703(h) protects such systems absent proof of intentional sex discrimination and the PDA does not mandate retroactive recrediting.


AT&T Corp. v. Hulteen, 556 U.S. 701 (2009)