Hulteen v. At & T Corp.

• Decision Date: 08 March 2006
• Docket Number: No. 04-16087.,04-16087.
• Citation: 441 F.3d 653
• Parties: Noreen HULTEEN; Eleanora Collet, Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

441 F.3d 653

Noreen HULTEEN; Eleanora Collet, Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant.

No. 04-16087.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 20, 2005.

Filed March 8, 2006.

Joseph R. Guerra (argued) and Joseph Palmore, Sidley Austin Brown & Wood LLP, Washington, D.C.; Charles C. Jackson and Allegra R. Rich, Seyfarth Shaw LLP, Chicago, IL; Laura A. Kaster and Valerie Fant Custer, AT & T Corporation, Bedminster, NJ, for the defendant-appellant.

M. Suzanne Murphy (argued) and Blythe Mickelson, Weinberg, Roger & Rosenfeld, Oakland, CA; Henry S. Hewitt, Erickson, Beasley, Hewitt & Wilson, Oakland, CA; Noreen Farrell, Equal Rights Advocates, San Francisco, CA; Judith E Kurtz, San Francisco, CA, Mary K. O'Melveny, Communications Workers of America, AFL-CIO, Washington, D.C., for the plaintiffs-appellees.

Paul D. Ramshaw, U.S. Equal Employment Opportunity Commission, Washington, D.C., for amicus Equal Employment Opportunity Commission.

Appeal from the United States District Court for the Northern District of California; Martin J. Jenkins, District Judge, Presiding. D.C. No. CV-01-01122-MJJ.

Before: TROTT, RYMER, and PLAGER,^* Circuit Judges.

PLAGER, Circuit Judge:

This is a Title VII Civil Rights case.¹ It requires us to decide whether AT & T, in making current retirement benefits determinations, discriminates in violation of Title VII against women who took pregnancy-related leaves before 1979. 1979 was the year when the Pregnancy Discrimination Act of 1978 (PDA), an amendment to Title VII, became effective.²

Prior to the PDA, an AT & T employee on pregnancy leave was not awarded service credit for the entire period of her absence, whereas employees on other temporary disability leaves received full service credit for that time period. Although AT & T today awards full credit for pregnancy leaves, plaintiffs in this case, four female employees and the Communications Workers of America (CWA), complain that the company's failure to give employees full service credit for their pre-PDA leaves affects their eligibility for and computation of retirement benefits and is therefore a present violation of the PDA. AT & T marshaled a number of arguments based on the current state of the law.

The district court, while acknowledging the "great logical and legal force" of AT & T's arguments, felt compelled by this court's decision in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir. 1991), to conclude that AT & T's post-PDA benefits determinations violated the PDA. The district court therefore granted summary judgment in plaintiffs' favor on their Title VII claims. Because the result reached by the district court gives the PDA impermissible retroactive effect under controlling law today, we reverse the judgment of the district court.

BACKGROUND

Noreen Hulteen, Eleanora Collet, Linda Porter, and Elizabeth Snyder were long-time employees of Pacific Telephone and Telegraph (PT & T), a Bell System operating company that was transferred to AT & T when the former Bell system was broken up in 1984. They continued to work for AT & T thereafter. PT & T and, in turn, AT & T maintain a "Net Credited Service" (NCS) date for all employees. The NCS date consists of an employee's original hire date and adjustments for periods during which no service credit is accrued. Periods of leave or other breaks in service that are not credited result in a later NCS date than the employee's original hire date. The NCS date is used to determine benefits for which employees may qualify, including the amount of pension payments, eligibility for early retirement, qualification for voluntary termination packages, job bidding, shift preferences, and seniority for layoffs.

Hulteen, Collet, Porter and Snyder took pregnancy leaves between 1968 and 1976. Before August 7, 1977, PT & T treated pregnancy leaves as personal leaves for which the employee was given a maximum of 30 days of service credit; at the same time, employees on disability leave for reasons other than pregnancy received full service credit for the entire period of their absence. Also, female employees who took a personal leave because of pregnancy and became temporarily disabled while on that leave for reasons unrelated to pregnancy were ineligible for sickness or disability benefits or for NCS credit in excess of 30 days. On August 7, 1977, PT & T adopted the Maternity Payment Plan (MPP) under which pregnant employees could begin a pregnancy leave at any mutually convenient time and were eligible for disability benefits for up to six weeks of leave. They received service credit for this period, but beyond this, absence became a personal leave. Employees whose pregnancy-related disability lasted longer than six weeks and who then had a second disability received no service credit for the period of the second disability. Employees on non-pregnancy-related disability leave received full service credit for the entire period of their disability absence, including for leave resulting from disability for a different reason from the initial disability.

On April 29, 1979, the effective date of the PDA, PT & T adopted the Anticipated Disability Plan (ADP), which superseded the MPP and provided service credit for pregnancy leaves on the same basis as leaves taken for other temporary disabilities. No adjustment was made to the service credit calculations of employees who had been subject to pre-MPP policies when the MPP was adopted, or for pre-ADP calculations when the ADP was adopted.

In 1982 the United States District Court for the District of Columbia entered a consent decree and Modified Final Judgment to resolve the government's antitrust suit against AT & T. United States v. Am. Tel. & Tel. Co., 552 F.Supp. 131 (D.D.C. 1982), aff'd sub nom., Maryland v. United States, 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983). Among other things, the judgment required recognition of pre-divestiture employment service by the newly-created regional telephone holding companies and their subsidiaries, including PT & T. It resulted in a Plan of Reorganization that was approved by the court in 1983. United States v. Western Elec. Co., 569 F.Supp. 1057 (D.D.C. 1983), aff'd sub nom., California v. United States, 464 U.S. 1013, 104 S.Ct. 542, 78 L.Ed.2d 719 (1983). The Plan of Reorganization specifies that "all employees will carry with them all pre-divestiture Bell System service regardless of the organizational unit or corporation by which they are employed immediately after divestiture." It also states that "[a]ll employees and retirees of any pre-divestiture Bell System entity will have the same pension benefit entitlements immediately after divestiture as they had immediately prior to divestiture under the existing [Bell System pension plans]."

Over the years, collective bargaining agreements between AT & T and the CWA have contained provisions recognizing the use of NCS as established by company practice to determine various employment-related benefits. AT & T has continued to utilize employees' NCS dates as the basis for computing benefits and determining other rights negotiated in collective bargaining agreements.

Hulteen's employment was terminated June 1, 1994 through a reduction in force; Collet retired early under a Voluntary Retirement Incentive Program on December 31, 1998; Porter is a current employee who has not yet retired; and Snyder voluntarily terminated her employment on April 28, 2000 pursuant to a Voluntary Termination Plan. Calculation of their benefits or the date of their retirement opportunities would have been more favorable had AT & T or PT & T credited some or all of the previously uncredited time they were off work due to pregnancy leaves prior to 1979.

Each filed a charge with the Equal Employment Opportunity Commission (EEOC). The first of these charges was filed in 1994. The EEOC issued a Letter of Determination finding reasonable cause to believe that AT & T discriminated by determining eligibility for benefits and retirement offerings based on the applicable NCS date. The CWA likewise filed a charge of discrimination on behalf of its bargaining unit employees. The EEOC issued a notice of right to sue to all claimants. Hulteen, Collet, Porter, and Snyder then filed suit in 2001 on their own behalf and on behalf of a class of similarly situated employees. The CWA joined.

The parties filed cross-motions for summary judgment on plaintiffs' Title VII claims. Although the district court found AT & T's arguments "compelling," it considered itself bound by Pallas and obligated to follow it. Accordingly, plaintiffs' motion was granted. The district court certified the order for interlocutory appeal, and we granted AT & T's petition for permission to appeal pursuant to 28 U.S.C. § 1292(b).

DISCUSSION

The arguments and the briefs in this case were focused on whether the outcome is dictated by this court's 1991 Pallas decision. The issue before us, however, is not Pallas, but Hulteen — whether the trial court erred in this case in holding for the Hulteen plaintiffs. To sustain their Title VII cause of action, plaintiffs on appeal must do two things: one, find some way to have the pre-PDA leaves credited under post-PDA rules; and two, since the alleged unlawful practice occurred prior to 1979, find a hook on which to base their lawsuit that is recent enough to avoid the statute of limitations requiring that charges be filed with the EEOC within 180 days "after the alleged unlawful employment practice occurred." 42 U.S.C. § 2000e-5(e)(1). The first is the retroactivity problem; the second the statute of limitations problem.

The ultimate question to be answered in this appeal is, in light of controlling law, what is the correct result? Controlling law in this case, as in all cases governed by federal law, is what Congress has enacted and what the...