Hulteen v. At & T Corp.

• Decision Date: 17 August 2007
• Docket Number: No. 04-16087.,04-16087.
• Citation: 498 F.3d 1001
• 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

498 F.3d 1001

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 En Banc October 4, 2006.

Filed August 17, 2007.

Joseph R. Guerra, Sidley Austin Brown & Wood, Washington, District of Columbia, for the defendant-appellant.

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

Paul D. Ramshaw, Equal Employment Opportunity Commission, Washington, District of Columbia, amicus curiae.

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: MARY M. SCHROEDER, Chief Circuit Judge, STEPHEN REINHARDT, DIARMUID F. O'SCANNLAIN, PAMELA ANN RYMER, HAWKINS, SUSAN P. GRABER, M. MARGARET McKEOWN, KIM McLANE WARDLAW, W. FLETCHER, RAYMOND C. FISHER, RONALD M. GOULD, RICHARD A. PAEZ, MARSHA S. BERZON, JAY S. BYBEE, and CONSUELO M. CALLAHAN, Circuit Judges.

WARDLAW, Circuit Judge, with whom Chief Judge SCHROEDER, Judges REINHARDT, HAWKINS, GRABER, McKEOWN, WILLIAM A. FLETCHER, FISHER, GOULD, PAEZ, BERZON join, and with whom Judge RYMER joins as to Part II-B:

This appeal presents an issue previously decided on virtually identical facts sixteen years ago in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir.1991), cert. denied, 502 U.S. 1050, 112 S.Ct. 916, 116 L.Ed.2d 815 (1992). There, we held that Pacific Bell violated Title VII in calculating retirement benefits after the effective date of the Pregnancy Discrimination Act of 1978 ("PDA"), 42 U.S.C. § 2000e(k), when it gave service credit in those calculations for all pre-PDA temporary disability leave taken by employees except leave by reason of pregnancy. Pallas, 940 F.2d at 1326-27. Here, a three-judge panel of our court, in a now-withdrawn opinion, held that AT & T Corporation ("AT & T"), successor in interest to Pacific Bell and Pacific Telephone and Telegraph ("PT & T"), did not violate Title VII by engaging in identical conduct. The panel reasoned that Pallas no longer controlled because it was inconsistent with intervening Supreme Court authority governing retroactivity principles. Hulteen v. AT & T Corp., 441 F.3d 653, 664 (9th Cir.2006) (citing Landgraf v. USI Film Prods., 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994)). Because we conclude that Pallas is not "clearly irreconcilable" with intervening authority, see Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.2003) (en banc), we affirm the district court's application of Pallas to the undisputed facts presented here and its award of summary judgment against AT & T. We further hold that our conclusion in Pallas that calculation of service credit excluding time spent on pregnancy leave violates Title VII was, and is, correct.

I

Noreen Hulteen, Eleanora Collet, Linda Porter, Elizabeth Snyder and the Communications Workers of America, AFLCIO (collectively "Hulteen"), brought this suit to challenge AT & T's use of a facially discriminatory service credit policy to calculate employee pension and retirement benefits. Each of the individual plaintiffs took pregnancy leave between 1968 and 1976. They would have enjoyed more favorable benefits or retirement opportunities had they, at the time that they parted from AT & T, been given full service credit for their pre-PDA pregnancy leaves.

Congress passed the PDA in 1978. Amendments to the Civil Rights Act of 1964, Pub.L. No. 95-555, § 995, 92 Stat. 2076 (1978). The PDA clarified that Title VII prohibits discrimination "because of or on the basis of pregnancy, child-birth, or related medical conditions," as discrimination "because of sex." 42 U.S.C. § 2000e(k). The PDA further provides that "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work." Id. Thus, Title VII, as amended by the PDA, requires employers to accord women who take pregnancy leave the same benefits as employees who take other types of temporary disability leave.

From as early as 1914, AT & T, along with its predecessor companies PT & T and Pacific Bell, has used a Net Credited Service ("NCS") date to calculate employee benefits, including eligibility for early retirement and pension payment amounts. The NCS date is an employee's original hire date, adjusted forward in time for periods during which no service credit accrued. An earlier NCS date places an employee in a superior position for service-related determinations such as job bidding, vacation time and retirement benefits.

Before August 7, 1977, AT & T and its predecessor companies classified pregnancy leave as personal leave. An employee on personal leave received a maximum of thirty days NCS credit, whereas there was no limit on the amount of NCS credit for employees on temporary disability leave. Also, during that time, some female employees were forced to take pregnancy leave before the onset of pregnancy disability, even though other employees who anticipated a temporary disability could delay their leave until the onset of the disability. Employees on pregnancy leave who subsequently became temporarily disabled for reasons unrelated to pregnancy were ineligible for NCS credit beyond the thirty-day personal leave credit. By contrast employees on temporary disability leave who suffered a new disability were eligible for NCS credit for the entire leave.

On August 7, 1977, PT & T adopted the Maternity Payment Plan ("MPP"). The MPP extended the maximum pregnancy NCS credit to thirty days before delivery and a maximum of six weeks after delivery. The MPP also allowed pregnant employees to work until the onset of the pregnancy disability. On April 29, 1979, the effective date of the PDA, PT & T adopted the Anticipated Disability Plan ("ADP"). The ADP replaced the MPP and provided service credit for pregnancy leave on the same terms as other temporary disability leave. No service credit adjustments or changes to the NCS date were made for female employees who had taken pregnancy leave under either the MPP or the pre-1977 system. In 1984, ownership of PT & T was transferred to AT & T. The NCS credit calculation method described above remains in force at AT & T, notwithstanding AT & T's operations within the Ninth Circuit and our controlling decision in Pallas.

Noreen Hulteen retired involuntarily in 1994 as part of an AT & T reduction in force. She has 210 days of uncredited pregnancy leave that resulted in reduced pension benefits. Eleanora Collet retired voluntarily under an incentive program in 1998 with 261 days of uncredited pregnancy leave. Linda Porter is a current employee with seventy-three uncredited days from pregnancy leave and forced leave before the onset of her pregnancy disability.¹ Elizabeth Snyder terminated her employment voluntarily in 2000, and has sixty-seven days of uncredited pregnancy and unrelated temporary disability occurring during her pregnancy leave. The AT & T plan administrator, in 2000, authorized a credit for Snyder's first thirty days of her 1974 pregnancy leave "as was the policy at the time," changing her NCS date from July 29, 1966 to June 29, 1966.²

Between 1994 and 2002, each woman filed a charge with the United States Equal Employment Opportunity Commission ("EEOC"). CWA likewise filed a charge of discrimination with the EEOC on behalf of its bargaining unit employees. The EEOC issued a Letter of Determination finding reasonable cause to believe that AT & T had discriminated against Noreen Hulteen "and a class of other similarly-situated female employees whose adjusted [NCS] date has been used to determine eligibility for a service or disability pension, the amount of pension benefits, and eligibility for certain other benefits and programs, including early retirement offerings." The EEOC also issued a Notice of Right to Sue to each of the four named plaintiffs and CWA.

Hulteen brought suit, alleging, inter alia, that AT & T violated Title VII in its calculation of NCS credit. On cross-motions for summary judgment, the parties stipulated to all of the material facts. Applying Pallas, the district court granted Hulteen's motion for summary judgment on the Title VII claim. AT & T timely appealed, and on March 8, 2006, a panel of our court reversed the district court, holding that Pallas gave "the PDA impermissible retroactive effect under controlling law today." Hulteen, 441 F.3d at 655. Judge Rymer dissented, arguing that because there appears to be "no acceptable basis . . . to overrule Pallas, and AT & T offers no reason for distinguishing it, . . . Pallas remains binding and controls disposition of this case." Id. at 670. A majority of the active judges of this court voted in favor of rehearing en banc. We consider the appeal anew.

II

We review de novo the district court's grant of summary judgment. Qwest Commc'ns, Inc. v. City of Berkeley, 433 F.3d 1253, 1256 (9th Cir.2006). "We must determine, viewing the evidence in the light most favorable to[AT & T], the non-moving party, whether . . . the district court correctly applied the substantive law." Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004).

A

The district court correctly held that our decision in Pallas compels the conclusion that AT & T violated Title VII by failing to credit pre-PDA pregnancy leave when it calculated benefits owed Hulteen. Lana Pallas was a former Pacific...