Employer May Violate Pregnancy Bias Law by Denying Light Duty, Split Court Rules

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By Kevin McGowan

March 25 — An employer may violate the Pregnancy Discrimination Act if it fails to offer a pregnant employee with work restrictions the accommodations it makes available to other, nonpregnant employees “similar in their ability or inability to work,” a divided U.S. Supreme Court decided March 25.

In a 6-3 ruling, the court reversed a U.S. Court of Appeals for the Fourth Circuit decision affirming summary judgment for United Parcel Service Inc. on former driver Peggy Young's claim the company violated the PDA by not offering light duty when Young was pregnant and subject to a 20-pound lifting restriction, while UPS accommodated some nonpregnant drivers with the same work restriction.

Writing for the court, Justice Stephen Breyer rejected both UPS's and the solicitor general's suggested interpretations of the PDA's second clause, which says employers must treat women affected by pregnancy “the same for all employment-related purposes” as “other persons not so affected but similar in their ability or inability to work.”

The government's position, also reflected in a 2014 Equal Employment Opportunity Commission enforcement guidance, would grant pregnant employees “most favored nation status,” contrary to Congress's intent in passing the 1978 PDA amendment to Title VII of the 1964 Civil Rights Act, the court said.

Adopting UPS's interpretation that the PDA's second clause merely reiterates pregnancy discrimination is sex discrimination would render the second clause superfluous and fail to achieve Congress's objective of overturning both the reasoning and result in General Electric Co. v. Gilbert, 429 U.S. 125, 13 FEP Cases 1657 (1976), the court said.

Instead, a pregnant employee may raise a disparate treatment claim under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 5 FEP Cases 965 (1973), if she can show the employer's policies placed a “significant burden” on pregnant workers, such as evidence the employer “accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers,” Breyer wrote.

Viewing the facts most favorably to Young, she could show UPS accommodated most nonpregnant employees with lifting restrictions while “categorically failing to accommodate pregnant employees with lifting restrictions,” the court said. She might also show UPS's multiple policies for accommodating nonpregnant employees with lifting restrictions, but not pregnant employees with the same restrictions, aren't “sufficiently strong,” so a jury reasonably could infer intentional discrimination, the court said.

The Fourth Circuit must decide those questions in the first instance, as well as whether UPS's asserted reasons for its policies were a pretext for pregnancy bias, the Supreme Court said.

In dissent, Justice Antonin Scalia said the majority's PDA interpretation is “splendidly unconnected with the text and even the legislative history” of the act. “Where do the ‘significant burden' and ‘sufficiently strong justification' requirements come from?” he wrote. “Inventiveness posing as scholarship—which gives us an interpretation that is as dubious in principle as it is senseless in practice.”

Justices Anthony Kennedy and Clarence Thomas joined in the dissent.

EEOC, Women's Advocates Hail ‘Clear Win.'

The EEOC, women's rights groups and employee advocates applauded the court's ruling.

The decision “is a clear win for women and families across America,” EEOC Chair Jenny Yang said in a March 25 statement.

The court's analysis “reflects the broad protection Congress intended” when it passed the PDA, Yang said. “I am pleased that the court also recognized that the Americans with Disabilities Act, as amended, provides important protections for employees with pregnancy-related conditions. As a result of this decision, many pregnant women who were previously denied accommodations will now be entitled to receive them.”

“The court has put employers on notice pregnancy is not a reason to discriminate,” said Marcia Greenberger, co-president of the National Women's Law Center in Washington, in a March 25 statement.

While the group hailed the “important victory” for Young and pregnant employees everywhere, it said Congress still should pass proposed legislation that would require employers reasonably to accommodate pregnant employees' work restrictions.

The court “fundamentally said” Young and other pregnant employees “deserve their day in court” under the PDA when denied accommodations offered to nonpregnant workers with the same restrictions, said Katherine Kimpel, a plaintiffs' attorney with Sanford Heisler Kimpel LLP in Washington.

The court ruled the PDA has “teeth” and employers aren't “insulated from review” when they accommodate some employees but not those whose restrictions arise from pregnancy, Kimpel told Bloomberg BNA March 25.

Employers must answer for policies that deny accommodation to pregnant employees and a jury gets to decide if an employer's policy is based on legitimate, nondiscriminatory reasons or a pretext for bias, she said.

“It's a good decision not just for Young, but for all pregnant employees,” Kimpel said. “UPS does not get to subject Young to a ‘least favored nation' status.”

The court recognized a ruling for UPS “would have thwarted Congress's intent” in passing the PDA, said Samuel Bagenstos, a University of Michigan law professor who represented Young before the Supreme Court.

The decision makes clear “employers may not refuse to accommodate pregnant workers based on considerations of cost or convenience when they accommodate other workers,” Bagenstos said in a March 25 statement. “It's a big step forward toward enforcing the principle that a woman shouldn't have to choose between her pregnancy and her job.”

Some Surprises, Management Lawyers Say 

The court's result was “not surprising,” but the majority's reasoning was a surprise, especially because Breyer wrote the opinion, said Tina Syring, a management lawyer with Barnes & Thornburg LLP in Minneapolis.

During the Dec. 3 oral argument, Breyer had wondered aloud why Young hadn't pursued a disparate impact claim, given there was no evidence that UPS's policy was motivated by anti-pregnancy animus and that Young seemed to be challenging the effects of a neutral practice.

Although she's “not surprised” the court ruled the Fourth Circuit got it wrong, the Supreme Court “punted” somewhat by creating a new proof standard under the PDA and remanding for the appeals court to figure it out, Syring told Bloomberg BNA March 25.

As for that new standard, “it's going to be more difficult for employers than for plaintiffs” to prevail on future PDA claims, she predicted.

Under the court's decision, an employer can't rely “just on a facially neutral policy” or plead the business reason of increased costs to justify decisions regarding light duty or other accommodations, Syring said.

Employers will have to show there's no statistical adverse impact on pregnant employees, Syring said. “It will be interesting to see” how the Fourth Circuit handles the case, she said.

The decision “does feel like it was a compromise” among justices who wanted to rule against UPS but had no disparate impact claim before them, Syring said. From an employer's perspective, it might be an example of “bad facts make bad law,” she said.

As a practical matter, employers shouldn't reject pregnant workers' accommodation requests out of hand, but rather should engage the employee in an interactive process, Syring said. Several states already require “light duty” beyond the workers' compensation context, she said.

The majority offers a “road map” for Young to follow on remand, and employers are well-advised to study the elements the court says must be supported to advance the PDA claim, Syring said.

Perhaps if UPS had gone through an interactive process with Young rather than summarily rejecting her accommodation request, the case might have developed differently, Syring said.

The majority “flatly rejected the view” pregnant workers “were entitled to preferential treatment” or that employers “had the some obligations” under the PDA as under the ADA, said Barry Hartstein, a management attorney with Littler Mendelson in Chicago.

Instead, the court “essentially treated pregnancy under the classic disparate treatment theory, finding that discrimination can be inferred by certain employer conduct,” Hartstein said in a March 25 e-mail.

The court also declined to defer to the EEOC's enforcement guidance on pregnancy discrimination, which the agency issued about two weeks after the court had granted review in Young's case.

“The court was somewhat critical of the EEOC in drafting guidance after the court granted certiorari, rejecting its view of the law,” Hartstein said. “EEOC clearly will have to go back to the drawing board based on the court's decision.”

No Deference Owed to EEOC 

The court declined to adopt the PDA interpretation advocated by Young and the EEOC. “We agree with UPS to this extent,” Breyer wrote. “We doubt that Congress intended to grant pregnant workers an unconditional most-favored-nation status. The language of the statute does not require that unqualified reading.”

Disparate treatment law “normally permits an employer to implement policies that are not intended to harm members of the protected class, even if their implementation sometimes harms those members, as long as the employer has a legitimate, nondiscriminatory, nonpretextual reason for doing so,” the court said. “There is no reason to believe Congress intended its language in the [PDA] to embody a significant deviation from this approach.”

No deference is owed to the EEOC's enforcement guidance interpreting the PDA because the circumstances under which the agency issued guidance “severely limit” its “special power to persuade,” the court said.

“The EEOC promulgated its 2014 guidelines only recently, after this court had granted certiorari in this case,” Breyer wrote. “In these circumstances, it is fair to say that the EEOC's current guidelines take a position about which the EEOC's previous guidelines were silent. And that position is inconsistent with positions for which the [federal] government has long advocated.”

The EEOC also failed to explain why the guidance took a position contrary to the government's prior litigation stance. “Without further explanation, we cannot rely significantly on the EEOC's determination,” the court said.

Court Adopts Third Way 

But the court likewise rejected UPS's argument the PDA's “same-treatment” clause simply clarifies that sex discrimination includes pregnancy discrimination. Because the act's first clause accomplishes that objective, UPS's interpretation would render the second clause “superfluous,” the court said.

UPS's interpretation “would fail to carry out an important congressional objective,” which was to overturn the Gilbert result as well as its reasoning, the court said.

The PDA “lends itself to an interpretation other than those that the parties advocate and that the dissent sets forth,” the court said. “Our interpretation minimizes the problems we have discussed, responds directly to Gilbert, and is consistent with long-standing interpretations of Title VII.”

A pregnant worker alleging that denial of an accommodation was disparate treatment under McDonnell Douglas can make a prima facie case by showing she belongs to the protected class, she sought accommodation, the employer didn't accommodate her and the employer accommodated others “similar in their ability or inability to work,” the court said.

The employer may seek to justify its refusal to accommodate by relying on “legitimate, nondiscriminatory reasons,” the court said. “But, consistent with the [PDA's] basic objective, that reason generally cannot consist simply of a claim that it is more expensive to add pregnant women to the category of those (‘similar in their ability or inability to work') whom the employer accommodates.”

A PDA plaintiff may reach a jury “by providing sufficient evidence that the employer's positions impose a significant burden on pregnant workers, and that the employer's ‘legitimate, nondiscriminatory' reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination,” the court said.

This approach is “consistent with our long-standing rule that a plaintiff can use circumstantial proof to rebut an employer's apparently legitimate, nondiscriminatory reasons for treating individuals within a protected class differently than those outside the protected class,” the court said.

The Fourth Circuit decision must be vacated and remanded because genuine factual disputes exist as to whether UPS provided “more favorable treatment to at least some employees whose situation cannot be reasonably distinguished from Young,” the court said.

The court said it's not deciding if Young raised a triable issue that UPS's asserted reasons for treating her less favorably were pretextual. “We leave final determination of that question to the Fourth Circuit to make on remand,” Breyer wrote.

Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan joined in the majority opinion.

In an opinion concurring in the judgment, Justice Samuel Alito said that under the PDA, an employer's treatment of pregnant employees must be compared to its treatment of “nonpregnant employees whose jobs involve the performance of the same or very similar tasks.”

“[I]t is not at all clear that [UPS] had any neutral business ground for treating pregnant drivers less favorably than at least some of its nonpregnant drivers who were reassigned to other jobs that they were physically capable of performing,” Alito wrote. “I therefore agree with the court that the decision of the [Fourth Circuit] with respect to [Young's] claim under the second clause of the PDA must be vacated, and the case must be remanded.”

Disparate Impact in Disguise, Dissent Says 

Meanwhile, Scalia in dissent said the majority's articulated standard thoroughly muddles the traditional distinction between Title VII disparate treatment and disparate impact.

UPS didn't single out pregnancy for disfavored treatment and didn't adopt its accommodations policy limiting light duty with discriminatory intent, Scalia wrote. But faced with the circumstance that Young didn't plead disparate impact, the majority was forced to concoct new standards for “disparate treatment” that can't be linked to the PDA's language, its legislative history or prior Title VII cases, the dissent said.

The “most natural way” to read the PDA's second clause is “that an employer may not distinguish between pregnant women and others of similar ability because of pregnancy,” Scalia wrote. “Here, that means pregnant women are entitled to accommodations on the same terms as other workers with disabling conditions. If a pregnant woman is denied an accommodation under a policy that does not discriminate against pregnancy, then she has been ‘treated the same' as everyone else.”

UPS's policy passes muster because a pregnant employee who temporarily lost her Department of Transportation driver certification, for example, would be offered light duty just like a nonpregnant driver who lost DOT certification, the dissent said. But neither the pregnant driver nor a nonpregnant driver with work restrictions that don't result in losing DOT certification would be accommodated, the dissent said.

But the majority reads the PDA as requiring pregnant employees be offered “the same accommodations” as other work-restricted employees, “no matter the differences (other than pregnancy) between them,” the dissent said.

Only the first reading of the PDA “makes sense in the context of Title VII,” the dissent said.

“The point of Title VII's bans on discrimination is to prohibit employers from treating one worker differently from another because of a protected trait,” Scalia wrote. “It is not to prohibit employers from treating workers differently for reasons that have nothing to do with protected traits.”

Interpreting the PDA to prohibit employers from “making any distinctions” between pregnant employers and workers of similar ability “would elevate pregnant workers” to the status of “most favored employees,” the dissent said.

That can't be correct given that Title VII “elsewhere creates guarantees of equal treatment,” not favored treatment, and the PDA's thrust is that pregnancy discrimination is a form of sex discrimination, the dissent said.

“All things considered, the right reading of the same-treatment clause prohibits practices that discriminate against pregnant women relative to workers of similar ability or inability,” Scalia wrote. “It does not prohibit denying pregnant women accommodations, or any other benefit for that matter, on the basis of an evenhanded policy.”

By stretching to define a PDA claim for Young, the court obliterates the traditional Title VII dichotomy between disparate treatment and disparate impact analysis, the dissent said. “A sound reading of the same-treatment clause would preserve the distinctions so carefully made elsewhere in [Title VII]; the court's reading makes a muddle of them,” Scalia wrote.

“Today's decision can thus serve only one purpose: allowing claims that belong under Title VII's disparate-impact provisions to be brought under its disparate-treatment provisions instead,” the dissent said.

In a separate dissent, Kennedy said the court “injects unnecessary confusion” into the “accepted burden-shifting framework” for disparate treatment claims under McDonnell Douglas.

Mark A. Perry in Washington and Caitlin J. Halligan in New York, both of Gibson Dunn & Crutcher, represented UPS.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the opinion is available in Section E and at http://www.bloomberglaw.com/public/document/Young_v_United_Parcel_Service_Inc_No_121226_2015_BL_81886_US_Mar_.