Hulteen v. At&t Corporation

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NOREEN HULTEEN; ELEANORA 

COLLET; LINDA PORTER; ELIZABETH

SNYDER; COMMUNICATIONS No. 04-16087

WORKERS OF AMERICA,

Plaintiffs-Appellees,  D.C. No.

CV-01-01122-MJJ

v. OPINION

AT&T CORPORATION,

Defendant-Appellant.



Appeal from the United States District Court

for the Northern District of California

Martin J. Jenkins, District Judge, Presiding

Argued and Submitted En Banc

October 4, 2006—San Francisco, California

Filed August 17, 2007

Before: Mary M. Schroeder, Chief Circuit Judge,

Stephen Reinhardt, Diarmuid F. O’Scannlain,

Pamela Ann Rymer, Michael Daly Hawkins,

Susan P. Graber, M. Margaret McKeown,

Kim McLane Wardlaw, William A. Fletcher,

Raymond C. Fisher, Ronald M. Gould, Richard A. Paez,

Marsha S. Berzon, Jay S. Bybee, and Consuelo M. Callahan,

Circuit Judges.

Opinion by Judge Wardlaw;

Dissent by Judge O’Scannlain

10025

10028 HULTEEN v. AT&T CORPORATION

COUNSEL

Joseph R. Guerra, Sidley Austin Brown & Wood, Washing-

ton, District of Columbia, for the defendant-appellant.

Henry S. Hewitt, Erickson, Beasley, Hewitt & Wilson, Oak-

land, California, and Blythe Michelson and M. Suzanne Mur-

HULTEEN v. AT&T CORPORATION 10029

phy, Weinberg, Roger & Rosenfeld, Oakland, California, for

the plaintiffs-appellees.

Paul D. Ramshaw, Equal Employment Opportunity Commis-

sion, Washington, District of Columbia, amicus curiae.

OPINION

WARDLAW, Circuit Judge, with whom Chief Judge

SCHROEDER, Judges REINHARDT, HAWKINS, GRA-

BER, McKEOWN, W. 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 virtu-

ally identical facts sixteen years ago in Pallas v. Pacific Bell,

940 F.2d 1324 (9th Cir. 1991), cert. denied, 502 U.S. 1050

(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 employ-

ees 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withdrawn opinion, held that AT&T Corporation (“AT&T”),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 (1994)).

Because we conclude that Pallas is not “clearly irreconcil-

able” 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

10030 HULTEEN v. AT&T CORPORATION

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 vio-

lates Title VII was, and is, correct.

I

Noreen Hulteen, Eleanora Collet, Linda Porter, Elizabeth

Snyder and the Communications Workers of America, AFL-

CIO (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 dis-

crimination “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 pro-

vides 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, includ-

ing eligibility for early retirement and pension payment

HULTEEN v. AT&T CORPORATION 10031

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 compa-

nies 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 disabil-

ity, even though other employees who anticipated a temporary

disability could delay their leave until the onset of the disabil-

ity. 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.

10032 HULTEEN v. AT&T CORPORATION

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 pro-

gram in 1998 with 261 days of uncredited pregnancy leave.

Linda Porter is a current employee with seventy-three uncred-

ited days from pregnancy leave and forced leave before the

onset of her pregnancy disability.1 Elizabeth Snyder termi-

nated 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 pol-

icy 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 Commis-

sion (“EEOC”). CWA likewise filed a charge of discrimina-

tion with the EEOC on behalf of its bargaining unit

1

We have jurisdiction to entertain Porter’s claim even though the illegal

employment action — her calculation of benefits — is yet to occur. When

a plaintiff seeks declaratory and injunctive relief, as Porter has here, ripe-

ness is evaluated by examining “whether the facts alleged, under all the

circumstances, show that there is a substantial controversy, between par-

ties having adverse legal interests, of sufficient immediacy and reality to

warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac.

Coal & Oil Co., 312 U.S. 270, 273 (1941); see also 42 U.S.C. § 2000e-

5(g)(1) (If an employer “is intentionally engaging in an unlawful employ-

ment practice charged in the complaint, the court may enjoin the

[employer] from engaging in such unlawful employment practice.”).

Given AT&T’s truculent refusal to credit employees for their pre-PDA

pregnancy leave in its benefits calculations as it credits other disability

leave (notwithstanding our decision in Pallas), Porter faces a real and

immediate threat of AT&T making discriminatory employment decisions

based on her NCS date.

2

The remaining appellee, Communications Workers of America

(“CWA”), is the collective bargaining representative for the majority of

AT&T’s non-management employees.

HULTEEN v. AT&T CORPORATION 10033

employees. The EEOC issued a Letter of Determination find-

ing 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 retire-

ment 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 vio-

lated 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 control-

ling law today.” Hulteen, 441 F.3d at 655. Judge Rymer dis-

sented, 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, view-

ing 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

[1] The district court correctly held that our decision in Pal-

las compels the conclusion that AT&T violated Title VII by

10034 HULTEEN v. AT&T CORPORATION

failing to credit pre-PDA pregnancy leave when it calculated

benefits owed Hulteen. Lana Pallas was a former Pacific Bell

employee who took pregnancy leave before the PDA was

enacted. Pallas, 940 F.2d at 1325. “In 1987, Pacific Bell insti-

tuted a new retirement benefit for management employees

called the ‘Early Retirement Opportunity.’ ” Id. at 1326. To

qualify for the benefit, an eligible employee had to accrue

twenty years of service as measured by the same NCS system

applied to Hulteen. Id. Pallas was denied eligibility because

a pregnancy-related leave taken in 1972 deprived her of the

necessary amount of service credit by some three or four

days. Id.

The district court dismissed Pallas’s Title VII sex discrimi-

nation claim for failure to state a claim, and we reversed.

In doing so, we criticized reliance on the Supreme Court’s

decisions holding that challenges based on disparate impacts

resulting from a facially neutral bona fide seniority system

must be brought during a limitations period running from the

date the system was adopted. Id. at 1326-27 (citing Lorance

v. AT&T Techs., Inc., 490 U.S. 900, 911 (1989) (holding that

“when a seniority system is nondiscriminatory in form and

application, it is the allegedly discriminatory adoption which

triggers the limitations period”) (emphasis in original), and

United Air Lines, Inc. v. Evans, 431 U.S. 553, 557-58

(1977)3).

3

Evans worked as a United Air Lines flight attendant for eighteen

months, until she married in 1968 and was forced to resign pursuant to

United’s policy of prohibiting its female flight attendants from being mar-

ried. 431 U.S. at 554. While this policy was later found to violate Title

VII, Evans was not a party to that suit. Id. at 554-55. In 1972, four years

after her resignation, United hired Evans as a new employee. Id. at 555.

Evans was not credited for her previous service pursuant to a new policy

prohibiting prior seniority credit from being given to flight attendants,

regardless of sex, if they resigned or their employment was “permanently

severed for just cause.” Id. at 555 n.6. Evans filed suit, seeking an award

of seniority credit to 1966 and back pay lost because of United’s discrimi-

natory no marriage policy. Id. at 556 & n.7. The Court found United’s

HULTEEN v. AT&T CORPORATION 10035

We found Lorance and Evans inapposite for two reasons.

First, because the discriminatory program that gave rise to the

lawsuit was instituted in 1987, Pallas’s claim “could not have

been brought earlier.” Id.

Second, we concluded that, unlike the facially neutral

seniority credit policy in Evans,

the net credit system used to calculate eligibility

under the Early Retirement Opportunity is not

facially neutral. The system used to determine eligi-

bility facially discriminates against pregnant women.

The system distinguishes between similarly situated

employees: female employees who took leave prior

to 1979 due to a pregnancy-related disability and

employees who took leave prior to 1979 for other

temporary disabilities.

Id. at 1327.4 We therefore held, relying on Bazemore v. Fri-

day, 478 U.S. 385 (1986), that Pacific Bell’s decision to dis-

criminate against Pallas in 1987 was actionable because

“liability may be imposed” for a pre-Title VII discriminatory

policy to the extent it is perpetuated in post-Title VII employ-

ment decisions. Pallas, 940 F.2d at 1327 (citing Bazemore,

478 U.S. at 395 (Brennan, J., joined by all other Members of

1972 policy was facially neutral because “both male and female employ-

ees who had service prior to February 1968, who resigned or were termi-

nated . . . and who were later re-employed, also were treated as new

employees receiving no seniority credit for their prior service.” Id. at 557.

The Court held that the application of the facially neutral policy, which

gives present effect to the past discriminatory act of forced resignation for

married female flight attendants in 1968, was not actionable. Id. at 558.

4

Evans would be controlling if Pacific Bell credited neither pre-PDA

pregnancy leave nor pre-PDA disability leave when it made its early

retirement determinations in 1987. The dissent, by blurring the distinction

between facially neutral and facially discriminatory employment policies,

inappropriately relies on Evans. See Dissent Op. at 10069-70.

10036 HULTEEN v. AT&T CORPORATION

the Court, concurring in part) (“Each week’s paycheck that

delivers less to a black than to a similarly situated white is a

wrong actionable under Title VII, regardless of the fact that

this pattern was begun prior to the effective date of Title

VII.”)).

The Court recently reaffirmed Bazemore in Ledbetter v.

Goodyear Tire & Rubber Co., 127 S. Ct. 2162, 2172-74 (2007).5

The Court distinguished Bazemore on the basis of Ledbetter’s

failure to show that her disparate treatment was the result of

intentional discrimination during the charging period. Id. at

2174. The Court reiterated that “a freestanding violation may

always be charged within its own charging period regardless

of its connection to other violations.” Id. It explained Bazem-

ore as holding:

when an employer adopts a facially discriminatory

pay structure that puts some employees on a lower

scale because of race, the employer engages in inten-

tional discrimination whenever it issues a check to

one of these disfavored employees. An employer that

adopts and intentionally retains such a pay structure

can surely be regarded as intending to discriminate

on the basis of race as long as the structure is used.

Id. at 2173. Pallas is true to Bazemore and Ledbetter: Pacific

Bell adopted a policy that calculates pregnancy leave differ-

ently than other temporary disability leave, and it engages in

intentional discrimination each time it applies the policy in a

5

Ledbetter, as the Court’s most recent pronouncement on Title VII, is

relevant, but does not control this appeal. There, the Court considered

whether an employee can recover for disparate pay received under a “fa-

cially nondiscriminatory and neutrally applied” policy, but which is the

result of intentionally discriminatory pay decisions occurring outside the

statutory filing period. 127 S. Ct. at 2174 (quoting Lorance, 490 U.S. at

911). Here, we are concerned with an employer who made benefits calcu-

lations during the statutory filing period and under a seniority system that

intentionally discriminates against women affected by pregnancy.

HULTEEN v. AT&T CORPORATION 10037

benefits calculation for an employee affected by pregnancy,

even if the pregnancy occurred before the enactment of the

PDA. 940 F.2d at 1327; accord Ledbetter, 127 S. Ct. at 2173;

Bazemore, 478 U.S. at 395.

[2] In Pallas, we did not address whether the PDA had

retroactive effect because Pallas’s complaint alleged that a

post-PDA determination — the calculation of benefits after

the PDA was enacted — discriminated against women on the

basis of their pre-PDA pregnancy leaves.

B

AT&T admits that under Pallas its current conduct in cal-

culating retirement benefits excluding pre-PDA pregnancy

leave violates Title VII.6 AT&T argued to our three-judge

panel that Landgraf worked a “sea-change” in retroactivity

principles. Thus, AT&T continued, Landgraf is intervening

authority with which the decision in Pallas is “clearly irrecon-

cilable,” a retroactivity argument the panel majority

6

We reject as disingenuous AT&T’s argument that Pallas “clearly upset

the settled expectations” that it would not be required to credit pre-PDA

pregnancy leave in the same manner as temporary disability leave when

it made post-PDA retirement and pension decisions. Title VII, enacted in

1964, prohibited employers from discriminating on the basis of sex. 42

U.S.C. § 2000e-2(a)(1). Only one Supreme Court decision cast doubt on

whether Title VII prohibited employers from discriminating on the basis

of pregnancy: General Electric Co. v. Gilbert, 429 U.S. 125, 145-46

(1976) (upholding a policy that denied coverage of pregnancy-related dis-

abilities in its disability benefits plan). “When Congress amended Title

VII in 1978, it unambiguously expressed its disapproval of both the hold-

ing and the reasoning of the Court in the Gilbert decision.” Newport News

Shipbldg. & Dry Dock Co. v. EEOC, 462 U.S. 669, 678 (1983); see id. at

679 (Many members of Congress “expressly agreed with the views of the

dissenting Justices [in Gilbert].”). The PDA therefore did not alter Hult-

een’s or AT&T’s rights or liabilities under Title VII, but corrected Gil-

bert’s erroneous interpretation of Title VII. Id. at 678-79 & n.17. Thus,

Pallas, decided in 1991, could not have upset AT&T’s “settled expecta-

tions.”

10038 HULTEEN v. AT&T CORPORATION

embraced. However, as Judge Rymer’s dissenting opinion

ably points out, AT&T’s Landgraf argument fails. We adopt

Judge Rymer’s reasoning:

[We] read Landgraf as refining, rather than sea-

changing, the landscape[,] for the Court explicitly

drew upon Justice Story’s “influential definition” of

retroactivity in Society for Propagation of the Gos-

pel v. Wheeler, 22 F. Cas. 756, 766-69 (1814), to

make clear how courts should determine whether a

statute operates retroactively:

A statute does not operate “retrospectively”

merely because it is applied in a case aris-

ing from conduct antedating the statute’s

enactment, or upsets expectations based in

prior law. Rather, the court must ask

whether the new provision attaches new

legal consequences to events completed

before its enactment. The conclusion that a

particular rule operates “retroactively”

comes at the end of a process of judgment

concerning the nature and extent of the

change in the law and the degree of connec-

tion between the operation of the new rule

and a relevant past event.

...

When a case implicates a federal statute

enacted after the events in suit, the court’s

first task is to determine whether Congress

has expressly prescribed the statute’s reach.

If Congress has done so, of course, there is

no need to resort to judicial default rules.

When, however, the statute contains no

such express command, the court must

determine whether the new statute would

HULTEEN v. AT&T CORPORATION 10039

have retroactive effect, i.e., whether it

would impair rights a party possessed when

he acted, increase a party’s liability for past

conduct, or impose new duties with respect

to transactions already completed. If the

statute would operate retroactively, our tra-

ditional presumption teaches that it does not

govern absent clear congressional intent

favoring such a result.

Landgraf, 511 U.S. at 268, 269-70, 280[ ] (internal

citations omitted).

[We] do not believe that the reasoning or theory of

Pallas is so irreconcilable with the reasoning or the-

ory of Landgraf as to give [a three-judge] panel

license to overrule it. Pallas held that the actionable

conduct was PT&T’s decision to discriminate

against the employee on the basis of pregnancy when

she applied for, and was denied, early retirement.

The decision to deny benefits was made in the post-

PDA world. As we emphasized in United States ex

rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810

(9th Cir. 1995), if “the law changes the legal conse-

quences of conduct that takes place after the law

goes into effect, the law operates on that conduct

prospectively.” Id. at 814. This being the case, and

assuming (without deciding) that Congress intended

the PDA to have prospective effect only, Pallas was

premised on a discrete act — the decision to deny a

retirement benefit — that gave rise to a current vio-

lation of the PDA. Given Pallas’s finding of a cur-

rent violation, the Act operated prospectively on that

decision.

Hulteen, 441 F.3d at 666-67 (Rymer, J., dissenting).

Nor do we agree with AT&T’s companion argument that

Lockheed Corp. v. Spink, 517 U.S. 882 (1996), rev’g 60 F.3d

10040 HULTEEN v. AT&T CORPORATION

616 (9th Cir. 1995), a post-Landgraf decision, demonstrates

that Pallas gave retroactive effect to the PDA. Again, we

adopt Judge Rymer’s analysis:

Spink involved 1986 amendments to the Age Dis-

crimination in Employment Act of 1967, 29 U.S.C.

§[§] 621, 623(i)(1), and the Employee Retirement

Income Security Act of 1974, 29 U.S.C.

§ 1054(b)(1)(i), that prohibited employers from

excluding new employees over age 60 from partici-

pating in their retirement plans. Spink had worked

for Lockheed between 1939 and 1950, and began

working there again in 1979 at the age of 61. He was

excluded by Lockheed’s retirement plan because he

was over 60. After the 1986 amendments, Spink was

allowed to participate in the plan, but was not cred-

ited with accrued benefits based on his years of ser-

vice with Lockheed prior to the amendments’

effective date. Spink sued. We held that denying

credited service years that an older employee would

otherwise have accumulated was unlawful under the

amendments. In so doing, we observed that, “[t]o the

extent our interpretation requires employers to

include pre-enactment service years in calculating

accrued benefits, it applies retroactively.” 60 F.3d at

620, n.1. AT&T seizes upon this remark to maintain

that when the Supreme Court reversed our conclu-

sion that Congress intended the statute to have retro-

active effect, it necessarily agreed that requiring

employers to include pre-enactment service in calcu-

lating accrued benefits was a retroactive application.

[We] cannot read so much into the Spink opinions.

Our observation in Spink I did not affect our ultimate

decision in that case because the decision was “based

on the retroactive intent of the statute manifested in

its text.” Id. The Supreme Court simply disagreed

with our construction of the statute. Thus, its analy-

HULTEEN v. AT&T CORPORATION 10041

sis — like ours — was limited to Landgraf’s first

step.

Hulteen, 441 F.3d at 667-68 (Rymer, J., dissenting).

[3] Thus, Landgraf and Spink do not implicate, much less

contradict, the twin holdings of Pallas that the NCS system

is facially discriminatory and that the post-PDA decision as to

Pallas’s eligibility is the relevant, actionable discriminatory

employment practice.

AT&T also asserts incorrectly that Pallas must be over-

ruled because it relied upon the “continuing violation” doc-

trine abrogated in National Railroad Passenger Corp. v.

Morgan, 536 U.S. 101, 114-15 (2002) (holding an employee

can only recover for discrete discriminatory acts that occur

within the statutory filing period). As Judge Rymer explained:

Neither the reasoning nor theory of Morgan is irrec-

oncilable with Pallas. Pallas held that the NCS sys-

tem is facially discriminatory, an issue that was not

presented in Morgan. Morgan sought damages,

which Pallas did not. Further, Morgan proceeded on

the basis of a continuing violation, whereas Pallas

relied upon PT&T’s decision to deny benefits as the

discrete act that was actionable. As the Pallas court

saw it, this was a current violation, not a continuing

one.

Hulteen, 441 F.3d at 668 (Rymer, J., dissenting). Morgan is

also inapposite because, as in Pallas, it is undisputed here that

the charges were filed with the EEOC within the statutory fil-

ing period after the denial of retirement benefits.

Moreover, our decision in Pallas is consistent with Mor-

gan’s holding that “[t]he existence of past acts . . . does not

bar employees from filing charges about related discrete acts

so long as the acts are independently discriminatory and

10042 HULTEEN v. AT&T CORPORATION

charges addressing those acts are themselves timely filed.”

Morgan, 536 U.S. at 113. In Morgan, the Court listed “termi-

nation, failure to promote, denial of transfer, or refusal to

hire” as examples of employment decisions that are discrete

acts, and explained that each one, if decided in a discrimina-

tory fashion, “constitutes a separate actionable ‘unlawful

employment practice.’ ” Id. at 114; see also Ledbetter, 127

S. Ct. at 2169 (explaining “if an employer engages in a series

of acts each of which is intentionally discriminatory, then a

fresh violation takes place when each act is committed”).

While Pacific Bell may have used unlawful calculations in

many prior employment decisions, its denial of early retire-

ment was a discrete independent act. See Pallas, 940 F.2d at

1327. Because Pallas timely filed a charge, the existence of

past acts would not bar her (or here, Hulteen’s) suit under

Morgan or Ledbetter.

[4] A three-judge panel must follow a prior circuit decision

unless a subsequent decision by a relevant court of last resort

either effectively overrules the decision in a case “closely on

point” or undercuts the reasoning underlying the circuit prece-

dent rendering the cases “clearly irreconcilable.” Miller, 335

F.3d at 899-900. Because Pallas is not irreconcilable with

Landgraf, Spink or Morgan, it is well-settled law that the

panel was required to either follow Pallas or make a sua

sponte en banc call. See, e.g., In re Complaint of Ross Island

Sand & Gravel v. Matson, 226 F.3d 1015, 1018 (9th Cir.

2000) (per curiam) (“[A]bsent a rehearing en banc, we are

without authority to overrule [controlling circuit prece-

dent].”).

[5] “[T]he important doctrine of stare decisis . . . permits

society to presume that bedrock principles are founded in the

law rather than in the proclivities of individuals, and thereby

contributes to the integrity of our constitutional system of

government, both in appearance and in fact.” Vasquez v. Hil-

lery, 474 U.S. 254, 265-66 (1986). “[T]he labor of judges

would be increased almost to the breaking point if every past

HULTEEN v. AT&T CORPORATION 10043

decision could be reopened in every case.” BENJAMIN N.

CARDOZO, THE NATURE OF THE JUDICIAL PROCESS 149 (Yale

Univ. Press 1960). The danger we create when we depart

lightly from our precedent is underscored by AT&T’s admis-

sion here, that even sixteen years after Pallas was decided, it

continues to operate its NCS system in a discriminatory fash-

ion because of “its belief that the PDA does not apply retroac-

tively” and “in order to preserve its ability to litigate the issue

in its own right.” AT&T’s litigation position rests on the

assumption that our precedent can be ignored. Because it can-

not, we affirm the district court’s summary judgment in favor

of Hulteen.7

III

[6] A plain reading of Title VII supports the legal conclu-

sion reached in Pallas. By passing the PDA, Congress clari-

fied that discrimination “because of sex” under Title VII

included discrimination “because of or on the basis of preg-

nancy, childbirth, or related medical conditions.” 42 U.S.C.

§ 2000e(k). It further added the requirement that employers

treat “women affected by pregnancy . . . 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.

7

AT&T also argues that Pallas should not be followed because it failed

to cite and follow the purportedly controlling decision in International

Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977) (“IBT”).

AT&T argues that IBT forecloses Pallas’s claim because the Court con-

strued 42 U.S.C. § 2000e-2(h) as immunizing neutral seniority systems

from challenge. Id. at 352-53. We disagree. In Pallas, we cited Lorance

which not only cited IBT, but also distinguished facially neutral from

facially discriminatory seniority systems. Lorance, 490 U.S. at 905, 909,

911-12. Pallas found the NCS system facially discriminatory because it

treated similarly situated employees differently if the female employee

took a pre-PDA pregnancy-related disability leave. Pallas, 940 F.2d at

1327.

10044 HULTEEN v. AT&T CORPORATION

In interpreting this additional requirement, we must begin

with the text of the statute. Where congressional intent “has

been expressed in reasonably plain terms, that language must

ordinarily be regarded as conclusive.” Griffin v. Oceanic Con-

tractors, Inc., 458 U.S. 564, 570 (1982) (internal quotation

omitted). And when “the meaning of the words seems to us

to be intelligible upon a simple reading, . . . we shall spend

no time upon generalities concerning the principles of [statu-

tory] interpretation.” United States v. M.H. Pulaski Co., 243

U.S. 97, 106 (1917).

[7] The ordinary meaning of “affected” is “[a]cted upon,

influenced, or changed.” The American Heritage Dictionary

of the English Language 28 (4th ed. 2000); see also Black’s

Law Dictionary 62 (8th ed. 2004) (defining “affect” as

“[m]ost generally, to produce an effect on; to influence in

some way”). Applying the ordinary meaning of the term “af-

fected” here leads to the conclusion that although Hulteen was

affected by pregnancy when she took pregnancy leave, she

was again “affected by pregnancy” when AT&T calculated

her retirement benefits in 1994, deliberately choosing to use

an NCS date that would deprive her of benefits received by

those who were not “affected by pregnancy” by excluding her

earlier pregnancy leave from the later calculation of benefits.

It was well within AT&T’s ability and control to calculate

Hulteen’s benefits in 1994 giving her service credit for the

time she spent on pregnancy leave, and to thus avoid violating

the PDA. AT&T simply chose to continue its systematic dis-

crimination against women, based on pregnancy, even after

Congress made it illegal.

[8] In 1991, Congress amended the Civil Rights Act to

make it clear, if Pallas had not already done so, that an

employer who adopts a seniority system for an intentionally

discriminatory purpose commits an unlawful employment

practice “when the seniority system is adopted, when an indi-

vidual becomes subject to the seniority system, or when a per-

son aggrieved is injured by the application of the seniority

HULTEEN v. AT&T CORPORATION 10045

system or provision of the system.” Civil Rights Act of 1991,

Pub. L. No. 102-166, 105 Stat. 1071, 1078-79 (Nov. 21,

1991). Congress thus clarified that injury occurs at the time

that the seniority system is applied to the aggrieved party

because that is when the employee is actually harmed by the

deprivation of benefits. See 42 U.S.C. § 2000e-5(e)(2). As the

House Report accompanying the amendment noted, this

amendment was intended to “overrule[ ] Lorance and per-

mit[ ] person[s] to challenge discriminatory employment prac-

tices when those practices actually harm them.” H.R. REP. NO.

102-40, pt. II, at 3 (1991), reprinted in 1991 U.S.C.C.A.N.

694, 695. Congress was concerned that, “[t]aken to its logical

conclusion, the Lorance rule would bar all challenges to pres-

ent day applications of discriminatory practices in existence

when Title VII became law since, under the Lorance rule, the

deadline for a timely charge would have expired before Title

VII became effective.” Id. at 23, reprinted in 1991

U.S.C.C.A.N. 694, 716. The Supreme Court recently

acknowledged that this amendment was targeted at Lorance

and designed to “allow[ ] Title VII liability [to arise] from an

intentionally discriminatory seniority system both at the time

of its adoption and at the time of its application.” Ledbetter,

127 S. Ct. at 2169 n.2.

[9] AT&T applied its discriminatory seniority system to

Hulteen in 1994, causing her to be deprived of early retire-

ment benefits and thus injuring her. AT&T never asserted that

it could not credit Hulteen with pregnancy leave when it

denied and/or calculated her benefits. Indeed, AT&T and

Hulteen stipulated not only to the number of days each plain-

tiff was penalized within the charging period for past preg-

nancies but also to AT&T’s ability to add service credit to an

employee’s length of service. Instead of engaging in its dis-

criminatory calculation and defending the EEOC charge and

this litigation, AT&T could have simply credited the applica-

ble number of days to each plaintiff’s NCS date when it cal-

culated her benefits.

10046 HULTEEN v. AT&T CORPORATION

AT&T, in fact, credited plaintiff Elizabeth Snyder thirty

days from her 1974 pregnancy leave in 2000. In a March 1,

2000 letter, Pension Plan Administrator Michael L. Brown

stated:

In preparing your claim for service credit for the

period of your maternity leave of absence for review

by the Employees’ Benefit Committee, it was deter-

mined that you were not given service credit for the

first 30 calendar days of your leave (as was the pol-

icy at the time).

Therefore, I have authorized the Pension Service

Center to adjust your Net Credited Service date by

30 days.

The Pension Service Center, on March 29, 2000, notified Sny-

der that “[a]fter a careful review of [her] service record histo-

ry,” her NCS date had been adjusted from July 29, 1966 to

June 29, 1966. These letters demonstrate that in its determina-

tion of benefits, AT&T does not simply rely on pre-PDA NCS

calculations. Rather, when AT&T determines benefits eligi-

bility, it reviews an employee’s entire work history and affir-

matively chooses to apply “the policy at the time” that the

leave occurred. Any assertion that the violations here are con-

tinuing effects of pre-PDA discrimination and thus “unfortu-

nate event[s] in history which [have] no present legal

consequences” is belied by this record. Ledbetter, 127 S. Ct.

at 2168 (quoting Evans, 431 U.S. at 558). That AT&T’s prac-

tice of applying the discriminatory pre-PDA policies consti-

tutes a separate and actionable act of discrimination is “too

obvious to warrant extended discussion.” Ledbetter, 127

S. Ct. at 2173 (quoting Bazemore, 478 U.S. at 395).

AT&T asks us, sitting en banc, to overrule Pallas and fol-

low the Seventh Circuit’s approach in Ameritech Benefit Plan

Committee v. Communication Workers of America, 220 F.3d

HULTEEN v. AT&T CORPORATION 10047

814 (7th Cir. 2000).8 We decline to do so. The Seventh Cir-

cuit’s analysis in Ameritech is problematic because, although

it mentioned the Civil Rights Act of 1991, it failed to actually

apply it.

In Ameritech, the Seventh Circuit considered a claim nearly

identical to Pallas’s and Hulteen’s made by two women who

filed a charge with the EEOC when, due to an NCS system

that, like Pacific Bell’s and AT&T’s here, failed to credit time

spent on pregnancy leave, they were denied early retirement

benefits in 1994. Id. at 817-18. The Seventh Circuit found that

Ameritech’s NCS system was a seniority system because it

calculated “relative lengths of employment.” Id. at 823 (citing

Cal. Brewers Ass’n v. Bryant, 444 U.S. 598, 606 (1980)). It

next incorrectly concluded that the time of injury provisions

of § 2000e-5(e)(2) were inapplicable because the plaintiffs

failed to “show the kind of intentional discrimination that

would trigger [this] exception to the statutory protection

afforded to [bona fide] seniority systems [under 42 U.S.C.

§ 2000e-2(h)].” Id. However, as we explained in Pallas, the

NCS system “facially discriminates against pregnant women

[because it] distinguishes between similarly situated employ-

ees.” 940 F.2d at 1327. Facial discrimination is “by its very

terms” intentional discrimination. Lovell v. Chandler, 303

F.3d 1039, 1057 (9th Cir. 2002); see also UAW v. Johnson

8

In Ameritech, decided nine years after Pallas, the Seventh Circuit cre-

ated an inter-circuit conflict over this issue without citing Pallas. Since

then, the Eighth Circuit has rejected an analysis similar to that found in

Ameritech. Cf. Maki v. Allete, Inc., 383 F.3d 740, 742-45 (8th Cir. 2004)

(holding that pension benefits calculated post-PDA using past discrimina-

tory marriage and pregnancy policies violated Title VII, rejecting argu-

ments that application of the PDA was impermissibly retroactive and time-

barred because the discriminatory act occurred when the “pension benefits

vested” and the “discriminatory provision . . . was applied to each plain-

tiff”). In Maki, as in Pallas and here, the policy at issue was facially dis-

criminatory. The dissent would have us disregard a well-reasoned decision

by the Eighth Circuit in favor of the Seventh Circuit’s Ameritech decision,

which erroneously failed to apply the very legislation it purported to inter-

pret. See Dissent Op. at 10059 n.7.

10048 HULTEEN v. AT&T CORPORATION

Controls, Inc., 499 U.S. 187, 199 (1991) (holding “the

absence of a malevolent motive does not convert a facially

discriminatory policy into a neutral policy with a discrimina-

tory effect”). The Seventh Circuit should have applied

§ 2000e-5(e)(2) to the Ameritech facts, which would have led

it to the ineluctable conclusion that Ameritech had committed

an unfair employment practice in 1994 when it denied early

retirement benefits.

[10] The Seventh Circuit compounded its error by also con-

cluding that the system was immunized from challenge as an

unlawful employment practice by 42 U.S.C. § 2000e-2(h),

because a seniority system that perpetuates pre-PDA discrimi-

nation can nevertheless be a bona fide system, id. at 823 (cit-

ing IBT, 431 U.S. at 352-53), and thus nonactionable under

§ 2000e-2(h) of Title VII.

Section 2000e-2(h) provides:

Notwithstanding any other provision of this subchap-

ter, it shall not be an unlawful employment practice

for an employer to apply different standards of com-

pensation, or different terms, conditions, or privi-

leges of employment pursuant to a bona fide

seniority or merit system, . . . provided that such dif-

ferences are not the result of an intention to discrimi-

nate because of race, color, religion, sex, or national

origin . . . . It shall not be an unlawful employment

practice under this subchapter for any employer to

differentiate upon the basis of sex in determining the

amount of the wages or compensation paid or to be

paid to employees of such employer if such differen-

tiation is authorized by the provisions of section

206(d) of Title 29.

42 U.S.C. § 2000e-2(h).9 Under this section, unintentional dis-

9

The statutory language, “[i]t shall not be an unlawful employment

practice under this subchapter for any employer to differentiate upon the

HULTEEN v. AT&T CORPORATION 10049

criminatory effects resulting from bona fide seniority systems

are exempted from Title VII’s definition of an unlawful

employment practice. What the Seventh Circuit failed to note

in Ameritech is that the PDA, which was subsequently

enacted to prohibit sex discrimination based on pregnancy,

also expressly provides that “nothing in section 2000e-2(h) of

this title shall be interpreted to permit otherwise.” 42 U.S.C.

§ 2000e(k). Thus, the Ameritech decision runs contrary to this

express legislative directive.

Neither the Supreme Court nor we have analyzed the inter-

action of these two Title VII provisions.10 By beginning

§ 2000e-2(h) with the phrase “[n]otwithstanding any other

provision of this subchapter,” Congress broadly exempted

bona fide seniority systems from Title VII’s coverage. How-

ever, in enacting the PDA in 1978, Congress could not have

been more clear in expressing its intent to limit the scope of

the bona fide seniority system exemption, when it stated that

“nothing in section 2000e-2(h) of this title shall be interpreted

to permit otherwise.” 42 U.S.C. § 2000e(k). A later-enacted

specific amendment, like the PDA, alters an earlier broad pro-

vision of the statute when the amendment states that it should

control. See FDA v. Brown & Williamson Tobacco Corp., 529

U.S. 120, 143 (2000) (“The classic judicial task of reconciling

many laws enacted over time, and getting them to make sense

in combination, necessarily assumes that the implications of

a statute may be altered by the implications of a later statute.

basis of sex in determining the amount of the wages or compensation paid

or to be paid to employees of such employer if such differentiation is

authorized by the provisions of section 206(d) of Title 29,” is also known

as the “Bennett Amendment.”

10

Section 2000e(k) post-dates Evans and IBT. Nor was it construed in

any of the Supreme Court decisions concerning timeliness under Title VII.

See Ledbetter, 127 S. Ct. at 2165-66 (sex-based salary discrimination);

Morgan, 536 U.S. at 104 (race discrimination); Lorance, 490 U.S. at 901-

05 (seniority policy that had a disparate impact on women unrelated to

pregnancy); Bazemore, 478 U.S. at 387 (race-based salary discrimination).

10050 HULTEEN v. AT&T CORPORATION

This is particularly so where the scope of the earlier statute is

broad but the subsequent statute[ ] more specifically address-

[es] the topic at hand.”) (internal citation and quotations omit-

ted); cf. Morton v. Mancari, 417 U.S. 535, 545-50 (1974)

(refusing to find an implied repeal of part of Title VII “in the

absence of some affirmative showing of an intention to

repeal”). We agree with the dissent that Congress knows how

to specifically carve out exceptions in Title VII. See Dissent

Op. at 10075-76. If Congress merely wanted to prevent the

Bennett Amendment from being used to justify pregnancy-

based discrimination, it could have tailored § 2000e(k)’s

exception to cover only the Bennett Amendment instead of

broadly excepting all of § 2000e-2(h).

[11] Further, although Congress did not amend the text of

§ 2000e-2(h) in its 1978 amendments, it unequivocally

expressed a policy that the bona fide seniority system exemp-

tion will not immunize employers from liability for seniority

systems that discriminate based on pregnancy. “ ‘[A] specific

policy embodied in a later federal statute should control our

construction of the [earlier] statute, even though it has not

been expressly amended.’ ” Brown & Williamson Tobacco

Corp., 529 U.S. at 143 (second alteration in original) (quoting

United States v. Estate of Romani, 523 U.S. 517, 530-31

(1998)). The express text of, as well as the policy embodied

in, the PDA thus preclude the application of § 2000e-2(h) in

pregnancy discrimination suits under Title VII. Any argument

predicated upon a supposed contrary legislative intent argu-

ment is thus irrelevant to the proper analysis. “[I]t is well-

settled that ‘reference to legislative history is inappropriate

when the text of the statute is unambiguous.’ ” United States

v. Sioux, 362 F.3d 1241, 1246 (9th Cir. 2004) (quoting HUD

v. Rucker, 535 U.S. 125, 132 (2002)).

[12] Therefore, the Seventh Circuit in Ameritech miscon-

strued the PDA when it held that § 2000e-2(h) shielded

Ameritech from liability for its facially discriminatory prac-

HULTEEN v. AT&T CORPORATION 10051

tices.11 We will not follow a decision that ignores a central

provision of the PDA while purporting to apply it.

IV

[13] The district court properly applied our decision in Pal-

las to conclude that AT&T’s post-PDA benefits calculations

violated the PDA. Pallas was, and remains, good law. We

therefore affirm the district court’s summary judgment in

favor of Hulteen, Collet, Porter, Snyder and CWA on their

Title VII sex discrimination claims.

11

The Sixth Circuit recently adopted part of Ameritech’s analysis in

Leffman v. Sprint Corp., 481 F.3d 428 (6th Cir. 2007). Leffman was found

ineligible for Special Early Retirement benefits in 2000 because of an

uncredited pregnancy leave taken in 1976. Id. at 429. The court affirmed

the district court’s grant of summary judgment in favor of Sprint, relying

on Evans, id. at 431-32, and Ameritech, id. at 433. The court failed to dis-

cuss the 1991 Civil Rights Amendments, however, and concluded that

Leffman’s claim was time-barred. Id. at 433 (citing Sawchik v. E.I.

DuPont Denemours & Co., 783 F.2d 635, 638 (6th Cir. 1986)). The court

made the same error as the Seventh Circuit in Ameritech, relying on

§ 2000e-2(h) without acknowledging that the PDA had carved out preg-

nancy discrimination from that exemption. Id. at 430-31. Finally, the court

inexplicably justified its decision with the flawed conclusion that Sprint

did not discriminate at all because it treated non-credited maternity leave

like other non-credited leave. Id. at 433. This comparison was inapt

because, in 1976, Sprint employees received credit for time spent on sick

or disability leave for reasons other than pregnancy. The Leffman court

missed the point that if Leffman had been allowed to take sick or disability

leave for her 1976 pregnancy disability, she would have qualified for early

retirement benefits in 2000 like other employees who received credited

leave time when they were similarly unable to work for reasons other than

pregnancy. See Leffman v. Sprint Corp., No. 3:04CV7222, 2006 WL

144549, at *1-2 (N.D. Ohio Jan. 18, 2006). The dissent employs similarly

faulty logic to conclude Hulteen cannot show intentional discrimination

because AT&T’s benefits calculation was made pursuant to her NCS date.

See Dissent Op. at 10069. Like Leffman’s, Hulteen’s benefits would have

been greater if AT&T had chosen when it calculated her retirement bene-

fits post-PDA to treat her pre-PDA pregnancy leave the same as pre-PDA

disability unrelated to pregnancy leave.

10052 HULTEEN v. AT&T CORPORATION

AFFIRMED.

O’SCANNLAIN, Circuit Judge, with whom Judges RYMER,

BYBEE, and CALLAHAN join, dissenting:

By concluding that Pallas v. Pacific Bell, 940 F.2d 1324

(9th Cir. 1991), cert. denied, 502 U.S. 1050 (1992), remains

good law, the majority erroneously perpetuates a circuit split

with the Sixth and the Seventh Circuits.1 I believe that Pallas

was wrong then and is wrong now. Because this en banc court

can and should overrule Pallas and follow the Seventh Cir-

cuit’s well-reasoned decision in Ameritech Benefit Plan Com-

mittee v. Communication Workers of America, 220 F.3d 814

(7th Cir.), cert. denied, 531 U.S. 1127 (2000), I must respect-

fully dissent from the majority’s conclusion that the sex dis-

crimination claims in this case are timely.2

1

Compare Pallas, 940 F.2d at 1327, with Ameritech Benefit Plan

Comm. v. Commc’n Workers of Am., 220 F.3d 814 (7th Cir. 2000), and

Leffman v. Sprint Corp., 481 F.3d 428, 433 (6th Cir. 2007). No circuit has

followed our decision in Pallas.

2

The majority devotes considerable attention to whether intervening

Supreme Court authority is “clearly irreconcilable” with our prior decision

in Pallas. Ante, at 10037-43. That standard governs whether a three-judge

panel of our court is free to reexamine the holding of prior circuit prece-

dent. See Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc).

Here, of course, we sit as an en banc court. If Pallas is wrongly decided,

we are free to overrule it even if subsequent authorities are not “clearly

irreconcilable.” See id. at 902 (O’Scannlain, J., concurring in part) (“The

en banc court, however, is unencumbered by any obligation to follow the

decision of a three-judge panel, and therefore is free to do what . . . [a]

panel could not.”); see also Robbins v. Carey, 481 F.3d 1143, 1149 n.3

(9th Cir. 2007) (“Ordinarily, panels cannot overrule a circuit precedent;

that power is reserved to the circuit court sitting en banc.”). I turn directly

to that inquiry.

HULTEEN v. AT&T CORPORATION 10053

I

At the core of this dispute is AT&T Corporation’s (“AT&T”)3

Net Credit Service (“NCS”) seniority system, a concept which

is not defined in Title VII. See Cal. Brewers Ass’n v. Bryant,

444 U.S. 598, 605 (1980). The term “seniority” connotes

length of employment. Id. “A ‘seniority system’ is a scheme

that, alone or in tandem with non-‘seniority’ criteria, allots to

employees ever improving employment rights and benefits as

their relative lengths of pertinent employment increase.” Id. at

605-06 (footnotes omitted). “[T]he principal feature of any

and every ‘seniority system’ is that preferential treatment is

dispensed on the basis of some measure of time served in

employment.” Id. at 606. “In order for any seniority system

to operate at all, it has to contain ancillary rules that accom-

plish certain necessary functions.” Id. at 607. “[E]very senior-

ity system must include ancillary rules that delineate how and

when the seniority time clock begins ticking,” as well as other

provisions that “define which passage of time will ‘count’

towards the accrual of seniority and which will not.” Id.

AT&T has such a seniority system. Pursuant to that system,

AT&T maintains an NCS date for each employee (from the

initial date of hire until the date of termination) that consists

of that employee’s original hire date and any adjustments for

periods during which no service credit is accrued pursuant to

ancillary rules. AT&T moves the NCS date forward to

“squeeze out” the periods of leave or breaks in service that are

not credited, resulting in a later NCS date. AT&T uses the

NCS date that it maintains for each employee for purposes of

determining retirement benefits and other employment bene-

fits. An earlier NCS date places an employee in a compara-

3

For sake of convenience, I refer throughout this dissent to the employer

as AT&T, even though AT&T was a successor in interest to Pacific Tele-

phone and Telegraph (“PT&T”) after the former Bell system was broken

up in 1984. The difference in corporate identity does not affect the out-

come of this case.

10054 HULTEEN v. AT&T CORPORATION

tively better position for employment-related determinations,

including job bidding, layoffs, and eligibility for and calcula-

tion of certain retirement benefits.

Prior to August 7, 1977, AT&T’s seniority system included

two ancillary rules important to this case. The first provided

that an employee received only 30 days of NCS credit for per-

sonal leave, but received full credit for temporary disability

leave. The second specified that pregnancy leave would be

treated as personal leave. AT&T applied these two rules to

calculate NCS dates for all employees who became pregnant

prior to that date. At no time did AT&T apply the pregnancy

leave rule to any employee who became pregnant on or after

August 7, 1977. With one exception,4 the record fails to estab-

lish that on or after August 7, 1977, AT&T applied the preg-

nancy leave rule in effect before that date to adjust or to

recalculate any employee’s NCS date.

On August 7, 1977, AT&T adopted the Maternity Payment

Plan (“MPP”), which supplanted the prior pregnancy leave

rule. According to the MPP’s new rule, up to six months of

pregnancy leave would be treated as disability leave with full

NCS credit, and any pregnancy leave in excess of six months

would be treated as personal leave with a maximum of 30

days of NCS credit. Employees on non-pregnancy related dis-

ability leave continued to receive full NCS credit. AT&T

applied the MPP pregnancy leave rule to adjust the NCS dates

for all employees who became pregnant before April 29,

1979; AT&T did not retroactively apply the MPP pregnancy

leave rule to adjust the NCS dates for any employees who

became pregnant before August 7, 1977. The record fails to

demonstrate that AT&T applied the MPP pregnancy leave

rule to adjust or to recalculate any employee’s NCS date on

or after April 29, 1979.

4

In 2000, AT&T credited Elizabeth Snyder’s NCS seniority with 30

days because the previous NCS date mistakenly had not been adjusted ear-

lier for her pregnancy leave in 1974. See infra pp. 10067-68.

HULTEEN v. AT&T CORPORATION 10055

In response to the Pregnancy Discrimination Act of 1978

(“PDA”), Pub. L. No. 95-555, 92 Stat. 2076, on April 29,

1979 (the effective date of the PDA), AT&T adopted the

Anticipated Disability Plan (“ADP”), which superseded the

MPP pregnancy leave rule. The ADP provided that pregnancy

leave would be treated as disability leave with full NCS credit

for the entire period of pregnancy. The ADP pregnancy leave

rule remains in effect in AT&T’s current NCS seniority sys-

tem. AT&T applies the new ADP pregnancy leave rule to

adjust the NCS dates for all employees who become pregnant

on or after April 29, 1979. AT&T, however, made no adjust-

ment to the NCS dates for employees who had been subject

to the MPP pregnancy leave rule or the pre-1977 pregnancy

leave rule. Thus, for example, an employee who took preg-

nancy leave in 1980, after the effective date of the PDA,

would receive full NCS seniority credit for that period of

leave, but no adjustments were made to the NCS date of an

employee who took pregnancy leave in 1976 and received a

maximum of 30 days NCS seniority credit, or who took preg-

nancy leave in 1977 and received a maximum of six months

and 30 days of credit.

Noreen Hulteen, Eleanora Collect, Linda Porter, and Eliza-

beth Snyder are all female employees of AT&T who took

pregnancy leaves between 1968 and 1976, before the enact-

ment of the PDA.5 Under AT&T’s NCS seniority system in

effect at that time, Hulteen, Collect, Porter, and Snyder

received only partial NCS credit for their pregnancy leaves,

resulting in a later NCS date. AT&T’s subsequent calculation

of their benefits or the dates of their retirement eligibility

between 1994 and 2000, would have been more favorable had

AT&T retroactively credited their NCS dates for the previ-

ously uncredited periods of pregnancy leave before the enact-

5

For the sake of convenience, I will focus specifically on Hulteen’s sex

discrimination claim throughout the dissent. Except where expressly

noted, the reasoning with respect to that claim applies equally to the other

employees’ claims.

10056 HULTEEN v. AT&T CORPORATION

ment of the PDA. They contend that AT&T discriminated on

the basis of sex in violation of Title VII when AT&T deter-

mined their benefits based on the NCS dates that were unad-

justed to account for uncredited pre-PDA pregnancy leave.

II

A

Title VII of the Civil Rights Act of 1964, Pub. L. No. 88-

352, 78 Stat. 241, makes it an “unlawful employment prac-

tice” for any employer “to discriminate against any individual

with respect to his compensation, terms, conditions, or privi-

leges or employment, because of such individual’s . . . sex.”

42 U.S.C. § 2000e-2(a)(1).

In General Electric Co. v. Gilbert, 429 U.S. 125 (1976), the

Supreme Court held that discrimination based on pregnancy

was not discrimination within the meaning of Title VII. Id. at

145-46. There, General Electric adopted an employee disabil-

ity benefit plan that paid weekly nonoccupational sickness

and accident benefits. Id. at 127. However, General Electric

excluded from that plan’s coverage disabilities arising from

pregnancy. Id. The specific issue before the Court was

whether Title VII prohibited excluding pregnancy-related dis-

abilities from an employer’s disability benefit plan. The

Supreme Court recognized that pregnancy is confined to

women, but reasoned that the disability benefit plan did not

discriminate in violation of Title VII by excluding pregnancy-

related disabilities from its coverage:

The Plan, in effect (and for all that appears), is noth-

ing more than an insurance package, which covers

some risks but excludes others. The “package” going

to relevant identifiable groups we are presently con-

cerned with—General Electric’s male and female

employees—covers exactly the same categories of

risk, and is facially nondiscriminatory in the sense

HULTEEN v. AT&T CORPORATION 10057

that “there is no risk from which men are protected

and women are not. Likewise, there is no risk from

which women are protected and men are not.” As

there is no proof that the package is in fact worth

more to men than to women, it is impossible to find

any gender-based discriminatory effect in this

scheme simply because women disabled as a result

of pregnancy do not receive benefits; that is to say,

gender-based discrimination does not result simply

because an employer’s disability-benefits plan is less

than all-inclusive.

Id. at 138-39 (internal citations and footnote omitted).

In 1978, in response to Gilbert, Congress passed the Preg-

nancy Discrimination Act of 1978, Pub. L. No. 95-555, 92

Stat. 2076, which became effective on April 29, 1979,6 and

amended Title VII to define “because of sex” or “on the basis

of sex” to include discrimination based on pregnancy. 42

U.S.C. § 2000e(k). The PDA states in relevant part:

The terms “because of sex” or “on the basis of sex”

include, but are not limited to, because of or on the

basis of pregnancy, childbirth, or related medical

conditions; and women affected by pregnancy, child-

birth, 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 simi-

lar in their ability or inability to work, and nothing

in section 2000e-2(h) of this title shall be interpreted

to permit otherwise. . . .

6

“The amendment to Title VII became effective on the date of its enact-

ment, October 31, 1978, but its requirements did not apply to any then-

existing fringe benefit program until 180 days after enactment—April 29,

1979.” Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S.

669, 671 n.2 (1983).

10058 HULTEEN v. AT&T CORPORATION

Id.

An individual must file charges of discrimination under

Title VII within 180 days “after the alleged unlawful employ-

ment practice occurred,” unless the employee has first insti-

tuted proceedings with a state or local agency, in which case

the period is extended to 300 days. 42 U.S.C. § 2000e-5(e)(1).

The dispositive issue in this case is whether Hulteen timely

filed a sex discrimination action within the specified period of

limitations.

As the Supreme Court has repeatedly stressed, we must

“identify with care the specific employment practice that is at

issue” when determining whether the sex-discrimination

action is timely. Ledbetter v. Goodyear Tire & Rubber Co.,

127 S. Ct. 2162, 2167 (2007) (citing Nat’l Railroad Passen-

ger Corp. v. Morgan, 536 U.S. 101, 110-11 (2002)); see also

Delaware State College v. Ricks, 449 U.S. 250, 257 (1980).

There are three possible candidates in this case: (1) AT&T’s

adoption of its pregnancy leave rules before the enactment of

the PDA; (2) AT&T’s application of those leave rules to

adjust Hulteen’s NCS date before the enactment of the PDA;

and (3) AT&T’s calculation of Hulteen’s retirement benefits

in 1994 based, in part, on the NCS date it consistently main-

tained for her without retroactively adjusting that date for pre-

PDA pregnancy leave. The time to challenge the first and sec-

ond possible employment practices, however, has long since

expired. Accordingly, relying on our prior decision in Pallas,

Hulteen points us to the third alternative employment practice

in 1994 when AT&T declined to grant retroactive NCS credit

for pre-PDA pregnancy leave before it calculated her retire-

ment benefits.

Accepting Hulteen’s argument that such calculation in

1994 constituted a new and current violation of Title VII, the

majority holds that her Title VII action is timely. In so con-

cluding, the majority perpetuates Pallas’s error by breathing

new life into an expired sex discrimination claim. On virtually

HULTEEN v. AT&T CORPORATION 10059

identical facts, the Seventh Circuit reached the opposite con-

clusion in Ameritech.7 Because I believe the Seventh Circuit’s

decision faithfully applies controlling Supreme Court prece-

dents and the relevant provisions of Title VII, I would follow

that court’s reasoning.

III

“The outcome of this case,” as the Seventh Circuit recog-

nized, “turns on which of two competing lines of authority

provide a better ‘fit’ here.” Ameritech, 220 F.3d at 822. The

Seventh Circuit followed United Air Lines v. Evans, 431 U.S.

553 (1977), and its progeny. In Pallas, on the other hand, this

court followed Bazemore v. Friday, 478 U.S. 385 (1986) (per

curiam). Because the majority follows Pallas today, the

Bazemore and Evans line of cases deserve careful attention.

A

In Bazemore, the North Carolina Agricultural Extension

Service (“Service”) maintained two separate, racially segre-

gated work forces and paid black employees less than white

employees prior to the enactment of Title VII. 478 U.S. at

390-91 (Brennan, J., joined by all other Members of the

Court, concurring in part). After the enactment of Title VII,

the Service integrated the workforce, but the pay disparity

between black employees and white employees in the same

positions remained. Id. The Supreme Court held that the Ser-

vice was not liable for the discriminatory acts that occurred

prior to the enactment of Title VII and therefore “recovery

may not be permitted for [pre-Title VII] acts of discrimina-

7

The majority contends that in Maki v. Allette, Inc., 383 F.3d 740 (8th

Cir. 2004), the Eighth Circuit rejected an analysis similar to that found in

Ameritech. Ante, at 10047 n.8. But that case is quite different from Ameri-

tech and the one before us today. Unlike in Maki, Hulteen has not estab-

lished that, after the enactment of the PDA, AT&T adopted a new

seniority rule to bridge prior periods of employment for an intentionally

discriminatory purpose.

10060 HULTEEN v. AT&T CORPORATION

tion.” Id. at 395. However, the Supreme Court concluded that

the pay disparity that remained after the enactment of Title

VII was unlawful because “[e]ach week’s paycheck that

delivers less to a black than to a similarly situated white is a

wrong actionable under Title VII, regardless of the fact that

this pattern was begun prior to the effective date of Title VII.”

Id. at 395-96.

B

1

The Supreme Court’s decision in Evans represents the

fountainhead for the competing line of authority. In Evans,

United Air Lines (“United”) maintained a policy of refusing

to allow its female flight attendants to be married. 431 U.S.

at 554. Evans married in 1968 and therefore was forced to

resign pursuant to United’s no-marriage policy. Id. Previ-

ously, the Seventh Circuit held that United’s policy violated

Title VII. Sprogis v. United Air Lines, 444 F.2d 1194 (7th

Cir.), cert. denied, 404 U.S. 991 (1971). Evans, however, was

not a party to Sprogis and failed to initiate any proceedings

against United within the period of limitation for that past act

of discrimination. Evans, 431 U.S. at 555. After United ended

the no-marriage policy, United rehired Evans in 1972 as a

new employee, but refused to give her seniority credit for any

prior service with United. Id. Evans conceded that it was too

late to bring an action for her forced termination, but asserted

that “United [was] guilty of a present, continuing violation of

Title VII and therefore that her claim is timely.” Id. at 557.

Evans argued that “the seniority system gives present effect

to the past illegal act and therefore perpetuates the conse-

quences of forbidden discrimination.” Id. at 557. Rejecting

that argument, the Court emphasized that “United’s seniority

system does indeed have a continuing impact on her pay and

fringe benefits. But the emphasis should not be placed on

mere continuity; the critical question is whether any present

HULTEEN v. AT&T CORPORATION 10061

violation exists.” Id. at 558 (first emphasis added). Conclud-

ing that none did, the Court explained that “[a] discriminatory

act which is not made the basis for a timely charge is the legal

equivalent of a discriminatory act which occurred before the

statute was passed. . . . . [I]t is merely an unfortunate event

in history which has no present legal consequences.” Id. at

558.

2

The Supreme Court again embraced Evans’s reasoning in

Delaware State College v. Ricks, 449 U.S. 250. In that case,

Delaware State College denied Ricks, an African American

librarian, academic tenure in March 1974. Id. at 252. Adher-

ing to its policy of not discharging immediately a junior fac-

ulty member who did not receive tenure, the College offered

Ricks a nonrenewable one-year “terminal” contract that

would expire on June 30, 1975, with explicit notice that his

employment would end on that date. Id. at 253. Ricks filed an

employment discrimination charge against the College in

April 1975, alleging, inter alia, that the College unlawfully

discriminated against him on the basis of race in violation of

Title VII. Id. at 255.

Ricks argued that the period of limitations ran from the date

that his one-year terminal contract expired rather than the date

when the College denied tenure. Id at 257. Rejecting Ricks’s

argument, the Supreme Court held that his claim for discrimi-

nation in violation of Title VII was untimely. Id. at 256. The

Court concluded that “the only alleged discrimination

occurred—and the filing limitations period therefore

commenced—at the time the tenure decision was made and

communicated to Ricks . . . . even though one of the effects

of the denial of tenure—the eventual loss of a teaching

position—did not occur until later.”8 Id. at 258. The Supreme

8

I note that, according to the parties’ joint stipulation of facts, Hulteen

(as well as the other plaintiffs) knew that AT&T granted only partial NCS

10062 HULTEEN v. AT&T CORPORATION

Court emphasized that “[i]t is simply insufficient for Ricks to

allege that his termination ‘gives present effect to the past act

and therefore perpetuates the consequences of forbidden dis-

crimination.’ ” Id. (quoting Evans, 431 U.S. at 557).

3

The Supreme Court’s recent decision in Ledbetter v. Good-

year Tire & Rubber Co., 127 S. Ct. 2162, confirms this under-

standing of the Evans line of authority. Ledbetter worked for

Goodyear Tire and Rubber Company (“Goodyear”) from

1979 until 1998. Id. at 2165. Goodyear maintained a policy

during that time of granting or denying raises for salaried

employees based on their supervisors’ evaluations of their

performance. Id. In 1998 Ledbetter brought an action against

Goodyear, asserting, among other claims, a Title VII pay dis-

crimination claim. Id. At trial, she “introduced evidence that

during the course of her employment several supervisors had

given her poor evaluations because of her sex, that as a result

of these evaluations her pay was not increased as much as it

would have been if she had been evaluated fairly, and that

these past pay decisions continued to affect the amount of her

pay throughout her employment.” Id. at 2165-66. The evi-

dence also established that Ledbetter was earning signifi-

cantly less than her male counterparts at the end of her career.

Id. at 2166.

Ledbetter argued that her action was timely, pointing to two

different employment practices during the applicable period

of limitation as possible candidates. Id. at 2167. First, she

argued that each paycheck issued during the period of limita-

tions was a separate act of discrimination. Id. Alternatively,

credit at the time of her pre-PDA pregnancy leave, was aware that her

unadjusted NCS seniority dated traveled with her from PT&T to AT&T

in 1984, and periodically received documents throughout her employment

containing the unadjusted NCS seniority date. See also Ledbetter, 127

S. Ct. at 2177 & n.10.

HULTEEN v. AT&T CORPORATION 10063

she argued that the 1998 decision denying her a raise “was

‘unlawful because it carried forward intentionally discrimina-

tory disparities from prior years.’ ” Id. “In essence, she sug-

gests that it is sufficient that discriminatory acts that occurred

prior to the charging period had continuing effects during that

period.” Id. The Supreme Court rejected Ledbetter’s first

argument because she failed to allege actual discriminatory

intent by the relevant Goodyear decisionmakers when they

issued her checks or denied her a raise in 1998. Id. Further-

more, the Court rejected Ledbetter’s alternative argument,

concluding that it was squarely foreclosed by the Evans line

of authority. Id. The Court emphasized that the instruction

from that line of authority is clear: “The EEOC charging

period is triggered when a discrete unlawful practice takes

place. A new violation does not occur, and a new charging

period does not commence, upon the occurrence of subse-

quent non-discriminatory acts that entail adverse effects

resulting from the past discrimination.” Id. at 2169. The Court

specifically rejected as unsound Ledbetter’s attempt to shift

the intent from the prior discriminatory employment practice

to the 1998 pay decision denying her raise. Id. at 2170.

Accordingly, the Supreme Court held that Ledbetter’s claim

was untimely. Id. at 2172.

C

Bazemore stands for the general proposition that an

employment practice coupled with discriminatory intent

within the charging period gives rise to a current violation of

Title VII, even if related to past, uncharged discriminatory

acts. See Ledbetter, 127 S. Ct. at 2174. The Evans-Ricks-

Ledbetter line of authority stands for the proposition that an

act within the charging period that gives present effect to past

discriminatory acts, without more, does not give rise to a cur-

rent violation. Hulteen’s case turns on whether AT&T calcu-

lated her benefits in 1994 with the requisite discriminatory

intent (Bazemore) or whether that calculation simply gave

10064 HULTEEN v. AT&T CORPORATION

effect through the NCS date of past, uncharged discriminatory

acts (Evans-Ricks-Ledbetter).

In Ameritech, the Seventh Circuit found the Evans line of

authority controlling because of the “fact, simplistic as it may

seem, that [the] case involves computation of time in service

—seniority by another name—followed by a neutral applica-

tion of a benefit package to all employees with the same

amount of time.” Ameritech, 220 F.3d at 823. Pallas and the

majority today, on the other hand, reached the contrary con-

clusion, finding that Bazemore was the “controlling Supreme

Court precedent” for two reasons: “First, the discriminatory

program which gave rise to this suit, the Early Retirement

Opportunity, was instituted in 1987 . . . . Pallas challenges the

criteria adopted in 1987 to determine eligibility for the new

benefit program . . . . Second, the net credit system used to

calculate eligibility under the Early Retirement Opportunity is

not facially neutral. The system used to determine eligibility

facially discriminates against pregnant women.” 940 F.2d at

1327. With respect, Pallas was clearly wrong. The Supreme

Court’s logic in Evans, Ricks, and Ledbetter dictates the out-

come of the case before us today.

1

The Supreme Court’s most recent decision in Ledbetter

confirms that under Evans “current effects alone cannot

breathe life into prior, uncharged discrimination.” Ledbetter,

127 S. Ct. at 2169. The charging period (here, the 180 days

during which Hulteen was required to file a charge with the

EEOC), “is triggered when a discrete unlawful practice takes

place.” Id. Such a discrete unlawful practice requires the

coalescence of two elements: (1) an employment practice

(defined as “ ‘a discrete act or single “occurrence’ ” that takes

place at a particular point in time”); and (2) discriminatory

intent. Id. at 2169, 2171. Here, the majority concludes that the

AT&T’s denial of benefits under the retirement plan in 1994

is an “employment practice.” Ante, at 10041-42. But that

HULTEEN v. AT&T CORPORATION 10065

alone is insufficient. Ledbetter requires concurrent discrimi-

natory intent.

a

Pallas concluded that the “NCS [seniority] system used to

calculate eligibility under the [retirement plans] is not facially

neutral. The system used to determine eligibility facially dis-

criminates against pregnant women.” 940 F.2d at 1327.

Today, the majority locates discriminatory intent at the point

AT&T calculated Hulteen’s benefits in 1994 by embracing

Pallas’s erroneous determination that the NCS seniority sys-

tem is facially discriminatory and concluding that “[f]acial

discrimination is ‘by its very terms’ intentional discrimina-

tion.” Ante, at 10047 (citation omitted). The majority’s posi-

tion is erroneous.

AT&T’s current NCS seniority system includes a facially

nondiscriminatory and neutrally applied pregnancy leave rule

that grants female employees who become pregnant after the

enactment of the PDA full NCS seniority credit on the same

terms as employees who become temporarily disabled. The

retirement benefit plan under which Hulteen received retire-

ment benefits is also facially nondiscriminatory and neutrally

applied: calculation of eligibility and benefits under that plan

are determined based on an NCS date maintained for each

employee. That NCS date is also facially nondiscriminatory.

But the majority asserts facial discrimination by looking long

ago to the pre-PDA pregnancy leave rules that AT&T law-

fully applied before the enactment of the PDA to adjust the

NCS dates to grant only partial seniority credit for pre-PDA

pregnancy leave. The majority’s conclusion reaches too far.

The problem with the majority’s conclusion that the NCS

seniority system is facially discriminatory because the NCS

date reflects AT&T’s pre-PDA pregnancy leave rules is that

it necessarily depends on a retroactive application of the PDA.

Before the enactment of the PDA, the Supreme Court had

10066 HULTEEN v. AT&T CORPORATION

concluded in Gilbert, 429 U.S. 125, that classifications based

on pregnancy involved no facial gender-based discrimination.

Id. at 134-36, 138; see also Nashville Gas Co. v. Satty, 434

U.S. 136, 140 (1977) (“Petitioner’s decision not to treat preg-

nancy as a disease or disability for purpose of seniority reten-

tion is not on its face a discriminatory policy.”). Pallas

concluded that the NCS seniority system was facially discrim-

inatory because it “distinguishes between similarly situated

employees: female employees who took leave prior to 1979

due to a pregnancy-related disability and employees who took

leave prior to 1979 for other temporary disabilities.” 940 F.2d

at 1327. This conclusion therefore rests on a silent premise

that gives impermissible retroactive effect to the PDA.

A system is facially discriminatory, of course, if it treats

similarly situated employees differently. Hulteen asserts that,

as a female employee who took pregnancy leave prior to the

enactment of the PDA, she was treated differently from

employees who took leave for other temporary disabilities

during that same period. But these two groups are not simi-

larly situated. Temporarily disabled employees were not

female employees who took pregnancy leaves, but were

female and male employees who took other types of disability

leaves and, under the lawful seniority rules then in effect,

were entitled to accrue seniority credit for the full duration of

their leaves. And female employees who took pre-PDA preg-

nancy leaves under AT&T’s then lawful pre-PDA pregnancy

leave rules accrued seniority credit only for a portion of their

leaves. While this may be regrettable in hindsight, because it

was then lawful to distinguish between the two reasons for

leaves prior to the PDA, the two groups were not similarly sit-

uated. AT&T’s failure to award full seniority credit for pre-

PDA pregnancy leaves could be labeled facially discrimina-

tory only if employees in both groups were similarly situated.

That would be true, however, only if the PDA were given

impermissible retroactive effect. Because the PDA is not retro-

active,9 Pallas is wrong and the majority today is mistaken in

9

Landgraf v. USI Films Prods., 511 U.S. 244, 258 n.10 (1994) (“[I]n

amending Title VII to bar discrimination on the basis of pregnancy in

HULTEEN v. AT&T CORPORATION 10067

concluding that AT&T’s pre-PDA pregnancy leave rules were

facially discriminatory in violation of Title VII. Accordingly,

because the majority errs in concluding that the NCS seniority

system is facially discriminatory in violation of Title VII, it

necessarily errs in finding current discriminatory intent based

on the 1994 calculation.

b

Straining to find discriminatory intent when AT&T calcu-

lated Hulteen’s retirement benefits in 1994 based on the NCS

date, the majority also asserts that Hulteen satisfies that bur-

den by pointing to a single act by AT&T in crediting another

employee’s NCS date based on the pre-PDA pregnancy leave

rules. Ante, at 10046. In 2000, AT&T credited Snyder’s NCS

seniority date for 30 days because previously her NCS date

mistakenly had not been credited at all for her pregnancy

leave in 1974. The majority extrapolates from this retroactive

credit that “in the determination of benefits, AT&T does not

simply rely on pre-PDA NCS calculations,” but “reviews an

employee’s entire work history and affirmatively chooses to

apply ‘the policy at the time’ that the leave occurred.” Ante,

1978, Congress provided: ‘Except as provided in subsection (b), the

amendment made by this Act shall be effective on the date of enactment.’

The only Courts of Appeals to consider whether the 1978 amendments

applied to pending cases concluded that they did not. If we assume that

Congress was familiar with those decisions, its choice of language in

§ 402(a) would imply nonretroactivity.” (citations omitted)); Ameritech,

220 F.3d at 823 (recognizing that the PDA has not been treated as retroac-

tive); Whitehead v. Oklahoma Gas & Elec. Co., 187 F.3d 1184, 1193 (10th

Cir. 1999) (concluding that the PDA is not retroactive); Wambheim v. J.C.

Penny Co., 642 F.2d 362, 363 n.1 (9th Cir. 1981) (concluding that the

PDA did not apply in a case where the facts occurred before 1978); Fields

v. Bolger, 723 F.2d 1216, 1219 n.4 (6th Cir. 1984) (noting that the PDA

“was intended to be prospective only in application”); Schwabenbauer v.

Board of Ed. of School Dist. of Olean, 667 F.2d 305, 310 n.7 (2d Cir.

1981) (concluding the PDA is not retroactive); Condit v. United Air Lines,

Inc., 631 F.2d 1136, 1139-40 (4th Cir. 1980) (same).

10068 HULTEEN v. AT&T CORPORATION

at 10046. Any contrary assertion, the majority contends, “is

belied by this record.” Ante, at 10046. But it is the majority’s

perception of discriminatory intent based on this isolated

response to an error that is belied by the applicable standard

of review.

While previously recognizing that “ ‘[w]e must determine,

viewing the evidence in the light most favorable to [AT&T],

the non-moving party, whether [there are any genuine issues

of material fact and whether] the district court correctly

applied the substantive law,’ ” ante, at 10033 (second alter-

ation in original) (quoting Olsen v. Idaho State Bd. of Med.,

363 F.3d 916, 922 (9th Cir. 2004)), the majority fails to apply

that standard here. Viewing the evidence in the light most

favorable to AT&T, as we must, the letters evidencing

AT&T’s crediting of Snyder’s NCS date fail to demonstrate

that, “when AT&T determines benefits eligibility, it reviews

an employee’s entire work history and affirmatively chooses

to apply ‘the policy at the time’ that the leave occurred.” Ante,

at 10046. Rather, in the light most favorable to AT&T, that

evidence suggests that AT&T relies on the pre-PDA NCS cal-

culations, but in this one case an error came to light that

required it to review Snyder’s entire work history and to

adjust her NCS date for a previously uncredited pre-PDA

pregnancy leave. That evidence further suggests that AT&T

reviewed Snyder’s service record and adjusted her NCS date

in response to her request, not as a matter of course for all

employees: “In preparing your claim for service credit for the

period of your maternity leave of absence for review by the

Employees’ Benefit Committee, it was determined that you

were not given service credit for the first 30 calendar days of

your leave (as was the policy at the time).” Moreover, the par-

ties stipulated that “whether or not Snyder’s NCS date was

adjusted in the year 2000 does not affect the outcome of this

[stage of the] proceeding.”

The only thing that is “ ‘too obvious to warrant extended

discussion,’ ” ante, at 10046 (quoting Ledbetter, 127 S. Ct. at

HULTEEN v. AT&T CORPORATION 10069

2173), is the majority’s far-reaching efforts to infer the requi-

site discriminatory intent at the time AT&T calculated and/or

denied retirement benefits. Simply put, the record fails to

demonstrate that AT&T acted with discriminatory intent dur-

ing the charging period.

2

There is no meaningful basis for distinguishing Evans and

this case, which becomes abundantly evident when the key

aspects of each case are compared. In both Evans and here,

the employers maintained a host of employment programs10

that determined eligibility based on a seniority system. Those

benefit programs were facially nondiscriminatory and neu-

trally applied, but gave effect through the seniority system to

past discriminatory acts. Evans’s seniority was less because in

early 1968 United maintained a policy that forced her to

resign because she was female and because she married. Hult-

een’s seniority was less because AT&T maintained a pre-

PDA pregnancy leave rule that forced her to take personal

leave with only partial NCS seniority credit because she was

female and because she became pregnant. Because of the past

acts of discrimination, Evans and Hulteen had less seniority,11

and, not surprisingly, the determinations of their benefits

under those programs were adversely affected

Faced with “the question . . . whether the employer is com-

mitting a second violation of Title VII by refusing to credit

her with seniority for any [prior] period,” the Supreme Court

concluded in Evans that “such a challenge to a neutral system

10

In Evans, the seniority system “determine[d] a flight attendant’s

wages; the duration and timing of vacations; rights to retention in the

event of layoffs and rights to re-employment thereafter; and rights to pref-

erential selection of flight assignments.” 431 U.S. at 555 n.5. In Pallas, as

in this case, the NCS system was used for a host of employment-related

purposes, including job bidding, shift preferences, layoffs, and eligibility

for and calculation of certain benefit programs.

11

Seniority, by its very nature, reflects past employment decisions.

10070 HULTEEN v. AT&T CORPORATION

may not be predicated on the mere fact that a past event which

has no present legal significance has affected the calculation

of seniority credit, even if the past event might at one time

have justified a valid claim against the employer.” 431 U.S.

at 554, 560. Thinking itself the wiser, the majority adopts Pal-

las’s “contrary view,” which, with respect, should be rejected

because it “substitute[s] a claim for seniority credit for almost

every claim which is barred by limitations.” Id. at 560.

3

The majority repeats Pallas’s error by invoking Bazemore

in this case. See ante, at 10035-37. Bazemore is simply inap-

posite. First, as the Supreme Court recently emphasized in

Ledbetter, “Bazemore stands for the proposition that an

employer violates Title VII and triggers a new EEOC charg-

ing period whenever the employer issues a paycheck using a

discriminatory pay structure. But a new Title VII violation

does not occur and a new charging period is not triggered

when an employer issues paychecks pursuant to a system that

is ‘facially nondiscriminatory and neutrally applied.’ ” Led-

better, 127 S. Ct. at 2174 (quoting Lorance v. AT&T Technol-

ogies, Inc., 490 U.S. 900, 911 (1989)). As discussed above,

Hulteen’s retirement benefits were calculated pursuant to a

facially nondiscriminatory and neutrally applied benefits plan,

which relies upon the NCS date. That date, which is the prod-

uct of the NCS seniority system, gives effect to the then-

lawful pre-PDA pregnancy leave rules that granted only par-

tial NCS credit for pre-PDA pregnancy leave. However, with-

out having established discriminatory intent in 1994 when

AT&T calculated benefits, Bazemore is of no help to Hulteen.

As the Supreme Court emphasized in Ledbetter, “[t]he fact

that precharging period discrimination adversely affects the

calculation of a neutral factor (like seniority) that is used in

determining future pay does not mean that each new paycheck

constitutes a new violation and restarts the EEOC charging

period.” 127 S. Ct. at 2174 (emphasis added).

HULTEEN v. AT&T CORPORATION 10071

Second, in Bazemore the post-Title VII salary structure

resulted in a fresh violation of Title VII because it was a

“ ‘mere continuation’ ” of the pre-Title VII discriminatory

pay structure. Ledbetter, 127 S. Ct. at 2173 (quoting Bazem-

ore, 478 U.S. at 397 n.6 (Brennan, J., joined by all other

Members of the Court, concurring in part)). But in this case,

AT&T’s NCS seniority system is not the “mere continuation”

of the pre-PDA pregnancy leave rules; indeed it was expressly

amended to give full effect to pregnancy leave post-PDA. In

Bazemore, a current violation existed because the Service

paid black employees less than white employees for each new

hour (week, month, or year) of work after the enactment of

Title VII. In this case, no current violation exists: AT&T

grants NCS seniority credit for each period of pregnancy

leave after the enactment of the PDA, on the same terms as

disability-related leave. Simply put, unlike in Bazemore,

AT&T’s pre-PDA pregnancy leave rules no longer apply to

female employees who took pregnancy leave after the enact-

ment of the PDA, which made such distinction based on preg-

nancy a violation of Title VII. Bazemore would only be

analogous in this case if AT&T had continued to deny full

NCS seniority credit to female employees who had taken

pregnancy leave after the enactment of the PDA and

attempted to defend that practice on the ground that it began

before the enactment of that Act.12 But AT&T did no such

thing.

Finally, the majority’s strained interpretation of Bazemore

effectively imposes an unjustified burden on AT&T to rem-

edy all acts of discrimination on the basis of pregnancy before

12

For example, if a female employee took pregnancy leave in 1976,

before the enactment of the PDA, and again in 1981, after the enactment

of the PDA, the reasoning in Bazemore would apply only if AT&T contin-

ued to limit NCS seniority credit to 30 days (the maximum credit under

AT&T’s pregnancy leave rule in effect in 1976) for her pregnancy leave

in 1981. However, AT&T grants full NCS seniority credit for pregnancy

leaves taken after the enactment of the PDA. Accordingly, Bazemore is

simply inapt here.

10072 HULTEEN v. AT&T CORPORATION

the enactment of the PDA. Because the PDA is not retroactive,13

that is more than Congress required with the PDA. That is

also more than the Supreme Court required in Bazemore.

There, the Court held that “recovery may not be permitted for

pre-[Title VII] acts of discrimination”; thus the Service was

not required to pay retroactively the salary disparity for pre-

Title VII discrimination. Bazemore, 478 U.S. at 395 (Bren-

nan, J., joined by all other Members of the Court, concurring

in part) (emphasis added). Indeed, the Supreme Court empha-

sized that its decision in Bazemore “in no sense gives legal

effect to the pre-1972 actions, but, consistent with Evans . . . ,

focuses on the present salary structure, which is illegal if it is

a mere continuation of the [pre-Title VII] discriminatory pay

structure.” Id. at 396 n.6. By requiring AT&T now to grant

retroactive NCS seniority credit for pregnancy leave prior to

the effective date of the PDA, the majority impose an entirely

gratuitous burden upon AT&T to remedy the NCS seniority

system with respect to all classifications based on pregnancy

occurring before the enactment of the PDA. Bazemore pro-

vides no support for such arbitrary result.

D

In sum, because there is no evidence that AT&T acted with

the requisite discriminatory intent in 1994 when it calculated

Hulteen’s retirement benefits based in part on the NCS senior-

ity system, Bazemore is inapposite. Without more, the NCS

seniority system simply gives present effect to a past pre-PDA

incident. Under Evans that pre-PDA incident is “merely an

unfortunate event in history [with] no present legal conse-

quences.” 431 U.S. at 558. For this reason, the Supreme

Court’s logic in the Evans line of authority, reinforced weeks

ago in Ledbetter, controls the outcome of this case. Under that

line, “[a] new violation does not occur, and a new charging

period does not commence, upon the occurrence of subse-

quent nondiscriminatory acts that entail adverse effects result-

13

See cases cited supra n.9.

HULTEEN v. AT&T CORPORATION 10073

ing from the past discrimination.” Ledbetter, 127 S. Ct. at

2169 (emphasis added). The time for Hulteen to have chal-

lenged AT&T’s pre-PDA pregnancy leave rules has long

since expired.

IV

A

As the Seventh Circuit recognized in Ameritech, 42 U.S.C.

§ 2000-2(h) “offers good reason to treat seniority systems

with special care, because it specifically exempts discrimina-

tory effects that flow from bona fide seniority systems from

the definition of unlawful employment practices, as long as

the differences are not the result of an intention to discrimi-

nate.” Ameritech, 220 F.3d at 823; see also Trans World Air-

lines, Inc. v. Hardison, 432 U.S. 63, 81 (1977) (“Seniority

systems . . . are afforded special treatment under Title VII.”).

That section states:

Notwithstanding any other provision of this sub-

chapter, it shall not be an unlawful employment

practice for an employer to apply different standards

of compensation, or different terms, conditions, or

privileges of employment pursuant to a bona fide

seniority or merit system, or a system which mea-

sures earnings by quantity or quality of production or

to employees who work in different locations, pro-

vided that such differences are not the result of an

intention to discriminate because of race, color, reli-

gion, sex, or national origin, nor shall it be an unlaw-

ful employment practice for an employer to give and

to act upon the results of any professionally devel-

oped ability test provided that such test, its adminis-

tration or action upon the results is not designed,

intended or used to discriminate because of race,

color, religion, sex or national origin. It shall not be

an unlawful employment practice under this sub-

10074 HULTEEN v. AT&T CORPORATION

chapter for any employer to differentiate upon the

basis of sex in determining the amount of the wages

or compensation paid or to be paid to employees of

such employer if such differentiation is authorized

by the provisions of section 206(d) of Title 29.

42 U.S.C. § 2000e-2(h).

Section 2000e-2(h) provides AT&T no protection in this

case if (1) AT&T’s NCS seniority system is not a “bona fide”

seniority system; or (2) the differences are a result of an inten-

tion to discriminate. Neither exception bars protection of

AT&T’s NCS seniority system here.

First, the Supreme Court held in International Brotherhood

of Teamsters v. United States, 431 U.S. 324 (1977), that an

otherwise valid seniority system did not lose its bona fide

character simply because its operation may perpetuate past

discrimination. Id. at 353-54. In Teamsters, the Supreme

Court considered a seniority system that allegedly perpetuated

the effects of pre-Title VII discrimination. Id. at 348. The

employer’s seniority system unmistakably advantaged white

employees who had accumulated longer tenure because of the

“employer’s prior intentional discrimination” against “Negro

and Spanish-surnamed employees” before the enactment of

Title VII. Id. at 349-50. The Court stated that it “must decide,

in short, whether [§ 2000e-2(h)] validates otherwise bona fide

seniority systems that afford no constructive seniority to vic-

tims discriminated against prior to the effective date of Title

VII.” Id. at 349. And the Court concluded that, “[a]lthough a

seniority system inevitably tends to perpetuate the effects of

pre-Act discrimination in such cases, the congressional judg-

ment [through § 2000e-2(h)] was that Title VII should not

outlaw the use of existing seniority lists and thereby destroy

or water down the vested seniority rights of employees simply

because their employer had engaged in discrimination prior to

the passage of the Act.” 431 U.S. at 352-53. Thus, AT&T’s

NCS seniority system does not lose its bona fide characteristic

HULTEEN v. AT&T CORPORATION 10075

simply because it gives effect to the pre-PDA pregnancy leave

rules that granted only partial NCS credit for pre-PDA preg-

nancy leave.

Second, under § 2000e-2(h), “[t]o be cognizable, a claim

that a seniority system has a discriminatory impact must be

accompanied by proof of a discriminatory purpose.” Am.

Tobacco Co. v. Patterson, 456 U.S. 63, 69 (1982). But, as the

Seventh Circuit held in Ameritech, “these employees cannot

show the kind of intentional discrimination that would trigger

the exception to the statutory protection afforded to seniority

systems” because “prior to the adoption of the PDA an

authoritative Supreme Court decision had held that Title VII

did not prohibit distinctions based on pregnancy.” 220 F.3d at

823 (citing Gilbert, 429 U.S. 125). Moreover, because the

PDA is not retroactive, see supra n.9, AT&T “would have no

reason to think it had to reshuffle its NCS list after the Act

was passed,” Ameritech, 220 F.3d at 823, and therefore the

continued reliance on the unadjusted NCS date cannot consti-

tute intentional discrimination.

B

In an effort to frustrate reliance on § 2000e-2(h), the major-

ity simply reads that provision out of the statute in all preg-

nancy discrimination cases. Ante, at 10048-51. The majority

points to the PDA, which states that “women affected by

pregnancy, . . . shall be treated the same for all employment

related purposes, . . . as other persons not so affected but simi-

lar in their ability or inability to work, and nothing in section

§ 2000e-2(h) of this title shall be interpreted to permit other-

wise” (the “§ 2000e-(2)(h) proviso”). 42 U.S.C. § 2000e(k)

(emphasis added). While the majority’s argument has surface

appeal, that proviso cannot bear the burden it attempts to

place upon it.

First, the majority’s interpretation of that section com-

pletely removes the application of § 2000e-2(h) in all preg-

10076 HULTEEN v. AT&T CORPORATION

nancy discrimination suits under Title VII. Ante, at 10048-51.

But Congress did not go so far. If Congress had intended

wholly to prohibit the application of § 2000e-2(h) in all preg-

nancy discrimination cases, Congress would have expressed

this intent more clearly, as it did with other provisions in the

Civil Rights Act. Compare, e.g., 42 U.S.C. § 2000a(e) (“The

provisions of this subchapter shall not apply to a private club

or other establishment not in fact open to the public, except

to the extent that the facilities of such establishment are made

available to the customers or patrons of an establishment

within the scope of subsection (b) of this section.”); id.

§ 2000e-1(c)(2) (“Sections 2000e-2 and 2000e-3 of this title

shall not apply with respect to the foreign operations of an

employer that is a foreign person not controlled by an Ameri-

can employer.”).

Second, the conclusion that Congress did not intend that

proviso to remove § 2000e-2(h)’s protection for bona fide

seniority systems in all pregnancy discrimination cases draws

further support from the context in which Congress passed the

PDA. “Congress enacted the Pregnancy Discrimination Act of

1978, amending Title VII to include pregnancy classifications

within the statutory definition of sex discrimination,” in

response to the Supreme Court’s decision in Gilbert. See

Toomey v. Clark, 876 F.2d 1433, 1437 (9th Cir. 1989). By

amending Title VII to define “because of sex” to include on

the basis of pregnancy, the PDA “in effect overruled” Gil-

bert’s general holding that an employer’s disability benefit

plan did not violate Title VII because it excluded pregnancy-

related disabilities. Toomey, 876 F.2d at 1437. By adding the

§ 2000e-2(h) proviso to the PDA, Congress did not intend to

remove that section’s protection of bone fide seniority sys-

tems in all pregnancy discrimination actions as the majority

argues, but rather to address a specific anomaly suggested in

Gilbert.

In Gilbert, the Supreme Court refused to defer to the

EEOC’s interpretation of Title VII to prohibit discrimination

HULTEEN v. AT&T CORPORATION 10077

on the basis of pregnancy, because it appeared to conflict with

another agency’s interpretation of the Equal Pay Act. 429

U.S. at 144-45. The last sentence of § 2000e-2(h), the so-

called Bennett Amendment, was the source of the apparent

conflict in Gilbert. The Bennett Amendment provides that

“[i]t shall not be an unlawful employment practice under this

subchapter for any employer to differentiate upon the basis of

sex in determining the amount of the wages or compensation

paid or to be paid to employees of such employer if such dif-

ferentiation is authorized by the provisions of [the Equal Pact

Act, 29 U.S.C. § 206(d)].” 42 U.S.C. § 2000e-2(h). The Equal

Pay Act, in turn, generally authorizes the payment of wages

to employees at a lesser rate than the opposite sex “where

such payment is made pursuant to (i) a seniority system; (ii)

a merit system; (iii) a system which measures earnings by

quantity or quality or production; or (iv) a deferential based

on any other factor other than sex” 29 U.S.C. § 206(d)(1),

quoted in Gilbert, 429 U.S. at 412 n.21.14 In Gilbert the

Supreme Court interpreted the Bennett Amendment, in con-

junction with an agency regulation under the Equal Pay Act,

to permit under Title VII the exclusion of benefits under Title

VII for pregnancy-related disabilities under an employer’s

disability plan. Id. 144-45. Considering itself “pointed in dia-

metrically opposite directions by the conflicting regulations,”

the Supreme Court declined to grant deference to the EEOC’s

interpretation of Title VII to prohibit discrimination on the

basis of pregnancy. Id. 145-46. For these reasons, Congress

added the § 2000e-2(h) proviso to foreclose the possibility

raised in Gilbert that the Bennett Amendment would permit

wage discrimination under Title VII on the basis of preg-

nancy.

In sum, contrary to the majority’s conclusion, the plain

14

In County of Washington v. Gunther, 452 U.S. 161 (1981), the

Supreme Court held that the Bennett Amendment incorporated into Title

VII the four affirmative defenses of the Equal Pay Act in sex-based wage

discrimination cases. Id. at 171.

10078 HULTEEN v. AT&T CORPORATION

meaning of the § 2000e-2(h) proviso in the PDA and the

accompanying context establish that Congress did not intend

to remove the protections of § 2000e-2(h) for bona fide

seniority systems in all pregnancy discrimination actions.

Congress, of course, was free to excise § 2000e-2(h) with

respect to pregnancy discrimination actions. But the majority

reads far too much into the § 2000e-2(h) proviso in the PDA,

and therefore it is the majority, and not Congress, that renders

that section wholly inapplicable in such actions.

V

The majority also relies on 42 U.S.C. § 2000-5(e)(2) to

shore up its conclusion that Hulteen’s sex discrimination

claim is timely. Congress added § 2000-5(e)(2) to Title VII

with the Civil Rights Act of 1991, Pub. L. No. 102-166, 105

Stat. 1071, 1078-79 (Nov. 21, 1991).15 That section states in

relevant part that

an unlawful employment practice occurs, with

respect to a seniority system that has been adopted

for an intentionally discriminatory purpose in viola-

tion of this subchapter (whether or not that discrimi-

natory purpose is apparent on the face of the

seniority provision), when the seniority system is

adopted, when an individual becomes subject to the

15

The majority contends that the Civil Rights Act of 1991 simply “clari-

fied that injury occurs at the time that the seniority system is applied to

the aggrieved party because that is when the employee is actually harmed

by the deprivation of benefits.” Ante, at 10045 (emphasis added). But the

Supreme Court recently rejected that view. See Ledbetter, 127 S. Ct. at

2169 n.2 (“The dissent attaches great significance to [the Civil Rights Act

of 1991], suggesting that it shows that Lorance was wrongly reasoned as

an initial matter. However, the very legislative history cited by the dissent

explains that this amendment and the other 1991 Title VII amendments

‘ “expand[ed] the scope of relevant civil rights statutes in order to provide

adequate protection to victims of discrimination.” ’ ” (emphasis and sec-

ond alteration in original) (citations omitted)).

HULTEEN v. AT&T CORPORATION 10079

seniority system, or when a person aggrieved is

injured by the application of the seniority system or

provision of the system.

42 U.S.C. § 2000-5(e)(2). As the Seventh Circuit succinctly

put it in Ameritech, under § 2000-5(e)(2) “[i]f the employees

are able to show intentional discrimination, their action

accrues at the time they are injured by the seniority system—

that is, when they are denied benefits.”16 Ameritech, 220 F.3d

at 823 (emphasis added).

If that section were to apply here, Hulteen’s sex discrimina-

tion action, of course, would have been timely. For § 2000-

5(e)(2) to apply, however, Hulteen would have to establish

that AT&T adopted its NCS seniority system “for an inten-

tionally discriminatory purpose in violation of” Title VII. The

majority boldly asserts that AT&T’s seniority system inten-

tionally discriminates against pregnant women because the

NCS system “ ‘facially discriminates against pregnant women

[because it] distinguishes between similarly situated employ-

ees’ ” and “[f]acial discrimination is ‘by its very terms’ inten-

tional discrimination.” Ante, at 10047 (quoting Pallas, 940

F.2d at 1327, and Lovell v. Chandler, 303 F.3d 1039, 1057

(9th Cir. 2002)). But the majority simply ignores the statutory

requirement that Hulteen must show such intentional discrim-

ination at the time the seniority system was adopted.

Contrary to the majority’s assertion, § 2000-5(e)(2) cannot

serve to revive Hulteen’s sex discrimination charge in this

case. Hulteen cannot show that AT&T adopted the pre-PDA

pregnancy leave rules at the heart of this case with an inten-

16

The majority asserts that “[t]he Seventh Circuit’s analysis in Ameri-

tech is problematic because, although it mentioned the Civil Rights Act of

1991, it failed to actually apply it.” Ante, at 10047. Far from ignoring that

Act as the majority suggests, the Seventh Circuit concluded that it did not

apply because the employees failed to show discriminatory intent at the

time the employer adopted the seniority system, a statutory prerequisite.

Ameritech, 220 F.3d at 823.

10080 HULTEEN v. AT&T CORPORATION

tionally discriminatory purpose. See also Ameritech, 220 F.3d

at 829 (holding that the “employees cannot show the kind of

intentional discrimination that would trigger the exception to

the statutory protection afforded to seniority systems”). First,

the Supreme Court held in Gilbert that Title VII did not nec-

essarily prohibit distinctions based on pregnancy before the

enactment of the PDA. 429 U.S. at 145-56. There, the

Supreme Court concluded that an employer’s disability bene-

fits plan did not violate Title VII because it failed to cover

pregnancy-related disabilities. Id.17 Second, the Supreme

Court expressly held in Gilbert that classifications based on

pregnancy were not facially discriminatory. Id. at 134-36,

138; see also Satty, 434 U.S. at 140 (“Petitioner’s decision not

to treat pregnancy as a disease or disability for purposes of

seniority retention is not on its face a discriminatory policy.”);

supra pp. 10065-67. AT&T adopted the pregnancy leave rules

at the core of this case before the PDA and changed those

rules prospectively upon the enactment of the PDA in full

compliance with the statute that changed the operative playing

field previously defined by the Supreme Court. Accordingly,

in light of these authoritative Supreme Court precedents,

Hulteen cannot establish that AT&T adopted those pre-PDA

pregnancy leave rules for an intentionally discriminatory pur-

pose in violation of Title VII. See Ameritech, 220 F.3d at 823.

Absent a showing of discriminatory intent at that time,

§ 2000-5(e)(2) does not apply in this case.

17

While erecting a confusing benefits-burdens framework, in Nashville

Gas Co. v. Satty, 434 U.S. 136, the Supreme Court reaffirmed Gilbert.

There, the Court concluded that Title VII allowed an employer to deny

benefits to female employees who became pregnant, but Title VII prohib-

ited an employer from imposing on female employees who became preg-

nant a burden that men need not suffer. Id. at 142. Under that approach,

the Supreme Court in Satty concluded that an employer’s policy of requir-

ing forfeiture of all accumulated seniority for female employees who

became pregnant violated Title VII, id. at 138-43, but, reaffirming Gilbert,

held that an employer’s policy of not awarding sick-leave pay to female

employees who became pregnant did not violate Title VII, id. 143-46.

HULTEEN v. AT&T CORPORATION 10081

VI

As Judge Dumbauld lamented in his dissent to Pallas, we

consider “ ‘a melancholy tale [o]f things done long ago, and

ill-done.’ ” 940 F.2d at 1327 (Dumbauld, J., dissenting) (quot-

ing John Ford, The Lover’s Melancholy). Because Pallas

invented a timely Title VII violation where the determination

of benefits simply gave present effect to past, unchallenged

acts, contrary to Supreme Court authority, it must be over-

ruled. Because the majority today erroneously embraces Pal-

las and perpetuates a circuit split with the Sixth and Seventh

Circuits, I must respectfully dissent.