Petition — Liberty Mutual Insurance v. Wetzel

Court, U. S$.

74-1245 ee tL ED

APR 2 1975

IN THE

Supreme Court of the Ginite

OCTOBER TERM, 1974

No. 74-.......

LIBERTY MUTUAL INSURANCE COMPANY,

A CORPORATION,

Petitioner,

vs.

SANDRA WETZEL, anD MARI ROSS, ON BEHALF OF

THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

KALVIN M. GROVE

STEVEN R. SEMLER

LEDERER, Fox AND GROVE

Sears Tower—Suite 7916

233 South Wacker Drive

Chicago, Illinois 60606

ROBERT A. PENNEY

175 Berkeley Street

Boston, Massachusetts 02226

CLEM R. KYLE

717 Liberty Avenue

Pittsburgh, Pennsylvania 15222

Attorneys for Liberty Mutual

Insurance Company

Gunthorp-Warren Printing Company, Chicago e 346-1717

e.

INDEX

PAGE

Rc ee 1

a a a ed ee 2

I le 2 eS er ale 2

ae ot ee ee oe ee 2

I a Oa 3

Reasons for Granting the Writ .................005. 5

The Federal Judiciary Requires Guidance Concerning

the Effect 1 Be Accorded This Court’s Decision in

Geduldig v. Aiello in the Administration of Title VII. 5

AUTHORITIES CITED

Cases

Communication Workers of America v. A.T. & T. Co.,

Long Lines Dept., 379 F. Supp. 679 (S.D. N.Y. 1974),

appeal docketed, No. 74-2191 (2nd Cir. 1974) ..... 10

Espinoza v. Farah Mfg. Co., 414 U.S. 86 (1973) ..... 8

Geduldig v. Aiello, 417 U.S. 484 (1974) ....3, 5,6, 7, 10, 11

Gilbert v. General Electric Company, 375 F. Supp. 367

(E.D. Va. 1974), appeal docketed, No. 74-1557 (4th

Ne ok eas wee 11

Griggs v. Duke Power Co., 401 U.S. 424 (1971) ...... 7

Harding v. Kemper Insurance Co., No. 74-E-448-S (Mass.

Comm. Against Discrimination) ..............65.. 11

Isakson v. Fireman’s Fund American Insurance Co., No.

74-67 (City of Minneapolis Dept. of Civil Rights) .... 11

N.L.R.B. v. Savair Mfg. Co., 470 F. 2d 305 (6th Cir.

1972), affd. 414 U.S. 270 (1973) ................ 9

Newmon v. Delta Air Lines, Inc., 374 F. Supp. 238

Sh Se GD ewe kvneuceee seseuevewnandbuer 5,9

Ohio Civil Rights Commission v. Nationwide Life In-

surance Co., Case No. SE-6-74-2353 (O.C.R.C.) .... 11

Sale v. Waverly—Shell Rock Board of Education, ...... F.

Supp. ........... , 9 FEP Cases 138 (N.D. Iowa 1975) .... 11

Udall v. Tallman, 380 U.S. 1 (1965) ............... 9

Van Hoomissen v. Xerox Corp., 368 F. Supp. 829 (N. D.

i Dn +66 cde bee db eee > Renee eeshneteneen 9

Willingham v. Macon Telegraph Publishing Co., 507 F.

2d 1085 (Sth Cir. 1975) (en banc) .............. 8

iii

Statutes & Regulations

A RE SS A Oe a 2

ee a cL eee ae neesseseeens 11

ee oot og oi eGo OES GOES OOS eS 2,5

ep ee EE ov koe cceéeedecececseees 2-3

Miscellaneous

Note, Employer Dress and Appearance Codes and Title VII

of the Civil Rights Act of 1964, 46 So. Cal. L. Rev.

IR carats 2 hace i ee aig x

Note, Developments in The Law—Employment Discrimi-

nation and Title VII of the Civil Rights Act of 1964,

ee GE, ee UY CUPUED dec cccwovccnccess 8

Opinion Letter of EEOC General Counsel, CCH Employ-

ment Practices, December 21, 1966, 4 17,304.43 (1966

Go + cect ccecbunedntds checweseedscosvesseoes 8

IN THE

Supreme Court of the Anited States

OcTOBER TERM, 1974

LIBERTY MUTUAL INSURANCE COMPANY,

A CORPORATION,

Petitioner,

VS.

SANDRA WETZEL, anpD MARI ROSS, oN BEHALF OF

THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

Petitioner, Liberty Mutual Insurance Company (herein

“Liberty” or “the Company”) respectfully prays that a writ of

certiorari issue to review the judgment of the United States

Court of Appeals for the Third Circuit entered in this case

on February 11, 1975. (App. p. Al).

OPINIONS BELOW

The opinion of the Court of Appeals (App. pp. A2-A18) is

not yet officially reported. The opinion of the District Court

(App. pp. A19-A48) is reported at 372 F. Supp. 1146 and its

memorandum order, denying the Company’s motion for recon-

sideration (App. pp. A49-A51), is reported at 372 F. Supp.

1163.

The opinion and judgment of the Court of Appeals for the

Third Circuit (App. pp. Al-A48), affirming the judgment of

the United States District Court for the Western District of

Pennsylvania (App. pp. 19-51), were both issued on February

11, 1975. The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

QUESTION PRESENTED

Does an employer's exclusion of coverage for pregnancy re-

lated disabilities from an employee disability income protection

plan constitute sex discrimination proscribed by Title VII of

the Civil Rights Act of 1964?

STATUTE INVOLVED

The relevant portion of Section 703 of Title VII of the Civil

Rights Act of 1964, as amended, 42 U.S.C. § 2000e-2(a)(1),

is set forth below:

* o * . .

Sec. 703. (a) It shall be an unlawful employment prac-

tice for an employer—(1) to fail or refuse to hire or to

discharge any individual or otherwise to discriminate against

any individual with respect to his compensation, terms,

conditions, or privileges of employment, because of such

individual's race, color, religion, sex, or national origin;

* * > * >

The relevant portions of the Equal Employment Opportunity

Commission's Guidelines on Discrimination Because of Sex, 29

CFR, Chapter XIV, Part 1604, Sections 1604.9 and 1604.10,

effective March 30, 1972, are set forth below:

* * * * .

Sec. 1604.9 Fringe Benefits—(a) “Fringe benefits,” as

used herein, includes medical, hospital, accident, life in-

surance and retirement benefits; profit-sharing and bonus

3

plans; leave; and other terms, conditions, and privileges

of employment.

(b) It shall be an unlawful employment practice for

an employer to discriminate between men and women with

regord to fringe benefits. * * *

. al > . >

Sec. 1604.10 Employment Policies Relating to Pregnancy

and Childbirth—(a) A written or unwritten employment

policy or practice which excludes fxm employment ap-

plicants or employees because of pregnancy is in prima

facie violation of Title VII.

(b) Disabilities caused or contributed to by pregnancy,

miscarriage, abortion, childbirth, and recovery therefrom

are, for all job-related purposes, temporary disabilities and

should be treated as such under any health or temporary

disability insurance or sick leave plan available in connec-

tion with employment. Written and wiwritten employment

policies and practices involving matters such as the com-

mencement and duration of leave, the availability of ex-

tensions, the accrual of seniority and other benefits and

privileges, reinstatement, and payment under any health or

temporary disability insurance or sick leave plan, formal

or informal, shall be applied to disability due to pregnancy

or childbirth on the same terms and conditions as they are

applied to other temporary disabilities. * * *

STATEMENT OF THE CASE

This case presents a significant question of first impression in

the administration of the Civil Rights Act of 1964, as amended,

which was raised, but not resolved, in this Court's recent decision

in Geduldig v. Aiello:’ whether a private employer's distinctions

in coverage under an employee income protection plan, based

upon pregnancy, constitutes sex discrimination under Title VII,

particularly when, under Aiello, the identical exclusion by a

State, under its plan, was found to not constitute discrimination

based on sex.

1. 417 U.S. 484 (1974).

4

Liberty Mutual is a casualty insurance company which main-

tains offices throughout the country. Both men and women are

employed in the claims departments of these offices in what

the Company terms a “technical” capacity. Two of these tech-

nical claims department employees in Pittsburgh, Pennsylvania,

filed charges with the Equal Employment Opportunity Com-

mission in 1971 accusing Liberty of engaging in proscribed sex

discrimination.* Upon issuance of a right to sue letter to plain-

tiffs, they commenced an action in the district court, alleging, in-

sofar as is relevant herein, that Liberty discriminated against a

nationwide class of all female employees working in a technical

capacity in all Liberty claims offices, with respect to the ex-

clusion of coverage for pregnancy from its employee disability

income protection plan.

Liberty provides its employees with an income protection

plan as a fringe benefit. Pursuant to this plan, an employee out

of work eight calendar days due to an illness requiring the care

of a physician, receives insurance benefits for the duration of

disability, which continues for a period of up to age 65 if the

employee has been with the Company for more than five years,

or for a maximum two-year period if with the Company less

than five years. In addition, employees receive a salary supple-

ment for as many weeks as they have completed years of service

with the Company. The plan does not cover leaves or tem-

porary absences occasioned by pregnancy.*

Upon the basis of the foregoing, which was adduced by means

of discovery, plaintiffs moved for summary judgment with re-

2. It is noteworthy that, at the time the charges were filed, the

Company’s policy of excluding coverage of pregnancy under its

disability policy, was lawful, even in the view the E.E.O.C. It

was only subsequent to the charges that the Commission, on March

30, 1972, reversed its position and, via its guidelines, condemned

the practice it previously stated was not unlawful.

3. Nor does it cover intentionally self-inflicted injuries, suicide

attempts, accidents arising out of employment (for which work-

men’s compensation benefits would accrue), nor disabilities arising

out of war.

5

spect to liability. The district court granted that motion on

January 9, 1974 and issued an interlocutory order finding that

Liberty violated the Civil Rights Act of 1964, as amended, 42

U.S.C. § 2000e, et seq., with respect to application of its in-

come protection plan to pregnant employees (App. pp. 19-48).

Thereafter, Liberty moved the district court to reconsider its

order in light of the opinion of the United States District Court

for the Northern District of Georgia in Newmon v. Delta Air

Lines, Inc., 374 F. Supp. 238 (1973). The district court denied

this motion on February 20, 1974, but at the same time certified

its findings as a final order (App. pp. 49-51), thus enabling

Liberty's appeal to the Third Circuit, which on February 11,

1975, affirmed the district court’s decision (App. pp. A2-A18).*

REASONS FOR GRANTING THE WRIT

The Federal Judiciary Requires Guidance Concerning the

Effect to Be Accorded This Court’s Decision in Geduldig v.

Aiello in the Administration of Title VII

1. In Geduldig v. Aiello, 417 U.S. 484 (1974), this Court

held that a similar exclusion of coverage for pregnancy benefits

under a public disability income plan administered by the State

of California did not amount to individious sex discrimination

in violation of the equal protection clause of the Fourteenth’

Amendment to the Constitution. In finding the “under-in-

clusiveness of the set of risks that the State has selected to

insure”™® to be nondiscriminatory, this Court observed that the

plan neither “discriminated{d] with respect to the persons or

groups which are eligible for disability insurance protection under

4. The Court of - also affirmed the finding that the

Company violated Title by — pregnant employees to

return to work within six months of 4 tee cluineionment of leave, or

three months from delivery. The Petitioner does not present that

question for review by this Court.

5. 417 US. at 494.

6

the program,”® nor “worked to discriminate against any de-

finable group or class in terms of the aggregate risk protection

derived ...”". As the Court succinctly summarized, the predicate

for a finding of discriminatory treatment was plainly lacking:

“There is no risk from which men are protected and women are

not. Likewise, there is no risk from which women are pro-

tected and men are not.””*

Notwithstanding the presence of the identical factors in the

subject case which this Court utilized in Aiello to explain the

nondiscriminatory nature of the pregnancy exclusion therein,

the Court of Appeals summarily dismissed Aiello’s applicability,

finding it “not dispositive,” because that case arose in a con-

stitutional, rather than statutory, context (App. p. A8). It is

submitted, however, that Aiello is dispositive and that the source

of the Court of Appeals error lie in its misconception of this

Court's analysis in Aiello.

The equal protection context involved in Aiello posed a two

step analytical framework: First, was there discrimination on

the basis of sex? Second, if so, was it defensable on the grounds

that rationale reasons supported it. While the second step of

analysis may conceivably yield different results in the statutory

context due to Title VII arising under the commerce, rather

than equal protection clause, the first question is the same in

either the constitutional or statutory context. Since this Court

decided in Aiello that the pregnancy exclusion was not dis-

criminatory, that holding, forming the initial, as well as dis-

positive step of analysis, disposed of this case. The distinctions

drawn by the Court of Appeals on the basis of the rational

State interests pertinent to the second step of analysis are wholly

irrelevant and, accordingly, an erroneous basis for distinguish-

ing Aiello.

6. Id.

7. Id. at 496.

8. Jd. at 496-97 (footnote omitted).

7

The subject decision of the Court of Appeals therefore con-

flicts with this Court’s decision in Aiello and mandates review

by this Court to provide guidance to the federal judiciary con-

cerning the relationship of that case to the administration of

Title VII.

2. The Court of Appeals justified its decision primarily upon

deference to the E.E.0.C.’s self-serving sex discrimination guide-

lines which require insurance coverage for pregnancy when

coverage for most other disabilities is provided (App. p.

Al12). The guideline is, however, untenable, and the power

wielded by the Commission thereunder constitutes a particularly

pernicious abuse of agency power which commands review by

this Court.

a. The dissenting Justices in Aiello relied heavily upon the

Commission’s sex discrimination guidelines (pp. 2-3, supra;

417 U.S. at 501). In express response to the dissent, the ma-

jority rejected that argument, explaining (/d. at 496 n. 20):

* * * Normal pregnancy is an objectively identifiable phys-

ical condition with unique characteristics. * * *

The lack of identity between the excluded disability and

gender as such under this insurance program becomes

clear upon the most cursory analysis. The program divides

potential recipients into two groups—pregnant women and

nonpregnant persons. While the first group is exclusively

female, the second includes members of both sexes. The

fiscal and actuarial benefits of the program thus accrue to

members of both sexes.

The rationale of Aiello’s footnote no. 20 is equally applicable

to this case and compels rejection of the Commission’s funda-

mentally inconsistent sex discrimination guidelines.

b. It is axiomatic that agency guidelines which are founded

upon supportive legislative history are entitled to great defer-

ence® by the judiciary, and conversely, those which are con-

9. Griggs v. Duke Power Co., 401 U.S. 424, 433 (1971).

trary to the legislative history are entitled to no deference.”

Here, however, there is no legislative history’ supporting the

Commission’s guideline.’

Indeed, the Commission, for the first eight years in the ad-

ministration of the Act uniformly maintained that the practice

it now condemns was not unlawful. Thus, the Commission

maintained:

[I]t is our opinion that . . . a company’s group insurance

program which . . . excludes from its long term salary

continuation program those disabilities which result from

pregnancy and childbirth would not be in violation of Title

VIL.

10. Espinoza v. Farah Mfg. Co., 414 U.S. 86 (1973).

11. The “sex” discrimination amendment to Section 703(a)

was passed only one day before the House approved Title VII. There

was, as a result, only cursory floor debate; indeed, even the Court of

Appeals observed that it was inserted in a “tongue-in-cheek manner

with the intent to undermine the entire Act and assist in its defeat.”

(App. p. A9) Commentators have reached the same conclusion

as well. See, e.g., Note, Employer Dress and Appearance Codes

and Title VII of the Civil Rights Act of 1964, 46 So. Cal. L. Rev.

965, 968 (1973); Note, Developments in the Law—Employment

Discrimination and Title VII of the Civil Rights Act of 1964, 84

Harv. L. Rev. 1109, 1167 (1971).

12. The absence of any meaningful legislative history concerning

the scope of the congressional ban against sex discrimination has,

moreover, engendered a significant conflict in the Court of Appeals

over the breadth of this proscription. Thus, the Court of —

concluded herein, notwithstanding its concession that pertinent legis-

lative history was “indeed meager,” that “the broad purposes of

the Act can be applied to sex discrimination cases. Congress intended

to strike at all discriminatory treatmaent of men and women.” (App.

p. A9) In contrast, however, the Fifth Circuit held in Willingham v.

Macon Telegraph Publishing Co., 507 F.2d 1085, 1090 (en banc,

1975), that the inconclusive legislative history compelled the “nega-

tive inference” that a in all probability did not intend

for its proscription of sexual discrimination to have significant and

sweeping implications.” This conflict, it is submitted, threatens

uniform administration of Title VII and hence, further mandates

review by this Court.

13. This position statement of the Commission’s General Coun-

sel was nationally reported in CCH Employment Practices, Decem-

ber 21, 1966, 17,304.43 (1966 ed.).

9

Notwithstanding the absence of any articulated basis for

change, the Commission then suddenly reversed itself, and after

the charges in this case were filed, promulgated the rule that

“benefits shall be applied to disability due to pregnancy or

childbirth on the same terms and conditions as they are applied

to other temporary disabilities” (p. 3, supra). By giving great

deference to the Agency’s new guideline, the Court has ignored

and corrupted the premises upon which deference is owed.

First, deference accorded an agency’s interpretation is sound

only to the extent that it “has been acted upon for a number of

years” and is consistent with legislative history. Udall v. Tallman,

380 U.S. 1, 18 (1965). Neither requirement is met in this case.

In such circumstances, the original view is traditionally deemed

the correct one,"* especially since there was no foundation for

change from the longstanding prior position which, moreover,

Congress made no attempt to modify when Title VII was

amended in 1972.

Second, the Commission’s guidelines are not reasonable in

fact; they equate pregnancy with illness for purposes of requiring

coverage for it on a same par with other temporary disabilities

occasioned by illness. Indeed, as one federal court recently

critically observed in refusing to give any deference to the same

guideline here involved, “there appears to be no factual basis

upon which these regulations were drawn.”"* Further, there is

simply no evidence that the Commission gave serious thought to

the widespread ramifications’’ of its sudden reversal in policy.

14. Cf. N.L.R.B. v. Savair Mfg. Co., 470 F.2d 305 (6th

Cir. 1972), affd, 414 U.S. 270 (1973).

15. Cf. Van Hoomissen v. Xerox Corp., 368 F. Supp. 829

(N.D. Cal. 1973).

16. Newmon v. Delta Air Lines, Inc., 374 F. Supp. 238, 245

(N.D. Ga. 1973).

17. American Telephone and Telegraph Company, amicus curiae

in the Court of Appeals, estimates, for example, that based on an

eight week leave, system wide benefit costs for the projected

number of pregnancies would have increased its costs by $19,037,330

for 1971-1972.

10

Third, and perhaps the most pernicious aspect involved, the

agency has worked a reversal of the burden of proof upon liti-

gants: Under the shield of “agency deference”, the Commission

has evaded the scrutiny required of its reversed position, and the

Court of Appeals’ (App. p. Al2) acquiesence has catapulted

the guideline, from the shallow sands upon which it is built,

into a fortress-like rule of law which exists simply because the

Commission says it does. By baselessly changing its position and

then bootstrapping its position on the ground that its views are

entitled to great deference, the Agency has insulated itself from

challenge and avoided its burden of proof. Such abusive ex-

ploitation of the rule of deference to agency guidelines, it is

submitted, has engendered lack of respect in the business com-

munity for the Commission’s view and, accordingly, warrants

review by this Court to end the increasing litigation generated by

the widespread .refusal to acquiese in the Commission’s newly

divined rule.

3. The uncertain status concerning the effect to be given

Aiello in the Title VII context has already produced a significant

conflict in the federal courts, which is only serving to engender

further litigation as employers and fair employment practice

agencies square-off awaiting further guidance from this Court.

Thus, in direct conflict with the subject decision the district

court for the Southern District of New York found Aiello

dispositive in a Title VII case similar to the subject one:

In Communications Workers of America v. A. T. & T. Co.,

Long Lines Dept., 379 F. Supp. 679, 682 (S.D.N.Y.), the

Court, relying exclusively upon Aiello, and dismissing the case,

stated:

The holding [in Aiello] was that California’s treatment of

pregnancy related disabilities did not in and of itself con-

stitute a discrimination based on sex (or gender). Such a

11

holding precludes relief under Title VII even more clearly

than under the Fourteenth Amendment. Under the Amend-

ment it would be open to pregnant women to argue that it

was irrational to single them out as a class even if the

singling out were not sex related. No such argument is

open under Title VII... .

That judgment has been appealed to the Court of Appeals

for the Second Circuit,"* where it has been argued and is awaiting

decision. In contrast, the district court in Sale v. Waverly-Shell

Rock Board of Education, ....... F. Supp. ...... 9 FEP Cases

138, 141 (N.D. Iowa 1975), refusing to apply Aiello and

finding a violation, certified the case for immediate appeal pur-

suant to 28 U.S.C. § 1292(b), because of its assessment that

“this order involves a controlling question of law as to which

there is a substantial ground for difference of opinion.”

Additionally, an appeal involving the effect of Aiello in the

Title VII context is pending in the Court of Appeals for the

Fourth Circuit.’* Because of the volume of litigation generated

as a result of the Aiello decision, and the likelihood of additional

cases crowding the judicial and agency dockets,” this Court

should clarify the meaning of that case and its relationship to

Title VII.

18. No. 74-2191, Court of Appeals for the Second Circuit.

[While this Petition was in the final stages of printing, counsel

was telephonically advised that the Court of Appeals had just

reversed and remanded the A.7.&T7. case. While this reversal further

demonstrates the conflict within the judiciary concerning the effect of

Aiello, our analysis of the Second Circuit's decision must, of neces-

sity, be reserved to our reply to the anticipated opposition to this

Petition. ]

19. Gilbert v. General Electric Company, Fourth Circuit, No.

74-1557, on appeal from the U.S. District Court for the Eastern

District of Virginia, 375 F. Supp. 697 (1974).

20. E.g., Isakson v. Fireman’s Fund American Insurance Co.,

No. 74-67, (City of Minneapolis Dept. of Civil Rights), Ohio Civil

Rights Commission v. Nationwide Life Insurance Co., Case No.

SE-6-74-2353 (O.C.R.C.); Harding v. Kemper Insurance Co., No.

74-E-448-S (Massachusetts Comm. Against Discrimination).

12

CONCLUSION

For the foregoing reasons, Liberty Mutual Insurance Com-

pany respectfully prays that this petition for a writ of certiorari

be granted.

Respectfully submitted,

KALVIN M. GROVE

STEVEN R. SEMLER

LEDER®R, FOX AND GROVE

Sears Tower—Suite 7916

233 South Wacker Drive

Chicago, Illinois 60606

ROBERT A. PENNEY

175 Berkeley Street

Boston, Massachusetts 02226

CLEM R. KYLE

717 Liberty Avenue

Pittsburgh, Pennsylvania 15222

Attorneys for Liberty Mutual

Insurance Company

‘ 7 e.g Bey Ser ee

fell aR IESE

Al

UNITED STATES COURT OF APPEALS

No. 74-1233

SANDRA WETZEL and Mari Ross, on behalf of themselves and

all others similarly situated,

Equal Opportunity Commission as Amicus Curiae,

vs.

LIBERTY MuTUAL INSURANCE COMPANY, a corporation,

Appellant.

(D. C. Civil Action No. 72-169)

On Appeal from the United States District Court

for the Western District of Pennsylvania

Present: STALEY, HasTie and ALDISERT, Circuit Judges

JUDGMENT

This cause came on to be heard cn the record from the

United States District Court for the Western District of Penn-

sylvania and was argued by counsel.

On consideration whereof, it is now here ordered and ad-

judged by this Court that the judgment of the said District

Court, filed February 20, 1974, be, and the same is hereby

affirmed. Costs taxed against appellant.

Attest:

/s/ T. F. QUINN,

Clerk

February 11, 1975

A2

UNiTeD STATES COURT OF APPEALS

for the Third Circuit

No. 74-1233

SANDRA WETZEL, and Mari Ross, on behalf of themselves and

all others similarly situated,

vs.

LIBERTY MUTUAL INSURANCE COMPANY,

a Corporation,

Appellant.

On Appeal from the United States District Court for the Western

District of Pennsylvania

Argued October 30, 1974

Before STALEY, Hastie and ALDISERT, Circuit Judges.

LEDERER, FOX AND GROVE,

Sears Tower—Suite 7916,

233 South Wacker Drive,

Chicago, Illinois 60606.

ROBERT A. PENNEY,

175 Berkeley Street,

Boston, Massachusetts 02226.

CLEM R. KYLE,

717 Liberty Avenue,

Pittsburgh, Pennsylvania 15222.

Attorneys for Appellant.

—_—— —

REED SMITH SHAW & McCLAY,

747 Union Trust Building,

Pittsburgh, Pennsylvania 15219,

Counsel for Amicus Curiae Westing-

house Electric Corporation.

WILLIAM A. CAREY, General Counsel,

JOSEPH T. EDDINS, Associate General

Counsel,

BEATRICE ROSENBERG,

CHARLES L. REISCHEL,

BETH L. DON,

Attorneys for Amicus Curiae Equal

Employment Opportunity Com-

mission,

1800 G Street, N. W.,

Washington, D. C. 20506.

A4

OPINION OF THE COURT.

(Filed February 11, 1975)

By STALEY, Circuit Judge.

This appeal presents this court with significant questions of

first impression. We are asked to determine whether Title VII

of the Civil Rights Act of 1964, 42 U. S. C. § 2000e, et seq.,’ is

violated by a private employer who maintains employment poii-

cies that exclude pregnancy benefits from the company’s income

protection plan and that require female employees to return to

work within three months after childbirth or face termination.

Appellant, Liberty Mutual Insurance Company (“Liberty

Mutual”) is a national insurance underwriting business. Two of

its employees, Wetzel and Ross, filed charges of sex discrimina-

tion with the Pennsylvania Human Relations Commission

(“PHRC”). Filing of these charges led the company to review

and change certain employment policies. The PHRC, however,

failed to conciliate the parties, and Wetzel and Ross then filed

charges with the United States Equal Employment Opportunity

Commission (“EEOC”). After the statutory period within

which charging parties are precluded from commencing litiga-

tion, Wetzel and Ross requested and received right-to-sue letters.

On February 28, 1972, appellees commenced a class action on

behalf of female employees of Liberty Mutual, alleging that

appellant’s hiring and promotion policies and its pregnancy

related policies violated Title VII. The court granted the plain-

tiffs’ motion for class action and ordered that the suit could be

maintained as a class action under Rule 23(b)(2) of the Fed.

1. Section 703(a)(1) of the Civil Rights of 1964, 42 U. S. C.

§ 2000e2(a)(1), in pertinent part provides:

“It shall be an unlawful employme sy tt for an employer

. to fail or refuse to hire or to oy individual, or

otherwise to discrimnate against any individual with respect to

his compensation, terms, conditions, or privileges of employment,

because of i individual’s race, color, religion, sex, or national

origin -

AS

R. Civ. P. On March 26, 1973, after extensive discovery, Wetzel

and Ross moved for partial summary judgment only as to the

issue of liability. The district court, on January 9, 1974, finding

no issues of material fact, entered an interlocutory order finding

that Liberty Mutual’s pregnancy-related policies violated Title

VII of the Civil Rights Act of 1964. Liberty Mutual subse-

quently filed a motion for reconsideration which was denied by

the court. On February 20, 1974, the district court, pursuant to

Rule 54(b), directed the entry of final judgment as to the

pregnancy-related issues,? thus giving this court jurisdiction

under 28 U. S. C. § 1291. It is from this order that Liberty

Mutual appeals. The district court, in its order of January 9,

1974, also ruled that Liberty Mutual’s hiring and promotion

policies violated Title VII. On March 19, 1974, that court made

its judgment final, and the company appealed at No. 74-1515.

That appeal has been disposed of by another panel of this court,

and we need not discuss the issues presented there.’

Although appellant relegated the issue to a mere footnote,

we believe the question of whether the district court had juris-

diction is worthy of discussion. One who alleges a violation of

Title VII may not sue in federal district court until he has

exhausted his administrative remedies.‘ The filing of a charge

with the EEOC is a statutory prerequisite to commencing an

action in federal court. Richardson v. Miller, 446 F. 2d 1247,

1248 (C. A. 3 1971).

Appellant contends that the portion of the complaint relating

to the pregnancy policies should have been dismissed because

those claims were not presented to the EEOC. The basis for

this contention is that a box labeled “Benefits” on the Notice of

Charge form was not checked. Instead, a box labeled “Terms

and Conditions” was checked. We find no merit in appellant's

wpm ioyay court’s opinion is reported at 372 F. Supp. 1146

. i) et al. v. Liberty Mutual Ins. Co., No. 74-1515 (C. A.

4. 42U.5S.C. § 2000e-5(e).

A6

contention. The private litigant plays an important role in the

enforcement of Title VII. The EEOC was created by Congress

to effectuate the goals of the Civil Rights Act of 1964 (“Act”).

In 1972 the Equal Employment Opportunity Act, 42 USC

§ 2000e-5, provided the Commission with further authority to

bring its own actions. However, the Act did not provide the Com-

mission with direct powers of enforcement. Since enforcement

lies exclusively in the federal courts, Choate v. Caterpillar

Tractor Co., 402 F. 2d 357, 359 (C. A. 7 1968), the rights of

a private party, therefore, must not be barred by procedural

technicalities if Title VII is to operate effectively. Alexander

vy. Gardner-Denver Co., 415 U. S. 36, 44 (1974). Courts

have continously construed Title VII so as not to allow pro-

cedural technicalities to bar a claim under the Act. Sanchez v.

Standard Brands, Inc., 431 F. 2d 455 (C. A. 5 1970). The

only jurisdictional prerequisites that must be satisfied to com-

mence federal action are a timely filing of charges with the

EEOC and the receiving and acting on the EEOC notice of

the right to sue. 42 U. S. C. § 2000e-5(e).

Under the Act the charge of discrimination must be initiated

by laymen—people who are apt to be of varying educational

backgrounds and certainly few, if any, having knowledge of the

subtleties of pleading and of statutory distinctions. Further,

the complainants are probably, at this point, not represented by

counsel and should not be held to as strict a standard as

appellants have suggested. Since Wetzel and Ross have satisfied

the jurisdictional prerequisites and are people without legal

expertise, we believe that to deny them access to the federal

courts because of a technical error would seriously undermine

the policies of the Act and serve only to harm the interests of

those whom the Act was designed to protect. “[T]echnicalities are

particularly inappropriate in a statutory scheme in which lay-

men, unassisted by trained lawyers, initiate the process.” Love

v. Pullman Co., 404 U. S. 522, 527 (1972).

A7.

Also persuasive is the Supreme Court’s decision in McDonnell

Douglas Corp. v. Green, 411 U. S. 792, 798 (1973). The

Court held that since court actions under Title VII are de novo

a complainant is not resiricted to “those charges as to which the

Commission has made findings of reasonable cause.” See also

Fekete v. U. S. Steel Corp., 424 F. 2d 331 (C. A. 3, 1970);

Robinson v. Lorillard Corp., 444 F. 2d 791 (C. A. 4, 1971).

We, therefore, believe that the district court properly had

jurisdiction.

Pregnancy Benefits.

Liberty Mutual provides its employees with an income pro-

tection plan. The plan is a fringe benefit and provides em-

ployees with the payment of income during periods of disability.

Funding of the plan is partially through employee contributions.

After an employee is out of work eight days because of an ill-

ness requiring the care of a doctor, the employee receives a

percentage of his salary for the duration of his leave. If the

employee has been with the company five years or more,

he receives benefits up to age 65. If the employee has been

with the company less than five years, he receives the benefits

for 103 weeks. Liberty Mutual, however, does not pay any

benefits under the income protection plan for disability due to

pregnancy or for any disability related to pregnancy. Leaves or

temporary absences due to pregnancy-related disabilities are

not covered by the plan.

Liberty Mutual maintains that Title VII does not require

it to include pregnancy benefits in the income protection plan.

In its reply brief and at oral argument, Liberty Mutual primarily

relied on Geduldig v. Aiello, 417 U. S. 484 (1974). Appellant

feels that Aiello is dispositive of the case before us. We believe

there are several distinctions between the cases and therefore

disagree with the appellant.

Geduldig v. Aiello involved the question of whether there was

sex discrimination in violation of the Equal Protection Clause

A8

of the Fourteenth Amendment. Here we are involved with the

question of whether there was discrimination in violation of

Title VII of the Civil Rights Act of 1964. In this posture our

case is one of statutory interpretation rather than one of con-

stitutional analysis. On this distinction alone we believe appel-

lant’s reliance on Aiello is misplaced.

In Geduldig v. Aiello, the Supreme Court held that the

State of California could choose not to include disabilities re-

lating to normal pregnancy within its disability insurance pro-

gram and not be violative of the Fourteenth Amendment's

prohibition against sex discrimination. The Court relied heavily

on the fact that California’s program was totally self-supporting,

“never drawing on general state revenues.” Geduldig v. Aiello,

supra at 492. We are not faced with an insurance program similar

to Aiello’s, and we need not attempt to balance public social

welfare interests with the Constitution. An examination of Cali-

fornia’s program showed that only normal pregnancy and de-

livery disabilities were excluded from the benefits, while Liberty

Mutual excluded all pregnancy-related disabilities. It is worthy

of note that at oral argument, appellants counsel declared that

the company’s income protection plan would not cover a

disability suffered by a pregnant women but would have covered

the disability had the woman not been pregnant. The California

program as of January 1, 1974, covers certain pregnancy-related

disabilities. See Geduldig v. Aiello, 417 U. S. 484, 490-91,

note 15.

For the above reasons we do not rely on Geduldig v. Aiello

and find that it is not dispositive of the issues presently before us.

We then will proceed with our analysis, first examining the

legislative history of the statute involved. The Civil Rights

Act of 1964 was enacted to assure equality of employment

opportunities. McDonnell Douglas Corp. v. Green, 411 U. S.

792; Griggs v. Duke Power, 401 U. S. 424 (1971). Reading

the statute and the legislative history of the Act indicates that

A9

one of the goals of Congress was to provide the opportunity

for anyone to enter the job market without being subjected to

disparate treatment because of race, color, religion, sex, or

national origin. “The purpose of this title is to eliminate,

through utilization of formal and informal remedial procedures,

discrimination in employment.” H. Rep. No. 914, 1964, U. S.

Code Cong. & Adm. News 1964, p. 2401. Congress intended to

eliminate any artificial or arbitrary impediments to employment.

Until the 1964 Civil Rights Act, women had little or no legal

weapons to attack their systematic exclusion from many employ-

ment opportunities. The legislative history pertaining to the

addition of the word “sex” to the Act is indeed meager. It

appears that the amendment to the Act was offered in a

tongue-in-cheek manner with the intent to undermine the entire

Act and assist in its defeat. See 110 Cong. Rec. 2804-05 (1964).

In 1972 Congress had the chance to make any changes to the

Act that it felt was necessary. No substantive changes were made

regarding sex discrimination, and we feel this indicates a con-

gressional satisfaction with the operation and administration of

the Act. We, therefore, believe that the broad purposes of the

Act can be applied to sex discrimination cases. Congress in-

tended to strike at all discriminatory treatment of men and

women. Sprogis v. United Air Lines, Inc., 444 F. 2d 1194, 1198

(C. A. 7 1971), cert. denied, 404 U. S. 991 (1971).

To effectuate the goals of Title VII, Congress created the

EEOC. 42 U.S. C. § 2000e-4. As an agency, the EEOC was

given the power by Congress to issue regulations or guidelines

that would indicate what are or are not proscribed discriminatory

practices. These guidelines are the agency’s interpretation of the

statute. When faced with statutory construction problems, courts

have generally held that the guidelines are entitled to great

deference. McDonnell Douglas Corp. v. Green, supra; Griggs v.

Duke Power Co., supra.

Al0O

The guidelines’ we deal with here prohibit an employer from

discriminating berween men and women with regard to em-

ployment policies and fringe benefits.

Appellate urges us to reject these guidelines on the basis that

the guidelines were contra to the EEOC’s earlier position and

are now wholly inconsistent with the policy and understanding of

5. Ҥ 1604.9 Fringe benefits.

“(a) ‘Fringe benefits,’ as used herein, includes medical, hospital,

accident, life insurance and retirement benefits; t-sharing and

~~" eacua eaaaaasiiameramnmaee privileges of em-

oyment.

“(b) It shall be an unlawful t ice for an em

eam rant simran rtp Oe oe eaters

“(d) It shall be an unlawful employment practice for an employer

to make available benefits for the wives and familie of mak can-

loyees where the same benefits are not made available for the hus-

ds and for the wives of male employees which are not made avail-

able for female employees; or to make available benefits to the hus-

bands of female employees which are not made available for male

employees. An example of such an unlawful employment practice is a

situation in which wives of male employees receive maternity benefits

while female employees receive no such benefits.

— Employment policies relating to pregnancy and child-

“(b) Disabilities caused or contributed to by pregnancy, mis-

— abortion, childbirth, and recovery therefrom are, for all job-

temporary disabilities and should be treated as such

under any th or temporary aisability insurance or sick leave plan

sae in Bp with employment. Written a. oo

employment policies practices involving matters as the com-

mencement and duration of leave, and availability of extensions, the

accrual of seniority and other benefits and i , reinstatement,

and apr ey A Ae DE ility insurance or

sick leave plan, formal or informal, shall be applied to disability due

to pregnancy or childbirth on the same terms and conditions as they

are applied to other temporary disabilities.

“(c) Where the termination of an employee who is temporarily

ee loyment policy under which insufficient

or no leave is avai such a termination violates the Act if it has

a disparate impact on employees of one sex and is not justified by

business necessity.”

All

the statute and therefore should be given no deference by this

court. Appellant cites us Espinoza v. Farah Mfg. Co., 414 U. S.

86 (1973) in support of the argument. In that case the petitioner

alleged that Farah had discriminated against her because of her

“national origin” in violation of Title VII. The Supreme Court

in Espinoza said the EEOC guideline then in question,

“(The guideline relied on . . . is no doubt entitled to

great deference, [citing cases] but that deference must have

limits where, as here, application of the guideline would

be inconsistent with an obvious congressional intent not

to reach the employment practice in question.” Espinoza

supra at 94.

The Court was persuaded not to follow the EEOC interpreta-

tion of “national origin” because of legislative action by Congress.

The “obvious congressional intent” was found in other statutes

that required federal employees to be citizens of the United

States. The Court concluded that Congress did not intend that

citizenship be a requirement for federal employment and “at the

same time, prevent private employers from doing likewise.”

Espinoza supra at 91. The EEOC guideline was, therefore, re-

jected. Appellant suggests that because the EEOC had for several

years indicated that the denial of pregnancy benefits did not

violate the Act and now holds that this practice does violate

the Act, the EEOC is inconsistent, making the guidelines not

worthy of our consideration. The inconsistency to which the

Supreme Court addressed itself in Espinoza was that the EEOC

guideline was not reflective of the congressional intent. The

Court did say it was significant that the EEOC had held two

different views, but went on to say that the more recent guide-

line was entitled to great deference. Espinoza supra at 94. Unlike

Espinoza, we have not found any congressional intent contrary

to the EEOC guideline nor any “compelling indications” that it

is wrong. Appellant has not shown any evidence in light of

the legislative history that would indicate that the guidelines are

inconsistent with any congressional intent. A study of the legis-

Al2

lative history of the Act does not show any intent other than

to strike at the broad spectrum of discrimination.

We are not persuaded by appellant's argument that because

the guidelines in question were issued in 1972, they should not

be given our deference. The EEOC as the agency charged with

the responsibility of administering the Act, has issued the guide-

lines to keep pace with changes in society’s attitudes. This evolu-

tionary process is a necessary function of our legal system—a

system that must remain flexible and adaptable to ever-changing

concepts of our society. Congress has recognized this intrinsic

process. See S. Rep. No. 92-415, 92d Cong., Ist Sess., p. 5, com-

ments by Sen. Williams.

We feel that the legislative purpose of the Act is furthered

by the EEOC guidelines and that the guidelines are consistent

with the plain meaning of the statute. Mindful that the guide-

lines are interpretive rules, we will give them our deference

as required by Griggs v. Duke Power Co., supra.

Under the pertinent guidelines, it is discriminatory to treat

pregnancy differently from other temporary disabilities. 29

C. F. R. § 1604.10(b). Liberty Mutual expressly excludes

all pregnancy disabilities from coverage under its plan while

at the same time covers all other disabilities except those

voluntarily inflicted.

Appellant, in justification of this policy, argues that because

pregnancy is voluntary and illnesses are not, pregnancy can be

excluded from its income protection plan. We disagree. Volun-

tariness is no basis to justify disparate treatment of pregnancy.

There are a great many activities that people participate in that

involve a recognized risk. Most people undertake these activities

with full knowledge of the potential harm. Drinking intoxicating

beverages, smoking, skiing, handball and tennis are all types of

activities in which one could sustain harm.

According to the Liberty Mutual’s policy, all disabilities that

could result from the above activities are covered under the

Al3

income protection plan. Even if we were to accept appellant's

argument of voluntariness, we find that some voluntary disabil-

ities are covered while one voluntary disability that is pecular

to women is not so covered, Either way we find no support for

appellant’s argument. Moreover, pregnancy itself may not be

voluntary. Religious convictions and methods of contraception

may play a part in determining the voluntary nature of a

pregnancy. There is no 100% sure method of contraception,

short of surgery, and for health reasons many women cannot

use the pill. This court will not accept “voluntariness” as a rea-

sonable basis for excluding pregnancy from appellant's income

protection plan.

Appellant next contends that the plan covers only those dis-

abilities arising from sickness, and since pregnancy is not a

sickness it is properly excluded from coverage. Again we dis-

agree. We believe that pregnancy should be treated as any

other temporary disability. Employers offer disability insurance

plans to their employees to alleviate the economic burdens

caused by the loss of income and the incurrence of medical

expenses that arise from the inability to work. A woman, dis-

abled by pregnancy, has much in common with a person dis-

abled by a temporary illness. They both suffer a loss of income

because of absence from work; they both incur medical ex-

penses; and the pregnant woman will probabiy have hospitaliza-

tion expenses while the other person may have none, choosing

to convalesce at home.°

Thus, pregnancy is no different than any other temporary

disability under an income protection plan offered to help em-

ployees through the financially difficult times caused by illness.

Under Liberty Mutual’s plan nearly all disabilities are covered.

We believe that an income protection plan that covers so many

temporary disabilities but excludes pregnancy because it is aot

a sickness discriminates against women and cannot stand.

6. See the proposal by Citizens’ Advisory Council on the Status

of Women, Love’s Labors Lost: New Conceptions of Maternity

Leaves. 7 Harv. Civ. Rights—Civ. Lib. L. Rev. 260, 282 (1972).

Al4

Appellant also contends that the plan does not violate Title

VII because of the company’s legitimate interest in maintaining

the financial integrity of the plan.

Appellant has offered no statistical information from which

we could conclude that the increased cost for pregnancy bene-

fits would be “devastating.” we do realize that there would

be an increased premium. However, we are not convinced that

integrity of the plan would be jeopardized.

Giving our deference to the EEOC guidelines, we agree that

cost is no defense under Title VII to this particular issue. 29

C. F. R. § 1604.9(e).

Appellant advanced several other arguments to support its

contentions, but we find them wholly without merit. The com-

pany’s policy is neutral on its face but treats a protected class

of persons in a disparate manner. This is precisely what Title

VII intends to strike down. Griggs v. Duke Power Co., 401

U. S. 424.

We conclude that Liberty Mutual's income protection plan

violates Title VII of the 1964 Civil Rights Act by excluding

pregnancy benefits from coverage while including other kinds

of temporary disabilities.

Maternity Leave.

Prior to September 1970, appellant’s female employees who

became pregnant were terminated after the eighth month with

no right to re-employment. This policy was modified in Septem-

ber 1970 and again in November 1971 to allow a pregnant

woman “to work for as long as her physician certifies her ability

to work.” This is presently the company’s policy. It further

allows a woman who has been employed by the company for

one year to take a maternity leave of absence of six months

from when the leave commences, or three months from the

date of delivery, whichever comes first. The employee must

return to work by or within the time limit or lose her job. This

Al5

time limitation is applied only to maternity leaves and not to

any other leave of absence for other temporary disabilities. In

essence, this means a person who suffered from a temporary

disability other than pregnancy would return to work after re-

covery; however, a woman with pregnancy related disabilities

must return to work within the specified time limit or be fired.

As we did in our ananlysis of pregnancy benefits and for the

same reasons, we allow great deference to the EEOC guidelines.

Also in keeping with our prior analysis we will view the com-

pany’s leave policies, keeping in mind that pregnancy is to be

treated as any other temporary disability.

The EEOC guidelines concerning the leave issue are in

pertinent part as follows:

“* * * * (Ejmployment policies and practices involving

matters such as the commencement and duration of leave,

the availability of extensions, the accrual of seniority and

other benefits * * * shall be applied to disability due to

pregnancy or childbirth on the same terms and conditions

as they are applied to other temporary disabilities.” 29

C. F. R. § 1604.10(b).

“Where the termination of an employee who is tem-

porarily disabled is caused by an employment policy under

which insufficient or no leave is available, such a termina-

tion violates the Act if it has a disparate impact on em-

ployees of one sex and is not justified by business neces-

sity.” 29 C. F. R. § 1604.10(c).

The guidelines also provide that it is a violation of title VII

for an employer to discriminate between men and women with

regard to “fringe benefits,” of which leaves are one. 29 C. F. R.

§ 1604.9(a) & (b). It would appear, under the EEOC’s in-

terpretation, that Liberty Mutual’s maternity leave policy violates

Title VIL. Pregnancy, as a temporary disability, must be treated

no differently than any other disability. We are not requiring

appellant to give to women any more than it already gives to

men. Since appellant provides leaves for all temporary disabili-

Al6

ties, it must also provide leaves for pregnancy on the same

basis.

In cases that have dealt with Title VII, courts have held that

any policy that operates to totally exclude women is violative

of the Act. Willingham v. Macon Telegraph Pub. Co., 482,

F. 2d 535 (C. A. 5 1973); Sprogis v. United Air Lines, Inc.,

444 F. 2d 1194; Weeks v. Southern Bell Tel. & Tel. Co., 408

F. 2d 228 (C. A. 5 1969). In essence Liberty Mutual has two

leave policies—one for pregnancy and one for other temporary

disabilities. Since pregnancy is a disability common only to

women, to treat it differently by applying a separate leave policy

is sex discrimination. Liberty Mutual argues that since most

women are recovered within six weeks and that most women do

not return to work after childbirth, the company is justified in

maintaining the present maternity leave policy. We disagree.

This attitude is precisely what Congress intended to strike down.

Discrimination based on stereotypes or overly categorized dis-

tinctions between men and women forbidden by Title VII. Bowe

v. Colgate-Palmolive Co., 416 F. 2d 711 (C. A. 7 1969); Weeks

v. Southern Bell Tel. & Tel. Co., supra. Justice Marshall, con-

curring in Phillips V. Martin Marietta Corp., 400 U. S. 542,

545 (1971), recognized that Congress intended to prevent em-

ployers from relying on stereotyped characterizations in the

formulation of their employment policies. The legal standard

articulated by the EEOC requires that women be considered

on an individual basis on their own particular capabilities and

not on “characteristics generally attributed to the group.” 29

C. F. R. § 1604.2(a)(1)(ii). A policy, therefore, that is

founded on generalizations, such as most women after giving

birth are fully recovered within six weeks, or that most women

do not return to work after giving birth, is discriminatory be-

cause it makes no provision for considering individual capa-

bilities. Appellant’s maternity leave policy, requiring all women

to return to work within three months or be fired, penalizes

Al7

women because of a physiological condition found only in

their sex. There is no leeway under this leave policy to

ascertain individual capabilities or characteristics. As the district

court properly found, Liberty Mutual’s policy bears “no rela-

tion to the fitness of any individual female to perform the

functions of her job.” 372 F. Supp. at 1161. One women may be

physically and mentally prepared to return to her job within

the arbitrary time limit, while another, although wishing to re-

turn, may be unable to do so because she has not fully re-

covered. We believe that a leave policy that ir essence operates

as two distinct policies, one affecting only women, cannot stand

under Title VII. A maternity leave policy that is applied to

one sex only, that is based on ciass generalizations of that sex,

and that treats pregnancy different from other temporary dis-

abilities, is not permitted under Title VII. The district court,

therefore, properly concluded, as a matter of law, that Liberty

Mutual’s maternity leave policy is violative of § 703 of Title VII.

Appellant, Liberty Mutual, did not assert at trial or on its

motion for reconsideration any affirmative defense, nor did it

allege any evidentiary facts that could arguably give rise to a

defense.’ And even now, appellant’s briefs merely allude to the

possibility of a defense, never presenting to this court any sub-

stantive arguments that have been developed from the cases

that have discussed this issue. There are a number of cases that

consider the business-necessity defense, but Liberty Mutual has

not cited any of them in relation to its justification argument.

The district court, however, did address itself to the possibility

of a bona fide occupational qualification, 372 F. Supp. at 1161.

The court, relying on Weeks v. Southern Bell Tel. & Tel. Co.,

supra, and Rosenfeld v. Southern Pacific Co., 444 F. 2d 1219

(C. A. 9 1971), concluded that Liberty Mutual did not meet

its burden of proof because it did not present any evidence that

could raise that defense.

7. On Liberty Mutual’s motion for reconsideration, the district

court noted that the company did not set for evidence in support

of its argument. 372 F. Supp. at 1164. ”

Als

It is only now, on appeal, that appeliant attempts to justify

its discriminatory policies. It is clear that an issue not raised

at the trial and then presented for the first time on the appeal

will not be considered by this court. A party who fails to plead

or fails to produce evidence that raises certain issues is “pre-

cluded from raising such issues on appeal.” Cady v. Twin Rivers

Towing Co., 486 F. 2d 1335, 1337 (C. A. 3 1973); Bogacki

v. American Machine & Foundry Co., 417 F. 2d 400, 407

(C. A. 3, 1969); Crompton-Richmond Co.-Factors v. Smith,

392 F. 2d 577 (C. A. 3 1967).

We conclude that Liberty Mutual’s income protection plan

and maternity leave policy are violative of Title VII of the

1964 Civil Rights Act. The district court properly granted sum-

mary judgmen*

For the foregoing reasons, the judgment of the district court

will be affirmed.

Al9

UNITED STATES DisTRICT COURT

W. D. Pennsylvania

SANDRA WETZEL and Mari Ross on behalf of themselves

and all others similarly situated,

Plaintiffs,

vs.

LIBERTY MUTUAL INSURANCE COMPANY, a corporation,

Defendant.

Civ. A. No. 72-169

Jan. 9, 1974

OPINION

WEBER, District Judge

The two named Plaintiffs on behalf of themselves and all

other female technical employees employed in Defendant Liberty

Mutual Insurance Company’s Claims Department (the Com-

pany) have filed a Complaint charging that the Company dis-

criminated against women in hiring, job classification, promo-

tions, and in the compensation and job benefits they received

for the jobs they were allowed to hold.

The Representative Plaintiffs are Sandra Wetzel, a woman,

who was hired by Defendant Company as a “Claims Represen-

tative” in July 1967, and Mari Ross, who was hired by Defend-

ant Company as a “Claims Representative” in September 1967.

Both allege that they suffered discrimination by reason of their

A20

sex because of the hiring, job classification, pay differential, and

employment benefit policies of Defendant Company and that

these policies were applied to all female technical employees in

the Defendant’s Claims Department throughout the nation where

Defendant Company did business.

The court determined that the action should proceed as a

class action covering all female technical employees in the De-

fendant’s Claims Department in the entire geographical area

where the Company did business. The class as now defined in-

cludes all such employees who were hired or working for the

Company in its Claims Department since July 2, 1965, the

effective date of Title VII of 42 U. S. C. § 2000e et seq., the

Equal Employment Opportunity Act of 1972.

Extensive discovery has been employed and the Plaintiffs now

file a motion for partial summary judgment on certain of the

issues raised. It is agreed between the parties that one of the

issues, designated the “equal pay” issue, is not susceptible of

summary judgment at this time because there are disputed issues

of fact with respect to whether or not the work performed by

women in the job classification of “Claims Representative” was

equal to the work performed by men in the job classification of

“Claims Adjuster” for which they were paid a substantially

higher salary. However, the Plaintiffs at this time allege that

there is no genuine issue as to any material fact with respect to

the job classification under which men and women were origi-

nally hired as technical employees in the Claims Department,

with regard to the promotional policy within the Claims De-

partment, and with regard to the pregnancy and maternity leave

policies of the Company including the disability income protec-

tion plan of the Company as applied to women on maternity

leave.

The key point of discrimination set forth in the pleadings,

evidentiary material and briefs of the plaintiffs, and the amicus

curiae brief of the United States Equal Employment Opportunity

A21

Commission is the hiring policy of the Company, since original

assignment in effect determines the employee’s future chances

of promotion within the Company. Because the Company in its

Claims Department promotes from its own ranks, the opportun-

ity for advancement depends upon the entry level position to

which an employee is assigned upon first being employed by the

Company’s claim division. Promotion to the higher rank of

Claims Supervisor was limited to persons holding the position of

Claims Adjuster and throughout most of the period under con-

sideration through 1970 was limited to male employees because

all Claims Adjusters were male. On the other hand the entry

level classification in the Company’s Claims Department of

“Claims Representative” was exclusively limited to women

throughout most of the period under consideration here. There

was no avenue of promotion to Claims Supervisor and higher

supervisory positions from those personnel classified as “Claims

Representatives” on entry into the Company in its Claims Di-

vision.

There were two higher supervisory positions in the “Claims

Representative” category, that of “Supervising Claims Repre-

sentative” and “Claims Representative Supervisor”, but no pro-

motion beyond the second rank. Although the line of responsi-

bility from “Claims Representative Supervisor” runs to “Claims

Supervisor” there is no similar line of promotion because all

“Claims Supervisors” are drawn from the ranks of “Claims

Adjuster”.

A22

The lines of responsibility and promotion are illustrated as

follows:

CLAIMS DEPARTMENT - TECHNICAL EMPLOYEES

LINES OF RESPONSIBILITY AND PROMOTION

Division Claims Manager

| Paes

Assistant Division Claims Manager

‘

'

Branch Office Clainis Manager

rr

Branch Ottice Assistant a ager

Claims Representative Supervisor

Supervising Claims Representative

Claims Adjuster (CA)

Claims Representative (CR)

lines of responsibility

limes of promotion ....... -

The same educational requirements were in 1965 and there-

after until 1970 with respect to the hiring of “Claims Ad-

justers” and “Claims Representatives’, a coliege degree. No

prior experience in the insurance business was required and

in fact the Company did not hire persons who had worked for

other insurance companies in its entry level positions in the

Claims Department.

Although the Defendant Company had employed “Claims

Adjusters” for a long period of time the position of “Claims

Representative” was created in mid-1965. The position was

created when the Company had decided to handle more of its

claims work from inside its offices. A recruiting brochure for

this position was prepared and circulated through college

Tee — — _

A23

placement offices and employment agencies. The qualification

for the “Claims Representative” position included a college

degree. The recruiting brochure is entirely female oriented. Its

title page bears the caption and picture identifying the position

as a job fit for a queen. It shows women in its illustrations of

persons performing their duties in this capacity. Between July

1, 1965 and the end of 1966, 401 persons were hired for the

positions of “Claims Representative”, not one of which was

male. Between July 1, 1965 and March 17, 1972, 2,329 per-

sons were hired as “Claims Representatives” of which 2,302

or 98.84% were women. The first male “Claims Representa-

tive” was hired in 1969, four in 1970, and twenty in 1971.

During the period from 1965 until the end of 1970, the Com-

pany hired over 2,000 “Claims Adjusters”, not one of which

was female. '

The recruiting brochure used by the Company during this

period describing the position and duties of “Claims Adjusters”

was entirely male oriented, its illustrations showing men per-

forming the duties of the position, and bearing the legend in

large type, “Are you the right man?”, and reciting the avenues

of advancement from Claims Adjuster through Branch Office

Claims Manager, Division Claims Manager, Manager Home

Office Examiners’ Division, and so on up the ladder. The Com-

pany promoted to advanced positions in its Claims Department

sole!v from those persons who had served it in the capacity of

“Claims Adjuster”.

The two Representative Plaintiffs were hired in the position

of “Claims Representative” and they have deposed that in

answer to their inquiries they were informed that the position

of “Claims Adjuster”, the beginning of the promotional ladder

in the Claims Department, was not available for women. It has

been admitted by representatives of the Defendant that the two

named Representative Plaintiffs were qualified for the position

of “Claims Adjuster” at the time of the original hiring.

A24

It would serve little purpose to recite in detail the great mass

of statistical evidence which the Plaintiffs have produced in

support of their contention that the two initial entry positions

were segregated between male and female applicants, that the

educational requirement for both positions was the same, that

no prior insurance experience was required for either position,

that the functions performed in these positions were very similar

that the pay differential between the positions was substantial,

being approximately $2,500 per year greater for the Claims

Adjuster, that prior to 1971 no opportunity was given to women

“Claims Representatives” to qualify for the position of “Claims

Adjuster”, and that all promotions to higher positions in the

Claims Department were made from the ranks of the exclu-

sively male “Claims Adjuster” classification.

In addition to the statistical evidence which is unrebutted here

the Plaintiffs have produced additional supporting evidence of

the Company’s employment policies with respect to women in

the Claims Division. Much of this evidence is in the form of

oral testimony and affidavits which may be subject to a ques-

tion of credibility but a good deal of the supporting evidence

is documentary and supports the Plaintiffs’ contention of a

recognized pattern of treating the male and female employees

in the Claims Department differently in respect to recruitment,

hiring classifications, promotional opportunities, and salary.

We are not speaking of salary or compensation with respect

to the question of whether equal pay was given for the same

work but in connection with the entry level salary paid for the

two classifications and the salary differential between “Claims

Representatives” of considerable experience and the starting

salary which they could receive when openings were finally

made available to “Claims Representatives” to become “Claims

Adjusters”.

Two sections of Fed. R. Civ. P. 56 are applicable to our con-

sideration of Plaintiffs’ motion for summary judgment. Fed. R.

Civ. P. 56(c) provides in part:

A25

“The judgment sought shall be rendered forthwith if the

pleadings, depositions, answers to interrogatories, and [the]

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact, and

wid the moving party is entitled to judgment as a matter

w.”

and Fed. R. Civ. P. 56(e) which provides in part:

“When a motion for summary judgment is made and sup-

ported as provided in this rule, an adverse party may not

rest upon the mere allegations or denials of his pleading,

but his response, by affidavits, or as otherwise provided in

this rule, must set forth specific facts showing that there

is a genuine issue for trial. If he does noi so respond, sum-

oe judgment, if appropriate, shall be entered against

The Plaintiffs have relied chiefly on statistical evidence

in support of their contention of discriminatory employment

policies and in many cases the courts have accepted such

evidence in determination of whether Title VII has been violated.

Parham v. Southwestern Bell Telephone Co., 433 F. 2d 421

[8th Cir. 1970]; Witherspoon v. Mercury Freight Lines, Inc.,

457 F. 2d 496 [Sth Cir. 1972]; Bing v. Roadway Express, Inc.,

444 F. 2d 687 [Sth Cir. 1971]; Rowe v. General Motors Corp.,

457 F. 2d 348 [Sth Cir. 1972]. In accordance with these deci-

sions and under the doctrine of McDonnell Douglas Corp. v.

Green, 411 U. S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668

[1973], once the plaintiff has established a prima facie case by

setting forth statistics of this kind the burden is on the employer

to sufficiently explain the disparity in hiring; conclusory state-

ments that the employer never discriminated in hiring is insuf-

ficient to satisfy this burden. As stated in McDonnell, supra,

“The burden then must shift to the employer to articulate some

legitimate, non-discriminatory reason for the respondent’s re-

jection.” (p. 802, 93 S. Ct. p. 1824). We are of the opinion

that the Defendant’s response to the Plaintiffs’ motion for sum-

mary judgment fails to address this burden at all, let alone rebut

the Plaintiffs’ evidence.

A26

The response of the Defendant raises eight issues of defense,

as follows:

1.

Neither of the naimed Representative Plaintiffs is currently

in the employ of the Defendant. This is not a contested issue

of fact. The Plaintiffs admit that both the representative party

Plaintiffs have left the employ of Defendant and the ques-

tion of whether or not their termination from employment was

voluntary or forced by discriminatory employment practices of

the Defendant is not an issue before us at this time. This is a

matter of law concerning standing and it has been held that a

former employee may bring an action to enforce rights under

this statute claimed to have been infringed. In Hackett v.

McGuire Bros., Inc., 445 F. 2d 442 [3d Cir. 1971] this conten-

tion was rejected;

“The national public policy reflected . . . in Title VII...

may not be frustrated by the development of overly tech-

nical judicial doctrines of standing or election of remedies.

If the plaintiff is sufficiently aggrieved so that he claims

enough injury in fact to present a genuine case or contro-

versy in the Article III sense, then he should have stand-

ing to sue in his own right and as a class representative.”

(pp. 446, 447).

The Circuit Court continued:

“A person claiming to be aggrieved may never have been

an employee of the defendant. Indeed the Act forbids dis-

crimination noi only by employers, 42 U. S. C. § 2000e-

2(a)(2), but also by potential employers, 42 U. S. C.

§ 2000e-2(a)(i), by labor organizations, 42 U. S. C.

§ 2000e-2(c), and by employment agencies, 42 U. S. C.

§ 2000e-2(b). An aggrieved person obviously is any per-

son aggrieved by any of the forbidden practices. (pp.

445-446).

An interesting commentary on the argument asserted to this court

was made in Reed v. Arlington Hotel Co., Inc., 476 F. 2d

721 [8th Cir. 1973):

representative party Plaintiffs, but irrelevant to the question of

Defendant claims that there is a dispute as to the con-

tent of conversations between representatives of the Company

and a representative of the Pennsylvania Human Relations

Commission. This alleged conversation bears on the Company’s

motive and intent in offering “Claims Adjuster” status to the

named-Plaintiffs at the time that it did. We find this completely

immaterial to the issue before us at this time because the

offer of Claims Adjuster status was not made until the alleged

discriminatory practices in violation of Title VII of the Act

had continued for several years and the issue had been raised

A28

by a Complaint to the Equal Employment Opportunity Com-

mission by the named Plaintiffs.

4.

The Defendant contends that there is a disputed issue of fact

on the question of whether or not the qualifications and entrance

requirements for the position of “Claims Adjuster” are substan-

tially different from those of “Claims Representative”. Although

with respect to the duties and responsibilities of each position

which we have previously designated as the “equal pay” issue,

not before the Court on this Summary Judgment motion, never-

theless we are concerned at this time with whether or not quali-

fied female applicants were excluded from the position of

“Claims Adjuster” and its subsequent promotional ladder. The

statistical evidence shows that of more than 2,000 persons hired

for the position of “Claims Adjuster” up through 1970, not one

was female. The Defendant’s own representatives have admitted

that the representative Plaintiffs in this case were qualified for

the position of “Claims Adjuster” at the time of original hiring.

Therefore, we find that the Defendant has not met the burden of

showing why no female personnel were hired for the “Claims

Adjuster” position during the period following the effective date

of Title VII until sometime after August 1971 and subsequent to

the filing of complaints in the within matter. Plaintiff's contention

is further supported by evidence that no female employees occu-

pied the supervisory position of “Claims Supervisor” in the

Company which were filled from the ranks of the “Claim Ad-

justers” until at least 1970. If the jobs were substantially dis-

similar as the Defendant claims, the differential in starting

salary may be justified but the total exclusion of women from

entry into the higher paid “Claims Adjuster” position would

remain as a discriminatory practice, and the promotional policy

of the company in drawing all of its supervisory personnel from

the ranks of the exclusively male “Claims Adjusters” continued

A29

and emphasized the discriminatory effect of the policy. There-

fore, we find that the Defendant’s argument of a difference in

the qualifications or duties of the two positions is immaterial to

the Plaintiffs’ charge that women were discriminated against in

the selection of persons to fill the “Claim Adjuster” position.

The company has offered no evidence of any bonafide occupa-

tional qualification to justify the complete exclusion of women

for this position for over a period of five years, particularly in

view of its later determination that some women “Claims Repre-

sentatives” were qualified for and were offered these positions.

5.

The Defendant argues that it is not clearly established by the

evidence that a large number of Defendant’s female employees

were desirous of and qualified for better positions. We cannot

see the materiality of this argument to the question presently

before us. The undisputed evidence establishes that after charges

were filed in this case, the Defendant did interview its “Claims

Representatives” and that 10% of them were offered and ac-

cepted positions as “Claims Adjusters”. It was further established

by testimony of a Company representative that the Company

considered one-third of its women “Claims Representatives” to

be qualified for the position of “Claims Adjuster”. We fail to

see how these facts alter the statistical evidence that of the more

than 2,000 “Claims Adjusters” hired between 1965 and 1970

none were women, that all of the “Claims Representatives”

hired during this period were women, that no woman in the

job classification of “Claims Representative” was ever promoted

to the supervisory position of “Claims Supervisor” during this

period; that the Company deliberately engaged in the recruitment

of women for the “Claims Representative” position and repre-

sented the “Claims Adjuster” position to be solely a position for

male applicants.

A30

6.

The Defendant objects to using the import of the recruiting

brochures which were offered in evidence by Plaintiffs and has

shown that they have since been superseded by new recruiting

literature that is not sex oriented. However, in this matter as

in several other matters offered in defense in this case the evi-

dence shows that the Company policy changed after having

been continued for a period of approximately five years from

the effective date of Title VII and after the threat of the in-

stant litigation became imminent. While the change in Com-

pany policy may affect the question of the amount of damages

for which it may be liable, we cannot see what effect it has on

the liability of Defendant for its policy from and after July

2, 1965.

7.

The Defendant disputes the Plaintiffs’ statement that Defend-

ant discouraged acceptances for the offer given to female

“Claims Representatives” for re-classification to the position of

“Claims Adjuster”. We do not find this to be a dispute on a

material issue of fact. Whether or not the company discouraged

its female “Claims Representatives” from accepting the offered

position of “Claims Adjuster”, after that occupational classifi-

cation was opened to women is immaterial to the issue of

whether or not the Company practiced discrimination in its em-

ployment policies from and after July 2, 1965.

For the purposes of this motion we may assume that the

Company did not discourage its female employees from ac-

cepting offers to transfer to the classification of “Claims Ad-

juster.”

8.

The Defendant disputes the inferences which the Plaintiffs

draw from the facts that no women were promoted to the posi-

tions of Branch Office Claims Manager and above. Whether

A3l

or not there is a dispute from these inferences the undisputed

fact remains that no women in the Defendant’s organization

were promoted to or held these positions, and the Defendant

has failed to come forward with any evidence to explain or

refute the disparity in promotional practices.

Il.

A second issue presented by Plaintiffs’ motion for summary

judgment may be broadly categorized as the maternity leave

issue. This in turn is divided into two sub-issues which we

label as

(a) the maternity leave conditions of employment and

(b) the income protection plan as applied to maternity

leave.

(a) Maternity leave policy.

Until March 1967, the Company policy was to terminate

the employment of a pregnant employee at the end of her sixth

month of pregnancy. Thereafter, until September 1970 the

policy was to terminate an employee after the eighth month of

pregnancy. An employee so terminated could be re-employed,

at the sole discretion of the Company, if she re-applied for

employment after the birth of her child and if there was a posi-

tion, available.

In September 1970, Company policy was changed to re-

quire pregnant employees either to terminate employment or

to take a leave of absence at the end of the eighth month and

to return to work either within six months of the date of termina-

tion of employment or three months from date of delivery,

whichever comes first.

In November 1971, Company policy was again changed to

permit an employee to work for as long as her physician certifies

her ability to work prior to commencing a maternity leave of

absence.

A32

(a) Income Protection Policy.

The Company provides as a fringe benefit of employment

an Income Protection Plan which provides for the payment of

income during periods of disability. This plan is funded by

insurance benefits. The only long term disability for which no

benefits are provided is pregnancy. Furthermore, the Defend-

ant’s health insurance plan provides coverage for children of

employees who are working for the Company at the time of

the birth of the child, and this excludes from coverage the child

of an employee who is absent on a maternity leave of absence

at the time of the birth of the child.

There is no disputed issue of fact as to the provisions of the

maternity leave policies and the fringe benefit coverage of

Defendant Company. The question presented to us is solely a

matter of law as the application of Title VII to these un-

disputed facts.

A threshold question raised by Defendant is that the Plain-

tiffs have not fulfilled the statutory requirement of exhaustion

of the administrative remedy, 42 U. S. C. § 2000e-5(e) because

the charges filed by these Plaintiffs with the EEOC never

mentioned this aspect of the complaint. The policy of the

statute is to give the EEOC an opportunity to investigate and

conciliate charges of discrimination.

The strongest case urged by Defendant Company is Tedford

v. Airco Reduction Co., 4 F.E.P. Cases 406 {Sth Cir. 1972],

where the Court of Appeals reversed the dismissal by the Dis-

trict Court of a claim for discriminatory hiring practices be-

cause of mootness. The Appeals Court held that the sub-

sequent hiring of plaintiff did not extinguish plaintiffs claim

for back wages. However, the Court of Appeals did sustain

the dismissal of claims of a discriminatory seniority system and

discriminatory job assignments because,

A33

“the only factual allegation in Tedford’s EEOC com-

plaint was that Airco had refused to hire him as a truck

driver because of his race.”

s 8 e & S

“But giving this factual allegation the most generous con-

struction possible, we still are unable to conclude that the

investigation could properly have extended to Airco’s

seniority system, the driver lists, and the like. A charge

filed before the EEOC is not a plenary charter for a Com-

mission investigation of every aspect of a company’s em-

ployment practices. The conclusion is unavoidable that the

EEOC has never been called upon to investigate these

practices, and accordingly that litigation of their validity

in federal court is premature.” 4 F.E.P. Cases, p. 409.

However, this was the same Circuit Court that decided Sanchez

v. Standard Brands, 431 F. 2d 455 (Sth Cir. 1970], and the

Tedford court gave due regard to the Sanchez doctrine.

However, the courts have not restricted a plaintiff's suit under

42 U. S. C. § 2000e-5(e) to the specific issues raised before

the EEOC, nor to the specific findings of the EEOC.

“Respondent satisfied the jurisdictional prerequisites to a

federal action (i) by filing timely charges of employment

discrimination with the Commission and (ii) by receiving

and acting upon the Commission’s statutory notice of the

right to sue, 42 U. S. C. §§ 2000e-5(a) and 2000e-5(e).

The Act does not restrict a complainant’s right to sue to

those charges as to which the Commission has made

findings of reasonable cause, and we will not engraft on

the statute a requirement which may inhibit the review of

claims of employment discrimination in the federal courts.

.. . and the courts of appeal have held that, in view of the

large volume of complaints before the Commission and the

nonadversary character of many of its proceedings ‘court

actions under Title VII are de novo proceedings and. . . a

Commission “no reasonable cause” finding does not bar a

lawsuit in the case.’ Robinson v. Lorillard Corp., 444

F. 2d 791, 800 [C.A. 4, 1971]; Beverly v. Lone Star

Lead Construction Corp., 437 F. 2d 1136 [C.A. §,

A34

1971]; Flowers v. Local 6, Laborers International Union

of North America, 431 F. 2d 205 {C.A. 7, 1971]; Fekete

v. United States Steel Corp., 424 F. 2d 331 {C.A. 3,

1970].” McDonnell Douglas Corp. v. Green, 411 U. S.

792, 798-799, 93 S. Ct. 1817, 1822, 1823, 36 L. Ed. 2d

668 [1973].

In Sanchez v. Standard Brands, Inc., cit. supra, it was ex-

plained that in filing a charge with the EEOC an aggrieved

person is supplied with a simple one-page charge form in which

a row of boxes is provided to check the category of discrimina-

tion. We have as Exhibits in the present case the Notice of

Charge which the EEOC gave to Defendant Company for each

case which indicates “Basis of Discrimination—Sex”, and “Na-

ture of Charge—Promotion—Terms and Conditions.” The

Sanchez court found that no charging party should be barred

from the assertion of a charge because of the technicality of

his description.

“Surely the only procedural requirement which should con-

front a Title VII complainant is the requirement that he

state, within the ninety-day period, facts sufficient to trigger

a Commission investigation. 431 F. 2d p. 462.

Sanchez continues:

“At least one district court in this circuit has addressed

itself to the question, however, and in our judgment it

responded to the question by giving the correct answer.

In King v. Georgia Power Co., N. D. Ga. 1968, 295 F.

Supp. 943, Judge Smith held that the allegations in a

judicial complaint filed pursuant to Title VII ‘may en-

compass any kind of discrimination like or related to allega-

tions contained in the charge and growing out of such

allegation during the pendency of the case before the

Commission.’ 295 F. Supp. at 947. In other words, the

‘scope’ of the judicial complaint is limited to the ‘scope’

of the EEOC investigation which can reasonably be ex-

pected to grow out of the charge of discrimination.” 431

F. 2d p. 466.

A35

It appeared from oral argument that Defendant, although it

had received the “Notice of Charge of Employment Discrimina-

tion”, had not seen copies of the original charges filed by Plain-

tiffs with the Commission before the argument. It appeared

that they had never been requested. They were supplied to the

court and counsel the day following the argument on this

motion. The charge of Plaintiff Mari Ross states, inter alia,

“During interview for position as claims representative was

subjected to questions regarding marital situation and birth

control.” Furthermore, the Plaintiffs were required to pursue

their charges through an appropriate state agency, the Pennsyl-

vania Human Relations Commission, which on July 1, 1971,

sent to Defendant a Complaint which recited, inter alia:

“The complainants further allege that female applicants,

as a condition of hire, are subjected to inquiries about

anticipated marriage and family size, while men are not

similarly evaluated as a condition of hire.”

(Aune, Deposition, Exhibition 1).

The court believes that the Representative Plaintiffs have

properly employed the administrative procedures of Title VII

which are a prerequisite to suit in the district court, they have

properly raised the issue of sex discrimination in the “terms

and conditions” of employment, that they specifically raised

allegations of discrimination in respect to marital status and

family planning sufficient to satisfy the administrative investiga-

tion requirement for raising the specific question of sex dis-

crimination in maternity leave and pregnancy disability income

policies in the present lawsuit.

As a point of departure in considering the merits of Plaintiffs’

charges of sex discrimination with respect to Defendant’s ma-

ternity leave and pregnancy disability income protection policies

it might appear to the lay mind that we are treading on the

brink of a precipice of absurdity. Perhaps the admonition of

Professor Thomas Reed Powell to his law students is apt; “If

you can tink of something which is inextricably related to some

A36

other thing and not think of the other thing, you have a legal

mind.”

We are dealing with a statute enacted by the Congress of the

United States which says:

“It shall be unlawful employment practices for an em-

ployer—

(1) to fail or refuse to hire or to discharge any individual

or otherwise to discriminate against any individual with

respect to his compensation, terms, conditions, or privileges

or employment, because of such individual’s . . . sex; or

(2) to limit, segregate or classify his employees in any way

which would deprive or tend to deprive any individual of

employment opportunities or otherwise adversely affect his

status as an employee, because of such individual’s . . .

sex.” 42 U. S. C. § 2000e—2(a).

The defendant argues that its policies with regard to maternity

leave and income protection for disability excluding pregnancy

are not sex discriminatory because pregnancy is “sui generis”

and thus subject to special treatment.

We believe that the court may take judicial notice of certain

well known facts and statistics to illustrate the problem. We

have taken our statistics from the United States Census figures

as published in the 1974 edition of the World Almanac. In

1970, according to the census figures, there were 105,000,000

women and 100,000,000 men in the United States. In 1972

there were 31,000,000 women and 51,000,000 men, sixteen

years of age and upwards, employed in the United States.

Women between the ages of fourteen through forty-four

amounted to 43.5% of the total female population or 45,675,000

women, which we equate with the childbearing age. There is a

necessary Overlapping of the 31,000,000 women in the work

force sixteen years of age and older, and the 45,000,000 women

in the childbearing ages of fourteen to forty-four. There were

3,191,000 live births in the United States in the year ending

A37

June 30, 1973 which produces a birth rate of about fifteen per

1,000 of total population, but a fertility rate of sixty-nine births

per 1,000 women fifteen to forty-four years of age. We recog-

nize that more precise statistics are available but we are not

concerned with minutiae and only recite these figures to illusuate

the scope of the problem. Pregnancy is a natural condition, it is

an expectable condition, it is a statistically foreseeable condition,

and ultimately it is a necessary condition. It is a condition limited

to women, not by statutory law or custom, but by biological law.

If three-eighths of our employee working force consists of wo-

men, and their age group necessarily overlaps in large measure

the childbearing age group, pregnancy is certain to occur in a

statistically expectable number of employees. We have no doubt

that a large insurance company is well aware of the precise

statistics. We further note from this case that the defendant's

recruiting policies for female technical employees in its claims

department was aimed at young women finishing their college

education, and that its promotional policy was to advance per-

sonnel within its own ranks and not draw upon outside sources.

This policy would only increase the incidence of young women

of childbearing age among the female employees of a growing

business organization such as Defendant, which hired over

2,000 new female claims representatives in a five year period.

Because pregnancy is a natural, expectable, and societally

necessary condition, which is certain to occur in a statistically

predictable number of women in the labor force, we see no

merit in Defendant’s argument that it may be excluded from

equality of treatment in conditions and benefits of employment

because it is a voluntary condition. Whether voluntary or not,

it occurs with certainty and regularity. The distinction drawn

between one hiring policy for men and another for women—

each having pre-school age children—was rejected by the Su-

preme Court in Phillips v. Martin Marietta Corp., 400 U. S.

542, 544, 90 S. Ct. 496, 27 L. Ed. 2d 613 [1971] where

there was no showing that the condition in question is a bona-

A38

fide occupational qualification necessary to the operation of

that particular business or enterprise. —

The United States Equal Employment Opportunity Com-

mission which is the administrative body created by Title VII

to administer the Act, has issued the following Guidelines with

fespect to the question at issue:

§ 1604.10 Employment policies relating to pregnancy and

_ childbirth.

(a) A written or unwritten employment policy or practice

which excludes from employment applicants or employees

because of pregnancy is in prima facie violation of Title

VIL. |

(b) Disabilities caused or contributed to by pregnancy,

miscarriage, abortion, childbirth, and recovery, therefrom

are, for all job-related purposes, temporary disabilities and

should be treated as such under any health or temporary

disability insurance or sick ieave plan available in con-

nection with employment. Written and unwritten employ-

ment policies and practices involving matters such as the

commencement and duration of leave, the availability of

extensions, and accrual of seniority and other benefits or

temporary disability insurance or sick leave plan, formal

or informal, shall be applied to disability due to pregnancy

or childbirth on the same terms and conditions as they are

applied to other temporary disabilities.

(c) Where the termination of an employee who is tem-

porarily disabled is caused by an employment policy under

which insufficient or no leave is available, such a termina-

tion violates the Act if it has a disparate impact on em-

ployee of one sex and is not justified by business necessity.

29 C. F. R. Labor, Chapter XIV, Part 1604, As Amended

(As of March 31, 1972).

§ 1604.9 Fringe benefits.

(a) “Fringe benefits,” as used herein, includes medical,

hospital, accident, life insurance and retirement benefits;

profit-sharing and bonus plans; leave; and other terms,

conditions, and privileges of employment.

A39

(b) It shall be an unlawful employment practice for an

employer to discriminate between men and women with

regard to fringe benefits.

29 C. F. R. idem.

We give full recognition to the principle urged upon us

that the EEOC Guidelines, 29 C. F. R. § 1604.10, effective

April 5, 1972, do not have the force of law in the sense that

the “regulations” or “substantive rules” of an administrative

body authorized by statute to promulgate regulations to im-

plement existing law have a binding effect. We also recognize

that the Guidelines are interpretive statements of what the ad-

ministrative officer thinks the regulations mean. Gibson Wine

Co. Inc. v. Snyder, 90 U. S. App. D. C. 135, 194 F. 2d 329

[1951]. We are not compelled to follow them, but some def-

erence is due. Espinoza v. Farah Manufacturing Co., 462

F. 2d 1331, 1335 [6th Cir. 1972].

Our own Court of Appeals states it more strongly:

“Such an administrative interpretation is entitled to great

deference. Griggs v. Duke Power Co., 401 U.S. 424,

433-434, 91 S. Ct. 849, 28 L. Ed. 2d 158 [1971]; Udall

v. Tallman, 380 U.S. 1, 85 S. Ct. 792, 13 L. Ed. 2d

616 [1965]. That the guideline was not promulgated until

after this suit was initiated is of no moment. Rights which

came into being when the Act was passed are not abrogated

by administrative interpretation. Bartmess v. Drewrys

U. S. A., Inc., 444 F. 2d 1186 (C.A. 7], cert. denied, 404

U. S. 939, 92 S. Ct. 274, 30 L. Ed. 2d 252 [1971].”

“A reading of the statute convinces us that the commission’s

interpretation furthers the legislative purpose of the Act

and is consistent with the plain meaning of the language

employed.

intended to strike at the entire spectrum of

disparate treatment of men and women resulting from sex

stereotypes.’ Sprogis v. United Air Lines, 444 F. 2d 1194,

1198 [C.A. 7], cert. denied, 404 U.S. 991, 92 S. Ct. 536,

30 L. Ed. 2d 543 {1971].” Rosen v. Public Service Electric

and Gas Co., 477 F. 2d 90 [3rd Cir. 1973], at pp. 94-95.

A40

The only current provision of the Defendant’s maternity leave

policy under attack is the provision that the employee who is

granted a leave of absence for maternity must return to work on

a date certain or be terminated from employment. Plaintiffs’

Complaint is zeroed in on the target that this limitation on

leave of absence for temporary disability is only applied to ma-

ternity cases. There is no such requirement for any other dis-

ability.

Because state and local governments were exempted under

Title VII until 1972, there are few Title VII cases involving

pregnancy that give us guidelines, but the question has arisen

frequently under cases presenting claims of denial of equal pro-

tection or denial of civil rights under color of state authority.

We believe that Title VII standards are more compelling on a

private employer in view of the express statutory mandate upon

employers and the absence of the question of a “rational basis”

for classification by which a state statute is measured. Dandridge

v. Williams, 397 U. S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491

[1970]. While a fixed state policy of classification may survive

an equal protection attack it may still be violative of Title VII.

See Schattman v. Texas Employment Commission, 459 F. 2d

32 [Sth Cir. 1972], and Newmon v. Delta Airlines, Inc., 475

F. 2d 768 [Sth Cir. 1973].

A district court in the Fifth Circuit has recognized that:

“Schattman, . . . turned upon a divided Appellate Court’s

interpretation of the federal statute as it then read on the

question of its exclusion from coverage of state employers

and employees.” Vick v. Texas Employment Commission,

6 EPD 5990 [S. D. Tex. Aug. 30, 1973].

However, the Vick case found this impediment to jurisdiction

removed by the 1972 Amendment to Title VII, and proceeded

to find that the state’s denial of unemployment benefits on the

grounds that the last trimester of pregnancy rendered a woman

unavailable for work, violated the provisions of Title VII.

A4l

“While the expectancy of life confined and incident to

female pregnancy involves many delicacies of personal,

institutional and societal interest, Roe v. Wade, 410 U. S.

113 [93 S. Ct. 705, 35 L. Ed. 2d 147] 41 L. W. 4231

(January 22, 1973), such a natural and necessary female

condition cannot be a basis for categorical discrimination

in light of Phillips and its plain interpretation of Title VII

of the Act.” Vick, cit supra, 5 EPD p. 5992.

Nevertheless, we can take some guidelines from the Equal Pro-

tection Clause cases dealing with pregnancy.

Judge Brown in his dissent in Phillips v. Martin Marietta

Corp., 416 F. 2d 1257 [Sth Cir. 1969], vacated per curiam 400

U. S. 542, 91 S. Ct. 496, 27 L. Ed. 2d 613 [1972] noted with

respect to that case, where women with pre-school age children

were denied employment, but not men:

“The distinguishing factor seems to be motherhood versus

fatherhood. The question then arises: Is this sex-related?

To the simple query the answer is just as simple: Nobody

—and this includes Judges, Solomonic or life tenured—

has yet seen a male mother. A mother, to oversimplify

the simplest biology, must then be a woman”. 416 F. 2d

p. 1259.

To the argument that pregnancy is a voluntary status, the

court in Buckley v. Coyle Public School System, 476 F. 2d 92

{10th Cir. 1973] says:

“The fact, if it be a fact, that pregnancy is a voluntary

status really has nothing to do with the question. The

point is that the regulation penalizes the feminine school

teacher for being a woman and, therefore, it must be con-

demned on that ground.” 476 F. 2d at p. 95.

The Court of Appeals reversed the District Court’s dismissal and

remanded the case to the District Court for determination of a

compelling state interest to justify the regulation.

In Green v. Waterford Board of Education, 473 F. 2d 629

{2nd Cir. 1973], the Court of Appeals reversed a District Court’s

dismissal of a complaint alleging that an inflexible maternity

A42

leave policy denied equal protection. Even though the District

Court had found a rational basis for the school board’s action,

the Court of Appeals found that the state’s interests were not

sufficiently promoted by rule to justify the arbitrary and inflex-

ible regulation applied to pregnancy as distinguished from other

disabilities.

to take premature leave because of a known forthcoming

medical problem, female teachers should not be treated

differently. Thus stated, the argument is persuasive, even

compelling. One realizes with a shock what so many

women now proclaim: Old accepted rules and customs

often discriminate against women in ways that have long

been taken for granted or have gone unnoticed.” (p. 634).

See also the following Equal Protection clause cases involving

maternity leave: LaFleur v. Cleveland Board of Education, 465

F. 2d 1184 [6th Cir. 1972], cert. granted 411 U. S. 947, 93

S. Ct. 1921, 36 L. Ed. 2d 408, but Cf. Cohen v. Chesterfield

County School Board, 474 F. 2d 395 [4th Cir. 1973], cert.

granted, 411 U. S. 947, 93 S. Ct. 1925, 36 L. Ed. 2d 408.

Defendant has interposed a defense of good faith reliance

upon an administrative interpretation, "particularly in its defense

on the income protection exclusion policy here. This may be

a matter to consider when the questions of affirmative relief or

back pay are determined but we cannot see its application to

the immediate question of the inflexible maternity leave stand-

ard. During the period prior to the Guidelines published in

March 1972, there were no guidelines or opinions issued by the

EEOC. 42 U. S. C. § 2000e-12(b) (Sec. 713(b) of the Act)

A43

provides that “no person shall be subject to any liability or

punishment for or on account of (1) the commission by such

person of an unlawful employment practice if he pleads and

proves that the act or commission complained of was in good

faith, in conformity with and in reliance upon any written inter-

pretation or opinion of the Commission.”

We do not believe that the various opinion letters referred to

in the brief of amicus curiae United States Chamber of Com-

merce, with respect to the inclusion of maternity benefits in an

insurance plan meet the requirements of Sec. 713; there is no

evidence that defendant relied upon them, they were not ad-

dressed to the defendant, and do not otherwise conform to the

requirements of a written opinion under which the defense of

reliance may be asserted. Local 189 United Papermakers and

Paperworkers, etc. v. United States, 416 F. 2d 980 [Sth Cir.

1969]; Sprogis v. United Air Lines, Inc., 444 F. 2d 1194 [7th

Cir. 1971).

The maternity leave policy of the company which since 1970

has granted a leave of absence for six months from the last

date of work before delivery, or for three months from date of

delivery, whichever comes first, has no relation to the fitness

of any individual female to perform the functions of her job.

The defendant has not alleged, nor has it offered any

evidentiary material to establish that there is a disputed issue

of fact dependent upon a bona fide occupational qualification.

Such a bona fide occupational qualification is a defense to a

charge of discrimination where sex is a bona fide occupational

qualification reasonably necessary to the normal operation of

that particular business or enterprise. This has been narrowly

construed by the courts. In Weeks v. Southern Bell Telephone

and Telegraph Company, 408 F. 2d 228 [Sth Cir. 1969] the

Court held this must give the employer “a factual basis for be-

lieving that all or substantially all women would be unable to

perform safely and efficiently the duties of the job involved.”

In Rosenfeld v. Southern Pacific Co., 444 F. 2d 1219 [9th

A44

Cir. 1971] the court held the exclusion of women justified only

when “the sexual characteristics of the employee are crucial to

the successful performance of the job, as they would be for the

position of a wet-nurse.” Under Rosenfeld, if one woman can

do the job the employer cannot impose a blanket rule denying

all women the opportunity.

Under the company policy any female who cannot return to

her job within three months of delivery of her child is auto-

matically terminated. No other disability is cause for such auto-

matic termination. “For a woman, however, the effects of preg-

nancy and pregnancy-related illness are debilitating in much the

same way as the physical and mental conditions that are included

within the scope of the disability insurance program.” Aiello v.

Hansen, 359 F. Supp. 792 [N. D. Cal. 1973].

We conclude, as a matter of law, that the maternity

leave policy in effect in Defendant Company at the present time

and since September 1970 in the respect in which it requires a

female to return to work within three months of the date of

delivery of her child, or six months from the beginning of her

maternity leave, whichever date is earlier, or face termination

of employment, is violative of Sec. 703, of Title VII of the

Civil Rights Act of 1964, as amended, in that such policy dis-

criminates against female employees on the basis of sex.

Because only this present policy is still in existence, injunc-

tive relief as to this practice is appropriate at this time.

We further find that all prior company policies in effect

since July 2, 1965, which compelled pregnant female em-

ployees to leave employment at a fixed period of pregnancy

before delivery were likewise violative of the Act, and the com-

pany policy in effect since July 2, 1965 which denied reemploy-

ment because of pregnancy and maternity were violative of the

Act. Because these practices have ended there is no need for

injunctive relief, and the question of the intentional nature of

the violation and the appropriate relief will be considered in a

subsequent stage of these proceedings.

A45

Some additional considerations must be weighed with

respect to plaintiffs’ claim that the Income Protection Plan of

Defendant company is discriminatory to female employees. The

Company provides its employees with a contributory insurance

plan for continuation of income for a “long term illness”, i.e. an

illness requiring treatment by a doctor of eight or more calendar

days which causes absence from work. Such “benefits are not

payable for disability due to occupational injury or to sickness

covered under Workmen’s Compensation Insurance; for disabil-

ity due to pregnancy; for a disability in excess of 104 weeks;

or for a disability during which you were not treated by a physi-

cian licensed to practice medicine.”

Pregnancy is the only disability, not within the other excep-

tions, not covered by the Income Protection Plan. Pregnancy

is a condition limited to women. Conditions limited to men,

such as prostate troubles, are not excluded, nor is any exclusion

provided for a number of illnesses whose incidence among males

is greatly predominant (i.e. gout 19 to 1; the Merck Manual,

10th ed. 1961).

The brief of the United States Chamber of Commerce as

amicus curiae cites cost of the program if pregnancy were in-

cluded, as a justification for exclusion.

We must emphasize the distinction made by the Guidelines,

§ 1604.10(b) that it is “disabilities caused or contributed by

pregnancy, miscarriage, abortion, childbirth, and recovery

therefrom” which for job-related purposes are to be treated as

temporary disab‘lities. They do not cover leave for child rear-

ing, but only for job disability. No evidence has been presented

to us by Defendant as to the average duration of pregnancy dis-

ability. Again, we have a difficult time in freeing ourselves from

stereotype thinking. We note that the Defendant’s policy for

maternity leave prior to delivery has accommodated itself from

a fixed number of months prior to delivery to the recognition

that an employee may work prior to delivery as long as she is

able to do the job. Return to work may be made as soon after

A46

delivery as she is able to do the job. We may assume from a

general knowledge of the conditions of life, that in the normal

or usual pregnancy, the period of disability will be relatively

short. There is nothing in this record to show, and nothing in

our general experience with life indicates that the job-related

incidence of disability for pregnancy is any greater or any less

than that for a prostatectomy.

The EEOC Guidelines provide, § 1604.9 Fringe Benefits, (e) :

“It shall not be a defense under Title VII to a charge of

sex discrimination in benefits that the cost of such bene-

fits is greater with respect to one sex than the other.”

While cost may be a business purpose, and certainly to

add pregnancy disability to the insurance program will cost

more, it can only be a defense in a Title VII action where

“... there exists an overriding legitimate business purpose

such that the practice is necessary to the safe and efficient

operation of the business. Thus, the business purpose must

be sufficiently compelling to override any racial impact,

the challenged practice must effectively carry out the busi-

ness purpose it is alleged to serve; and there must be avail-

able no acceptable alternative policies or practices which

would better accomplish the business purpose advanced,

or accomplish it equally well with a lesser differential racial

impact. (footnotes omitted.) Robinson v. Lorillard Cor-

poration, 444 F. 2d 791, 798 [4th Cir. 1971).

With respect to the argument of increased costs there is no

statutory requirement that Defendant company offer any par-

ticular disability benefits, in any specific amount, or of any

particular duration. The only requirement is that there be no

inequality based on sex. Adjustments in the benefit plan to

achieve equality are a recognized means of achieving that end.

Rosen v. Public Service Electric Co. cit supra (p. 95); Hays v.

Potlatch Forests, Inc., 465 F. 2d 1081 (8th Cir. 1972].

“The increased costs could be accommodated quite easily

by making reasonable changes in the contribution rate, the

maximum benefits allowable, and the other variables affect-

A47

ing the solvency of the program.” Aiello v. Hansen, 359

F. Supp. 792, at p. 798 [N. D. Cal. 1973].

A final requirement for a finding of violation of Title

VII is that the court must find that defendant “has intentionally

engaged in or is intentionally engaging in an unlawful employ-

ment practice charged in the complaint” in order to issue an

injunction or to order such affirmative action as may be appro-

priate. While we are not now concerned with any question of

relief in which the questions of back pay or reinstatement may be

considered, certain continuing policies of defendant are subject

to immediate injunctive relief, and require a finding of intentional

action. Defendant has raised no question of intentional violation,

except as to its defense of good faith reliance on administrative

interpretation which we have found insufficient. The term “inten-

tional” in this Act means that the Defendant intended to do what

it did, not that there was a wilful and deliberate intention to

violate the law.

“

. intentional unfair employment practices are those

engaged in deliberately and not accidentally. No willfulness

on the part of the employer need be shown to establish a

violation of Sec. 706(g).” Kober v. Westinghouse Electric

Corp., 408 F. 2d 240, 246 [3rd Cir. 1973].

We, therefore, find that the violations of Title VII of the Act

herein charged were intentional within the terms of that statute.

We, therefore, conclude that as to the issues raised by Plain-

tiffs’ Motion for Partial Summary Judgment, there is no genuine

issue as to material fact and that summary judgment interlocu-

tory in character should be entered on those issues.

Because the evidentiary materials show that at certain times

subsequent to the effective date of the Act, or subsequent to

the filing of the administrative charge or the within Complaint

the Defendant has ceased or discontinued the discriminatory

practice, injunctive relief is not appropriate as to those practices.

Kober v. Westinghouse Elec. Co., supra, p. 250.

A48

As to continuing practices which violate Title VII preliminary

injunctive relief at this time is appropriate.

The question of other affirmative relief for past actions is not

now before us. The Court is mandated to issue “such affirmative

relief as may be appropriate”. Kober, cit supra. This will depend

upon the evidence to be presented on the individual claims,

which may be considered at the time of trial of the “equal pay”

issue not here considered.

A49

IN THE UNITED STATES DistRICT COURT

For the Western District of Pennsylvania

* + (Caption—72-169) * *

MEMORANDUM ORDER ON MOTION TO RECONSIDER

The Defendant Liberty Mutual Insurance Company has moved

the court to reconsicer that portion of its Order of January 9,

1974, that found that the Defendant’s policy of requiring female

employees to return to work within three months of delivery

or be terminated and its policy of denying the benefits of the

disability income protection plan to female employees for any

disability related to pregnancy or childbirth are violations of

Title VII of the Civil Rights Act of 1964.

Defendant brings to our attention the decision of the Northern

District of Georgia in Newmon v. Delta Air Lines, Inc., Civil

Action No. 15681, issued December 31, 1973 of which this

court was unaware at the time of its January 9, 1974 order.

We have considered that Opinion and its Findings which, in

many parts are in complete accord with the Findings of this

Court. However, we do disagree with the Finding of that court

that pregnancy is not a “disability”.

We do note that the decision in Newmon v. Delta Air Lines,

Inc. was made after a consideration of a great deal of evidentiary

material presented by both parties in that case concerning work-

ing conditions, the type of work performed, the preference of

the woman, the accessibility of a hospital, and, of course, the

possibility of complications to both mother and child in preg-

nancy cases. The court also considered whether or not the

defendant Airlines maternity leave policy was “reasonably neces-

sary to the normal operation of the airlines business”.

The remainder of Defendant’s motion continues the argument

that it is impossible for Defendant to present any statistical

material of the cost of extending disability benefits to pregnancy

because no statistics are available. Whether such statistics are

AS50

available or not, the Defendant made no attempt to produce any

such evidence before this court. The court cannot understand

why the disability from performing work due to pregnancy or

childbirth cannot be medically determined in the same way

that disability from performing work is medically determined

in all other disability cases. For a half century or more in this

country, and for over a century in European countries, these

matters are decided in hundreds, if not thousands of cases daily.

Finally, the Defendant argues that “because employees can, in

some situations, make as much or more money by receiving

disability income it can be assumed that females on pregnancy

leave of absence will remain at home longer than normal.” The

Defendant presented absolutely no evidence to support this

argument and as a trial judge who has seen hundreds of cases

of soft tissue damage arising from the so-called “whip lash”

type of injuries which produce few observable objective symp-

toms the court sees no basis for assigning the tendency to

malinger as a sex-related characteristic. If as defendant suggests,

the employee can make as much or more money on disability

than at work be true, then the fault lies with the particular

insurance plan and not with the female sex. The motion for

reconsideration will be denied.

In its Order the court stated it would enjoin the continuance

of practices which the court found to be in violation of Title

VII. The Plaintiffs were invited to submit the form of the injunc-

tion order and the Defendant has filed Notice of Appeal and

asked for stay of any injunctive order. Under these circumstances

the court will withhold the issuance of the injunctive order and

amend the Order previously issued under the provisions of

Fed. R. Civ. P. 54(b), as follows:

And now this 20th day of February, 1974, it is directed that

final judgment be entered in favor of Plaintiffs that Defendant's

policy of requiring female employees to return to work within

three months of delivery of a child or be terminated is in viola-

tion of the provisions of Title VII of the Civil Rights Act of

AS1

1964; that Defendant's policy of denying disability income pro-

tection plan benefits to female employees for disabilities related

to pregnancies or childbirth are in violation of Title VII of the

Civil Rights Act of 1964 and that it is expressly directed that

Judgment be entered for the Plaintiffs upon these claims of Plain-

tiffs’ Complaint; there being no just reason for delay.