Petition for Writ of Certiorari — Communications Workers v. Ameritech Benefit Plan Committee

Supreme Court brief2001

Ask Donna

What actually matters in this document.

Text

(i) PILED

yee 8 6 4 NOV 2 8 2000

OFFICE OF THE CLERK

Supreme Court ate the Gnited States

COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO,

BERNADETTE BERNABEI, ANNETTE FOSTER-HALL, ef ai.,

Petitioners,

AMERITECH BENEFIT PLAN COMMITTEE, et ai..,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

PETITION FOR A WRIT OF CERTIORARI

MICHAEL B. ERP

LAURIE M, BURGESS

KATZ, FRIEDMAN, EAGLE,

EISENSTEIN & JOHNSON

77 W. Washington St.

20th Floor

Chicago, IL 60602

(312) 263-6330

Counsel for Annette

Foster-Hall, et al.

ROBERT J. TSCHOLL

740 United Bank Building

220 Market Ave.

South Canton, OH 44702

(330) 456-7702

Counsel for Bernadette

Bernabei

*Counsel of Record

MARY K. O’MELVENY*

501 Third Street, N.W.

Washington, D.C. 20001

(202) 434-1213

Counsel for Communications

Workers of America,

AFL-CIO

DOUGLAS M. MOREHART

HAVERKAMP, BRINKER,

REBOLD, & RIEHL

5856 Glenway Ave.

Cincinnati, OH 45238

(513) 922-3200

Counsel for Annette Foster-Hall,

et al.

ERIC SCHNAPPER

University of Washington

School of Law

1100 N.E. Campus Parkway

Seattle, WA 98105

(206) 616-3167

Counsel for Petitioners

——

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001

@ <eSe co

TT a HEE Se

QUESTION PRESENTED

Do Title VII, the Equal Pay Act, and ERISA permit an

employer to pay reduced retirement benefits, or deny early

retirement opportunities, io female workers by utilizing facially

discriminatory pregnancy leave rules that were Originally

adopted prior to the 1978 Pregnancy Discrimination Act?

(i)

PARTIES

The petitioners are the Communications Workers of

America, AFL-CIO, Annette Foster-Hall, Bernadette Bernabei,

and 945 other female present or former employees of the

Ameritech Corporation, its predecessors or wholly owned

subsidiaries. These additional petitioners are listed in Appendix

D to the petition.

The respondents are the Ameritech Corporation, the

Ameritech Pension Plan, the Ameritech Benefit Plan

Committee, the Ameritech Management Pension Plan, the

Ameritech Employees’ Benefit Committee, and twenty-four

wholly owned subsidiaries of the Ameritech Corporation.

Those subsidiary firms are listed in Appendix E to the petition.”

Since the commencement of this litigation, the Ameritech

Corporation has been acquired by the SBC Corporation. SBC now

combines the telephone companies formerly known as Ameritech,

Southwestern Bell, Pacific Bell, and Southern New England Telephone

Co.

There is another case raising the same issues now pending against the Bell

Atlantic Corporation. EEOC v. Bell Atlantic Corp., 80 FEP Cases 164, 1999

U.S. Dist. LEXIS 8813, 1999 WL 386725 (S.D.N.Y. 1999). It is anticipated

that a new action raising these issues will be commenced in the near future

against AT&T. The resolution of this case would be largely determinative of

pending EEOC charges or future claims by a large number of female

employees against all of the corporations that prior to 1984 were subsidiaries

or part of AT&T.

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....cssssessesseessernseensessesnes

COPURCUOINES BELOW oss ssennnsssenssovreoeessseoesnsseesnsns

SURI TIONG ccscsccacecennnceesssccovnsscsovsnneorneseeeensnrccsn

STATUTES INVOLVED ocscseocsscensssosersscsrecorenesoessssees

STATEMENT OF THE CASE .n.scssosssssssecsseeesnneeeesntes

REASONS FOR GRANTING THE WRIT .......soossessee

Il.

This Case Presents An Issue of National

Importance Which Will Affect, Inter Alia, The

Retirement Rights of Tens of Thousands of

Current and Retired Female Employees Who

Worked for AT&T and Its Subsidiaries Prior to

the Pregnancy Discrimination ACt.........:s:s++s++

The Decision Below Is In Conflict With

Decisions In Four Other Circuits and With

EEOC’s Interpretation of Title VII...........sses

The Decision Below Is In Conflict With

Numerous Decisions of This Court.................0++

CONCLUSION .....ccccccoscssscesscsssecccccsocsenerscsssscessonssssooseess

APPENDICES

Appendix A: Opinion of the Court of Appeals (July

Appendix B: Memorandum Opinion and Order of

the District Court (July 20, 1998) ............sssseeserseeeeees

Appendix C: Order of the Court of Appeals

Denying Rehearing and Rehearing En Banc

(August 31, 2000) ........scccscsseer sessesessersenensnensnenenenensnes

20a

TABLE OF CONTENTS—Continued

Appendix D: Names of Individual Petitioners .......... 42a

Appendix E: Corporate Subsidiaries of Ameritech |

SITTIN sncenscicicentsscrinesiststinssieiianininneleiioaniteiaiatdiiilin 56a

TABLE OF AUTHORITIES

Cases: Page

Acha v. Beame, 570 F.2d 57 (2d Cir. 1978)........... 18

Anderson v. Zubieta, 180 F.3d 329 (D.C.Cir.

LDDPD sacsccssiicccccesessinscctcneshntensdeniinnioinnastienbieusbinabees 18

Arizona Governing Committee v. Norris, 463

U.S. 10°73 (1983) .ncccorcescrcsrccsssecasescecsccsaseseressszense 23

Ashley v. Boyles Famous Corned Beef, 66 F.3d

164 (Sth Cir. 1995)........cccccccccrsoscccssccceccssevssseess 18

AT&T Corp. v. EEOC, 99 Civ. 1444 (TFH)

(D.D.C. July 13, 2000), appeal docketed, No.

00-5280 (Aug. 4, 2000)........secseeereeeseneeserseees 12

Bazemore v. Friday, 478 U.S. 385 (1986) .........0+. 20

Bazemore v. Friday, 751 F.2d 662 (4th Cir.

RODD ccscictniaeisniiecinndenbchniinisininicntbind ‘. 8, 14, 18, 20-21, 23

Bell Atlantic Cash Balance Plan v. E.E.0.C., 182

F.3d 906 (4th Cir. 1999) ....csccccccccccssrscccsesscccsoeses 12

California Brewers Assn. v. Bryant, 444 U.S. 598

(TSB DY sccincssescsnsvssasscssvnnscescrecssibintetetontocssbimneaoteese 23

Carter v. West Publishing, 225 F.3d 1258 (11th

Che, FED ccnscitesntasrsnsicisincnsssstscnsseininvoniasanesnsanbeite 18

Cox v. City of Memphis, 230 F.3d 199 (6th Cir.

DOOD iciicincssscincissionssstcneciesiniasbtnsincseteinsanimanesients 19

Eberts v. Westinghouse Elec. Corp., 581 F.2d

957 (3d Cle, 1976) ncccssrccsestnsscscsosescssassscnssscsesnncees 17

EEOC v. Bell Atlantic Corp., 80 fep cases 164,

1999 WL 386725 1999 U.S. Dist. LEXIS 8813

(S.D.N.Y.. 1999) .ccssorcccccseccssscccssccccsoscessossssssseseooe ii, 15

General Electric Co. v. Gilbert, 423 U.S. 822

(1G TG) once scccnsnsinsrenrnetsneianinisenscbirsinitonsanbiuaanentnete 21-22

Greenspan y. Automobile Club of Michigan, 495

F.Supp. 1021 (E.D.Mich. 1980)..........ssssssssesesees 10

Guardians Ass’n of New York City Police Dept.

v. Civil Service Comm'n of City of New York,

633 F.2d 232 (2d Cir. 1980)..........scceeceerreesereeees 19

TABLE OF AUTHORITIES—Continued

Page

Harriss v. Pan American World Airways, Inc.,

649 F.2d 670 (9th Cir. 1980) .........ccccccecceseeenees 10, 17

International Brotherhood of Teamsters v.

United States, 431 U.S. 324 (1977) ..ccccccccccceeeeee 22 )

Lorance v. AT&T Technologies, 490 U.S. 900 )

( , 23

Los Angeles Dept. of Water & Power v. Manhart,

GSD GB. FB (RF Pep ctternncsnvsniicnnnstteritniactensiteati 23

Mullins v. Crowell, 228 F.3d 1305 (11th Cir.

OED cacsererenenssneeneninvinnaniensiaainndiainien 18-19

Nashville Gas Co. v. Satty, 434 U.S. 136 (1977)... 22

Pallas v. Pacific Bell, 940 F.2d 1324 (9th

Cir. 1991), cert. denied, 502 U.S. 1050

( _’ | nN eR Se re 5, 6, 8-20

Patterson v. American Tobacco, 456 U.S. 63

CRED cecencosnssevsussvinsntinesissnniiveisnsansitiiuhsbaahisiiientibbiaienas 22-23

Pollis v. New School for Social Research, 132

FSS BED CAG Cam. BGI T rcecsscsccsccscnsescisnestecssensesses 8, 18

Redding v. AT&T Corp., 124 F.3d 217 (10th Cir.

SDN TF ) cecensesenssensssnnsessniiisensesntinstibidatiinniistisiaiiiieaitahibiid 17-18

Southwestern Bell Tel. Co. Maternity Benefit

Litigation, 602 F.2d 845 (8th Cir. 1979)............ 17

Sweeney v. Employees’ Benefit Committee of

Ameritech, No. 93-CV-74302 (E.D.Mich.

Swint v. Pullmaa-Standard, 456 U.S. 273 (1982).. 23

United. Air Lines v. Evans, 431 U.S. 553

6 jee a 8, 14-15, 18, 19, 21

Whitehead v. Oklahoma Gas & Electric Co., 187

Bl ott ols 8, eee 15

Statutes:

29 Usbac. G BELL) ctiteectinnidinieeiees passim

29 USC. § VIDE T MANE) crccccrcccceccscsccscnesecescsee passim

vii

TABLE OF AUTHORITIES—Continued

Page

BD DBA. BE RICE HOI D cvcecssccsscnnssstsmnenennennsioneans 3

ee ie SD citcenicinrcentsetetignmaniabiaeiinis passim

GB Ui Ace F I ED cccssecssccecczcsnsnsencsccencesmanenntes 2, 22

SEE | | ENT 2

GB UBL, F Bee ea prcvcncescscsssscscncscscnccssscenseess passim

Ae Cs F sO Gh sncascscecnczscsnecnestessnsscesecentingmanes passim

Other Authorities:

es B BOAO cecentinstnieetccinncicemenintn 16

29 C.F.R. § 1610.11, Appendix A ............cccceeeeees 16

H.R. Rep. No. 948, 95th Cong. ............c.sscessseseeees 16

SS BRO, BOR, FE, FEE CIGIE, cccccsccccsmncncnsnesccnscsesseess 9, 16

EEOC Compliance Manual, No. 915.003 (Oct. 3,

2000), “Employee Benefits,” § Ill, B................. 16

EEOC v. Ameritech Services, Inc., No. 97 CV

2106 (N.D.Ohio Aug. 15, 1997) .0........ecceeeeeees 7, 16

EEOC, et al. v. Bell Atlantic Corp., et al., 97 CIV

6723 (S.D.N.Y. Sept. 10, 1997) ....ccccccccccesecsseeses 16

Brief Amicus Curiae, Carter v. AT&T Corp., No.

TS ee 16

Brief Amicus Curiae, California Employment

Law Council, Pallas v. Pacific Bell, et al. (9th

| eee 20

Brief Amicus Curiae, Equal Employment

Advisory Council, Pallas v. Pacific Bell, et al.

My ee 20

Respondent's Brief in Opposition to Petition for

Writ of Certiorari, Pallas v. Pacific Bell, et al.

Cs Cae BIT) Gee. DED) cccccccccccnescsocecesscesnes 20

Petitioners Communications Workers of America, AFL-

CIO, Annette Foster-Hall, Bernadette Bernabei, et al., respect-

fully pray that this Court grant a writ of certiorari to review the

judgment and opinion of the United States Court of Appeals for

the Seventh Circuit entered on July 13, 2000.

OPINIONS BELOW

The July 13, 2000, opinion of the court of appeals, which is

reported at 220 F. 3d 814 (7th Cir. 2000), is set out at pp. la-

19a of the Appendix to this Petition (“App.”). The August 31,

2000, order of the court of appeals denying rehearing and re-

hearing en banc, is set out at pp. 40a-41a of the Appendix. The

July 20, 1998, opinion of the district court, which is not offi-

cially reported, is reported at 1998 U.S.Dist. Lexis 11363

(N.D.I1.) and at 1998 WL 419483 (N.D.I1.), and is set out on

pp. 20a-39a of the Appendix.

JURISDICTION

The decision of the court of appeals was entered on July 13,

2000. A timely petition for rehearing was denied on August

31, 2000. The jurisdiction of this Court is invoked pursuant to

28 U.S.C. §1254.

STATUTES INVOLVED

Section 701(k) of Title VI, 42 U.S.C. §2000e-(k), as

amended by the Pregnancy Discrimination Act of 1978, 92

Stat. 2076, provides in pertinent part:

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

clude, but are not limited to, because of or on the basis of

pregnancy, childbirth or related medical conditions, and

women affected by pregnancy, childbirth, or related medi-

cal conditions shall be treated the same for all employ-

ment related purposes, including receipt of benefits under

fringe benefit programs, as other persons not so affected

but similar in their ability or inability to work, and nothing

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

permit otherwise.

Section 703(a) of Title VII of the 1964 Civil Rights Act, 42

U.S.C. §2000e-2(a), provides in pertinent part, “It shall be an

unlawful employment practice for an employer . . . to discrimi-

nate against any individual with respect to his compensation .. .

because of such individual’s ...sex....”

Section 703(h) of Title VII, 42 U.S.C. §2000e-2(h), provides

in pertinent part,

Notwithstanding any other provision of this title, it shall

not be an unlawful employment practice for an employer

to apply different standards of compensation, or different

terms, conditions, or privileges of employment, pursuant

to a bona fide seniority system ....

Section 706(e)(1) of Title VII, 42 U.S.C. §2000e-5(e)(1),

provides in pertinent part,

A charge under this section shall be filed within one hun-

dred and eighty days after the alleged unlawful employ-

ment practice occurred . . . except that in a case of an

unlawful employment practice with respect to which the

person aggrieved has initially instituted proceedings with a

State or local agency with authority to grant relief or seek

relief from such practice . . . such charge shall be filed by

or on behalf of the person aggrieved within three hundred

days after the alleged unlawful employment practice oc-

curred ....

Section 706(e)(2) of Title VII, 42 U.S.C. §2000e-5(e)(2), as

amended by the 1991 Civil Rights Act, provides:

For the purposes of this section, an unlawful employment

practice occurs, with respect to a seniority system that has

been adopted for an intentionally discriminatory purpose

in violation of this title (whether or not that discriminatory

purpose is apparent on the face of the seniority provision),

when the seniority system is adopted, when an individual

becomes subject to the seniority system, or when a person

aggrieved is injured by the application of the seniority sys-

tem or provision of the system.

Section 206(d)(1) of the Equal Pay Act, 29 U.S.C.

§206(d)(1), provides in pertinent part:

No employer having employees subject to any provisions

of this section shall discriminate, within any establishment

in which such employees are employed, between employ-

ees on the basis of sex by paying wages to employees in —

such establishment at a rate less than the rate at which he

pays wages to employees of the opposite sex in such es-

tablishment for equal work on jobs the performance of

which requires equal skill, effort, and responsibility, and

which are performed under similar working conditions,

except where such payment is made pursuant to (i) a sen-

iority system ...

Section 404 of ERISA, 29 U.S.C. §1104(a)(1)(A)(@), pro-

vides in pertinent part that ERISA fiduciaries must act “solely

in the interest of the participants and beneficiaries.” Section

502 of ERISA, 29 U.S.C. §1132(a)(1)(B), authorizes a benefi-

ciary to bring a civil action “to recover benefits due to him un-

der the terms of the plan.”

STATEMENT OF THE CASE

This case concerns the current utilization of rules, originally

adopted prior to the Pregnancy Discrimination Act (“PDA”),

which expressly discriminate against pregnant female employ-

ees. Before April 29, 1979, the effective date of the PDA,

Ameritech’ avowedly treated pregnancy-related disabilities

' The respondents in this case, in addition to Ameritech, include two

dozen Ameritech subsidiaries and certain employer run benefit commit-

tees. Ameritech itself only came into existence in the wake of the 1984

differently than other disabilities. Ameritech permitted all

other employees who were absent from work because of a

physical disability to continue to accrue seniority during the en-

tire period of their disability leave. But until the PDA came

into effect, female workers who were on pregnancy leave were

treated less favorably. “For most of the time prior to the advent

of the PDA, Ameritech had counted only a maximum of 30

days of an employee’s pregnancy or maternity leave towards

her N{et] C[redited] Sfervice]. . . . In contrast, employees with

other disabilities were granted full . . . credit for their disability-

related leaves.” App. 3a.”

In determining whether a worker is eligible for a pension,

and in calculating the amount of her benefits, Ameritech re-

duces her total term of employment in the manner provided by

its pre-PDA pregnancy leave policies. App. 4a, 23a. Begin-

ning in 1991, Ameritech’s utilization of pre-PDA pregnancy

leave policies to calculate a worker’s total term of employment

became a matter of significant importance to thousands of its

female employees. Between 1991 and 1994, Ameritech created

several different early retirement plans, each of which provided

generous financial incentives for eligible workers who chose to

retire before the age of 65. The most important of these was

the Ameritech Pension Plan Early Retirement Program

(“APPEP”); it provided that, for purposes of determining re-

tirement eligibility and in calculating the amount of benefits,

workers who retired between February 22, 1994 and September

30, 1995, would have three years of age added to their actual

age and three years of employment added to their term of em-

ployment. App. 2a, 4a, 22a-23a. The APPEP provided other

lucrative benefits to eligible early retirees, including up to

AT&T dive: :ture. For simplicity, however, we refer to all of these enti-

ties as Ameritech.

? For much if not all of this period Ameritech engaged in other practices

which had the effect of prolonging the period of pregnancy leave. App. 3a.

$3,000 for pre-approved educational expenses and a one-time

cash payment of approximately $25,000. App. 4a.

Many female “employees who had taken pregnancy or ma-

ternity leaves prior to April 29, 1979 . . . did not receive the

added 1994 benefits even though they would have been eligible

if they had been disabled in any other way.” App. 4a. Disputes

about the interpretation and legality of these early retirement

plans arose as soon as the first of them was announced in 1991.

Ultimately a total of 1,800 female workers filed claims with

Ameritech, asking that their term of employment not be re-

duced by the period of time when they were on pregnancy

leave.” Many of these workers were represented by petitioner

Communications Workers of America, (“CWA”), which also

sought without success to resolve the dispute through negotia-

tions with Ameritech.

Much of the dispute focussed on a Ninth Circuit decision in

Pallas v. Pacific Bell, 940 F. 2d 1324 (9th Cir. 1991), cert. de-

nied, 502 U.S. 1050 (1992). The Ninth Circuit in Pallas had

held that both Title VII of the 1964 Civil Rights Act and

ERISA forbade Pacific Bell, when determining eligibility for a

newly adopted early retirement plan, from deducting a worker’s

pre-PDA pregnancy leave from her service credit. In negotia-

tions with Ameritech officials, representatives of the CWA

invoked Pallas and argued that the company should comply

with the holding in that case. Many of the hundreds of written

*In 1996 a district court in Michigan held that this reapplication of

Ameritech’s pre-PDA pregnancy leave rules to one of the pre-APPEP early

retirement plans violated section 1104 of ERISA. Sweeney v.

Employees’ Benefit Committee of Ameritech, No. 93-CV-74302 (E.D.Mich.

1996) (Memorandum Opinion of March 29, 1996). The court’s conclusion

was premised on its finding that utilization of these pre-PDA policies vio-

lated Title VII itself. Subsequently the parties to this action agreed to a set-

tlement, and jointly stipulated to an order vacating this opinion and dismiss-

_ appeals filed by female employees expressly cited and relied on

Pallas.’

Ameritech’s attorneys, however, advised the company that

the Ninth Circuit’s decision in Pallas was incorrect, and urged

the company to disregard it.° They also insisted that prior to

the PDA it was perfectly legal for Ameritech to deny to preg-

nant workers the service credit that was accorded to all other

disabled employees.° In the wake of that advice, company offi-

cials were expressly instructed that they should not consider the

Pallas decision.’ In rejecting the employee appeals that had

invoked the Pallas decision, Ameritech officials responded that

in the company’s view the Ninth Circuit had misconstrued fed-

eral law.”

The first lawsuit to challenge the administration of APPEP

was an individual action commenced by petitioner Bernadette

Bernabei in February, 1995, in the district court for the North-

erm District of Ohio. Bernabei asserted that reutilization of the

pre-PDA pregnancy leave policies to deny APPEP benefits

violated Title VII, the Equal Pay Act, ERISA, and state law.

App. 4a.

In March, 1997, Ameritech commenced an action of its own

in the Northern District of Ilinois. It sued two unions (includ-

ing petitioner CWA), as well as petitioner Foster-Hall and

thirty-six other workers as representatives of 4 class of some

* Seventh Circuit Appendix of Appellants, Nos. 98-3096, 98-3101, and

98-3102, p. 162.

, Joint Exhibits, v. 3, exhibit 24. Letter of Michael S. Horne to Walter

Oliver, March 15, 1995, pp. 13-16.

° Id. at 1, 7-10.

” See e.g., Plaintiffs’ Exhibits, v. 3, Exhibit 4 to Deposition of Harry

Malone, pp. 000040424, 000040426.

* Seventh Circuit Appendix of Appellants, supra, pp. 151, 169.

eee as fe

7,000° female employees who had taken pregnancy leaves

prior to the PDA. Ameritech sought a declaratory judgment

that the use of its pre-PDA policies to determine a new retire-

ment benefit did not violate Title VII, ERISA, the Equal Pay

Act, or various state laws. Petitioners CWA and the named

employees counterclaimed for relief under those statutes, and

more than 910 other female Ameritech employees, also peti-

tioners here, intervened in the Illinois proceeding. In August,

1997, EEOC filed suit in the Northern District of Ohio on

behalf of the same 7,000 Ameritech workers, contending that

the continued use of pre-PDA pregnancy leave policies to cal-

culate current pension eligibility violated Title VII and the

Equal Pay Act.'° Ultimately, Bernabei’s lawsuit was trans-

ferred to the Illinois federal court and consolidated with the

Ameritech declaratory judgment action.'' App. 4a-Sa.

In August, 1997, the Illinois district court granted the parties’

joint request to certify a class consisting of all female employ-

ees and retirees who had taken pregnancy leaves between the

effective date of Title VII and the effective date of the Preg-

nancy Discrimination Act.'? The parties subsequently filed

cross-motions for summary judgment. App. 5a.

On July 20, 1998, the district court granted Ameritech’s mo-

tion. The court acknowledged that the dispute presented “close

and difficult questions,” and that Ameritech’s actions would be

* In addition to approximately 1,800 female employees who filed claims

regarding the early retirement plans, this action, as well as that of the EEOC,

also sought resolution of the rights of some additional 5,200 female em-

ployees.

'0 EEOC v. Ameritech Services, Inc., No. 97 CV 2106 (N.D. Ohio August

15, 1997).

'! The Ohio district court never acted on Ameritech’s motion to transfer

the EEOC action to Illinois. Proceedings in that action have remained in

abeyance pending final disposition of the Ameritech and Bernabei actions.

'2 The class was certified as to the Title VII, ERISA, and state law claims,

but not the Equal Pay Act issues. App. 10a.

illegal under both the Ninth Circuit decision in Pallas and a

Second Circuit decision in Pollis v. New School for Social Re-

search, 132 F, 3d 115 (2d Cir. 1997). App. 30a, 34a-35a. The

district judge, however, insisted that both Pallas and Pollis

were wrongly decided. App. 30a, 35a. The district court con-

cluded that Ameritech’s reutilization of the pre-PDA policies

did not violate the PDA, Title VII, the Equal Pay Act, or

ERISA.”* App. 38a-39a.

The court of appeals affirmed this interpretation of those

federal statutes. The Seventh Circuit recognized, as had the

Ninth Circuit in Pallas, that the controlling question was

whether the legality of the practices in question was controlled

by this Court’s decision in Bazemore v. Friday, 478 U.S. 385

(1986), or by United Air Lines v. Evans, 431 U.S. 553 (1977).

Compare App. 12a with Pallas, 940 F. 2d at 1326-27. The

court below acknowledged that the distinction between

Bazemore and Evans was “subtle at best” (App. 14a); unlike

the Ninth Circuit in Pallas, however, it concluded that Evans

controlled.

For the court of appeals, the critical issue was that, prior to

the adoption of the PDA, Ameritech had already calculated a

“net credited service” date for each of its female employees.

The Seventh Circuit held that Ameritech’s pregnancy leave

policies were lawful before the adoption of the PDA itself.

App. 15a. Once a net credited service date calculation had

been made pursuant to those policies, the court believed,

Ameritech could thereafter choose to use that net credited ser-

vice date to deny benefits under later, newly created retirement

programs. App. 14a-16a.

The Seventh Circuit, however, disapproved the class certifi-

cation. The court recognized that its decision left all of the

non-party Ameritech employees in the Seventh Circuit free to

'? The court also held that the disputed practices did not violate state law.

(App.—).

bring new actions against the company. The panel also noted

that the EEOC’s Ohio action could therefore proceed. 10a-

Ila.

On July 27, 2000, Ameritech filed a timely petition for re-

hearing and suggestion for rehearing en banc seeking review of

the panel’s disapproval of class certification. That petition was

denied on August 31, 2000.

REASONS FOR GRANTING THE WRIT

I. THIS CASE PRESENTS AN ISSUE OF

NATIONAL IMPORTANCE WHICH WILL

AFFECT, INTER ALIA, THE RETIREMENT

RIGHTS OF TENS OF THOUSANDS OF

CURRENT AND RETIRED FEMALE EMPLOY-

EES WHO WORKED FOR AT&T AND ITS

SUBSIDIARIES PRIOR TO THE PREGNANCY

DISCRIMINATION ACT

This case presents a problem of national scope and increas-

ing urgency threatening the retirement rights of large numbers

of women because of their pregnancies in the 1960s and 1970s.

A significant proportion of this generation of women was, like

the petitioners, denied credited service because of their preg-

nancies, while men with any type of disability were given full

credit. This practice was widespread prior to the adoption in

1978 of the Pregnancy Discrimination Act. See, e.g. S. Rep.

No. 95-331, pp. 6,8. Today, the generation of women who

were the victims of this discrimination is reaching retire-

ment age. Because the amount of a worker’s accrued serv-

ice usually determines eligibility for, and the amount of,

retirement benefits, large numbers of women are at risk of

‘““{OJur ruling in this action will not formally preclude the EEOC in its

Ohio action, since the Commission is also not a party before this court. The

Ohio court, and the Sixth Circuit in turn should an appeal be taken, will have

the right to come to their own conclusions on these issues.” App. | la.

receiving smaller pensions and other retirement benefits than

men who were hired at the same period and who held the same

jobs. Most litigation to date has concerned the denial, as here,

of early retirement benefits; the magnitude of the problem will

swell as more women of this generation reach regular retire-

ment age.

The discriminatory policies of pre-divesture AT&T were

typical of this problem, and by themselves affected tens of

thousands of female workers. Prior to divestiture, AT&T and

its subsidiaries in the telephone industry were among the larg-

est private employers of women in the nation. In the case of

Ameritech alone, the retirement benefits of approximately

7,000 women are at stake. A case now pending in the Southern

District of New York, which raises essentially the same issues

regarding the practices of the phone companies in New York

and several New England states, will determine the pension

rights of at least 5,000 older women workers. There are tens of

thousands of female employees at AT&T and its other former

subsidiaries whose retirement benefits remain in question. And

the discriminatory practices that were national policy within

AT&T prior to 1979 were also utilized by other major employ-

ers prior to the adoption of the Pregnancy Discrimination Act.

See e.g. Harriss v. Pan American World Airways, Inc., 649 F.

2d 670 (9th Cir. 1980); Greenspan v. Automobile Club of

Michigan, 495 F. Supp. 1021 (E.D.Mich. 1980).

It is of particular importance that this Court definitively re-

solve now whether female workers can be paid reduced retire-

ment benefits because of pregnancies earlier in their careers.

For many of the victims of the practices at issue in this case,

benefits delayed will be benefits irretrievably denied.

Where, as here, one of the benefits in dispute is the opportu-

nity to take early retirement, any delay in resolving that issue is

likely to nullify the rights of the victims. For example, one of

the key benefits in question at Ameritech was the right to take

Peers

_—

early retirement in 1994 or 1995, rather than in 1997-1998. Af-

ter five years of litigation, that opportunity no longer exists; the

plaintiffs have monetary claims, but there is no way they can

get back the three years of retirement that they have now lost.

Another benefit sought in this case was a grant of up to $3000

for education that would permit retirees to obtain training for

new jobs. Even if petitioners ultimately prevail, they will have

lost several years during which they might have utilized that

training to start new careers. Women retiring at the typical age

of 65 to 70 face a more fundamental problem; if there are sub-

stantial delays in resolving disputes about the level of their re-

tirement benefits, an ever increasing portion of this group will

not live long enough to enjoy the result of any ultimate legal

victory. Unless this Court acts expeditiously to resolve the le-

gal issues raised in this case, the ensuing delay will nullify in

many cases the Title VII and other federal rights of a large

number of women.

Employers too have a substantial interest in the prompt and

definitive resolution of these issues. Because at many major

companies there are a very large number of female workers

whose retirement benefits necessarily would turn on the legal

questions presented by this petition, employers need a conclu-

Sive determination of those questions in order to make deci-

sions with substantial financial implications about benefits and

benefit plans. For that reason, employers have taken the un-

common step of commencing suit themselves to resolve these

questions, rather than passively awaiting legal action by em-

ployees. In the instant case, for example, the court of appeals

observed that “[iJn an unusual move, Ameritech jumped into

court with an action for a declaratory judgment

.... App. 2a. In two other recent cases, employers have tried

to resolve the issue by bringing a preemptive suit against

EEOC, seeking a judicial determination that their practices

were lawful and therefore could not be investigated by the

Commission.'* In both instances the lower courts concluded

that this method of clarifying the law was not available to em-

ployers under Title VII. And in the instant case the Seventh

Circuit held that Ameritech could not even obtain in the lower

courts a definitive resolution of its obligations to its own em-

ployees, leaving Ameritech still subject to suit by its employees

or by EEOC in the Sixth Circuit, where Seventh Circuit prece-

dent would not be controlling, and even in the Seventh Circuit

by other plaintiffs hopeful that the decision below might ulti-

mately be overturned by the Seventh Circuit en banc or by this

Court.

The inter-circuit conflict described infra makes the need for

action by this Court particularly pressing. Many of the employ-

ers whose retirement practices are at issue have offices and em-

ployees in several states located in different circuits. Respon-

dent Ameritech is now a subsidiary of SBC, a telephone com-

pany with subsidiaries in the Fifth, Sixth, Seventh, Eighth,

Ninth and Tenth Circuits.'® Thus in determining the retirement

benefits which it will pay to its employees, SBC is subject to

conflicting legal standards. Other nationwide employers that

emerged from the 1984 divestiture, including AT&T and Lu-

cent Technologies, also have employees in multiple states and

face a similar situation.

This case provides an appropriate vehicle for definitively re-

solving these issues. The claims and counterclaims in this case

squarely present questions about the legality of Ameritech’s

current practices under all three of the applicable fed-

eral laws—Title VII, the Equal Pay Act, and ERISA. The

'S Bell Atlantic Cash Balance Plan v. E.E.0.C., 916 F. Supp. 376 (E.D.Va.

1997), aff'd, 182 F. 3d 906 (4th Cir. 1999), 1999 WL 485679 (4th Cir, July

12, 1999); AT&T Corp. v. EEOC, 99 Civ. 1444 (TFH) (D.D.C. July 13,

2000), appeal docketed No. 00-5280 (D.C. Cir. Aug. 4, 2000).

'° SBC has subsidiaries in California, Nevada, Illinois, Hawaii, Ohio, Michi-

gan, Indiana, Wisconsin, Texas, Kansas, Missouri, Oklahoma and Arkansas.

————————aaa_a eae

documentary record assembled in the district court presents a

Clear picture of the manner in which pregnancy leaves were

handled prior to the PDA, and of the way in which Ameritech’s

pre-PDA pregnancy leave policies are currently being used to

determine eligibility for early retirement benefits and to calcu-

late the amount of regular pension checks. These policies are

representative of the practices that existed throughout the Beli

system prior to the PDA.

ll. THE DECISION BELOW IS IN CONFLICT

WITH DECISIONS IN FOUR OTHER CIRCUITS

AND EEOC’S INTERPRETATION OF TITLE VII

(1) The decision below is squarely inconsistent with the de-

cision of the Ninth Circuit in Pallas v. Pacific Bell, 940 F. 2d

1324, (9th Cir. 1991), cert. denied, 502 U.S. 1050 (1992). In

Pallas the defendants, like Ameritech, had been subsidiaries of

AT&T prior to the 1984 divestiture; the pre-PDA policies in

Pallas were essentially the same as those in the instant case,

and Pacific Bell, as here, had invoked those policies to exclude

women from a post-PDA early retirement program. In deter-

mining how many years of service Ms. Pallas had, and in con-

cluding that she was ineligible to participate in its new early re-

tirement program, Pacific Bell had excluded most of the period

in 1972 when she was on pregnancy leave. The Ninth Circuit

held that that was a current per se violation of Title VIL.

[T]he discriminatory program which gave rise to this suit,

the Early Retirement Opportunity, was instituted in 1987

. . + + In 1987, Pacific Bell instituted a program that

adopted, and thereby perpetuated, acts of discrimination

which occurred prior to the enactment of the Pregnancy

Discrimination Act. While the act of discriminating

against Pallas in 1972 is not itself, actionable, Pacific Bell

is liable for its decision to discriminate against Pallas in

1987 on the basis of pregnancy.

940 F. 2d at 1326-27.

The Ninth Circuit in Pallas concluded that, in determining

the legality of the practice at issue in these cases, “(t]he control-

ling Supreme Court precedent is Bazemore v. Friday”, 940 F.

2d at 1327, and held that “[t}he district court erred in relying on

[United Airlines v.] Evans.” 940 F. 2d at 1326. In the instant

case the Seventh Circuit reached the opposite conclusion, in-

sisting that “we should look first to Evans and follow

[Bazemore] only if there is no alternative.” App. 14a. The

Ninth Circuit recognized the rules being utilized were facially

discriminatory.

[T]he net credit seniority system used to calculate eligibil-

ity under the Early Retirement Opportunity is not facially

neutral. The system used to determine eligibility facially

discriminates against pregnant women.

940 F. 2d at 1327. The Seventh Circuit, on the other hand, held

that the identical plan utilized by respondent was not “the kind

of intentional discrimination that would trigger the exception to

the statutory protection afforded to seniority systems.”

App. 15a.

Throughout the dispute about its practices, Ameritech has

been well aware that the manner in which it determines retire-

ment benefits would be illegal in the Ninth Circuit under

Pallas. In March, 1995, Ameritech’s attorneys called its atten-

tion to the decision in Pallas, and correctly noted that what the

respondents proposed to do could only be upheld if the courts

in the Seventh Circuit were to conclude that Pallas was

wrongly decided. Most of the written requests that respondent

received in 1994-95 from women seeking credit for the

period of their pregnancies relied on Pallas; respondent’s rejec-

tion of those claims expressly asserted its view-that Pallas was

wrong.

In upholding the practices in this case, the district court

explained that it “finds Pallas unpersuasive and respectfully

declines to follow it.” App. 30a. A subsequent district court

]

;

celiac

decision in the Southern District of New York, recognizing the

conflict between Pallas and the decision in this case, chose to

follow Pallas because it was convinced that “the Ameritech de-

cision was wrongly decided.” EEOC v. Bell Atlantic Corp., 80

FEP Cases 164, 1999 U.S. Dist. LEXIS 8813, 1999 WL

386725 *4 (S.D.N.Y. 1999). In the Seventh Circuit the central

contention successfully advanced by respondents was that

“(t]he majority opinion in Pallas was wrong.”

The Seventh Circuit’s decision conflicts as well with the

analysis of the Tenth Circuit in Whitehead v. Oklahoma Gas &

Electric Co., 187 F. 3d 1184 (10th Cir. 1999). The plaintiff in

that case had lost accrued seniority rights when she was fired

because of her pregnancy; although she was later rehired, the

employer declined to restore those lost rights by “bridging” the

period when she was not employed. That loss of seniority later

rendered Whitehead ineligible for certain early retirement bene-

fits. The court of appeals held that the earlier dismissal was no

longer actionable, relying on Evans. However, the loss of sen-

iority would be a current violation, the Tenth Circuit reasoned,

if men who had left the company’s employement had been

permitted to retain previously accrued seniority while women

dismissed because of pregnancy were not.

The proper comparison group for Whitehead’s claim

would be men who also stopped working for OG&E dur-

ing the same time periods. Such men... have not had

their prior time of employment bridged, just like White-

head.

187 F. 2d at 1193. The instant case falls Squarely within the ra-

tionale of Whitehead; the proper comparison group, men who

were disabled, were permitted to continue to accrue service

credit while pregnant women were not.

"” Brief of Appellees, Nos. 98-3096, 98-3101, 98-3102, p. 19.

The decision below is also in direct conflict with EEOC’s

longstanding and consistent interpretation of Title VII. The

Commission “disagrees with the court’s analysis in Ameritech

and believes that the Pallas decision states the correct applica-

tion of the law.”'* EEOC Guidelines issued in 1972"? insisted

even before the adoption of the PDA that employers were re-

quired by Title VII to treat disabilities caused by pregnancy or

related medical conditions the same as all other disabilities for

ali employment purposes, including benefit and retirement

plans and seniority accrual. 29 C.F.R. §1604.10; App. A. to

§1610.11.” EEOC’s Compliance Manual explicitly interprets

Title VII to prohibit employers from using discriminatory pre-

PDA pregnancy leave rules today to determine current retire-

ment benefits.”’ The Commission has repeatedly adhered to

that interpretation of Title VII in litigation regarding current

utilization of pre-PDA pregnancy leave seniority practices.”

'S EEOC Compliance Manual, No. 915.003 (Oct. 3, 2000), “Employee

Benefits,” §III, B, n. 96. 4

'? In enacting the PDA, Congress recognized that “these guidelines

rightly implemented the Title VII prohibition of sex discrimination in the

1964 act.” H.R.Rep. No. 95-948, p. 2; S.Rep. No. 95-331, p.2.

2° Title VII has always prohibited an employer from failing to accord a

woman on pregnancy-related leave the same seniority . . . accrual accorded

those on other disability leaves.”

1 REOC Compliance Manual, No. 915.003, (Oct. 3, 2000), “Employee

Benefits,” §III, B (If “[{iJn evaluating eligibility for early retirement in 1996,

the employer has distinguished between employees who took leave prior to

1979 due to a pregnancy-related disability and employees who took leave

prior to 1979 for other temporary disabilities . . . the employer’s decision to

incorporate that denial of service credit in calculating seniority in 1996 is

discriminatory.”)

2 See, e.g., Complaint, EEOC v. Ameritech Services, Inc., 97 CV 2106

(N.D.Ohio August 15, 1997); Complaint, EEOC, et al. v. Bell Atlantic Corp,

et al., 97 CIV 6723 (D.C.) (S.D.N.Y. Sept. 10, 1997); Brief Amicus Curiae,

Carter v. AT&T Corp., No. 95-3213 (6th Cir. 1995).

(2) The linchpin of the Seventh Circuit’s holding that

respondents’ pregnancy leave policies are not facially discrimi-

natory was its assertion that those practices had been legal prior

to the adoption of the PDA.. App. 15a. The courts of appeals

are divided about that issue as well. In addition to the Seventh

Circuit, the Eighth Circuit has held that before the PDA it was

legal under Title VII to deny seniority credit to women on

pregnancy leave, even though workers with all other disabilities

received such credit. Southwestern Bell Tel. Co. Maternity

Benefit Litigation, 602 F. 2d 845, 848-49 (8th Cir. 1979). On

the other hand, the Third and Ninth Circuits held that such sen-

iority credit practices were illegal even prior to the adoption of

the Pregnancy Discrimination Act. Eberts v. Westinghouse

Elec. Corp., 581 F. 2d 357, 361-62 (3d Cir. 1978); Harriss v.

Pan American World Airways, Inc., 649 F. 2d 670, 678 (9th

Cir. 1980). If, as the Seventh Circuit believed, the legality of a

current reutilization of pre-PDA pregnancy leave policies de-

pends on whether those policies were lawful prior to the adop-

tion of the Pregnancy Discrimination Act, that premise will

necessarily lead to different results in different circuits.

(3) The Ninth Circuit decision in Pallas also concluded that

the practices at issue here violate ERISA. “Discrimination

constitutes a fiduciary breach for purposes of ERISA.” 940 F.

2d at 1327. The Seventh Circuit below reached the opposite

conclusion, holding that those practices were permissible under

ERISA. App. 17a-19a.

The Tenth Circuit has taken an intermediate position, in an

unreported decision regarding the applicability of ERISA to

practices similar to those in the instant case. Redding v. AT&T

Corp., 124 F. 3d 217, 1997 WL 537882 (10th Cir. 1997). Red-

ding held that a plaintiff could establish a claim under ERISA if

she could show that plan officials had discretion to give her full

credit for the period of her pregnancy leave. The Tenth Circuit

concluded that the plaintiff in Redding had failed to adduce

specific allegations that such discretion existed under the plan

18 .

in that case. 1997 WL 537882 *4. By contrast, the Ninth Cir-

cuit in Pallas held that the practice in Redding is a per se viola-

tion of ERISA.

(4) The conflict between Pallas and the decision below is

part of a wider disagreement among the lower courts about

which practices are governed by this Court’s decision in

Bazemore, and which by the Court’s opinion in Evans. Com-

pare Carter v. West Publishing, 225 F. 3d 1258, 1264-65 (11th

Cir. 2000)(Evans not Bazemore applies to, and bars, claims that

female employees were paid less in dividends from stock op-

tions) with Anderson v. Zubieta, 180 F. 3d 329, 335-36

(D.C.Cir. 1999)(claims regarding differences in housing, travel

and vacation benefits “fall on the Bazemore rather than Evans

side of the line”) and Ashley v. Boyles Famous Corned Beef, 66

F, 3d 164 (8th Cir. 1995) (work assignment claims barred by

Evans, but wage discrimination claims actionable under

Bazemore).

The district court below understood that the practices in this

case would be unlawful in the Second Circuit. App. 35a (de-

clining to follow the decision in Pollis v. New School for Social

Research, {32 F. 3d 115 (2d Cir. 1997), on the ground that it

was “unpersuasive.”) In Pollis and in Acha v. Beame, 570 F.

2d 57, 65 (2d Cir. 1978), the Second Circuit held that a dis-

criminatory denial of seniority credit which had first occurred

outside the relevant limitations period remained actionable,

stressing that “‘a discriminatory policy that results in a wrongful

denial of seniority causes harm not so much at the moment of

denial as in the future.” Pollis, 132 F. 3d at 118. Under the de-

cisions in Pollis and Acha, the practices at issue in the instant

case would be illegal in the Second Circuit.

Most recently in Mullins v. Crowell, 228 F. 3d 1305 (11th

Cir. 2000), the Eleventh Circuit held that the utilization of a fa-

cially discriminatory seniority classification rule could be chal-

lenged years later when that earlier decision was invoked to lay

off the plaintiffs. The plaintiffs there had been assigned to a

special undesirable seniority classification for workers with

physical disabilities. The defendant in Mullins insisted that the

plaintiffs could only complain at the time that that assignment

was first made; it reasoned, like the Seventh Circuit below, that

the victims of such discrimination could not object if the em-

ployer later invoked that earlier classification to lay off the

plaintiffs. The Eleventh Circuit rejected that contention, hold-

ing that if the original classification was facially discriminatory,

a subsequent employment action relying on that classification

could be challenged at any time.

[T]he use of the classification system to rif the plaintiffs

gave effect to the discriminatory classifications and started

the running of the limitations period. . . .

228 F. 3d at 1311-12.

On the other hand, the Sixth Circuit, relying on Evans, has

held that if an employer engages in intentional discrimination

in placing employees on a ranked promotion list, the limitations

period begins to run as soon as the list is created. On this view,

Evans precludes legal action if it was not commenced until the

victims were actually denied promotions. Cox v. City of Mem-

phis, 230 F. 3d 199 (6th Cir. 2000). The Sixth Circuit in Cox

expressly acknowledged that the Second Circuit rejects this in-

terpretation of Title VII. Guardians Ass’n of New York City

Police Dept. v. Civil Service Comm’ n of City of New York, 633

F, 2d 232, 247-48 (2d Cir. 1980).

(5) In 1992 this Court had occasion to consider whether to

address these issues when certiorari was sought in Pallas. 502

U.S. 1050 (1992). At that time a number of employer organi-

zations submitted amicus briefs emphasizing the practical im-

portance of a definitive resolution of the issue of whether

women could be paid reduced retirement benefits because of

pre-PDA pregnancy leave policies.” But the respondent in

Pallas correctly noted that at that juncture there was no conflict

among the circuits, and predicted—in retrospect incorrectly—

that the adoption of the 1991 Civil Rights Act would end fur-

ther efforts by employers to discriminate in this manner.”

Eight years later, that conflict is open and notorious, the appli-

cation of pre-PDA policies to calculate and limit retirement

benefits continues, and an increasing number of women with

pre-PDA pregnancies are now on the verge of retirement.

Ii. THE DECISION OF THE COURT BELOW IS IN

CONFLICT WITH NUMEROUS DECISIONS OF

THIS COURT

As the Ninth Circuit correctly recognized in Pallas, the prac-

tices in the instant case—and thus the decision below—are in-

consistent with this Court’s decision in Bazemore. The Sev-

enth Circuit acknowledged that, as of the effective date of the

PDA, women had less credited service than men solely because

they had been on pregnancy leave. It reasoned that there was

no post-PDA violation because after 1979 Ameritech had

added to the seniority of male and female workers in a non-

discriminatory manner. App. 12a-16a. That was precisely the

reasoning relied on by the Fourth Circuit, and rejected by this

Court, in Bazemore. Bazemore v. Friday, 751 F. 2d 662, 670

(4th Cir. 1984). The employer in Bazemore had, in the years

following the enactment of Title VII, afforded raises to black

and white workers in a non-discriminatory manner; their pre-

Title VII base pay, however, was the result of intentional pre-

Act discrimination. That arrangement, this Court concluded,

was “a mere continuation of the pre-1965 discriminatory pay

3 Brief Amicus Curiae of the California Employment Law Council, No.

91-812, pp. 8-9, 17; Brief Amicus Curiae of the Equal Employment Advi-

sory Council, pp. 13-15, No. 91-812.

*4 Respondents’ Brief in Opposition to Petition for Writ of Certiorari,

pp. 8-11, No. 91-812.

structure.” 478 U.S. 397 n. 6. The employer was “under an ob-

ligation to eradicate salary disparities based on race that began

prior to the effective date of Title VII.” 478 U.S. at 397. In the

instant case, Ameritech was under a similar obligation to eradi-

cate, rather than continue, service credit disparities that derived

from pre-PDA discrimination.

The circumstances of this case are clearly controlled by

Bazemore rather than Evans. In Evans the female plaintiff was

similarly situated to male comparators. The employer dealt in

the same manner with every employee who had been fired and

later rehired; all of them lost accrued seniority. Here the oppo-

site is the case; Ameritech does not treat in the same manner all

employees who were absent for work because of a disability.

All men who were absent due to disability continued to accrue

service credit, but women on pregnancy leave received no

credit after 30 days. It was this disparate treatment that was

applied by Ameritech to determine pension checks in the

1990’s.

In Bazemore, current paychecks were based on old policies;

here, current pension payments (or the denial of such benefits)

are based on old policies. If in 1975 Ameritech had penalized

pregnant women by cutting their wages in half, that decision

would necessarily have reduced their pensions as well; as in

Bazemore, every reduced pension check, like every reduced

paycheck, would be a new violation. In the instant case,

Ameritech’s discrimination affects pension checks, not pay-

checks, but that is not a difference of legal significance.

Ameritech’s practice is simply Bazemore in slow motion.

The pivotal premise of the opinion below was that all forms

of discrimination based on pregnancy were lawful before the

1978 enactment of the Pregnancy Discrimination Act. The

court stated: “[P]rior to the adoption of the PDA an authorita-

tive Supreme Court decision had held that Title VII did not

prohibit distinctions based on pregnancy. General Electric Co.

v. Gilbert, 423 U.S. 822 (1976).” App. 15a. But only a year af-

ter Gilbert, and before the adoption of the PDA, this Court in

Nashville Gas Co. v. Satty, 434 U.S. 136 (1977), held that some

distinctions based on pregnancy were indeed unlawful under

Title VII. In Satty the employer generally permitted workers to

maintain their accrued seniority during a leave caused by dis-

ability, but denied accumulated seniority to women who

returned from pregnancy leaves. Because that policy had a

palpable discriminatory effect on female workers, this Court

held unanimously that it was illegal under Title VII. In the

instant case, the reutilization of Ameritech’s pre-PDA preg-

nancy leave policies to deny or reduce current benefits clearly

discriminates against female workers, a fact which the

company has never suggested could be justified by business

necessity.

The decision below conflicts as well with this Court’s deci-

sion in International Brotherhood of Teamsters v. United

States, 431 U.S. 324 (1977). The Seventh Circuit recognized

that Title VII does not permit an employer to utilize a seniority

rule that involves intentional discrimination. However, it held

that a policy is only “facially” discriminatory if the type of dis-

crimination apparent on its face was illegal at the time when the

policy was originally adopted. Because the court of appeals be-

lieved that Ameritech’s pre-PDA pregnancy leave policies were

lawful prior to April 1979, it concluded that those policies did

not involve “the kind of intentional discrimination that would

trigger the exception to the statutory protection afforded to sen-

iority systems.” App. 15a. Teamsters, however, expressly held

that a seniority system is not afforded the protection of section

703(h) of Title VII if, prior to the enactment of Title VII, the

system was adopted for the purpose of discriminating on the

basis of race or sex, even though federal law did not forbid -

such discrimination at the time. 431 U.S. at 324 (pre-Act sys-

tem would be unlawful if it “ha{d] its genesis in racial dis-

crimination’’); Patterson v. American Tobacco, 456 U.S. 63

(1982)(standard for determining legality of pre-Act seniority

system same as standard for post-Act system); Swint v. Pull-

man-Standard, 456 U.S. 273 (1982)(seniority system adopted

in 1954 unlawful if structured for discriminatory purpose);

California Brewers Assn. v. Bryant, 444 U.S. 598, 611

(1980)(remanding to afford plaintiff an opportunity to prove

seniority system adopted in 1959 was adopted for a discrimina-

tory purpose).

The Seventh Circuit also insisted that an ongoing illegal

practice only constitutes a “continuing violation” if the victims

“had no way of knowing that something bad had happened to

them until much later.” App. 15a. Since women knew in 1979

that their net credited service had not been corrected in the

wake of the PDA, the court below reasoned, the continued

utilization of that discriminatory calculation became legal when

the victims failed to complain immediately about that ongoing

violation once the PDA became law. This holding too is in-

consistent with Bazemore v. Friday. The black employees in

Bazemore also knew full well that the discriminatory pre-Title

VII salary structure had never been corrected. This Court re-

jected the employer’s contention that its discriminatory wage

practices had somehow acquired immunity from challenge be-

cause of its prolonged application; “[t]o hold otherwise would

have the effect of exempting from liability those employers

who were historically the greatest offenders of the rights of

blacks.” 478 U.S. at 385. This Court has repeatedly permitted

plaintiffs to challenge the legality of employment practices

whose discriminatory nature had been known for years. See

e.g. Arizona Governing Committee v. Norris, 463 U.S. 1073

(1983); Los Angeles Dept. of Water & Power v. Manhart, 435

U.S. 702 (1978). The holding in Lorance v. AT&T Technolo-

gies, 490 U.S. 900, 912 (1989) that a facially discriminatory

seniority system “can be challenged at any time” is clearly in-

consistent with the Seventh Circuit’s holding that the very fact

that a discriminatory nature of a practice is express, and thus

apparent to its victims, precludes legal challenge at any

time other than the moment when the practice first becomes

unlawful.

CONCLUSION

For the above reasons, a writ_of certiorari should issue to re-

view the judgment and opinion of the Court of Appeals for the

Seventh Circuit.

MICHAEL B. ERP

LAURIE M. BURGESS

KATZ, FRIEDMAN, EAGLE,

EISENSTEIN & JOHNSON

77 W. Washington St.

20th Floor

Chicago, IL 60602

(312) 263-6330

Counsel for Annette

Foster-Hall, et al.

ROBERT J. TSCHOLL

740 United Bank Building

220 Market Ave.

South Canton, OH 44702

(330) 456-7702

Counsel for Bernadette

Bernabei

*Counsel of Record

Respectfully submitted,

MARY K. O’MELVENY*

501 Third Street, N.W.

Washington, D.C. 20001

(202) 434-1213

Counsel for Communications

Workers of America,

AFL-CIO

DOUGLAS M. MOREHART

HAVERKAMP, BRINKER,

REBOLD, & RIEHL

5856 Glenway Ave.

Cincinnati, OH 45238

(513) 922-3200

Counsel for Annette Foster-Hall,

et al.

ERIC SCHNAPPER

University of Washington

School of Law

1100 N.E. Campus Parkway

Seattle, WA 98105

(206) 616-3167

Counsel for Petitioners

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Nos. 98-3096, 98-3101, 98-3102

AML«ITECH BENEFIT PLAN COMMITTEE, et al.,

Plaintiffs-Appellees,

Vv.

COMMUNICATION WORKERS OF AMERICA,

ANNETTE FOSTER-HALL, et ai.,

Defendants-Appellants.

and BERNADETTE BERNABEI,

Plaintiff-Appellant,

AMERITECH CORPORATION, ef ai.,

Defendants-Appellees.

February 9, 1999, Argued

July 13, 2000, Decided

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division. Nos. 97-C-

1441, 97-C-2209. Suzanne B. Conlon, Judge.

Before CUDAHY, RIPPLE, and DIANE P. WOOD,

Circuit Judges.

OPINION OF THE COURT OF APPEALS

DIANE P. WOOD, Circuit Judge. This case is about the

present consequences of the way in which Ameritech

Corporation (and its predecessors) computed time for

purposes of its pension plan, early retirement, and similar

benefits, when the reason for an approved absence from work

was pregnancy rather than any other short-term disability.

(For the sake of convenience, we refer throughout to the

company as Ameritech, even though Ameritech did not come

into being until 1984. The difference in corporate identity

makes no difference to the outcome of this case.) After the

passage of the Pregnancy Discrimination Act (the PDA) in

1979, Pub. L. No. 95-555, codified at 42 U.S.C. § 2000e(k),

the Ameritech Benefit Plan Committee (benefit committee)

did not go back to recompute leave periods for women

employees whose absences were because of pregnancy.

This decision took on immediate importance for the

affected employees in 1994, when Ameritech added benefits

to its pension plan. For these people, indeed, it made the

difference between eligibility to take early retirement and to

enjoy other pension benefits, and lack of eligibility. In an

unusual move, Ameritech jumped into court with an action

for a declaratory judgment, and it attempted to sue a

defendant class of employees. The district court granted

summary judgment for Ameritech, dismissing the class

claims under Title VII, ERISA, the Equal Pay Act, and

various state laws. We affirm. é

For the entire time period relevant to this suit, Ameritech

has used a record-keeping system it calls Net Credited

Service (NCS) for purposes of determining an employee’s

entitlement to pension and other employment benefits. The

NCS system produces a number, created by Ameritech and

assigned to each employee, which reflects an adjusted amount

of “continuous” employment with which the employee is

credited. Each employee’s NCS number is based on several

factors, including credit that Ameritech gives the employee

for time spent working at Ameritech, and credit that it gives

the employee for various leaves of absence. In other words,

employees receive service credit for actual time worked and

for certain leaves, but they do not receive service credit for

nh cai a il

—

other leaves. The latter time periods are “squeezed out” or

subtracted from the gross time between hire date and the

present, before benefit eligibility is determined. Ameritech

notes, without contradiction from the employees, that the

NCS system is incorporated in both its collective bargaining

agreements and in its pension plans.

The addition of the PDA to Title VI, effective April 29,

1979, forced Ameritech to change its method of calculating

NCS. For most of the time prior to the advent of the PDA,

Ameritech had counted only a maximum of 30 days of an

employee’s pregnancy or maternity leave towards her NCS

(because it was treating pregnancy as a “personal leave”

capped by a 30-day limit, instead of as a disability leave).

Pregnancy leaves in those days typically lasted much more

than 30 days, at Ameritech’s insistence: Ameritech required

pregnant women to begin their pregnancy leaves several

months before their due dates. In contrast, employees with

other disabilities were granted full NCS credit for their

disability-related leaves. The PDA, which established that

discrimination based on pregnancy is sex discrimination and

that pregnancy must be treated the same as any other short-

term disability, made it clear to Ameritech that its NCS

system had to change. Ameritech accordingly began giving

employees full NCS credit for their pregnancy and maternity

leaves. It did not, however, adjust the NCS periods of

employees who had taken pregnancy or maternity leaves

before the effective date of the PDA, April 29, 1979, nor did

it discontinue its use of NCS to calculate various employee

benefits.

Here matters stood for many years. The stakes for the

women who had received only partial credit for their pre-

PDA pregnancy leaves became higher in 1994, however,

which led to the present litigation. On March 7 of that year,

Ameritech amended its pension plan to provide early

retirement benefits to some employees. Under the

}

amendments, eligible non-managemeat employees who

retired between February 22, 1994, and September 30, 1995

were entitled to have three years added to their terms of

employment and three years added to their actual ages for

purposes of determining retirement eligibility and calculating

the amount of their pension benefits. The same employees

were made eligible for additional tuition assistance, as well as

cash payments under a Supplemental Income Protection

Program. Ameritech’s plan administrators used the NCS in

calculating each employee’s term of employment in order to

distribute the benefits. Because employees who had taken

pregnancy or maternity leaves prior to April 29, 1979 had

lower NCS numbers than they would have had under a

system that did not discriminate against pregnancy, some of

them did not receive the added 1994 benefits even though

they would have been eligible if they had been disabled in

any other way.

Cheryl Cuprys and Bernadette Bernabei were two Ameri-

tech employees who had taken pre-April 29, 1979 pregnancy

and maternity leaves and were therefore not eligible for the

1994 benefits. Cuprys and Bernabei both challenged their

denial of benefits, but Ameritech’s benefit committee denied

their claims and appeals. Cuprys and Bernabei then turned to

the EEOC and filed charges with it. The EEOC issued a right

to sue letter to Cuprys on February 24, 1995, and to Bernabei

on September 28, 1995. !

On December 20, 1995, Bernabei filed suit in the United

States District Court for the Northern District of Ohio

alleging that Ameritech’s actions violated Title VII, the Equal

Pay Act, ERISA, and state law (Bernabei v. Ameritech Corp.,

et al., 1998 U.S. Dist. LEXIS 11363, No. 97-CV-02209). On

March 3, 1997, Ameritech filed suit against a claimed

defendant class of affected women and against two unions,

the Communications Workers of America, AFL-CIO (the

CWA) and certain local unions affiliated with the

wee.

International Brotherhood of Electrical Workers (IBEW), in

the Northern District of Illinois. Ameritech’s complaint asked

for a declaratory judgment that it had not violated any of the

same laws invoked in the Bernabei action. Bernabei’s suit

was transferred to Illinois, and in May of 1997 it was

consolidated with Ameritech’s declaratory judgment action.

The putative defendant class and the CWA filed their

answers, along with counterclaims under Title VII, the Equal

Pay Act, ERISA, and the state laws. (Indeed, these claims

mirrored Ameritech’s request for declaratory relief, which

saves this case from undue complication as we explain

below.) In an order dated August 28, 1997, the district court

approved the parties’ joint request for class certification as to

the Title VII, ERISA, and state law claims, apparently under

Fed. R. Civ. P. 23(b)(1) and 23(b)(2). (The order contains no

discussion or explanation of this decision, but these are the

rules cited in the earlier motion for certification.) Later, the

district court granted Ameritech’s summary judgment motion

as to all parties, and denied the cross-motions of the CWA,

the class, and Bernabei. This appeal followed.

A. Subject Matter Jurisdiction

The EEOC, through a brief amicus curiae it has filed with

this court, argues that the district court lacked subject matter

jurisdiction over Ameritech’s Title VII and Equal Pay Act

claims, because neither statute provides for suits by the

employer against whom discrimination is alleged. Given the

fundamental nature of this argument, we address it first. In

our view, the district court had subject matter jurisdiction

under 28 U.S.C. § 1331. It is of course true that the Declara-

tory Judgment Act, 28 U.S.C. § 2201, is not an independent

source of subject matter jurisdiction. See GNB Battery

Technologies, Inc. v. Gould, Inc., 65 F.3d 615, 619 (7th Cir.

1995); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667,

a ee ee

671, 94 L. Ed. 1194, 70 S. Ct. 876 (1950). It allows suits for

declaratory judgment where federal jurisdiction would exist

in a coercive suit brought by the declaratory judgment

defendant. See GNB Battery Technologies, Inc., 65 F.3d at

619; Franchise Tax Board, 463 U.S. 1, 19, 77 L. Ed. 2d 420,

. 103 §. Ct. 2841 (1983). Had the aggrieved employees (here,

class defendants) brought a suit to enforce Title VII and the

Equal Pay Act against Ameritech, the district court would

have had jurisdiction over the complaint because inter-

pretation and application of these statutes present federal

questions. See Steel Co. v. Citizens for a Better Environment,

523 U.S. 83, 89, 118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998).

Indeed, this is exactly what the employees did when they

filed their counterclaims. One way or the other, the claims on

all sides present federal questions, and so our jurisdiction is

secure.

The Commission is really arguing that the statutes confer

no right on Ameritech to sue as a plaintiff, because they

confer no such rights on employers (i.e. no claim can be

stated) or because it is the wrong party (i.e. it lacks statutory

standing). While these could be important points, they do not

implicate the jurisdiction of the district court. Our basis for

jurisdiction comes from the underlying controversy, not the

particular party initiating suit. We note, however, that the

question whether an employer should have the right to short

circuit the EEOC’s internal processes by running to court and

filing a declaratory judgment action in a Title VII suit is an

important one, which will have to be addressed in a case that

raises it properly. The counterclaims and Bernabei’s direct

action mean that this is not such a case, however, so we leave

further discussion of this point to another day.

B. Ripeness of Ameritech Action

The EEOC argues in the alternative that Ameritech’s suit

was unripe because the parties failed to exhaust their

administrative remedies. At the time Ameritech filed its

those people as defendants. Shortly after Ameritech filed this

action, the Comm

here. Although Bernabei’s suit was transferred to the

Northern District of Illinois from the same Ohio district court,

that court denied Ameritech’s motion to transfer the EEOC

case here, and so the Commission’s action is still pending

there, awaiting the outcome of this appeal.

Had Ameritech not filed its declaratory judgment action,

the Commission could have controlled both the timing and

the forum of this litigation to a far greater degree. (We note,

however, that the Commission is not immune from a transfer

of venue under 28 U.S.C. § 1404(a), and so this right is not

_ unqualified.) The Commission argues that the employer

should not have the right to thwart its enforcement decisions

in the way that Ameritech has done here. In a sense, its

argument is that any employer action that is possible

(assuming arguendo that such actions exist) must be subject

to the same exhaustion requirements that employees face.

This too is a reasonable argument, but not one that can Carry

the day on the facts before us. To begin with, exhaustion is

not a jurisdictional requirement for Title VII Claims. See

Gibson v. West, 201 F.3d 990, 994 (7th Cir. 2000). It is

merely a precondition to bringing a Title VII claim in federal

court, and is therefore subject to the doctrines of waiver,

estoppel, and equitable tolling. See id.

We would have a much more difficult Case on our hands if

Bernabei and Cuprys had never filed charges with the EEOC,

or if the EEOC had not responded to the charges by issuing

right-to-sue letters. We do not need to address that

hypothetical situation here, however, nor is it necessary for us

nan A a Ag

to address the question whether an employer must file a

formal charge with the Commission as a prerequisite to

bringing the kind of declaratory judgment action Ameritech

filed. In our case, individual charges were filed and the EEOC

issued right-to-sue letters. Thus, whatever interests in

completion of the Commission’s internal procedures may

exist were satisfied. We are left with the more conventional

problem of competing lawsuits on the same issues in two

different federal districts. This does not seem to have

bothered the parties much, and it is surely not the kind of

fundamental defect that divests the district court of power to

rule on the case.

C. Class Certification

Despite the fact that neither party has addressed the way

that class certification was accomplished in this case, we

cannot proceed without considering this problem as well.

This is so precisely because classes include not only the

parties directly before the court, but absentees, and in some

cases the active participants may sell out the interests of the

others. See, e.g., Crawford v. Equifax Payment Services, Inc.,

201 F.3d 877, 882{7th Cir. 2000); see Pettway v. American

Cast Iron Pipe Co., 576 F.2d 1157, 1169 (Sth Cir. 1978);

Plummer v. Chemical Bank, 668 F.2d 654, 658 (2d Cir.

1982). We look at the alleged defendant class that the district

court certified for Ameritech’s declaratory judgment under

Title VII.

To begin with, there is a potential problem with virtually

all defendant classes that proceed under anything but Rule

23(b)(3). Defendant classes, initiated by those opposed to the

interests of the class, are more likely than plaintiff classes to

include members whose interests diverge from those of the

named representatives, which means they are more in need of

the due process protections afforded by (b)(3)’s safeguards. It

also means that they are less likely to satisfy the requirements

of Rule 23(a). Risks of diverging interests are particularly

high in actions seeking monetary remedies. In Phillips

Petroleum Co. v. Shutts, 472 U.S. 797,-86 L. Ed. 2d 628, 105

S. Ct. 2965 (1985), the Supreme Court discussed the

analogous problem of the rights of absentee members of a

plaintiff class that sought monetary relief. The Court

concluded that nothing less than the type of notice and opt-

Out opportunity provided by Rule 23(c) (or, in Shutts, the

Kansas equivalent to the federal rule) would Satisfy due

process. Moreover, throughout its discussion, it frequently

drew comparisons between the position of absentee plaintiff

class members and defendants, and virtually every one of

those comparisons implied that defendants have, if anything,

greater rights. We are not aware of a single case that has ever

justified a monetary award (or, as here, a judgment declaring

that a party is entitled to no money) without at a minimum

requiring notice be afforded to that party.

Our decision in Henson v. East Lincoln Township, 814

F.2d 410 (7th Cir. 1987), cert. granted, 484 U.S. 923 (1987),

cert. dismissed, 506 U.S. 1042 (1993), holds that a defendant

class is normally impermissible under Rule 23(b)(2), although

it leaves open the possibility of a debtor’s bringing a class

action against a class of creditors seeking a declaration of

nonliability. This is what Ameritech says it has done, but later

developments in this circuit’s class action jurisprudence make

it clear that the district court should not have brushed over the

requirements of Rule 23 so quickly. We refer to the decision

in Jefferson v. Ingersoll Intern. Inc., 195 F.3d 894 (7th Cir.

1999), in which we made clear that mixed class actions that

seek both equitable and compensatory relief must satisfy the

formalities of Rule 23(b)(3). See also Lemon v. Intern. Union

of Operating Eng’rs, Local No. 139, 2000 U.S. App. LEXIS

12722, 2000 WL 733577, No. 99-4101 (7th Cir., June 9,

2000). As for this, some blame lies at the feet of the class

representatives. Paragraph 1 of the counterclaim begins by

saying “this counterclaim seeks money damages, declaratory

and injunctive relief against Plaintiffs for violations of Title

Ae ihe me earn

10a

VIl,... ERISA, ... the Equal Pay Act, . . . [and certain state

laws]."” What could be clearer? And yet the record is devoid

of any indication that the absentees had any idea that the case

was going on.

The parties did not ask for class certification for purposes

of the Equal Pay Act claims, because they recognized that the

problems with certifying such a class under the Equal Pay Act

are especially great. There is_no such thing as a Rule 23 class

action in an Equal Pay Act case. The Act, by incorporating

the requirements of the Fair Labor Standards Act, compels

the use of a more restrictive “opt-in” procedure. 29 U.S.C.

$2/6(b). Nothing of the sort occurred here, once again

because neither the district court nor the parties paid

appropriate attention to the certification question.

The problem with ignoring these issues is that the rights of

persons not before the court are necessarily implicated once a

class is certified. We have concluded that the proper way to

proceed is to decide the claims of the parties who are clearly

before the court: the named plaintiffs and anyone who

intervened formally.’ In fact, our resolution of these claims

will have a powerful stare decisis effect on -the claims

absentees might have wanted to assert, but that cannot be

"These plaintiffs include (aside from the unions) Bernadette Bernabei,

the original named individual defendants in Ameritech’s declaratory

judgment suit (Annette Foster-Hall, Brenda Gibson, Wilbur Haynes,

Helen Kloess, H. Carleen Leach, Sharon Parrish, Frances Timmerman,

Phyllis Barnes, Betty Bober, Janet Champer, Linda Croddy, Patricia

Elick, Lesle Gardner, Dolores Harmacinski, Polly Neimeier, Debby Flynn

Adomaitis, Anne Marie Allen, Carol Amato, Vicki Andrews, Evelyn

Dallos, Leanne Grover, Ruth Johnson, Virginia Jones, Francie Wingo,

Sara Sue Adkins, Debra Anderson, Janet Appleton, Sandra Ballard,

Kathryn Kreger, Margaret Perrill, Diane Richard, Brenda Smitherman-

_Muir, Mary Jo Avery, Diana Beattie, Christine Berger, and Shirley

Connell), and those individuals whom the district court allowed to

intervene (see Agreed Amended Motion to Intervene Certain Class

Members, Exhibit A).

lla

helped. By the same token, our ruling in this action will not

formally preclude the EEOC in its Ohio action, since the

Commission is also not a party before this court. The Ohio

court, and the Sixth Circuit in turn should an appeal be taken,

will have the right to come to their own conclusions on these

issues.

D. The Unions

As the litigation progressed, only the CWA played an

active role in filing papers with the court. Our comments,

however, apply in principle to both unions. Apart from their

potential role as an organizational representation of their

members, the unions had little to say here. Indeed, because

the way in which time of service was computed implicates the

collective bargaining agreements the unions had with

Ameritech, they might have some incentive to defend their

earlier actions. For the same reason we have disregarded the

role of the absentee class members, we do not reach the legal

issues that might be raised in conjunction with the unions’

role. Neither party briefed these questions, and it suffices to

say here that the unions’ participation does not change our

view of the merits of the action.

We turn, finally, to the merits. Because this appeal comes

to us from a grant of summary judgment, we review the

decision of the district court de novo. See Vakharia vy.

~ Swedish Covenant Hosp., 190 F 3d 799, 805 (7th Cir. 1 999).

We construe the record in the light most favorable to the

employees, who are entitled as the non-moving parties to a

reversal if the record reveals a genuine issue of material fact.

See id.

A. Title VI

As we have already noted, Title VII prohibits an employer

from discriminating against an employee or applicant based

12a

on sex, 42 U.S.C. § 2000e-2(a), and the PDA provides that

for purposes of Title VII discrimination based on sex includes

discrimination based on pregnancy. 42 U.S.C. § 2000e(k). In

light of those indisputable facts, Ameritech freely admits that

it could not today calculate its NCS numbers to favor persons

who had not taken pregnancy or maternity leave, or in a way

that imposed some form of discount on that one type of short-

term disability, and then apply those numbers to determine

employee benefits. Its point is a different one: it urges that it

is too late for the employees to complain about a method of

calculation of NCS that applied only to pre-PDA leaves and

that has not been in existence at Ameritech since 1979. A

Title VII charge must be filed within 180 days after the

“alleged unlawful employment practice occurred,” unless the

plaintiff initially filed charges with an appropriate State or

local agency, in which case the charge must be filed within

300 days after the “alleged unlawful employment practice,”

or within 30 days after receiving notice that the State or local

agency has terminated the proceedings—whichever is earlier.

42 U.S.C. § 2000e-5(e)(1).

The outcome of this case turns on which of two competing

lines of authority provide a better “fit” here. The one on

which the employees rely is represented by Bazemore v.

Friday, 478 U.S. 385, 92 L. Ed. 2d 315, 106 S. Ct. 3000 ~

(19806). In Bazemore, the Court found that an employer’s

calculation of a discriminatory base salary structure prior to

the effective date of Title VII did not leave the employer free

to use that tainted base salary structure in determining salaries

after Title VII's effective date. /d. at 395-96. See also Wagner

v. Nutrasweet Company, 95 F.3d 527, 534 (7th Cir. 1996).

Just so here, they say: Ameritech may not use a system for

calculating time of service that was tainted by pregnancy

discrimination when it makes present decisions about

eligibility for benefits.

13a

Intoning the words “bona fide seniority system” does not

help Ameritech, in the employees’ view, because the Civil

Rights Act of 1991 amended 42 U.S.C. §2000e-5(e) to

provide that “an unlawful employment practice occurs, with

respect to a seniority system that has been adopted for a

discriminatory purpose in violation of this title, . . . when a

person aggrieved is injured by the application of the seniority

system or provision of the system.” The employees conclude

that Ameritech’s continued use of pre-1979 NCS compu-

tations is a fresh violation of the statute, which occurred in

1994. It was then that Ameritech afforded early retirement

and various cash benefits to employees who had high enough

NCS numbers to retire between February 22, 1994 and

September 30, 1995. The company could have decided to

give its new benefits to all of its employees based on how

long they had worked for Ameritech, and it could have

calculated that length of time such that all employees who

had been disabled prior to April of 1979 were treated alike.

Instead, in applying the 1994 benefits, it decided to hinge

them on “NCS,” thereby favoring those employees who had

not been pregnant prior to April of 1979.

Ameritech (naturally) relies on the other line of cases,

represented by United Air Lines v. Evans, 431 U.S. 553, 52 L.

Ed. 2d 571, 97 S. Ct. 1885 (1977), and Delaware State

College v. Ricks, 449 U.S. 250, 66 L. Ed. 2d 431, 101 S. Ct.

498 (1980). In Evans, the employer’s discriminatory action

occurred when it forced a female flight attendant to quit

because she got married. 43] U.S. at 554-55. Later, the

employer rehired the flight attendant. The Evans Court held

that the employer’s refusal after the rehiring to “ orrect” the

effects of the past firing by affording her additional seniority

did not violate Title VII, because such a refusal was not a

discriminatory action in itself. Jd. at 557-58. Both male and

female employees who had been fired (whether for a non-

discriminatory reason or for an unchallenged discriminatory

reason) and then re-hired were treated the same for purposes

l4a

of seniority credit. The continuing impact of the earlier

action, within the context of an otherwise neutral system, was

not enough to show a present violation. Ricks is similar.

There, the College’s discriminatory act occurred when it

denied plaintiff Ricks academic tenure, allegedly on the basis

of his national origin. 449 U.S. at 252. The college fired

Ricks a year later, as it fired other academic employees at the

expiration of their terminal 1-year contracts. The Court

concluded that there was no continuing violation, and that

Ricks’ claim accrued at the time of the tenure denial. /d. at

257-58.

For a number of reasons, we think that Ameritech has the

better of this dispute, though we acknowledge hat the line

between continuing violations that arise with each new use of

the discriminatory act (e.g., the Bazemore paychecks) and

past violations with present effects (e.g., the Evans seniority)

is subtle at best. But it is a line the Supreme Court has drawn,

and it is our obligation to apply it if at all possible. First is the

fact, simplistic as it may seem, that our case involves

computation of time in service—seniority by another name—

followed by a neutral application of a benefit package to all

employees with the same amount of time. That suggests that

we should look first to Evans, and follow the other line only

if there is no alternative. It is true that Bazemore was decided

nine years after Evans, but the Bazemore Court said nothing

about overruling Evans, and so we assume that it did not do

so.

The statute itself offers good reason to treat seniority

systems with special care, because it specifically exempts

discriminatory effects that flow from bona fide seniority

systems from the definition of unlawful employment

practices, as long as the differences are not the result of an

intention to discriminate. 42 U.S.C. §2000e-2(h). If the

employees are able to show intentional discrimination, their

action accrues at the time they are injured by the seniority

15a

system—that is, when they are denied benefits. 42 U.S.C.

§ 2000e-5(e).

In our opinion, these employees cannot show the kind of

intentional discrimination that would trigger the exception to

the statutory protection afforded to seniority systems. As

Ameritech points out, prior to the adoption of the PDA an

authoritative Supreme Court decision had held that Title VI

did not prohibit distinctions based on pregnancy. General

Electric Co. v. Gilbert, 429 U.S. 125, 50 L. Ed. 2d 343, 97

S. Ct. 401 (1976). Moreover, the PDA has not been treated as

a retroactive statute, see Condit v. United Air Lines Inc., 631

F 2d 1136, 1139-40 (4th Cir. 1980); Schwabenbauer v. Board

of Ed. of City Sch. Dist. of City of Olean, 667 F.2d 305, 310

n. 7 (2d Cir. 1981); Whitehead v. Oklahoma Gas & Elec. Co.,

187 F.3d 1184, 1193 (10th Cir. 1999), and so Ameritech

would have had no reason to think it had to reshuffle its NCS

list after the Act was passed. Third, the Supreme Court has

held that the fact that a seniority system perpetuates pre-Act

discrimination does not preclude it from being bona fide. See

International Brotherhood of Teamsters v. United States, 431

U.S. 324, 352-53, 52 L. Ed. 2d 396, 97 S. Ct. 1843 (1977).

The employees here protest that they are not talking about a

seniority system, but they are wrong. Under the Supreme

Court’s test in California Brewers Ass'n v. Bryant, 444 U.S.

598, 606, 63 L. Ed. 2d 55, 100 S. Ct. 814 (1980), the key to

deciding whether a decision-making process qualifies as a

seniority system is its reliance on relative lengths of

employment. That is what Ameritech’s NCS system does, and

we think it fits easily into the seniority system !ine of cases.

Last, this is not a case like some continuing violations

where the employees had no way of knowing that something

bad had happened to them until much later. Hostile

environment sexual harassment cases, for example, can only

be brought once it becomes clear that the harassment is severe

Or pervasive enough to constitute an adverse effect on terms

16a

and conditions of employment. Here, the women knew the

minute they took their pregnancy or maternity leaves that

they were not getting full credit for their time off. No later

than the time when Ameritech amended its plan in response

! to the PDA, they knew that their NCS had not been amended.

It is no secret to any employee that seniority rolls like

Ameritech’s NCS make a difference for a host of employee

benefits, some present, and some future. Ameritech informed

each employee periodically of his or her accrued NCS. The

time for bringing a complaint was therefore long ago, and the

district court correctly recognized that these employees had

sued too late.

B. The Equal Pay Act

The employees next challenge Ameritech’s procedures

under the Equal Pay Act. (As before, we are addressing only

the claims of the named plaintiffs and anyone who properly

intervened before the district court.) We assume for the sake

of argument that the employees have satisfied their initial

burden under the statute to show that Ameritech pays women

less than men for “equal work on jobs the performance of

which requires equal skill, effort, and responsibility, and

which are performed under similar working conditions.” 29

U.S.C. § 206(d)(1); see Corning Glass Works v. Brennan,

417 U.S. 188, 195, 94 §. Ct. 2223, 41 L. Ed. 2d 1 (1974). On

the record here, the only difference between the complaining

employees and their colleagues who were able to receive the

1994 benefits is that they were pregnant women before April

of 1979.

But once again, the fact that the disadvantage from which

they suffer is the result of a bona fide seniority system dooms

their claim. The Equal Pay Act provides that there is no

violation if the unequal pay was due to “any other factor other

| than sex,” including “(i) a seniority system; (ii) a merit

| system; [or] (iii) a system which measures earnings by

quantity or quality of production.” 29 U.S.C. § 206(d)(1).

eee Dee er ae enna oN gr

17a

This is an affirmative defense for the employer, see Corning

Glass Works, 417 U.S. at 196, but for the same reasons we

have just reviewed for purposes of Title VII, we find that

Ameritech has met its burden. In addition, we agree with

Ameritech that the Equal Pay Act claim is untimely. Claims

arising under that statute must be filed within two years of

their accrual, 29 U.S.C. $ 255(a), and these claims were not

presented until many years after the initial decision not to

adjust the employees’ time in service for pre-1979 pregnancy

leaves.

C. ERISA

The employees’ final federal claims involve ERISA. First,

they believe that Ameritech violated its duty under ERISA to

act in the best interest of all the plan beneficiaries and

participants when it discriminated against certain female

beneficiaries of the plan. ERISA fiduciaries are required to

act with care and skill “solely in the interest of

the participants and beneficiaries.” 29 U.S.C. § 1104(a).

Ameritech is a fiduciary under ERISA, because it has

discretion and control in implementing the plan. See 29

U.S.C. § 1002(21 (A); Administrative Committee v. Gauf, 188

F.3d 767, 770 (7th Cir. 1999). Second, the employees argue

that Ameritech violated section 510 of ERISA, which

prohibits employers from frustrating their employees’

attainment or enjoyment of benefit rights. 29 U.S.C. § 1140;

see Feldman v. American Memorial Life Ins. Co., 196 F.3d

783, 792 (7th Cir. 1999). Individuals may bring claims to

recover benefits, to enforce rights, and to clarify rights under

29 U.S.C. § 1132(a)(1)(B).

Even if we agreed that the employees’ ERISA claims were

timely, perhaps because they arise more directly out of the

1994 plan amendment than the Title VII or Equal Pay Act

claims, the ERISA claims face an additional hurdle. In order

for the employees to show that Ameritech breached either a

fiduciary duty or section 510, the employees must be able to

18a

show that they were, at some time, eligible for the plan’s

: benefits. Fiduciaries are required to act “in accordance with

the documents and instruments governing the plan.” 29

U.S.C. § 1104. Any breach of the fiduciary duty must derive

from Ameritech’s implementation of the plan. For its part,

section 510 only applies if the employees can show (among

other things) that they were qualified under the plan for the

denied benefits. See Feldman, 196 F.3d at 792. If the plan

itself provides for discriminatory practices, such that they do

not qualify for benefits under its terms, they cannot prevail on

an ERISA claim.

The employees stress that the plan refers to “TOE,” or

“time of employment,” and not NCS. They maintain that

TOE does not necessarily need to be calculated using NCS,

and that they would be-eligible for the benefits of the plan if

their time of employment was calculated in the same way as

it would be for other previously disabled employees.

Nevertheless, Ameritech’s decision to use NCS to calculate

time of employment cannot evidence an intent to discriminate

if the NCS system itself has passed muster under the

antidiscrimination laws.

Furthermore, there may be a problem with shoe-horning a

discrimination claim into the ERISA notion of fiduciary duty,

because ERISA “does not itself proscribe discrimination in

the provision of employee benefits.” Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 91, 77 L. Ed. 2d 490, 103 S. Ct. 2890

(1983). Shaw found that a state law prohibiting discrimination

was preempted by ERISA, because it “related to” the area of

benefits, which is covered ' ' ERISA. /d. at 99. Ameritech

argues that the Shaw Court . .0 insinuated that ERISA would

not be a source of protection against such discrimination. The

Court said that discriminatory practices would have to be

evaluated under Title VII, rather than a broad state law, and

did not specifically include the option of resorting to ERISA.

Id. at 105-06. But the Shaw Court was not presented with and

2a EOS SON AA NE EAS 5 NC AEN EINE DEIN A NODAL CR AIA RL NAT BN PAUL

OE Ee Ne ee eC neem a

19a

did not answer the question of whether discrimination against

certain plan participants could ever reach the point of

breaching fiduciary duties. We have no need to decide

whether such a claim might be stated in some future case; we

conclude only that this is not such a case.

ERISA’s fiduciary duty was meant to hold plan

administrators to a duty of loyalty akin to that of a common-

law trustee, See John Langbein, “The Supreme Court Flunks

Trusts,” 1990 Sup. Ct. Rev. 207, 210-11. A common-law

trustee was not allowed to favor one class of beneficiaries

over another. Restatement of Trusts § 183. A plan

administrator’s duty to act in the best interest of all the

beneficiaries cannot mean that it must cater to the optimal

needs of each individual beneficiary. All of the beneficiaries’

interests will not always be aligned. The fiduciary must act as

though it were a reasonably prudent business person with the

interests of all the beneficiaries at heart. The question is

whether such a businessperson, facing potential risks of

future litigation as well as possible employee disenchantment

with the plan, would have chosen to adhere to the NCS

system, with the consequent effect of denying the 1994

benefits to the women affected here. See 29 U.S.C.

§ 1104(a)(1)(B). The answer must be yes, since adherence to

the system for all participants meant that the company had a

reliable seniority list upon which everyone could rely for any

appropriate purpose.

The district court’s order granting summary judgment also

awarded judgment to Ameritech on the state law claims,

because they mirrored the federal claims. The appellants have

not contested that part of the court’s decision on appeal, and

SO we consider any possible arguments waived.

For the reasons stated, we AFFIRM the judgment of the

district court.

20a

APPENDIX B

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF ILLINOIS,

EASTERN DIVISION *

No. 97 C 1441, No. 97 C 2209

~ AMERITECH BENEFIT PLAN COMMITTEE, et ai.,

Plaintiffs,

ANNETTE FOSTER-HALL, et al.,

Defendants.

AND BERNADETTE BERNABEI,

Plaintiff,

Vv.

AMERITECH CORPORATION, AMERITECH

MANAGEMENT PENSION PLAN, AND AMERITECH

EMPLOYEES’ BENEFIT COMMITTEE,

Defendants.

July 20, 1998, Decided

July 21, 1998, Docketed

MEMORANDUM OPINION AND ORDER

SUZANNE B. CONLON, United States District Judge.

Ameritech Benefit Plan Committee, Ameritech Pension

| Plan, Ameritech Management Pension Plan and Ameritech

; Corporation and its subsidiaries (collectively “Ameritech”)

sue 36 present and former employees of Ameritech

Corporation, as representatives of approximately 7,000

similarly-situated class members (collectively “the class

defendants”); the Communications Workers of America,

\ Ee enh UneM mane TnnT mn ncr |

2la

AFL-CIO (“CWA”); and the International Brotherhood of

Electrical Workers, Local Nos. 165, 188, 336, 383, and 399

(“IBEW”), Ameritech seeks a declaratory judgment that its

treatment of service credit for pregnancy or maternity-related

leaves taken prior to the effective date of the Pregnancy

Discrimination Act (April 29, 1979) does not violate ERISA,

Title VI, the Equal Pay Act, or any other federal, state, or

local law (Count I). Ameritech also seeks a declaratory

judgment that its treatment of service credit does not violate

the terms of collective bargaining agreements between

Ameritech Corporation and the unions (Count Il).

The CWA, the class defendants, and intervening defend-

ant employees (collectively “the employees”) filed counter-

claims alleging that Ameritech’s denial of additional service

credit for pre-1979 pregnancy leaves in connection with

pension plan enhancement programs offered in 1991 through

1995 violates ERISA and constitutes intentional discrim-

ination based on gender and/or pregnancy in violation of Title

Vil, the Equal Pay Act and various states’ discrimination

laws. In a consolidated action (97 C 2209), Bernadette

Bernabei_ sues Ameritech Corporation, Ameritech

Management Pension Plan and Ameritech Employees’

Benefit Committee for violations of ERISA, Title VII, the

Equal Pay Act, and Ohio discrimination law.' The parties

have filed cross-motions for summary judgment pursuant to

Fed. R. Civ. P. 56.

BACKGROUND

The following facts are undisputed. Ameritech Benefit Plan

Committee (“ABPC”) is a named fiduciary and administrator

of Ameritech Pension Plan (“APP”) and Ameritech

Management Pension Plan (“AMPP”) (collectively “the

pension plans”), Agreed Joint Stipulations of Fact (“Stip.”) 1,

‘Bernabei adopts the arguments set forth in the class defendants’

memoranda.

22a

44 1, 2. The pension plans were established and are main-

tained for the benefit of the participating employees of

Ameritech Corporation, its direct and indirect subsidiaries,

and Ameritech’s predecessors. /d. 4 31. The benefits provided

to eligible employees under the pension pians are determined

in part by each employee's term of employment. /d. ¥ 34.

April 29, 1979 was the effective date of the Pregnancy

Discrimination Act (“PDA”), 42 U.S.C. § 2000e-(k). Prior to

April 29, 1979, Ameritech’s predecessors typically granted

their female employees a maximum of 30 days service credit

for pregnancy or maternity-related leaves of absence. /d. § 36.

In contrast, Ameritech’s predecessors typically granted full

service credit for the entire period of other disability-related

leaves of absence. /d. 4 37. Net credited service dates are part

of a record-keeping system used by Ameritech and its

predecessors to track terms of employment. Rather than

aggregate separate periods of service when service is

interrupted, employees’ hire dates are adjusted to “squeeze

out” those periods of absence that are not credited as service.

Since the PDA became effective, Ameritech and _ its

predecessors have provided service credit for pregnancy and

maternity-related leaves to the same extent as they provide

service credit for periods of disability attributable to other

- conditions. /d. | 39. However, Ameritech has not provided

additional retroactive service credit for pregnancy or

maternity-related leaves taken prior to April 29, 1979. Thus,

the employees’ net credited service dates continue to reflect

the fact they received a maximum of 30 days service credit

for pregnancy leaves taken before April 29, 1979.

In 1991, Ameritech amended the AMPP to implement a

program known as the 1991 Special Enhancement (“1991

Enhancement”). The 1991 Enhancement provided an

: additional three years of age and service under the AMPP for

certain benefit purposes to eligible management employees

———

23a

who retired between July 31, 1991 and December 30, 1991.

Id. 440. In 1992, Ameritech amended the AMPP to

implement a program called the 1992-93 Workforce Resizing _

Program (“WRP”). The WRP provided enhanced pension

benefits for eligible management employees who retired

between July 31, 1992 and March 31, 1993. Jd. ¥ 41.

On March 7, 1994, Ameritech’s board of directors author-

ized an amendment to the APP known as the Ameritech

Pension Plan Enhancement Program (“APPEP”’). /d. 4 42.

The APPEP provided that eligible non-management

employees who retired between February 22, 1994 and

September 30, 1995 would have three years added to their

terms of employment and three years added to their actual

ages for purposes of determining retirement eligibility and

calculating the amount of their pension benefits. /d. In April

1994, Ameritech announced it would offer the Supplemental

Income Protectioy Program (“SIPP’’) to certain non-

management employees. Employees eligible for SIPP could

receive additional payments upon leaving Ameritech, in

addition to benefits provided by the APPEP. /d. 4 45.

Payments under SIPP were calculated in part based upon an

employee’s term of employment. /d.

The APPEP, the WRP and the 1991 Enhancement did not

change the requirements for retirement eligibility or the

method of calculating an employee’s term of employment.

That is, the employees’ terms of employment continue to

reflect the fact they received a maximum of 30 days service

credit for pregnancy leaves taken before April 29, 1979. As a

result, even if employees elected to retire under the APPEP,

the WRP or the 1991 Enhancement they would have

remained ineligible for immediate retirement benefits—where

they would have otherwise been immediately eligible for

retirement benefits under these programs had they received

full service credit for pregnancy leaves taken before April 29,

1979,

24a

Beginning in 1992, employees filed administrative claims

under the pension plans seeking additional service credit for

pre-1979 pregnancy leaves. These claims were denied and the

employees appealed to the Ameritech Benefit Plan

Committee. The ABPC determined the claims were properly

denied, noting that the pension pians did not contain

provisions permitting additional service credit beyond the

service credit to which employees were entitled under

predecessor plan provisions and company leave policies in

effect when the leaves were granted. In 1994, a number of

employees filed charges with the Equal Employment

Opportunity Commission (“EEOC”), alleging that Ameri-

tech’s treatment of service credit for pregnancy leaves taken

prior to April 29, 1979 violated Title VII. In May 1997, the

EEOC issued right-to-sue notices; this suit followed.

On September 3, 1997, this court certified the following

defendant class:

All former and present female employees of Ameritech

Corporation and the other parties identified in Paragraph

8 of Plaintiffs’ Complaint (“Ameritech”) with respect to

whom_the Ameritech Pension Plan or the Ameritech

Management Pension Plan (collectively the “Plans’’)

recognizes service with American Telephone &

Telegraph Company, its pre-January 1, 1984 subsidiaries

and the allied companies of The Southern New England

Telephone Company and Cincinnati Bell Inc. (the “Bell

System Companies”), and who took a pregnancy or

maternity-related leave from a Bell System Company

prior to April 29, 1979, and who were or are participants

in a Plan or Plans.

Agreed Mot. for Class Cert. at 2; See Order, No. 97 C 1441

(N.D. Ill. Sept. 3, 1997).

25a

DISCUSSION

I. SUMMARY JUDGMENT STANDARD

A movant is entitled to summary judgment under Rule 56

when the moving papers and affidavits show there is no

genuine issue of material fact and the movant is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex

Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S.

Ct. 2548 (1986); Unterreiner v. Volkswagen of America, Inc.,

8 F.3d 1206, 1209 (7th Cir. 1993). Once a moving party has

met its burden, the non-moving party must go beyond the

pleadings and set forth specific facts showing there is a

genuine issue for trial. Fed. R. Civ. P. 56(e); Becker v.

Tenenbaum-Hill Assoc., Inc., 914 F.2d 107, 110 (7th Cir.

1990). The court considers the record as a whole and draws

all reasonable inferences in the light most favorable to the

party opposing the motion. Fisher v. Transco Services-

Milwaukee, Inc., 979 F.2d 1239, 1242 (7th Cir. 1992). A

genuine issue of material fact exists when “the evidence is

such that a reasonable jury could return a verdict for the

nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Stewart

v. McGinnis, 5 F.3d 1031, 1033 (7th Cir. 1993).

Ii. TITLE Vil

Title VII prohibits discrimination “against any individual

with respect to [her] compensation, terms and conditions, or

privileges of employment, because of such individual’s

race, color, religion, sex, or national origin” 42 U.S.C.

§ 2000e-(2)(a). In 1978 Congress enacted the Pregnancy

Discrimination Act (“PDA”), which amended Title VII by

clarifying that discrimination based on pregnancy constituted

discrimination based on sex. The PDA provides as follows:

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

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

of pregnancy, childbirth, or related medical conditions;

26a

and women affected by pregnancy, childbirth, or related

. medical conditions shall be treated the same for all

employment-related purposes, including receipt of

benefits under fringe benefits programs, as other persons

not so affected ....

42 U.S.C. § 2000e-(k).

The parties do not dispute that because of the pre-1979

leave policies enforced by Ameritech’s predecessors, women

who took pregnancy leaves before April 29, 1979 currently

have less credited service than otherwise similarly situated

employees who took leaves of absence for other disabilities

during that same period. Nor do the parties dispute [that

whenever Ameritech bases current employment decisions (for

example, eligibility for retirement) on employees’ net

credited service dates, women who took pregnancy leaves

before April 29, 1979 are disadvantaged when compared to

employees who took leaves of absence for other disabilities.

Ameritech characterizes the harm resulting from its reliance

on net credited service dates as the effect of discrete acts

taken before 1979: its predecessors’ refusal to grant more

than 30 days service credit for pregnancy and maternity

leaves and the corresponding adjustments to employees’ net

credited service dates upon their return to work. The

employees characterize the harm resulting from Ameritech’s

current reliance on net credited service dates as a fresh act of

discrimination; in other words, each time Ameritech bases

employment decisions on net credited service dates—without

re-calculating net credited service to remedy the effects of its

predecessors’ pre-1979 leave policies—it makes a fresh

decision to exclude pre-1979 pregnancy leave and

affirmatively adopts a facially discriminatory policy. As a

result of their different characterizations, the parties dispute

whether the employees’ Title VII counterclaims are timely.

Title VII requires employees to file charges of discrim-

ination “within three hundred days after the alleged unlawful

27a

employment practice occurred.” 42 U.S.C. § 2000e-5(e)(1).

The employees argue their Title VII claims are timely based

on three theories: (1) Ameritech’s method of calculating net

credited service is facially discriminatory and may be

challenged at any time; (2) Ameritech’s method of calculating

net credited service may be challenged at any time because it

was adopted for discriminatory purposes; and (3) Ameritech’s

reliance on net credited service constitutes a “continuing

violation” of Title VII. These theories are discussed in turn.

A. Facial Discrimination

The employees argue Ameritech’s method of calculating

net credited service (i.e., relying on net credited service dates

without re-calculating pre-1979 net credited service based on

post-1979 law) is facially discriminatory and may be

challenged at any time. In the employees’ view, the method

of calculating net credited service employed by Ameritech’s

predecessors was a facially discriminatory policy that

Ameritech continues to apply through its refusal to adjust net

credited service dates, much like Bazemore vy. Friday, 478

U.S. 385, 92 L. Ed. 2d 315, 106 S. Ct. 3000 (1986), where a

facially discriminatory salary structure was perpetuated after

enactment of Title VII.

Bazemore warrants close attention. Prior to passage of Title

Vil, the employer (the North Carolina Agricultural Extension

Service) maintained two separate branches of personnel: a

“Negro branch” and a “White branch.” /d. at 390. Although

the employer merged the two branches in 1965 in compliance

with Title VII, the employer did not eliminate the pre-merger

salary disparities that existed between the two branches. /d.

The Court of Appeals held the employer “was under no

obligation to eliminate any salary disparity between blacks

and whites that had its origin prior to 1972 when Title VII

became applicable to public employers.” Jd. at 394. The

Supreme Court rejected this conclusion, reasoning as follows:

28a

... that the Extension Service discriminated with respect

to salaries prior to the time it was covered by Title VII

does _not excuse perpetuating that discrimination after

the Extension Service became covered by Title VII. To

hold otherwise would have the effect of exempting from

liability those employers who were historically the

greatest offenders of the rights of blacks. A pattern or

practice that would have constituted a violation of Title

VII, but for the fact that the statute had not yet become

effective, became a violation upon Title VII's effective

date, and to the extent an employer continued to engage

in that act or practice, it is liable under that statute.

* * *

Each week's paycheck that delivers less to a black than

to a similarly situated white is a wrong actionable under

Title VII, regardless of the fact that this pattern was

begun prior to the effective date of Title VII. The Court

of Appeals plainly erred in holding that the pre-Act

discriminatory difference in salaries did not have to be

eliminated.

Bazemore, 478 U.S. at 395—96 (Brennan, J.). The employees

argue net credited service dates that reflect pre-PDA

pregnancy leave policies are analogous to the paychecks in

Bazemore that were based on discriminatory salary policies

established before Title VII.

Ameritech insists it makes decisions based on an

employee's currently accrued service credit, regardless of

gender. Ameritech points out its seniority system, on its face,

credits all employees with whatever service credit they earned

under prior plans and policies before Ameritech’s pension

plans came into existence in 1984; it does not “re-calculate”

pre-1979 service credits, freshly excluding time spent on

pregnancy leave each time it makes a decision. Ameritech

concedes that its reliance on net credited service dates may

29a

perpetuate the effects of its predecessors’ pre-1979 policies,

but maintains that its current system is facially neutral. See

United Air Lines, Inc. v. Evans, 431 U.S, 553, 52 L. Ed. 2d

571, 97 S. Ct. 1885 (1977); International Bhd. of Teamsters

v. United States, 431 U.S. 324, 52 L. Ed. 2d 396, 97 S, Ct.

1843 (1977),

The court is persuaded that Ameritech’s reliance on net

credited service dates is not facially discriminatory, and that

the employees’ reliance on Bazemore is misplaced. In

Bazemore, there was no facially neutral policy that explained

why “each week's paycheck” delivered “less to a black than

to a similarly situated white.” Bazemore, 478 U.S. at 396. The

original salary disparity in Bazemore was the result of a

facially discriminatory salary structure adopted before Title

VII was made applicable to public employers—a policy that

explicitly paid black employees less salary based on their

race. After Title VII became applicable, the salary disparity

remained. Critically, the salary disparity remained not

because of a facially neutral policy that gave effect to the

prior facially discriminatory policy, but because the facially

discriminatory policy was still the proffered justification for

“each week's paycheck.” The policy at issue in Bazemore

was not facially discriminatory because it resulted in salary

disparities along racial lines, or because salary disparities

were allowed to remain; the policy was facially dis-

criminatory because by its own terms it dictated salary

disparities along racial lines. That is what it means for a

policy to be “facially discriminatory.” At bottom, Bazemore

merely stands for the proposition that an employer does not

have a license to continue enforcing a facially discriminatory

policy merely because that policy was adopted before a

change in the law made the policy illegal. Despite its broad

language, Bazemore does not stand for the proposition that a

facially neutral policy becomes facially discriminatory if the

policy perpetuates discriminatory effects.

30a

Here, Ameritech did not rely on a facially discriminatory

policy to determine eligibility for retirement benefits. Ameri-

tech determined eligibility for retirement benefits based (in

part) on employees’ net credited service dates, regardless of

the employee’s gender, and whether or not the employee had

taken pregnancy leave. Ameritech concedes that its reliance

on net credited service dates may disadvantage employees

who took pre-PDA pregnancy or maternity-related leaves.

But as Ameritech argues, the harm suffered by the employees

does not result from Ameritech’s current and facially neutral

system for tracking years of service. The harm suffered by the

employees is an effect of the pre-PDA policies enforced by

Ameritech’s predecessors. The fact Ameritech has not

remedied the effects of those pre-PDA policies does not

render their system for tracking years of service facially

discriminatory. Cf. International Bhd. of Teamsters v. United

States, 431 U.S. 324, 52 L. Ed. 2d 396, 97 S. Ct. 1843 (1977);

United Air Lines, Inc. v. Evans, 431 U.S. 553, 52 L. Ed. 2d

571, 97 S. Ct. 1885 (1977). The court notes a different

conclusion was reached by a divided panel of the 9th Circuit

in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir. 1991)

(relying on Bazemore). To the extent Pallas concludes that

reliance on net credited service dates without re-calculating

pre-1979 net credited service based on post-1979 law is a

facially discriminatory policy, this court finds Pallas

unpersuasive and respectfully declines to follow it.

B. Discriminatory Purpose

Title VII provides in pertinent part that:

. an unlawful employment practice occurs, with

respect to a seniority system that has been adopted for an

intentionally discriminatory purpose . . . (whether or not

that discriminatory purpose is apparent on the face of the

seniority provision), when the seniority system is

adopted . . . cr when a person aggrieved is injured by the

application of the seniority system or provision of the

system.

3la

42 U.S.C. § 2000e-5(e)(2). The employees argue their claims

are timely because Ameritech’s current system for tracking

years of service was adopted with an intent to discriminate.

The employees argue that when Ameritech came into

existence in 1984 and decided to base employment decisions

on net credited service dates, Ameritech made the

concomitant decision to adopt its predecessors’ policies with

respect to pre-1979 pregnancy leaves, and Ameritech

affirmatively re-adopts those policies each time it relies on

net credited service dates to determine employees’ eligibility

for benefits.

As an initial matter, the court does not accept the

employees’ assertion that Ameritech “adopted” its pred-

ecessors pre-1979 pregnancy leave policies. To be sure,

Ameritech adopted net credited service dates that reflect the

effects of its predecessors’ pre- 1979 pregnancy leave policies.

But that is not quite the same as adopting the pre-1979

pregnancy leave policies themselves. For the reasons

discussed in the previous section, this distinction is a

meaningful one.

The important question is whether there is any basis to

conclude Ameritech adopted the net credited service dates for

a discriminatory purpose. As evidence of discriminatory

purpose, the employees point to Ameritech’s “constructive

knowledge” of the passage of the Pregnancy Discrimination

Act and the decisions in Pallas y. Pacific Bell, 940 F.2d 1324

(9th Cir. 1991) and Carter v. AT&T, 870 F. Supp. 1438 (S.D.

Ohio 1994) (following Pallas; vacated by 1996 U.S. Dist.

LEXIS 21836, 1996 WL 656571 (S.D. Ohio Sept. 13, 1996),

per settlement agreement). The Pregnancy Discrimination Act

does not speak to the specific issues presented in this lawsuit;

consequently, knowledge of the PDA is not evidence that

Ameritech chose to rely on net credited service dates for the

purpose of discriminating against women who took preg-

nancy leaves before 1979. Nor are the issues presented by this

lawsuit so straightforward that Ameritech was bound to

34a

The Seventh Circuit recently addressed the distinction

between actionable “continuing violations” and non-

actionable effects of time-barred discrimination. See

Dasgupta v. University of Wisconsin Board of Regents, 121

F.3d 1138 (7th Cir. 1997). Dasgupta claimed that as a result

of national origin discrimination early in his career, his

present salary was much lower than the salaries earned by his

peers, even though they had all received similar raises in

recent years. The court held that Dasgupta’s claim was time-

barred:

There were no new violations during the limitations

period, but merely a refusal to rectify the consequences

of time-barred violations. It is not a violation of Title VI

to tell an employee he won’t get a raise to bring him up

to the salary level he would have attained had he not

been discriminated against at a time so far in the past as

to be outside the period during which he could bring a

suit seeking relief against that discrimination.

121 F.3d at 1140 (Posner, C.J.). Nor is it a violation of Title

VII to refuse to grant an employee additional service credit to

bring her up to the seniority level she would have attained

had she been granted service credit for pregnancy leave(s)

before 1979. Admittedly, this case presents close and difficult

questions about the scope of the “continuing violation”

doctrine in employment discrimination law. But the court is

| persuaded this case is more like Evans, Teamsters, Ricks, and

| Dasgupta than Bazemore and its progeny.

The employees argue that while they “may have had some

hint that Ameritech might choose to continue using [net

credited service dates] for assessing their retirement date

when that day came,” they were not injured until Ameritech

denied their request for additional service credit in connection

with the pension enhancements. Class Mem. at 20—21. The

employees argue that denial of service credit is different from

the forced resignation in Evans, the denial of tenure in Ricks

———V—a—aaLL a

35a

and the lower pay in Dasgupta because these actions had an

“immediate effect,” whereas the harm associated with denial

of service credit occurs “not so much at the moment of denial

as in the future.” Pollis v. New School for Social Research,

132 F.3d 115, 118 (2nd Cir. 1997). Pollis arose under the

Equal Pay Act and involved an allegedly discriminatory pay

scale. In the course of distinguishing another case, Pollis

suggested in dicta that “seniority rights are not of immediate

value, but have determinate effect on the future terms of

one’s employment. . . . As a consequence, a discriminatory

policy that results in a wrongful denial of seniority causes

harm not so much at the moment of denial as in the

future... .” Id.

Pollis cites no authority for the proposition that seniority

rights lack immediate value. To the extent Pollis suggests the

denial of seniority rights does not become 2 legally

cognizable injury until the seniority system is applied to

determine eligibility for benefits, the dicta in Pollis

unpersuasive. Seniority rights at Ameritech have immediate

value similar to the immediate value associated with tenure in

Delaware State College v. Ricks, 449 U.S. 250, 66 L. Ed. 2d

431, 101 S. Ct. 498 (1980). Neither tenure nor seniority rights

are valuable in the abstract; both are valuable because of the

rights and benefits that are associated with either tenure or

seniority. Yet in Ricks, the Supreme Court held the statute of

limitations began to run when Ricks was denied tenure, not

later when his employment contract ran out and—because he

was denied tenure—was not renewed. “When Ricks lost

[tenure] he lost something of value, and so was injured.”

Webb v. Indiana National Bank, 931 F.2d 434 (7th Cir.

1991). ,

Here, it is undisputed that throughout their employment,

management employees of Ameritech and its predecessors

are and were provided with disability and pension benefit

statements that indicate the employees’ net credited service

36a

dates.” Pl. 12(M) 4 45. It is further undisputed that throughout

their employment, non-management employees of Ameritech

and Ameritech’s predecessors are and were provided with (or

had access to) collective bargaining agreements. Stip. § 59.

These collective bargaining agreements state that net credited

service dates are used to determine vacation benefits and

selection, shift selection, promotion and transfer selection,

layoff selection and recall rights, voluntary separation

elections, the amount of separation payments, the amount and

duration of sickness and accident disability benefit payments,

and the date of periodic wage increases. Jd. As for the non-

management employees’ pension benefits, any ambiguity

concerning whether net credited service was effectively the

same as “term of employment” as defined by the Ameritech

Pension Plan (“pension plan”) was resolved by the following

language from the summary plan description for the pension

plan, effective May 1989: “For example, to be eligible to

retire with a service pension at age 65, you must have at least

10 years of net credited service.” Defs. 12(M) 4 75 (emphasis

added). Where an employee’s net credited service determines

the duration and amount of disability payments and all the

other rights and entitlements listed above, it cannot be said

that net credited service lacks immediate value to the

employee. Here, the employees were plainly injured when

Ameritech’s predecessors refused to grant service credit for

their pregnancy leaves. The fact that the effects of that injury

become most severe as the employees near retirement does

? The employees seek to create a genuine issue by arguing that even

though they received benefit statements and the benefit statements

indicated their net credited service dates, they did not know the net

credited service dates were relevant to the benefit calculations. See, e.g.,

Defs. 12(N) 945. On this record, no jury could reasonably infer the

employees did not know their net credited service dates were relevant to

the benefits calculation, where the dates were communicated to the

employees in benefit statements.

37a

not afford the employees a fresh limitations period. It is

undisputed that Ameritech and its predecessors provided

employees with various notifications of their net credited

service dates and any adjustments made to those dates. Stip.

19 53-58. Under these circumstances, the employees clearly

discovered or should have discovered the injury.

Nor does there appear to be any basis to support equitable

tolling of the statute of limitations. If, as the employees

sometimes argue, the PDA merely clarified the scope of Title

VII and was not a drastic shift in discrimination law, then

perhaps the employees should have had sufficient information

when their net credited service dates were adjusted to suspect

that their rights under Title VII were possibly violated. See

Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir.

1990) (“The qualification ‘possible’ is important. if a plaintiff

were entitled to have all the time he needed to be certain his

rights had been violated, the statute of limitations would

never run - for even after judgment, there is no certainty”). If,

however, the PDA represented a drastic shift in

discrimination law, then the change in law—together with the

employees’ knowledge of the relevance of net credited

service dates and the fact employees would have been

notified of any subsequent adjustments made to those dates -

Should have been enough to trigger a suspicion that their

rights under Title VII may have been violated. The employees

argue they reasonably waited to sue because Ameritech might

have chosen to grant retroactive service credit as they neared

retirement. The employees assert that Ameritech has “the

power and ability” to grant retroactive service credit, as

evidenced by the fact its predecessor once granted retroactive

service credit in 1973 to workers who returned from strike.

But the fact Ameritech has the power to grant retroactive

service credit does not establish that the decision of

Ameritech’s predecessors to deny service credit for

pregnancy leave is perpetually “not final.” That decision

became final when the employees returned to work and their

38a

net credited service dates were adjusted. Accordingly, there is

no basis to toll the statute of limitations. The employees’ Title

VII claims are time-barred.

Ill. EQUAL PAY ACT

Even assuming the employees could demonstrate a prima

facie case under the Equal Pay Act, Ameritech has a complete

defense because any disparity in pension benefits resulted

from the nondiscriminatory application of Ameritech’s

seniority system (i.e., Ameritech’s reliance on net credited

service dates). See 29 U.S.C. § 206(d). Ameritech has

established a bona fide seniority system - one that is drafted

and applied in a neutral manner. Accordingly, Ameritech is

entitled to summary judgement as to this claim.

IV. ERISA

The employees argue Ameritech breached its fiduciary

duty by discriminating against them based on pre-1979

pregnancy leaves. ERISA does not specifically prohibit

gender discrimination. Shaw v. Delta Air Lines, Inc., 463

U.S. 85, 91, 77 L. Ed. 2d 496, 103 S. Ct. 2890 (1983). As an

initial matter, there is some question whether the employees

should be allowed to “bootstrap” an ERISA breach of

fiduciary claim onto a gender discrimination claim. Some

courts have refused to recognize a separate ERISA claim in

these circumstances. See, e.g., Biggs v. North Central United

Tel. Co., 1997 WL 760669 (S.D. Ohio Oct. 15, 1997). But

even assuming the employees could state a separate ERISA

claim, the court finds no support for the proposition that a

plan administrator breaches its fiduciary duty to the plan

participants by relying on a neutral seniority system that

happens to give effect to the employer’s pre-PDA leave

policies. Accordingly, Ameritech is entitled to summary

judgment as to any breach of fiduciary claims under ERISA.

39a

V. STATE LAW CLAIMS

The state law claims mirror the employees’ Title VII and

Equal Pay Act claims. For the reasons previously discussed in

parts If and III of this opinion, Ameritech is entitled to

summary judgment as to the state law ciaims.

CONCLUSION

Defendants’ motions for summary judgment are denied.

Plaintiffs’ motion for summary judgment is granted.

ENTER:

July 20, 1998

/s/ Suzanne B. Conlon

. SUZANNE B. CONLON

United States District Judge

JUDGMENT IN A CIVIL CASE

Decision by Court. This action came to hearing before the

Court. The issues have been heard and a decision has been

rendered.

IT IS HEREBY ORDERED AND -ADJUDGED that

judgment is eniered in favor of plaintiffs Ameritech Benefit

Plan Comwitittee, et al. and against defendants Annette Foster-

Hall, et al.

Date: 7/20/1998

40a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

Nos. 98-3096, 98-3101 & 98-3102

AMERITECH BENEFIT PLAN Appeals from the United States

committee, et al., District Court for the Northern District of

Illinois, Eastern Division

Plaintiffs-Appellees,

Vv.

Nos. 97 C 1441 & 97 C 2209

ANNETTE FOSTER-HALL, et ai., we

Defendants-Appellants,

SUZANNE B, CONLON, Judge AND BERNADETTE BERNABEL

Plaintiff-Appellant,

AMERITECH CORPORATION, ef al.,

Defendants-Appellees.

Before

Hon. RICHARD D. CUDAHY, Circuit Judge

Hon. KENNETH F. RIPPLE, Circuit Judge

Hon. DIANE P. WOOD, Circuit Judge

Order of the Court of Appeals Denying

Rehearing and Rehearing En Banc

August 31, 2000

4la

ORDER

On consideration of the petition for rehearing and petition

for rehearing en banc filed by counsel for the plaintiffs-

appellees/defendants-appellees on July 27, 2000, all members

of the original panel have voted to DENY the petition for i

rehearing. No judge’ in regular active service requested a

vote on the petition for rehearing en banc. :

Accordingly, the petition for rehearing is hereby DENIED.

* Chief Judge Flaum and Circuit Judge Coffey did not participate in

consideration of the petition for rehearing en banc.

42a

APPENDIX D

Names of Individual Petitioners

Adair Paget

Adams Debra

Adams Patricia

Addington Carol Ann

Addis Josephine

Alicea Carmen

Allen Brenda

Anderson Janice

Anderson Karen

Anderson Linda

Andre Jeanette

Anter Judith

Appleby-Darrow Rita

Archambeau Patricia

Armstrong Deneen

Amold Joanne

Amold Sharon Elaine

Artino Darline

Asciutto Mary

Aurino Barbara

Austin Madiline

Baas Charlene Rae

Baker Deborah

Ball Sandra

Ballard Elizabeth

Banasiak Kathleen

Banaszynski Carmen

Barnes Connie

Barnhart Linda Lou

Barrett Cozette

Barrett Kathleen

Barrick Roberta

Barron Shirley

Barto Mary

Bass Cheryl Lee

Bates Betsy

Beach Cynthia J.

Beck Barbara E.

Beck Gail

Beck Margaret

Becker Marjorie A.

Becker Sue

Begley Kathryn A.

Belden Karen G.

Bell Dorothy J.

Bell Barbara J.

Bellotta Nancy J.

Bennett Gertrude

Benton Magdalene

Berger Peggy

Best Patricia A.

Beverly Jane

Bierbaum Kathryn

Bilbrey Linda

Binger Janet K.

Birkey (Peterson)Linda I.

Blake Sharon M.

Blanchard Annette M.

Blanchard Barbara K.

Bloomfield _Antonino M.

Bodbyl RaenAnne

Bolden Shirley

Boogaard Linda M.

Borucki (Kopena)Pamela M.

Bosley Dianna L.

Boston Brenda L.

Bowman Patricia

Boyd Charlene

Boyd Clara L.

Braden Catherine L.

Brewer Carol

Britton-Dozier Paula

Brogden Sally A.

‘Brogdon Nellie Roper

Brooks Juanita

Brooks Nathalia

Brown Donna

Brown Ella R.

Brown Judith L.

Brown Mary A.

Brown Patricia A.

Brown Sharon Elayne

Brown Vera

Brown-Royston M.

Bruce Marsha

Brull Lois A.

Brunsfield PamelaJ.

Brunson Glenda S.

Brzezinski Jane

Buck Diana S.

Buckner Karen

Buehl Elizabeth A.

Bunyan Sally

43a

Butts Michelle D.

Cain (Neavor) Linda M.

Cammarn (Carpenter) Carla L

Campbell Alice M.

Campbell Glenna M.

Campbell Harriet S.

Canty Brenda

Canty Lenice

Carney Jerlyn A.

Carpenter Carol

Carpenter Patricia L.

Carr Victoria Y.

Carter Charlestein

Caster Mary

Cemborski (Seifert) Marie B.

Chapman Janet S.

Chartrand Christine A.

Cheetham Therese

Chellevold Linda

Chovanec Carol A.

Christian Harriett J.

Chrystan Patricia M.

Clark Clara G.

Clark Linda M.

Clark Susan

Clarke Mary

Clemens Nancy M.

Burke (Foster) Joann N. Clements Loraine

Burkows (Mackert) Sandra R. Clemons Norma J.

Bumett-Roy Diane M. Clinkscales Patricia

Burnett (Watts) Patricia A. Coates Linda F.

Burns Joyce Cobb Peggy L.

Burris Barbara J. Cochran Barbara K.

Burton Carol A. Coleman Katrina D.

Bush Janice B. Coleman Willie Jean

Bushu Linda L. Coles Fredda L.

Collier Maxine K.

Collier Sharon R.

Collins Barbara A. Dale

Colvin Annette

Conner Diana Kay

Cook Jane M.

Cook Patricia A.

Cook Susan

Coolidge Linda J.

Cooper Sharon L.

Corliss Jane M.

Coulter Cora

Courter Phyllis D.

Cousino Karen K.

Covell Janice G.

Craft Sheila A.

Crowe (Mullins) Sandra

Cummings Madeline L.

Curless Marsha

Curley Mary E.

Currie Donna

Currie Renetta

Curtis Jacqueline A.

Custer Beatrice

Dalie Christina Jane

Dalton Dianne M.

Dalton Judith A.

Darlas Debbie

Darling Kristi

Darrow Rita C. Appleby

Dattilo Susan L

Daugherty Ardyce P.

Dauthard Bernice

Davidson Bonnie

Davis Bernadette

Davis Yvonia

44a

Dawson Cynthia M.

Deeger Karen D.

Delgadillo JoyceA.

DeMaagd Diane

DeMarcus Carol S.

Dempsey Patricia A.

Demyers-Moore Renee

Dennison Jean

Denton Shirley M.

DeRose Patricia

DeSpear Katherine

Deuparo Barbara J.

Devonshire Nancy J.

Dickerson Karla F.

Dickeson Linda

Diderrich Barbara V.

Dill Margaret M.

Dimavicius Patricia

Dinwieddie Pearl

Dishner Brenda F.

Dmytryka Carol Ann

Dodson Nancy J.

Doherty Patricia E.

Donell Nathalie C.

Donnie Zrothea L.

Douglas Irma J.

Dowd (Arata) Diane B.

Draper Annie B.

Drewnowski Linda K.

Driscoll Pamela E.

Dunn Lillie R.

Dwyer Connie R.

Dye Emma A.

Dziad Debra K.

Early Linda Y.

Easley Karen J.

ee na a a ST

Edgar Gloria J.

Edstrom Kathy

Edwards Janet

Elam Marlene

Elkins Marsha J.

Ellingboe Catherine

Elliott Janie E.

Ellis Karen S.

Ely Judy I.

Emch Kathleen M.

Endres Sandra L.

Engen Catherine S.

Enright Mary Ann

Edrmann Linda S.

Etter Ruth E.

Evanoff Ruth A.

Evans Emestine H.

Evans Sandra

Everse Deborah S.

Exner Julie A.

Fazulak Mary Jo

Fedewa Linda

Fellows Sherrie L.

Felty JoAnn M.

Fenton Sandra L.

Fergerson Jacqueline A.

Fernandez Carmen Maria

Ferris Darlene Kathryn

Field Sharon

Fineout (Lightfoot) Katheryn

Fisher Diane B.

Fleming Velma

Fleury Jane A.

Flier (Ewing) Mary Jane

Flood Barbara A.

Fluker Charlene D.

Fry Patricia A. :

Galambos Marcia J.

Garland Joanne M.

Garmon Bernice

Gates Charlotte

Gaulke Cristine L.

Gawkowski Jeanette

Geer Deborah J.

George Marlene

George Susan M.

Gerba Lorena A.

Gesen Linda K.

Ghighi Sharon W.

Gibson Sharon M.

Giddens Judy P.

Gilbert Constance M.

Gildersleeve Brenda

Giles Arlis

Gilkerson Annabelle

Gillespie Deborah A.

Giordano Madeline

Glover (Johnson) (Brown)

Pamela A.

Gnadr Cecilia M.

Goan Linda M

Godwin Maxine L.

Goetsch (Schaller) Donna M.

Gogoe Sheron

Gollick Deborah M.

Goltz Patricia

Gonder-Harris-Fluker

Sharon D.

Gonyer Mary M.

Gonzales Mirta Iris

Gonzales Mirta

Good (Birmingham) Daria S.

Goodfelllow Rosalla A.

Goodson Marie A.

Gorge Susan M.

Goujon-Borton Maria B.

Gramza Debra L.

Green Christina

Green Genevieve

Griffin Doris A.

Grooms Catharine S.

Groot Sally

Grow Kathleen

Grubb Carla J.

Guthrie Linda K.

Hafey Louise M.

Hagan Nancy

Halbig Pamela S.

Hall Alethea

Halloran Rosemary A.

Halter Teresa

Hamilton Carol

Hamman (Fisher) Virginia K.

Hamman (Wichert) Susan

Hammond Bonnie M.

it peo

Hampton Peggy A.

Hane Michelle D.

Hanon Kathryn L.

Hanson Kathryn L.

Hardin Betty L.

Hardnick Mildred

Harkins Catherine S.

Harner Clare A.

Harrigill Janelle C.

Harrington Karen

Harris Jane A.

Harris Julia R.

Harris Penny

Hartle Shirley Lovins

Hartman Ravella A. _

Hartshorn (Saaler) Diane L.

Hartung Delores M.

Harvey Rose June

Hassell Nadine

Hatwood Carolyn L.

Hawes Patricia A.

Hawkins Donelda M.

Hawthorne Dorothy A.

Hayes Pamela M.

Hayworth Nancy

Heald Dorothy J.

Heaton (Wirkula) Anita L.

Heinrich Irene E.

Henderson Margaret E.

Burgess

Henderson Rozelle M.

Henning Philistine

Henry Carolyn

Hensley Inez M.

Hepner Judith K.

Hernandez Linda C.

Herncjar Jane K.

Hess Deborah L.

Hess Julia A.

Hicks Jaye N.

Higginbotham Victoria A.

Hildreth Mary J.

Hill Barbara J.

Hines Sandra K.

Hodges Beverly B.

Hoffman Shirley

Holdaway Connie

Holland Regina B.

Holloman Alexandra J.

Holloway Anna M.

Holloway Arletha

Holmes Joyce A.

Holtrop Rosalie A.

Horton Betty J.

Hough Gloria L.

Hovanic Catherine A.

Howard Mae C.

Howell Myra

Huffman Mable L.

Hughes Donna K.

Hughes Elaine K.

Hughes Sonia M.

Humble Karen J.

Humphrey Angel J.

Hundley Mildred A.

Hunter Andrea T.

Hutson Rita Anne

[ilinsman Glenna

Ingles Janet

Isaacson Lynn M.

Isom Mayme

Jackson Edie

47a

Jackson Linda F.

Jackson Phyllis

Jamar Shirley A.

James LaBéertha

James Lenora J.

Jandeveer Catherine M.

Janick Catherine J.

Jankowiak Vonnie S.

Janney Dinah L.

Janssen Kay

Jefferson Linda D.

Jenks Sharon L.

Johnson Cheryl M.

Johnson Loretta G.

Johnson Margaret E.

Johnson Marsha D.

Johnson Nancy A.

Johnson Seriata

Johnson Shirley A.

Johnston Jacquelyn M.

Johrendt Sandra L

Jones Diane R.

Jones Elizabeth A.

Jones Elrena

Jones Helen A.

Jones Martha

Jones (Buckles) Joan

Jones (Jochum) Pamela E.

Jordan Delores

Jordan Marilyn

Jordan Patricia E.

Jorgenson Jill

Justice Gloria

Kaiser Arlene Mary

Kaiser Vicki A.

KammererAnn M.

Kartes Sally A.

Kastelic Patricia Ann

Kazmir Dorothy

Keena Linda Lee

Keller Eileen Ruth

Kelsch Caro] M.

Kendall Jacqueline

Kennedy Karen L.

Kent Linda

Keplar Suzan

Kershner Anne K.

Keys Dallas E.

Killings Constance M.

Kilson Margaret

King Geraldine R.

King (Williams) Evlyn M.

Kippen Gayle

Klaas Grace J.

Kleiser Rosanka

Klem Elizabeth J.

Klepper Wanda M.

Klokis Kaye Y.

Klopfenstein Kathy

Kmiec Linda

Knox Henrietta Y.

Kohlis-Ruehr Mary L.

Kolby Barbara L.

Kosick Constance

Kostuck Linda

Krachie Bonnie K.

Krupp Ruth E.

Kuglen Martha

Kurtzakowski Elizabeth

LaCourse Carol

LaFontaine Sharon

Lamorand Mary L.

48a

Lamp Blanca E.

LaPlante Georgia A.

LaPorte Carol

Larsen Virginia A.

Larson Vicki L.

Lata Elaine

Laycock Elizabeth J.

Leasure (McCarrich)

Christine M.

Lee Avonia

Lee Barbara

Lemmens Beverly A.

Lemonta Bridget M.

Leonard Velmateen

LeQuia Sonya E.

LeVan Cathy

Lewis Nini

Lewis Patricia

Lewis Carole

Lewis Carole E. Tucker :

Ley Roberta Lyne _

Lindee Ella M.-

Lindley Jean L.

Lindsay Marjorie F.

Littleton Sandra M.

Livingston Mary L.

Livingston Roxanne Reyes

Loewengruber (Gunther)

Patricia

Logan Sheila M._

Longcore Janet R.

Longmire Gertrude E.

Lorence Elizabeth J.

Redding-Lott Rosemary

Lotz Gloria J.-

Love Andrea

Love Marsha A.

Lowden Johanne M.

Lubin Linda D. -

Ludwig Margaret M.

Luhrs Patricia L.

Lund Deborah C.

MacArthur Nancy

Machin Noreen

MacNealy Mary Jean

Macon Charlotte A.

Mager Cheryl D.

Maichi Herta G.

Manhardt Elizabeth L.

Mans Lana R.

Marion Sharon L.

Market Vicki

Marsh CarolJean

Marshall Jacqueline F.

Marshall Marjory K.

Martin Alecia Y.

Mason Cathy

Matney Marcia

Maurer Melody

Maxal Beverly Joe

Maxell Beverly

Maxwell Juanna E.

McArthur Diana

McClain Jacqueline

McClain Reynell O.

McCord Barbara S.

McDowell Marionette

McFall Shirley

McGrath Patricia L.

McGreary Mary

McKeever Georgeannd

McKnight Gloria -

49a

McNeil Lynn

McPherson Patricia A.

McRae Esther

Means Agnes

Medlin Patricia

Mervosh ShirelyA.

Meyer Bonnie K.

Michalowski Linda J.

Miles Carolyn

Miller Janet S.

Mills Pamela A.

Miner Catherine A.

Ming Sandra

-Moneypenny Donna

Moon Sandra L.

Moore Barbara R.

Moore Beverly D.

Moore Chris

Morris Alma J.

Morse Laurie L.

Moultrie Johnnie P.

Mulhall Sandra K.

Mullins Betty J.

Mumford Beulah G.

Murphy Diane M.

Murphy Mary A.

Murphy Pamela A.

Nash Lois

Newlin Doris K.

Newton Loyce J.

Nichols Barbara J.

Nichols Frances

Nicholson Valerie J.

Nicolai Cynthia M.

Niendorf Linda A.

Nietubicz M. Dawn

Nix Melba J.

Norris Evelyn F.

Norris Shirley Anne

Nowicki Nancy K.

Nuber Chery] L.

Nuttall Cynthia Ann

Odeuvald Debbie A.

Ogg Virginia E.

Oliver Delores J.

Olson Gloria J.

Osgood Dianne M.

Osowski Theresa

Overbey Pearl H.

Owens Carrie L.

Page Susan

Palmitieri Karen

Pandolfo Karen

Park ~Linda

Park Nancy

Parker Diane

Pasinski Patricia

Patrick Zenora

Patton Sally

Paul Ida

Pauli Cathy

Pavey Donna R.

Pekarek Fredia

Pendergast Mary

Perry Sheila

Perugini Janice

Peterson Patricia

Peterson Vivian

Phillips Mary Lou

Pickett (Mackey) Patricia

Pierson Jacqueline

Pirtle Bianche

50a

Pizzino Carol

Plants Gail

Pline Cheryl

Polden Sharon

Pope Betty

Pope Jerry

Pope (Scherer)Cheryl

Porter Judith

Powers Nancy

Preston Cynthia

Prewitt-Brown Willa

Price Nancy

Priest Iler

Pringh Nancy

Pritchard Dale

Pruitt Willie

Pryor C. Lynne

Pugh Erma

Pulfer Wanda _

Quinn Jean C.

Ramsden Martha

Rankin Anna

Rauwerda De'Ann

Reed Deborah

Reed Lucy

Reed Patricia

Reese Rebecca

Reeves Frances

Reichman Jacqueline

Remson Nicola

Repke Jane

Restainer Victoria

Rhoades Paulette C.

Rice Donna L.

Richardson Louise E.

Richey Beverly A. —

Rieves Dianne Marie

Riffle Phyllis M.

Rigden Patrice

Riley (Johnson) (Davis)

Cynthia N.

Ringer Alma M.

Roach Suzanne M.

Robbins Della

Roberts Crystal J.

Roberts Joy R.

Roberts Maryanne

Robinson Beverly

Robinson Yvonne

Robison (Hansen) Judith L.

Rokosky JoAnn

Roof Donna E.

Rose Joan E.

Ross Shirley R. Erickson

Rouchion Brenda L.

Rowan Linda A.

Ruch Veronica A.

Rudolph Margaret A.

Ruminski Margaret J.

Rushman Margaret A.

Russell Christine M.

Ryan Theresa A.

Sabisch Margaret K.

Sadler Debra K.

Sagert Janet E.

Salata Nina J.

Sams Peggy S.

Samuels Rhonda

Sanchez Margaret A.

Sank-Williams (Newton)

Mary J.

Santy Sandra

S5la

Saults Sharon

Saykally Marjorie

Schmidt Karem

Schmidt Sandra L.

Schneider Kathleen A.

Schneider Rose M.

Schober Suzan A.

Schuette (Reimer) Debra A.

Schwab Bonita L.

Schweda Cynthia

Scott (Harris) Jannie M.

Scozzafave Darlene

Seevers Sue E.

Setter Judith R.

Severson Renae R.

Sewell Blanche

Sexton Debra C.

Shadduck Robin

Shannon Edith M.

Sharif Deborah Chapman

Sharpley Glenda

Shaw Janice F.

Shearer Karen

Shepherd Paula P.

Sherrill Virginia

Schields Connie L.

Shiffman Charol L.

Sidner Sherry E.

Sielaff Linda

Sieloff Diane

Simail Anna

Simmons Marveta

Simuel (Arnold) Celia O.

Skamiera Mary R.

Skurski Susan C.

Slatt Sharon -

Slezak Jane E.

Sluiter Maria A.

Smallwood Debra L.

Smigul Paula J.

Smiskey Kay M.

Smith Brenda R

Smith Christine L.

Smith Constance D.

Smith Denise

Smith Irene

Smith Janice A.

Smith Johnnie M.

Smith Jule A.

Smith Marri Y.

Smith Patricia A.

Smith Linda

Sorensen Arlene

Spangler Susan M.

Sparks Sherline

Spears Joann E.

Spencer (Spates) Harriet L.

Spight Darice E.

Spires Judy

Springman Leslie

Stanislowski Darlene

Stansfield Joanne Rebecca

Steeg Dian

Stegehuis Uneta P.

Steger Pamela A.

Stein Deanna L.

Steiner Mary J.

Steinko Virginia

Stemos (Winders) Carol S.

Stephens Clara L.

Stephens Margariette

Stepnoski Donna L.

52a

Stevens Kathleen

Stewart Diane E.

Stewart Patti

Stewart Vanessa D.

Stewart (Reiner) Randi Sue

Stocker Patricia A.

Stockford Mary Kay

Stodghill Barbara W.

Storts Diana L.

Strauss Kathryn L.

Suber Beverly

Sullivan Judith

Swain Donna M.

Szilaqyi Theresa M.

Tackla Linda Susan

Tankovich Jane M.

Tarpley Patncia

Tarver Catherine

Tate Carolyn S.

Taylor Janice Marie

Taylor Minnie Pearl Kyser

Thomas Denise J.

Thompson Janetta

Thompson Lottie L.

Thompson Bessie

Thompson Diana L.

Thornton Jannie M.

Thruston Joanna Lynn

Tisevich Sharon Louise

Toyer Rosalind F.

Trepka Mary

Triplett Christine A.

Trzaskowski Grace

Tubbs Doris M.

Tucker DeVonne

Turner Teletha

Tynan Sharon L.

Tyson Elizabeth

Underwood Olivia

Urbanski Anne L.

Urquhart Betty J.

Valko Judith E.

Van Aacken (Groh) Gloria

VanHelden Jane

Varga Beatrice S.

Varney Mariha J.

Vassallo Amy L.

Vaughn Vicky L.

Vaught Judith D.

Venzon (Little) Georgia C.

Veverka Rebecca K.

Victor Maria R.

Vistein Linda

Vondeling Sherry D.

Wagner Alicia

Wallace Patricia H.

Wallace Deborah C.

Wallace Maxine L.

Walsh Sharon L.

Ward Karen

Ward Kathleen S.

Ward Mildred L.

Warren Vickie D.

Washington Mariah

Wazniak Sheri D.

Weaver Rita D.

Webb Nancy R.

Webb Karen D.

Wehler Noreen J.

Weis Linnea

Welch (Colvin) Barbara L.

Wells Barbara Ann

53a

Wells Jetty L.

Wenberg (Drinkwine)

Cheryl L

Wendling Kathleen M.

Wendorf Connie K.

Wenger Margaret

West Cecilila Lynn

West Merrie

West (Nemeth) Sandra

White Linda L.

White Linda S.

Whitfield Elsie

Whiting Peggy

Whitson Marie

Whitten JoanE.

Whittenburg Margene

Wicklund Carol

Wiesner Norma J.

Wiggins Sharon L.

Willgues Judith A.

Williams Barbara Ann

Williams Carolyn J.

Williams Faye A.

Williams Hilah

Williams Judith E.

Williams Kristine J.

Williams Renee

Williams Theresa

Williams Winnie F.

Williams Zaneeta

Williamson Betty A.

Wilmoth Sharon Ann

Wilson Catherine A.

Wilson Joan R.

Wilson Sarah R.

Wiltjer Constance

Wincek Mary Lou

Winkelman Karen J.

Winn Karen S. Lawrence

Withey Virginia E.

Witkowski Carol T.

Witsaman Debora

Wojtczak Harriet M.

WolfgangBarbara A.

Wood Rose Ann

Woods Era M.

Worda Patricia

54a

Worley Beverly J.

Wright Dianne Christopher

Wright Elaine

Young Ozella

Zank Patricia M.

Zaremba Susan K.

Zielinski Mary K.

Ziglinski Patty

Zimmer Bonita J.

Zimmerman Marilyn

Gibson Brenda

Kloess Helen

Leach H. Carleen

Parrish Sharon

Timmerman Frances

Barnes Phyllis

Bober Betty

Champer Janet -

Croddy Linda

Elick Patricia

Gardner Lesle

Harmacinski Dolores

Niemeier Polly

Flynn Adomaitis Debby

Allen Anne Marie

Amato Carol

Andrews Vicki

Dallos Evelyn

Grover Leanne

Johnson Ruth

Jones Virginia

Wingo Francie

Adkins Sara Sue

Anderson Debra

Appleton Janet

Ballard Sandra

Kreger Kathryn

Perril Margaret

Richard Diane

Smitherman-Mui Brenda

Avery Mary Jo

Beattie Diana

Berger Christine

Connell Shirley

55a

Ray Carolyn

Cuprys Cheryl

Lanzy Patrica

Gaulden Phyllis

Massengale Linda

Tofstad Barbara

Sturdivant Gloria

Weininger Karen

Riddlebarger Teresa ~

Cox Kathleen

Musick Jo

Sears Carol

Gregg Cynthia

Appling Linda

Wiczynski Joyce

Ewing Cathy

Clay Jackie

56a

APPENDIX E

Corporate Subsidiaries of Ameritech Corporation

Illinois Bell Telephone Company

Indiana Bell Telephone Company, Inc.

Michigan Bell Telephone Company

The Ohio Bell Telephone Company

Wisconsin Bell, Inc.

Ameritech Services, Inc.

Ameritech Advanced Data Services of Ilinois, Inc.

Ameritech Advanced Data Services of Indiana, Inc.

Ameritech Advanced Data Services of Michigan, Inc.

10. Ameritech Advanced Data Services of Ohio, Inc.

oP SP Pe PS

11. Ameritech Advanced Data Services of Wisconsin, Inc.

12. Ameritech Mobile Communications, Inc.

13. Ameritech Information Systems, Inc.

14. Ameritech Credit Corporation 3

15. Ameritech Development Corporation

16. Ameritech International, Inc.

17. Ameritech Publishing, Inc.

18. Ameritech Interactive Media Services, Inc.

19. Ameritech New Zealand Limited

20. Ameritech Health Connections, Inc.

21. Ameritech Denmark, Inc.

22. Ameritech Communications, Inc.

23. Ameritech New Media, Inc.

24. Ameritech Telecommunications Services Company

= val

=) ay

SX. Ane SET eee,

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.