Argument Recap: AT&T v. Hulteen

The second case argued on December 10, 2008, AT&T v. Hulteen, stemmed from a decision out of the Ninth Circuit in favor of Noreen Hulteen and three other women who were denied full service credit for pregnancy leaves taken from AT&T between 1968 and 1976.  When the company calculated their pension benefits decades later, the women and the union who represent them sued under the Pregnancy Discrimination Act (PDA). 

Arguing on behalf of petitioner, Carter Phillips tried to persuade the justices that while the women’s claims were actionable when the credit was originally denied, any claim was now stale.  To require AT&T to credit the women, decades later, for their absences would upset the “competitive seniority” amongst employees.  Justice Ginsburg seemed unconvinced, suggesting that absent a felt application of their loss in seniority, there was “nothing to be done” in the time immediately following the leave.  Mr. Phillips emphasized that both Congress and the Supreme Court’s prior decisions have “consistently recognized” the rights of all members of the plan.  Phillips faced questions from Justices Ginsburg, Breyer, and Souter when he rejected respondents’ merits briefing classification of the benefits plan as facially discriminatory.  Since AT&T immediately changed its plan after the PDA was passed to henceforth credit pregnancy leaves like other temporary disability leaves, he argued that the plan must be in complete compliance and cannot be facially discriminatory.  Justices Breyer and Souter both struggled to identify the correct line of cases through which to understand Hulteen – whether to rely upon Bazemore, in which the Court ruled against a company paying unequal wages to black and white employees based on pre-ERA salaries, or instead upon Evans and Ledbetter, in which the Court recently held that “the fact that pre-charging period discrimination adversely affects the calculation of a neutral factor like seniority…does not mean that each new paycheck constitutions a new violation.”  Mr. Phillips conceded that there were multiple ways of understanding the case, but that he believed Evans to be the most appropriate lens.

Arguing for the federal government as amicus curiae, Lisa Blatt reiterated that the decision below imposed impermissible retroactive liability on AT&T.  Justice Ginsburg immediately pointed out that “the position of the only representative of the United States” in the court below was in fact opposite to the one taken by Ms. Blatt.  Citing Ledbetter, Ms. Blatt maintained that the Commission was due “no special deference” on Supreme Court cases.  Ms. Blatt voiced concern for the vested rights of other employees in the same pension system if respondents prevailed, describing it as a “zero-sum game.”  Justice Souter disagreed, commenting that it did not seem as if, in the case at hand, others’ benefits would be endangered.  A series of questions from Justice Stevens and then Justice Kennedy led Ms. Blatt to end her time by characterizing AT&T’s seniority system as facially neutral, affording “seniority to men and women on an equal basis depending on whether they took disability leave or personal leave.”  She acknowledged, though, that its pre-PDA leave policy, while legal then, would be unlawful today and facially discriminatory. 

Kevin Russell, arguing on behalf of respondents, began by distinguishing Evans from the case at hand as “the difference between discrimination outside of the seniority system which affects an employee’s ability to provide services to the employer, and discrimination within the seniority system itself that gives unequal credit for equal services.” Mr. Russell did not seem eager to indulge the Justices’ questions on the lawfulness of the plan at the time and was concerned more with the argument that, under Section 706(e)(2), which allows challenges against discriminatory seniority systems to be brought when the system is adopted, when an individual becomes subject to it, or when a individual is aggrieved by its application, the more important question is whether the system is intentionally discriminatory.  Chief Justice Roberts and Justices Stevens and Scalia, however, pressed him on the pre-PDA lawfulness of AT&T’s benefits system.  In response, Mr. Russell characterized the pre-PDA plan as “not unlawful intentional sex discrimination,” but, nevertheless, as having “an unlawful disparate impact on the basis of sex.”  After Mr. Russell returned to the question of whether the system today is facially discriminatory, Justice Stevens objected to his reliance on Bazemore and distinguished between paychecks and pension plans.  Justice Souter continued the distinction, drawing out what he said to be the difference between unlawful unequal paychecks and a seniority system that was lawful at the time.  Justice Kennedy then returned to the risk that in fixed-fund pension plans, employees who were not parties to the action might receive less.  Mr. Russell responded that there was very little risk to funds, particularly because the decision would apply to a relatively small number of people and relatively small amounts of money.  The Justices then mused over the possible implications that a ruling in favor of respondents might have in other areas and in light of Ledbetter.  Mr. Russell maintained that the important difference between Ledbetter and Hulteen is that the discrimination in Ledbetter was entirely outside the seniority system and so 706(e)(2) didn’t apply. 

In his rebuttal, Mr. Phillips returned to the Justice Kennedy’s concern over the pension fund, stressing that the most fundamental point “is that you don’t know” what the impact of a decision in favor of respondents would be.   The nature of the pension process, he argued, depends upon actuarial assumptions made in far in advance.