This?? case?? involved?? AT&T?s?? pension?? system. Under the rules in effect through the mid 1970s, employees on ?disability? leave got pension credit for the leave, but employees on ?personal leave? did not. ?Until 1977 AT&T treated pregnancy leave as personal, not disability, leave.?? In 1977 AT&T changed its plan to allow women to credit up to six weeks of pregnancy leave as disability leave, but not more. ?In 1978 Congress passed the Pregnancy Discrimination?? Act?? to?? overrule?? the?? Supreme Court?s 5-4 decision in General Electric v. Gilbert, 429? U.S.? 125? (1976),? that? pregnancy discrimination wasn?t sex discrimination. ?Among other things, the PDA prohibited the less favorable treatment of pregnancy related medical conditions. On the effective date of the PDA, AT&T began allowing full pension credit for pregnancy leave. ?It did?? not?? make?? any?? retroactive?? adjustments?? to accrued benefits.

The plaintiffs filed a class action suit in 1998, arguing that AT&T?s failure to adjust the service credit of women disadvantaged by its pre-PDA pregnancy policies violated Title VII. ?The EEOC found reasonable cause. ?Relying on existing Ninth Circuit law holding post PDA retirement eligibility calculations? incorporating ?pre-PDA ?accrual ?rules that disadvantaged pregnancy violated Title, the district court granted summary judgment to the plaintiffs.? The Ninth Circuit affirmed, en banc.

The Supreme Court reversed, 7-2. ?Justice Souter held that the payment of pension benefits was the functional? equivalent? of a? seniority? system,? as benefits increased with time in employment. Under ?Title? VII, ?seniority ?systems ?are ?valid unless ?the ?result ?of? intentional ?discrimination. The majority held that the disproportionate pension advantage to male employees under AT&T?s pension system did not amount to intentional? discrimination? because? the? system was lawful under Gilbert. ?The Court rejected the argument that AT&T?s continuation of the pension accrual system, after the enactment of the PDA, should be considered intentional because it was facial discrimination.

The Court held that the relevant time period for determining AT&T?s intent was prior to the effective date of the PDA, and it was irrelevant that the PDA restored the law to what it had been for several years prior to the Gilbert decision. The majority held that the PDA was not retroactive. ?The majority rejected the plaintiffs? argument that the Lily Ledbetter Fair Pay Act of 2009? ?applied.???? ?That? ?Act? ?provides?? that?? an unlawful employment practice occurs when a person is affected by a discriminatory compensation practice.?? The majority held that there was no discriminatory compensation practice,?? because? ?AT&T?s? ?pre-PDA? ?pension rules were not discriminatory.

Justice Stevens, who had dissented in Gilbert, concurred.?? ?Justices Ginsburg and Breyer dissented. ?They noted that all circuit courts had held, prior to Gilbert, that pregnancy discrimination violated Title VII. ?The purpose of the PDA was to protect women against repetition or continuation of pregnancy-based disadvantageous treatment.??? ?The dissent interpreted the PDA to require employers to abandon reliance on rules that disadvantaged pregnancy. ?The dissent noted that the plaintiffs sought no retrospective relief, only the payment of current and future pension benefits on equal terms. The dissent urged the Court to overrule Gilbert.

AT&T Corp.? v.? Hulteen,? 556? U.S.–,? 129? S.? Ct. 1962, 173 L. Ed 2d 898 (May 18, 2009).