Noreen HULTEEN; Eleanora Collet; Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant.
No. 04-16087.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted En Banc Oct. 4, 2006. Filed Aug. 17, 2007.
498 F.3d 1001
The Petition for Review in No. 04-71072 is DENIED. The Petition in No. 04-75361 is GRANTED and REMANDED.
Joseph R. Guerra, Sidley Austin Brown & Wood, Washington, District of Columbia, for the defendant-appellant.
Henry S. Hewitt, Erickson, Beasley & Hewitt, Oakland, CA, and Blythe Mickelson and M. Suzanne Murphy, Weinberg,
Paul D. Ramshaw, Equal Employment Opportunity Commission, Washington, District of Columbia, amicus curiae.
Before: MARY M. SCHROEDER, Chief Circuit Judge, STEPHEN REINHARDT, DIARMUID F. O‘SCANNLAIN, PAMELA ANN RYMER, HAWKINS, SUSAN P. GRABER, M. MARGARET McKEOWN, KIM McLANE WARDLAW, W. FLETCHER, RAYMOND C. FISHER, RONALD M. GOULD, RICHARD A. PAEZ, MARSHA S. BERZON, JAY S. BYBEE, and CONSUELO M. CALLAHAN, Circuit Judges.
WARDLAW, Circuit Judge, with whom Chief Judge SCHROEDER, Judges REINHARDT, HAWKINS, GRABER, McKEOWN, WILLIAM A. FLETCHER, FISHER, GOULD, PAEZ, BERZON join, and with whom Judge RYMER joins as to Part II-B:
This appeal presents an issue previously decided on virtually identical facts sixteen years ago in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir.1991), cert. denied, 502 U.S. 1050, 112 S.Ct. 916, 116 L.Ed.2d 815 (1992). There, we held that Pacific Bell violated Title VII in calculating retirement benefits after the effective date of the Pregnancy Discrimination Act of 1978 (“PDA“),
I
Noreen Hulteen, Eleanora Collet, Linda Porter, Elizabeth Snyder and the Communications Workers of America, AFLCIO (collectively “Hulteen“), brought this suit to challenge AT & T‘s use of a facially discriminatory service credit policy to calculate employee pension and retirement benefits. Each of the individual plaintiffs took pregnancy leave between 1968 and 1976. They would have enjoyed more favorable benefits or retirement opportunities had they, at the time that they parted from AT & T, been given full service credit for their pre-PDA pregnancy leaves.
Congress passed the PDA in 1978. Amendments to the Civil Rights Act of 1964, Pub.L. No. 95-555, § 995, 92 Stat. 2076 (1978). The PDA clarified that Title VII prohibits discrimination “because of or on the basis of pregnancy, childbirth, or related medical conditions,” as discrimination “because of sex.”
From as early as 1914, AT & T, along with its predecessor companies PT & T and Pacific Bell, has used a Net Credited Service (“NCS“) date to calculate employee benefits, including eligibility for early retirement and pension payment amounts. The NCS date is an employee‘s original hire date, adjusted forward in time for periods during which no service credit accrued. An earlier NCS date places an employee in a superior position for service-related determinations such as job bidding, vacation time and retirement benefits.
Before August 7, 1977, AT & T and its predecessor companies classified pregnancy leave as personal leave. An employee on personal leave received a maximum of thirty days NCS credit, whereas there was no limit on the amount of NCS credit for employees on temporary disability leave. Also, during that time, some female employees were forced to take pregnancy leave before the onset of pregnancy disability, even though other employees who anticipated a temporary disability could delay their leave until the onset of the disability. Employees on pregnancy leave who subsequently became temporarily disabled for reasons unrelated to pregnancy were ineligible for NCS credit beyond the thirty-day personal leave credit. By con-
On August 7, 1977, PT & T adopted the Maternity Payment Plan (“MPP“). The MPP extended the maximum pregnancy NCS credit to thirty days before delivery and a maximum of six weeks after delivery. The MPP also allowed pregnant employees to work until the onset of the pregnancy disability. On April 29, 1979, the effective date of the PDA, PT & T adopted the Anticipated Disability Plan (“ADP“). The ADP replaced the MPP and provided service credit for pregnancy leave on the same terms as other temporary disability leave. No service credit adjustments or changes to the NCS date were made for female employees who had taken pregnancy leave under either the MPP or the pre-1977 system. In 1984, ownership of PT & T was transferred to AT & T. The NCS credit calculation method described above remains in force at AT & T, notwithstanding AT & T‘s operations within the Ninth Circuit and our controlling decision in Pallas.
Noreen Hulteen retired involuntarily in 1994 as part of an AT & T reduction in force. She has 210 days of uncredited pregnancy leave that resulted in reduced pension benefits. Eleanora Collet retired voluntarily under an incentive program in 1998 with 261 days of uncredited pregnancy leave. Linda Porter is a current employee with seventy-three uncredited days from pregnancy leave and forced leave before the onset of her pregnancy disability.1 Elizabeth Snyder terminated her employment voluntarily in 2000, and has sixty-seven days of uncredited pregnancy and unrelated temporary disability occurring during her pregnancy leave. The AT & T plan administrator, in 2000, authorized a credit for Snyder‘s first thirty days of her 1974 pregnancy leave “as was the policy at the time,” changing her NCS date from July 29, 1966 to June 29, 1966.2
Between 1994 and 2002, each woman filed a charge with the United States Equal Employment Opportunity Commission (“EEOC“). CWA likewise filed a charge of discrimination with the EEOC on behalf of its bargaining unit employees. The EEOC issued a Letter of Determination finding reasonable cause to believe that AT & T had discriminated against Noreen Hulteen “and a class of other similarly-situated female employees whose adjusted [NCS] date has been used to determine eligibility for a service or disability pension, the amount of pension benefits, and eligibility for certain other benefits and programs, including early retirement offerings.” The EEOC also issued a No-
Hulteen brought suit, alleging, inter alia, that AT & T violated Title VII in its calculation of NCS credit. On cross-motions for summary judgment, the parties stipulated to all of the material facts. Applying Pallas, the district court granted Hulteen‘s motion for summary judgment on the Title VII claim. AT & T timely appealed, and on March 8, 2006, a panel of our court reversed the district court, holding that Pallas gave “the PDA impermissible retroactive effect under controlling law today.” Hulteen, 441 F.3d at 655. Judge Rymer dissented, arguing that because there appears to be “no acceptable basis ... to overrule Pallas, and AT & T offers no reason for distinguishing it, ... Pallas remains binding and controls disposition of this case.” Id. at 670. A majority of the active judges of this court voted in favor of rehearing en banc. We consider the appeal anew.
II
We review de novo the district court‘s grant of summary judgment. Qwest Commcns, Inc. v. City of Berkeley, 433 F.3d 1253, 1256 (9th Cir.2006). “We must determine, viewing the evidence in the light most favorable to [AT & T], the non-moving party, whether ... the district court correctly applied the substantive law.” Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004).
A
The district court correctly held that our decision in Pallas compels the conclusion that AT & T violated Title VII by failing to credit pre-PDA pregnancy leave when it calculated benefits owed Hulteen. Lana Pallas was a former Pacific Bell employee who took pregnancy leave before the PDA was enacted. Pallas, 940 F.2d at 1325. “In 1987, Pacific Bell instituted a new retirement benefit for management employees called the ‘Early Retirement Opportunity.‘” Id. at 1326. To qualify for the benefit, an eligible employee had to accrue twenty years of service as measured by the same NCS system applied to Hulteen. Id. Pallas was denied eligibility because a pregnancy-related leave taken in 1972 deprived her of the necessary amount of service credit by some three or four days. Id.
The district court dismissed Pallas‘s Title VII sex discrimination claim for failure to state a claim, and we reversed. In doing so, we criticized reliance on the Supreme Court‘s decisions holding that challenges based on disparate impacts resulting from a facially neutral bona fide seniority system must be brought during a limitations period running from the date the system was adopted. Id. at 1326-27 (citing Lorance v. AT & T Techs., Inc., 490 U.S. 900, 911, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989) (holding that “when a seniority system is nondiscriminatory in form and application, it is the allegedly discriminatory adoption which triggers the limitations period“) (emphasis in original), and United Air Lines, Inc. v. Evans, 431 U.S. 553, 557-58, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977)3).
We found Lorance and Evans inapposite for two reasons. First, because the discriminatory program that gave rise to the lawsuit was instituted in 1987, Pallas‘s claim “could not have been brought earlier.” Id.
Second, we concluded that, unlike the facially neutral seniority credit policy in Evans,
the net credit system used to calculate eligibility under the Early Retirement Opportunity is not facially neutral. The system used to determine eligibility facially discriminates against pregnant women. The system distinguishes between similarly situated employees: female employees who took leave prior to 1979 due to a pregnancy-related disability and employees who took leave prior to 1979 for other temporary disabilities.
Id. at 1327.4 We therefore held, relying on Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986), that Pacific Bell‘s decision to discriminate against Pallas in 1987 was actionable because “liability may be imposed” for a pre-Title VII discriminatory policy to the extent it is perpetuated in post-Title VII employment decisions. Pallas, 940 F.2d at 1327(citing Bazemore, 478 U.S. at 395, 106 S.Ct. 3000(Brennan, J., joined by all other Members of the Court, concurring in part) (“Each week‘s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII.“)).
The Court recently reaffirmed Bazemore in Ledbetter v. Goodyear Tire & Rubber Co., — U.S. —, 127 S.Ct. 2162, 2172-74, 167 L.Ed.2d 982 (2007).5 The Court distinguished Bazemore on the basis of Ledbetter‘s failure to show that her disparate treatment was the result of intentional discrimination during the charging period. Id. at 2174. The Court reiterated that “a freestanding violation may always be charged within its own charging period regardless of its connection to other violations.” Id. It explained Bazemore as holding:
when an employer adopts a facially discriminatory pay structure that puts some employees on a lower scale because of race, the employer engages in
intentional discrimination whenever it issues a check to one of these disfavored employees. An employer that adopts and intentionally retains such a pay structure can surely be regarded as intending to discriminate on the basis of race as long as the structure is used.
Id. at 2173. Pallas is true to Bazemore and Ledbetter: Pacific Bell adopted a policy that calculates pregnancy leave differently than other temporary disability leave, and it engages in intentional discrimination each time it applies the policy in a benefits calculation for an employee affected by pregnancy, even if the pregnancy occurred before the enactment of the PDA. 940 F.2d at 1327; accord Ledbetter, 127 S.Ct. at 2173; Bazemore, 478 U.S. at 395, 106 S.Ct. 3000.
In Pallas, we did not address whether the PDA had retroactive effect because Pallas‘s complaint alleged that a post-PDA determination—the calculation of benefits after the PDA was enacted—discriminated against women on the basis of their pre-PDA pregnancy leaves.
B
AT & T admits that under Pallas its current conduct in calculating retirement benefits excluding pre-PDA pregnancy leave violates Title VII.6 AT & T argued to our three-judge panel that Landgraf
[We] read Landgraf as refining, rather than sea-changing, the landscape[,] for the Court explicitly drew upon Justice Story‘s “influential definition” of retroactivity in Society for Propagation of the Gospel v. Wheeler, 22 F. Cas. 756, 766-69 (1814), to make clear how courts should determine whether a statute operates retroactively:
A statute does not operate “retrospectively” merely because it is applied in a case arising from conduct antedating the statute‘s enactment, or upsets expectations based in prior law. Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment. The conclusion that a particular rule operates “retroactively” comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the
operation of the new rule and a relevant past event. ...
When a case implicates a federal statute enacted after the events in suit, the court‘s first task is to determine whether Congress has expressly prescribed the statute‘s reach. If Congress has done so, of course, there is no need to resort to judicial default rules. When, however, the statute contains no such express command, the court must determine whether the new statute would have retroactive effect, i.e., whether it would impair rights a party possessed when he acted, increase a party‘s liability for past conduct, or impose new duties with respect to transactions already completed. If the statute would operate retroactively, our traditional presumption teaches that it does not govern absent clear congressional intent favoring such a result.
Landgraf, 511 U.S. at 268, 269-70, 280 [114 S.Ct. 1483, 128 L.Ed.2d 229](internal citations omitted).
[We] do not believe that the reasoning or theory of Pallas is so irreconcilable with the reasoning or theory of Landgraf as to give [a three-judge] panel license to overrule it. Pallas held that the actionable conduct was PT & T‘s decision to discriminate against the employee on the basis of pregnancy when she applied for, and was denied, early retirement. The decision to deny benefits was made in the post-PDA world. As we emphasized in United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810, 814 (9th Cir.1995), if “the law changes the legal consequences of conduct that takes place after the law goes into effect, the law operates on that conduct prospectively.” Id. at 814. This being the case, and assuming (without deciding) that Congress intended the PDA to have prospective effect only, Pallas was premised on a discrete act—the decision to deny a retirement benefit—that gave rise to a current violation of the PDA. Given Pallas‘s finding of a current violation, the Act operated prospectively on that decision.
Hulteen, 441 F.3d at 666-67 (Rymer, J., dissenting).
Nor do we agree with AT & T‘s companion argument that Lockheed Corp. v. Spink, 517 U.S. 882, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996), rev‘g 60 F.3d 616 (9th Cir.1995), a post-Landgraf decision, demonstrates that Pallas gave retroactive effect to the PDA. Again, we adopt Judge Rymer‘s analysis:
Spink involved 1986 amendments to the Age Discrimination in Employment Act of 1967,
29 U.S.C. § [§] 621 ,623(i)(1) , and the Employee Retirement Income Security Act of 1974,29 U.S.C. § 1054(b)(1)(i) , that prohibited employers from excluding new employees over age 60 from participating in their retirement plans. Spink had worked for Lockheed between 1939 and 1950, and began working there again in 1979 at the age of 61. He was excluded by Lockheed‘s retirement plan because he was over 60. After the 1986 amendments, Spink was allowed to participate in the plan, but was not credited with accrued benefits based on his years of service with Lockheed prior to the amendments’ effective date. Spink sued. We held that denying credited service years that an older employee would otherwise have accumulated was unlawful under the amendments. In so doing, we observed that, “[t]o the extent our interpretation requires employers to include pre-enactment service years in calculating accrued benefits, it applies retroactively.” 60 F.3d at 620, n. 1. AT& T seizes upon this remark to maintain that when the Supreme Court reversed our conclusion that Congress intended the statute to have retroactive effect, it necessarily agreed that requiring employers to include pre-enactment service in calculating accrued benefits was a retroactive application. [We] cannot read so much into the Spink opinions. Our observation in Spink I did not affect our ultimate decision in that case because the decision was “based on the retroactive intent of the statute manifested in its text.” Id. The Supreme Court simply disagreed with our construction of the statute. Thus, its analysis—like ours—was limited to Landgraf‘s first step.
Hulteen, 441 F.3d at 667-68 (Rymer, J., dissenting).
Thus, Landgraf and Spink do not implicate, much less contradict, the twin holdings of Pallas that the NCS system is facially discriminatory and that the post-PDA decision as to Pallas‘s eligibility is the relevant, actionable discriminatory employment practice.
AT & T also asserts incorrectly that Pallas must be overruled because it relied upon the “continuing violation” doctrine abrogated in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 114-15, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002) (holding an employee can only recover for discrete discriminatory acts that occur within the statutory filing period). As Judge Rymer explained:
Neither the reasoning nor theory of Morgan is irreconcilable with Pallas. Pallas held that the NCS system is facially discriminatory, an issue that was not presented in Morgan. Morgan sought damages, which Pallas did not. Further, Morgan proceeded on the basis of a continuing violation, whereas Pallas relied upon PT & T‘s decision to deny benefits as the discrete act that was actionable. As the Pallas court saw it, this was a current violation, not a continuing one.
Hulteen, 441 F.3d at 668 (Rymer, J., dissenting). Morgan is also inapposite because, as in Pallas, it is undisputed here that the charges were filed with the EEOC within the statutory filing period after the denial of retirement benefits.
Moreover, our decision in Pallas is consistent with Morgan‘s holding that “[t]he existence of past acts ... does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed.” Morgan, 536 U.S. at 113, 122, 122 S.Ct. 2061. In Morgan, the Court listed “termination, failure to promote, denial of transfer, or refusal to hire” as examples of employment decisions that are discrete acts, and explained that each one, if decided in a discriminatory fashion, “constitutes a separate actionable ‘unlawful employment practice.‘” Id. at 114, 122 S.Ct. 2061; see also Ledbetter, 127 S.Ct. at 2169(explaining “if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed“). While Pacific Bell may have used unlawful calculations in many prior employment decisions, its denial of early retirement was a discrete independent act. See Pallas, 940 F.2d at 1327. Because Pallas timely filed a charge, the existence of past acts would not bar her (or here, Hulteen‘s) suit under Morgan or Ledbetter.
A three-judge panel must follow a prior circuit decision unless a subsequent decision by a relevant court of last resort either effectively overrules the decision in a case “closely on point” or undercuts the reasoning underlying the circuit precedent rendering the cases “clearly irreconcil-
[T]he important doctrine of stare decisis ... permits society to presume that bedrock principles are founded in the law rather than in the proclivities of individuals, and thereby contributes to the integrity of our constitutional system of government, both in appearance and in fact.
Vasquez v. Hillery, 474 U.S. 254, 265-66, 106 S.Ct. 617, 88 L.Ed.2d 598 (1986). “[T]he labor of judges would be increased almost to the breaking point if every past decision could be reopened in every case.” BENJAMIN N. CARDOZO, THE NATURE OF THE JUDICIAL PROCESS 149 (Yale Univ. Press 1960). The danger we create when we depart lightly from our precedent is underscored by AT & T‘s admission here, that even sixteen years after Pallas was decided, it continues to operate its NCS system in a discriminatory fashion because of “its belief that the PDA does not apply retroactively” and “in order to preserve its ability to litigate the issue in its own right.” AT & T‘s litigation position rests on the assumption that our precedent can be ignored. Because it cannot, we affirm the district court‘s summary judgment in favor of Hulteen.7
III
A plain reading of Title VII supports the legal conclusion reached in Pallas. By passing the PDA, Congress clarified that discrimination “because of sex” under Title VII included discrimination “because of or on the basis of pregnancy, childbirth, or related medical conditions.”
In interpreting this additional requirement, we must begin with the text of the statute. Where congressional intent “has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive.” Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 570, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982) (internal quotation omitted). And when “the meaning of the words seems to us to be intelligible upon a simple reading, ... we shall spend no time upon generalities concerning the principles of [statutory] interpretation.” United States v. M.H. Pulaski Co., 243 U.S. 97, 106, 37 S.Ct. 346, 61 L.Ed. 617 (1917).
The ordinary meaning of “affected” is “[a]cted upon, influenced, or changed.” The American Heritage Dictionary of the English Language 28 (4th ed.2000); see also Black‘s Law Dictionary 62 (8th
In 1991, Congress amended the Civil Rights Act to make it clear, if Pallas had not already done so, that an employer who adopts a seniority system for an intentionally discriminatory purpose commits an unlawful employment practice “when the seniority system is adopted, when an individual becomes subject to the seniority system, or when a person aggrieved is injured by the application of the seniority system or provision of the system.” Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071, 1078-79(Nov. 21, 1991). Congress thus clarified that injury occurs at the time that the seniority system is applied to the aggrieved party because that is when the employee is actually harmed by the deprivation of benefits. See
AT & T applied its discriminatory seniority system to Hulteen in 1994, causing her to be deprived of early retirement benefits and thus injuring her. AT & T never asserted that it could not credit Hulteen with pregnancy leave when it denied and/or calculated her benefits. Indeed, AT & T and Hulteen stipulated not only to the number of days each plaintiff was penalized within the charging period for past pregnancies but also to AT & T‘s ability to add service credit to an employee‘s length of service. Instead of engaging in its discriminatory calculation and defending the EEOC charge and this litigation, AT & T could have simply credited the applicable number of days to each plaintiff‘s NCS date when it calculated her benefits.
AT & T, in fact, credited plaintiff Elizabeth Snyder thirty days from her 1974 pregnancy leave in 2000. In a March 1, 2000 letter, Pension Plan Administrator Michael L. Brown stated:
In preparing your claim for service credit for the period of your maternity leave of absence for review by the Employees’ Benefit Committee, it was determined that you were not given service credit
for the first 30 calendar days of your leave (as was the policy at the time). Therefore, I have authorized the Pension Service Center to adjust your Net Credited Service date by 30 days.
The Pension Service Center, on March 29, 2000, notified Snyder that “[a]fter a careful review of [her] service record history,” her NCS date had been adjusted from July 29, 1966 to June 29, 1966. These letters demonstrate that in its determination of benefits, AT & T does not simply rely on pre-PDA NCS calculations. Rather, when AT & T determines benefits eligibility, it reviews an employee‘s entire work history and affirmatively chooses to apply “the policy at the time” that the leave occurred. Any assertion that the violations here are continuing effects of pre-PDA discrimination and thus “unfortunate event[s] in history which [have] no present legal consequences” is belied by this record. Ledbetter, 127 S.Ct. at 2168(quoting Evans, 431 U.S. at 558, 97 S.Ct. 1885). That AT & T‘s practice of applying the discriminatory pre-PDA policies constitutes a separate and actionable act of discrimination is “too obvious to warrant extended discussion.” Ledbetter, 127 S.Ct. at 2173(quoting Bazemore, 478 U.S. at 395, 106 S.Ct. 3000).
AT & T asks us, sitting en banc, to overrule Pallas and follow the Seventh Circuit‘s approach in Ameritech Benefit Plan Committee v. Communication Workers of America, 220 F.3d 814 (7th Cir. 2000).8 We decline to do so. The Seventh Circuit‘s analysis in Ameritech is problematic because, although it mentioned the Civil Rights Act of 1991, it failed to actually apply it.
In Ameritech, the Seventh Circuit considered a claim nearly identical to Pallas‘s and Hulteen‘s made by two women who filed a charge with the EEOC when, due to an NCS system that, like Pacific Bell‘s and AT & T‘s here, failed to credit time spent on pregnancy leave, they were denied early retirement benefits in 1994. Id. at 817-18. The Seventh Circuit found that Ameritech‘s NCS system was a seniority system because it calculated “relative lengths of employment.” Id. at 823(citing Cal. Brewers Ass‘n v. Bryant, 444 U.S. 598, 606, 100 S.Ct. 814, 63 L.Ed.2d 55 (1980)). It next incorrectly concluded that the time of injury provisions of
The Seventh Circuit compounded its error by also concluding that the system was immunized from challenge as an unlawful employment practice by
Section
Notwithstanding any other provision of this subchapter, it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, ... provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin.... It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section
206(d) of Title 29 .9
Neither the Supreme Court nor we have analyzed the interaction of these two Title VII provisions.10 By beginning
Further, although Congress did not amend the text of
Therefore, the Seventh Circuit in Ameritech misconstrued the PDA when it held that
IV
The district court properly applied our decision in Pallas to conclude that AT & T‘s post-PDA benefits calculations violated the PDA. Pallas was, and remains, good law. We therefore affirm the district court‘s summary judgment in favor of Hulteen, Collet, Porter, Snyder and CWA on their Title VII sex discrimination claims.
AFFIRMED.
O‘SCANNLAIN, Circuit Judge, with whom Judges RYMER, BYBEE, and CALLAHAN join, dissenting:
By concluding that Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir.1991), cert. denied, 502 U.S. 1050, 112 S.Ct. 916, 116 L.Ed.2d 815 (1992), remains good law, the majority erroneously perpetuates a circuit split with the Sixth and the Seventh Circuits.1 I believe that Pallas was wrong then and is wrong now. Because this en banc court can and should overrule Pallas and follow the Seventh Circuit‘s well-reasoned decision in Ameritech Benefit Plan Committee v. Communication Workers of America, 220 F.3d 814 (7th Cir.), cert. denied, 531 U.S. 1127, 121 S.Ct. 883, 148 L.Ed.2d 791 (2001), I must respectfully dissent from the majority‘s conclusion that the sex discrimination claims in this case are timely.2
I
At the core of this dispute is AT & T Corporation‘s (“AT & T“)3 Net Credit Service (“NCS“) seniority system, a concept which is not defined in Title VII. See Cal. Brewers Ass‘n v. Bryant, 444 U.S. 598, 605, 100 S.Ct. 814, 63 L.Ed.2d 55 (1980). The term “seniority” connotes length of employment. Id. “A ‘seniority system’ is a scheme that, alone or in tandem with non-‘seniority’ criteria, allots to employees ever improving employment rights and benefits as their relative lengths of pertinent employment increase.” Id. at 605-06, 100 S.Ct. 814 (footnotes omitted). “[T]he principal feature of any and every ‘seniority system’ is that preferential treatment is
AT & T has such a seniority system. Pursuant to that system, AT & T maintains an NCS date for each employee (from the initial date of hire until the date of termination) that consists of that employee‘s original hire date and any adjustments for periods during which no service credit is accrued pursuant to ancillary rules. AT & T moves the NCS date forward to “squeeze out” the periods of leave or breaks in service that are not credited, resulting in a later NCS date. AT & T uses the NCS date that it maintains for each employee for purposes of determining retirement benefits and other employment benefits. An earlier NCS date places an employee in a comparatively better position for employment-related determinations, including job bidding, layoffs, and eligibility for and calculation of certain retirement benefits.
Prior to August 7, 1977, AT & T‘s seniority system included two ancillary rules important to this case. The first provided that an employee received only 30 days of NCS credit for personal leave, but received full credit for temporary disability leave. The second specified that pregnancy leave would be treated as personal leave. AT & T applied these two rules to calculate NCS dates for all employees who
On August 7, 1977, AT & T adopted the Maternity Payment Plan (“MPP“), which supplanted the prior pregnancy leave rule. According to the MPP‘s new rule, up to six months of pregnancy leave would be treated as disability leave with full NCS credit, and any pregnancy leave in excess of six months would be treated as personal leave with a maximum of 30 days of NCS credit. Employees on non-pregnancy related disability leave continued to receive full NCS credit. AT & T applied the MPP pregnancy leave rule to adjust the NCS dates for all employees who became pregnant before April 29, 1979; AT & T did not retroactively apply the MPP pregnancy leave rule to adjust the NCS dates for any employees who became pregnant before August 7, 1977. The record fails to demonstrate that AT & T applied the MPP pregnancy leave rule to adjust or to recalculate any employee‘s NCS date on or after April 29, 1979.
In response to the Pregnancy Discrimination Act of 1978 (“PDA“), Pub.L. No. 95-555, 92 Stat. 2076, on April 29, 1979 (the effective date of the PDA), AT & T adopted the Anticipated Disability Plan (“ADP“), which superseded the MPP pregnancy leave rule. The ADP provided that pregnancy leave would be treated as disability leave with full NCS credit for the entire period of pregnancy. The ADP pregnancy leave rule remains in effect in AT & T‘s current NCS seniority system.
Noreen Hulteen, Eleanora Collet, Linda Porter, and Elizabeth Snyder are all female employees of AT & T who took pregnancy leaves between 1968 and 1976, before the enactment of the PDA.5 Under AT & T‘s NCS seniority system in effect at that time, Hulteen, Collet, Porter, and Snyder received only partial NCS credit for their pregnancy leaves, resulting in a later NCS date. AT & T‘s subsequent calculation of their benefits or the dates of their retirement eligibility between 1994 and 2000, would have been more favorable had AT & T retroactively credited their NCS dates for the previously uncredited periods of pregnancy leave before the enactment of the PDA. They contend that AT & T discriminated on the basis of sex in violation of Title VII when AT & T determined their benefits based on the NCS dates that were unadjusted to account for uncredited pre-PDA pregnancy leave.
II
A
Title VII of the Civil Rights Act of 1964, Pub.L. No. 88-352, 78 Stat. 241, makes it an “unlawful employment practice” for any employer “to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual‘s ... sex.”
In General Electric Co. v. Gilbert, 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976), the Supreme Court held that discrimination based on pregnancy was not discrimination within the meaning of Title VII. Id. at 145-46, 97 S.Ct. 401. There, General Electric adopted an employee disability benefit plan that paid weekly nonoccupational sickness and accident benefits. Id. at 127, 97 S.Ct. 401. However, General Electric excluded from that plan‘s coverage disabilities arising from pregnancy. Id. The specific issue before the Court was whether Title VII prohibited excluding pregnancy-related disabilities from an employer‘s disability benefit plan. The Supreme Court recognized that pregnancy is confined to women, but reasoned that the disability benefit plan did not discriminate in violation of Title VII by excluding pregnancy-related disabilities from its coverage:
The Plan, in effect (and for all that appears), is nothing more than an insurance package, which covers some risks but excludes others. The “package” going to relevant identifiable groups we are presently concerned with—General Electric‘s male and female employees—covers exactly the same categories of risk, and is facially nondiscriminatory in the sense that “there is no risk from
which men are protected and women are not. Likewise, there is no risk from which women are protected and men are not.” As there is no proof that the package is in fact worth more to men than to women, it is impossible to find any gender-based discriminatory effect in this scheme simply because women disabled as a result of pregnancy do not receive benefits; that is to say, gender-based discrimination does not result simply because an employer‘s disability-benefits plan is less than all-inclusive.
Id. at 138-39, 97 S.Ct. 401 (internal citations and footnote omitted).
In 1978, in response to Gilbert, Congress passed the Pregnancy Discrimination Act of 1978, Pub.L. No. 95-555, 92 Stat. 2076, which became effective on April 29, 1979,6 and amended Title VII to define “because of sex” or “on the basis of sex” to include discrimination based on pregnancy.
The terms “because of sex” or “on the basis of sex” include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section
2000e-2(h) of this title shall be interpreted to permit otherwise....
An individual must file charges of discrimination under Title VII within 180 days “after the alleged unlawful employment practice occurred,” unless the em-
As the Supreme Court has repeatedly stressed, we must “identify with care the specific employment practice that is at issue” when determining whether the sex discrimination action is timely. Ledbetter v. Goodyear Tire & Rubber Co., — U.S. —, 127 S.Ct. 2162, 2167, 167 L.Ed.2d 982 (2007) (citing Nat‘l Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 110-11, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002)); see also Delaware State College v. Ricks, 449 U.S. 250, 257, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980). There are three possible candidates in this case: (1) AT & T‘s adoption of its pregnancy leave rules before the enactment of the PDA; (2) AT & T‘s application of those leave rules to adjust Hulteen‘s NCS date before the enactment of the PDA; and (3) AT & T‘s calculation of Hulteen‘s retirement benefits in 1994 based, in part, on the NCS date it consistently maintained for her without retroactively adjusting that date for pre-PDA pregnancy leave. The time to challenge the first and second possible employment practices, however, has long since expired. Accordingly, relying on our prior decision in Pallas, Hulteen points us to the third alternative employment practice in 1994 when AT & T declined to grant retroactive NCS credit for pre-PDA pregnancy leave before it calculated her retirement benefits.
Accepting Hulteen‘s argument that such calculation in 1994 constituted a new and
III
“The outcome of this case,” as the Seventh Circuit recognized, “turns on which of two competing lines of authority provide a better ‘fit’ here.” Ameritech, 220 F.3d at 822. The Seventh Circuit followed United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977), and its progeny. In Pallas, on the other hand, this court followed Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986) (per curiam). Because the majority follows Pallas today, the Bazemore and Evans line of cases deserve careful attention.
A
In Bazemore, the North Carolina Agricultural Extension Service (“Service“) maintained two separate, racially segregated work forces and paid black employees less than white employees prior to the enactment of Title VII. 478 U.S. at 390-91, 106 S.Ct. 3000 (Brennan, J., joined by all other Members of the Court, concurring in part). After the enactment of Title VII, the Service integrated the workforce, but the pay disparity between black employees and white employees in the same positions
B
1
The Supreme Court‘s decision in Evans represents the fountainhead for the competing line of authority. In Evans, United Air Lines (“United“) maintained a policy of refusing to allow its female flight attendants to be married. 431 U.S. at 554, 97 S.Ct. 1885. Evans married in 1968 and therefore was forced to resign pursuant to United‘s no-marriage policy. Id. Previously, the Seventh Circuit held that United‘s policy violated Title VII. Sprogis v. United Air Lines, Inc., 444 F.2d 1194 (7th Cir.), cert. denied, 404 U.S. 991, 92 S.Ct. 536, 30 L.Ed.2d 543 (1971). Evans, however, was not a party to Sprogis and failed to initiate any proceedings against United within the period of limitation for that past act of discrimination. Evans, 431 U.S. at 555, 97 S.Ct. 1885. After United ended the no-marriage policy, United rehired Evans in 1972 as a new employee, but refused to
Evans argued that “the seniority system gives present effect to the past illegal act and therefore perpetuates the consequences of forbidden discrimination.” Id. at 557, 97 S.Ct. 1885. Rejecting that argument, the Court emphasized that “United‘s seniority system does indeed have a continuing impact on her pay and fringe benefits. But the emphasis should not be placed on mere continuity; the critical question is whether any present violation exists.” Id. at 558, 97 S.Ct. 1885 (first emphasis added). Concluding that none did, the Court explained that “[a] discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed. ... [I]t is merely an unfortunate event in history which has no present legal consequences.” Id. at 558, 97 S.Ct. 1885.
2
The Supreme Court again embraced Evans‘s reasoning in Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980). In that case, Delaware State College denied Ricks, an African American librarian, academic tenure in March 1974. Id. at 252, 101 S.Ct. 498. Adhering to its policy of not discharging immediately a junior faculty member who did not receive tenure, the College offered Ricks a nonrenewable one-year “terminal” contract that
Ricks argued that the period of limitations ran from the date that his one-year terminal contract expired rather than the date when the College denied tenure. Id. at 257, 101 S.Ct. 498. Rejecting Ricks‘s argument, the Supreme Court held that his claim for discrimination in violation of Title VII was untimely. Id. at 256, 101 S.Ct. 498. The Court concluded that “the only alleged discrimination occurred—and the filing limitations period therefore commenced—at the time the tenure decision was made and communicated to Ricks ... even though one of the effects of the denial of tenure—the eventual loss of a teaching position—did not occur until later.”8 Id. at 258, 101 S.Ct. 498. The Supreme Court emphasized that “[i]t is simply insufficient for Ricks to allege that his termination ‘gives present effect to the past act and therefore perpetuates the consequences of forbidden discrimination.‘” Id. (quoting Evans, 431 U.S. at 557, 97 S.Ct. 1885).
3
The Supreme Court‘s recent decision in Ledbetter v. Goodyear Tire & Rubber Co., — U.S. —, 127 S.Ct. 2162, 167 L.Ed.2d 982 (2007), confirms this understanding of the Evans line of authority. Ledbetter worked for Goodyear Tire and Rubber
Company (“Goodyear“) from 1979 until 1998. Id. at 2165. Goodyear maintained a policy during that time of granting or denying raises for salaried employees based on their supervisors’ evaluations of their performance. Id. In 1998 Ledbetter brought an action against Goodyear, asserting, among other claims, a Title VII pay discrimination claim. Id. At trial, she “introduced evidence that during the course of her employment several supervisors had given her poor evaluations because of her sex, that as a result of these evaluations her pay was not increased as much as it would have been if she had been evaluated fairly, and that these past pay decisions continued to affect the amount of her pay throughout her employment.” Id. at 2165-66. The evidence also established that Ledbetter was earning significantly less than her male counterparts at the end of her career. Id. at 2166.
Ledbetter argued that her action was timely, pointing to two different employment practices during the applicable period of limitation as possible candidates. Id. at 2167. First, she argued that each paycheck issued during the period of limitations was a separate act of discrimination. Id. Alternatively, she argued that the 1998 decision denying her a raise “was unlawful because it carried forward intentionally discriminatory disparities from prior years.” Id. “In essence, she suggests that it is sufficient that discriminatory acts that occurred prior to the charging period had continuing effects during that period.” Id. The Supreme Court rejected Ledbetter‘s first argument because she failed to allege actual discriminatory intent by the relevant Goodyear decisionmakers when they issued her checks or denied her a raise in 1998. Id. Furthermore, the Court rejected Ledbetter‘s alternative argument, concluding that it was squarely foreclosed by the Evans line of authority. Id. The Court emphasized that the instruction from that line of authority is clear: “The EEOC
C
Bazemore stands for the general proposition that an employment practice coupled with discriminatory intent within the charging period gives rise to a current violation of
In Ameritech, the Seventh Circuit found the Evans line of authority controlling because of the “fact, simplistic as it may seem, that [the] case involves computation of time in service—seniority by another name—followed by a neutral application of a benefit package to all employees with the same amount of time.” Ameritech, 220 F.3d at 823. Pallas and the majority today, on the other hand, reached the contrary conclusion, finding that Bazemore
1
The Supreme Court‘s most recent decision in Ledbetter confirms that under Evans “current effects alone cannot breathe life into prior, uncharged discrimination.” Ledbetter, 127 S.Ct. at 2169. The charging period (here, the 180 days during which Hulteen was required to file a charge with the EEOC), “is triggered when a discrete unlawful practice takes place.” Id. Such a discrete unlawful practice requires the coalescence of two elements: (1) an employment practice (defined as “a discrete act or single ‘occurrence’ that takes place at a particular point in time“); and (2) discriminatory intent. Id. at 2169, 2171. Here, the majority concludes that the AT & T‘s denial of benefits under the retirement plan in 1994 is an “employment practice.” Ante, at 1009-10. But that alone is insufficient. Ledbetter requires concurrent discriminatory intent.
a
Pallas concluded that the “NCS [seniority] system used to calculate eligibility under the [retirement plans] is not facially neutral. The system used to determine eligibility facially discriminates against pregnant women.” 940 F.2d at 1327. Today, the majority locates discriminatory intent at the point AT & T calculated Hulteen‘s benefits in 1994 by embracing Pallas‘s erroneous determination that the NCS seniority system is facially discriminatory and concluding that “[f]acial discrimination is ‘by its very terms’ intentional discrimination.” Ante, at 1012 (citation omitted). The majority‘s position is erroneous.
AT & T‘s current NCS seniority system includes a facially nondiscriminatory and neutrally applied pregnancy leave rule that grants female employees who become pregnant after the enactment of the
The problem with the majority‘s conclusion that the NCS seniority system is facially discriminatory because the NCS date reflects AT & T‘s pre-PDA pregnancy leave rules is that it necessarily depends on a retroactive application of the
A system is facially discriminatory, of course, if it treats similarly situated employees differently. Hulteen asserts that, as a female employee who took pregnancy leave prior to the enactment of the
b
Straining to find discriminatory intent when AT & T calculated Hulteen‘s retirement benefits in 1994 based on the NCS date, the majority also asserts that Hulteen satisfies that burden by pointing to a single act by AT & T in crediting another employee‘s NCS date based on the pre-PDA pregnancy leave rules. Ante, at
While previously recognizing that “[w]e must determine, viewing the evidence in the light most favorable to [AT & T], the non-moving party, whether [there are any genuine issues of material fact and whether] the district court correctly applied the substantive law,” ante, at 1005 (second alteration in original) (quoting Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004)), the majority fails to apply that standard here. Viewing the evidence in the light most favorable to AT & T, as we must, the letters evidencing AT & T‘s crediting of Snyder‘s NCS date fail to demonstrate that, “when AT & T determines benefits eligibility, it reviews an employee‘s entire work history and affirmatively chooses to apply ‘the policy at the time’ that the leave occurred.” Ante, at 1012. Rather, in the light most favorable to AT & T, that evidence suggests that AT & T relies on the pre-PDA NCS calculations, but in this one case an error came to light that required it to review Snyder‘s entire work history and to adjust her NCS date for a previously uncredited pre-PDA pregnancy leave. That evidence further suggests that AT & T reviewed Snyder‘s service record and adjusted her NCS date in response to her request, not as a matter of course for all employees: “In preparing your claim for service credit for the period of your maternity leave of absence for review by the Employees’ Benefit Committee, it was determined that you were not given service credit for the first 30 calendar days of your leave (as was the policy at the time).” Moreover, the parties stipulated that “whether or not Snyder‘s NCS date was adjusted in the year 2000 does not affect the outcome of this [stage of the] proceeding.”
The only thing that is “too obvious to warrant extended discussion,” ante, at 1012 (quoting Ledbetter, 127 S.Ct. at 2173), is the majority‘s far-reaching efforts to infer the requisite discriminatory intent at the time AT & T calculated and/or denied retirement benefits. Simply put, the record fails to demonstrate that AT & T acted with discriminatory intent during the charging period.
2
There is no meaningful basis for distinguishing Evans and this case, which becomes abundantly evident when the key aspects of each case are compared. In both Evans and here, the employers maintained a host of employment programs10 that determined eligibility based on a seniority system. Those benefit programs were facially nondiscriminatory and neutrally applied, but gave effect through the seniority system to past discriminatory
Faced with “the question . . . whether the employer is committing a second violation of
3
The majority repeats Pallas‘s error by invoking Bazemore in this case. See ante, at 1006-07. Bazemore is simply inapposite. First, as the Supreme Court recently emphasized in Ledbetter, ”Bazemore stands for the proposition that an employer violates
Second, in Bazemore the post-Title VII salary structure resulted in a fresh violation of
Finally, the majority‘s strained interpretation of Bazemore effectively imposes an unjustified burden on AT & T to remedy all acts of discrimination on the basis of pregnancy before the enactment of the
D
In sum, because there is no evidence that AT & T acted with the requisite discriminatory intent in 1994 when it calculated Hulteen‘s retirement benefits based in part on the NCS seniority system, Bazemore is inapposite. Without more, the NCS seniority system simply gives present effect to a past pre-PDA incident. Under Evans that pre-PDA incident is “merely an unfortunate event in history [with] no present legal consequences.” 431 U.S. at 558, 97 S.Ct. 1885. For this reason, the Supreme Court‘s logic in the Evans line of authority, reinforced weeks ago in Ledbetter, controls the outcome of this case. Under that line, “[a] new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination.” Ledbetter, 127 S.Ct. at 2169 (emphasis added). The time for Hulteen to have challenged AT & T‘s pre-PDA
IV
A
As the Seventh Circuit recognized in Ameritech,
Notwithstanding any other provision of this subchapter, it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin, nor shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 206(d) of Title 29.
Section 2000e-2(h) provides AT & T no protection in this case if (1) AT & T‘s NCS seniority system is not a “bona fide” seniority system; or (2) the differences are a result of an intention to discriminate. Neither exception bars protection of AT & T‘s NCS seniority system here.
First, the Supreme Court held in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), that an otherwise valid seniority system did not lose its bona fide character simply because its operation may perpetuate past discrimination. Id. at 353-54. In Teamsters, the Supreme Court considered a seniority system that allegedly perpetuated the effects of pre-Title VII discrimination. Id. at 348. The employer‘s seniority system unmistakably advantaged white employees who had accumulated longer tenure because of the “employer‘s prior intentional discrimination” against “Negro and Spanish-surnamed employees” before the enactment of
Second, under
B
In an effort to frustrate reliance on
First, the majority‘s interpretation of that section completely removes the application of
Second, the conclusion that Congress did not intend that proviso to remove
In Gilbert, the Supreme Court refused to defer to the EEOC‘s interpretation of
In sum, contrary to the majority‘s conclusion, the plain meaning of the
V
The majority also relies on
an unlawful employment practice occurs, with respect to a seniority system that has been adopted for an intentionally discriminatory purpose in violation of this subchapter (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 system or provision of the system.
If that section were to apply here, Hulteen‘s sex discrimination action, of course, would have been timely. For
Contrary to the majority‘s assertion,
VI
As Judge Dumbauld lamented in his dissent to Pallas, we consider ” ‘a melancholy tale [o]f things done long ago, and ill-done.‘” 940 F.2d at 1327 (Dumbauld, J., dissenting) (quoting John Ford, The Lover‘s Melancholy). Because Pallas invented a timely