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Do pregnant workers get ‘most-favored-employee’ status in High Court’s pregnancy accommodation case?

By Lorene D. Park, J.D. and Lisa Milam-Perez, J.D.

Applying the McDonnell Douglas standard to a UPS driver’s Pregnancy Discrimination Act (PDA) claim, which asserted that UPS accommodated lifting restrictions for those with on-the-job injuries or disabilities but categorically and unlawfully refused to accommodate pregnant employees’ lifting restrictions, a divided Supreme Court found an issue of fact on whether UPS gave more favorable treatment to at least some workers whose situations cannot reasonably be distinguished from the employee’s situation. Vacating the Fourth Circuit, the High Court left it for the appeals court to determine whether there were issues of fact on pretext. Justice Scalia filed a dissenting opinion, in which Justices Kennedy and Thomas joined (Young v. United Parcel Service, Inc., March 25, 2015, Breyer, S.).

The employee, who was a part-time driver for UPS, became pregnant after taking FMLA leave for in vitro fertilization and extended her leave. Approximately three months into her leave, she communicated that she wanted to return to work and that she had a medical 20-pound lifting restriction. The UPS occupational health manager explained to her that: (1) UPS offered light duty for those with on-the-job injuries, those accommodated under the ADA, and those who had lost DOT certification, but not for pregnancy; (2) she had exhausted her FMLA leave; and (3) UPS policy did not permit her to continue working as a driver with her lifting restriction. She was unable to return to work and took an extended leave of absence, lost her medical insurance, and returned to work at UPS at some point after her child was born. She sued for pregnancy discrimination under the PDA and disability discrimination under the ADA. (She voluntarily dismissed a race discrimination claim.)

Prior proceedings. The district court granted summary judgment for UPS and the employee appealed. Affirming, the Fourth Circuit held that the UPS policy providing light-duty work only to employees who had on-the-job injuries, employees with disabilities accommodated under the ADA, and employees who had lost Department of Transportation (DOT) certification was not direct evidence of pregnancy-based sex discrimination. Nor could the employee make out a prima facie case of disparate treatment under the PDA because she was not similarly situated to employees with work-related injuries, ADA disabilities, or those who had lost DOT certification. Summary judgment on the ADA claim was also affirmed.

Interpreting the PDA. The employee filed a petition for certiorari, asking the Supreme Court to review the Fourth Circuit’s interpretation of the PDA. At issue was the second clause of the PDA, which states that “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work . . . .” To the High Court, this clause presented several possible interpretations. Did it mean courts must compare workers only in respect to the work limitations they suffer? Did it mean courts must ignore other similarities and differences between pregnant and nonpregnant workers? Or did it mean that courts, when deciding who the relevant “other persons” are, could consider other similarities and differences as well?

Employee’s interpretation. The High Court rejected both parties’ interpretations. The employee (and the United States as amicus curiae) asserted that the second clause of the PDA requires an employer to provide the same accommodations to workplace disabilities caused by pregnancy as it provides to disabilities from other causes which have a similar effect on the ability to work. It appeared to the Court that that the employee argued that the PDA grants pregnant workers a most-favored-nation status—as long as it accommodates one or two workers, it must provide similar accommodations to all pregnant workers, irrespective of the nature of their job or other factors. The Court noted that disparate treatment law normally permits an employer to implement policies that are not intended to harm members of a protected class, even if it does sometimes harm them, as long as there is a legitimate, nondiscriminatory, nonpretextual reason for doing so.

EEOC guidance. And while the Solicitor General urged the Supreme Court to give weight to a July 2014 EEOC guidance, the High Court declined. That guidance says that “[a]n employer may not refuse to treat a pregnant worker the same as other employees who are similar in their ability or inability to work by relying on a policy that makes distinctions based on the source of an employee’s limitations (e.g., a policy of providing light duty only to workers injured on the job).” The agency added that “an employer may not deny light duty to a pregnant employee based on a policy that limits light duty to employees with on-the-job injuries.”

To the Court, this took a position on which prior EEOC guidelines were silent and which was inconsistent with the Government’s prior litigation positions. For example, the DOJ, on behalf of the U.S. Postal Service, has argued that pregnant employees with work limitations are not similarly situated to those with similar limitations caused by on-the-job injuries. Moreover, the EEOC did not explain the basis of its latest guidance and why it took a position contrary to the government’s prior position. Without further explanation, the Court could not rely significantly on the guidance.

UPS’s interpretation. Also rejected was UPS’s “polar opposite view” that the second clause merely defines sex discrimination to include pregnancy discrimination. That could not be so, explained the Court, because the first clause accomplishes that objective by amending Title VII’s definitions. UPS’s interpretation would render the second clause “superfluous” and that runs contrary to rules of statutory interpretation. Although the dissent accepted UPS’s interpretation, finding that the second clause was not superfluous because it adds “clarity,” the majority found no need for “clarification” here. Moreover, UPS’s interpretation failed to carry out the important congressional objective in passing the Act—to overturn the Supreme Court’s holding and reasoning in General Electric Co. v. Gilbert, which found that a company benefits plan did not violate Title VII because it did not distinguish between employees because of pregnancy, but rather accommodated only sicknesses or accidents, and pregnancy was neither of those.

McDonnell Douglas applied. Ultimately, the Supreme Court held that a pregnant worker who seeks to show disparate treatment through indirect evidence may do so through the McDonnell Douglas framework. Specifically, she can make out a prima facie case by showing: (1) she belongs to the protected class; (2) she sought accommodation; (3) the employer did not accommodate her; and (4) the employer did accommodate others “similar in their ability or inability to work.” An employer can justify its refusal to accommodate the employee with a legitimate, nondiscriminatory reason, but that reason normally cannot be simply that it is more costly or inconvenient to add pregnant women to the category of those it must accommodate. If the employer proffers a legitimate reason, the employee then has the opportunity to show pretext.

With respect to pretext, the High Court explained that an employee can reach a jury by “providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers” and that its legitimate reasons for doing so “are not sufficiently strong to justify the burden” but instead give rise to an inference of intentional discrimination. The Court further explained that an employee could show a significant burden through evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers (the dissent believed this improperly allows one to establish intentional disparate treatment by demonstrating a disparate impact). In the majority’s view, this approach, though limited to the PDA context, was consistent with the longstanding rule that a plaintiff can use circumstantial proof to rebut an employer’s reasons for treating individuals in a protected class differently than others.

Judgment vacated. Applying that standard here, the Supreme Court vacated the Fourth Circuit’s judgment because the record showed an issue of fact on whether UPS provided more favorable treatment to at least some employees whose situations cannot reasonably be distinguished from the employee’s situation. For example, if the facts were as the employee alleged, she could show that UPS accommodated most nonpregnant employees with lifting restrictions (including employees who were injured on the job, suffered from ADA disabilities, or had lost their DOT certifications) while categorically failing to accommodate pregnant employees with lifting restrictions.

Indeed, UPS had three separate accommodation policies (on-the-job, ADA, DOT), raising the question of “why, when the employer accommodated so many, could it not accommodate pregnant women as well?” Given this issue of fact, summary judgment was not appropriate. The Court did not determine whether the employee actually raised an issue of fact as to whether UPS’s reasons for treating her less favorably than nonpregnant employees were pretextual, leaving that for the appeals court.

Concurring opinion. Justice Alito concurred in the judgment, but wrote separately to delve further into the possible interpretations of the PDA’s second clause, concluding that it not only explained the first clause but “adds a further requirement of equal treatment irrespective of intent.” Alito also interpreted the clause to mean that pregnant employees must be compared with coworkers performing the same or very similar jobs and must be given the same treatment as employees who are “similar in their ability or inability to work,” and two groups of employees are not similar in the relevant sense if the employer has a neutral business reason for treating them differently.

Dissenting opinions. Justice Scalia, joined by Justices Kennedy and Thomas, dissented. Protesting that the majority crafted “a new law that is splendidly unconnected with the text” and legislative history of the PDA, the dissent explained that the “most natural way to understand the same-treatment clause is that an employer may not distinguish between pregnant women and others of similar ability or inability because of pregnancy.” And a “requirement that pregnant women and other workers be treated the same is sensibly read to forbid distinctions that discriminate against pregnancy, not all distinctions whatsoever.” To the dissent, prohibiting employers from making any distinctions between pregnant workers and others of similar ability would elevate pregnant workers to “most favored employees.” For example, if Boeing offered chauffeurs to injured executives, it would have to offer chauffeurs to pregnant mechanics.

The dissent also opined that the majority “bungle[d] the dichotomy” between disparate treatment and disparate impact claims by allowing a pregnant woman to establish disparate treatment by showing that the effects of her employer’s policy fall more harshly on pregnant women than others (a “significant burden”). Justice Kennedy penned a separate dissent, providing further legislative history on the PDA and agreeing with Justice Scalia that the majority’s interpretation conflates disparate impact with disparate treatment and “injects unnecessary confusion into the accepted burden-shifting framework” of McDonnell Douglas.

Reaction and analysis. Employment Law Daily reached out to labor and employment practitioners for their thoughts on today’s decision and guidance for employers in light of its holding.

“Once again the Supreme Court appears to have dealt a setback to employers, but perhaps one that observers should have seen coming,” notes Chris Bourgeacq, AT&T General Attorney, Labor/HR for the former Southwestern Bell region and member of the Employment Law Daily Advisory Board. “Splitting the baby and largely rejecting both sides’ positions, the Court held in effect that the PDA’s amendment to Title VII accords pregnant employees a ‘most-favored nation’ protection, despite statements to the contrary. Here’s why: Before today, under the PDA an employer had to treat pregnant employees no worse, or no better, than similarly situated nonpregnant employees,” Bourgeacq said. “For example, if a pregnant employee was docked pay for missing work in the morning just like a nonpregnant employee under an absence policy, the fact that the pregnant employee’s absence was due to morning sickness did not mean the employer violated the PDA. The employer’s policy was equally applied. No problem. In today’s case, the Court expanded a pregnant employee’s ability to establish a claim under the PDA by using the McDonnell Douglas burden-shifting framework to bring in a much broader class of potential comparators. According to the Court, if a large percentage of nonpregnant employees are treated more favorably than pregnant employees, or if an employer’s practice imposes a ‘significant burden’ on pregnant employees, they get a trial. Moreover, the employer must show a ‘sufficiently strong’ legitimate, nondiscriminatory reason for the so-called significant burden.”

“Justice Scalia’s dissent hits the nail on the head, highlighting that the Court’s majority opinion creates a new, ‘most-favored-employee law’ in its result.”

ADAAA lessens impact. “I wonder about the impact of this decision given the time period the acts at issue occurred,” said David Harvey, Director of Employment Law for Publix Supermarkets and Employment Law Daily Advisory Board Member. “At the time Young was pregnant and had a work restriction, the ADA did not include most pregnancies within the definition of ‘disability.’ As we are all aware, the ADA was amended (by the ADAAA) and greatly expanded the types of conditions that are considered disabilities subject to reasonable accommodation requirements. Importantly here, pregnancy-related limitations are now considered ‘disabilities’ and employers are required to go through the normal accommodation process for such individuals. In fact, the majority commented on the potential for the case to have very little impact going forward in light of this change in the ADA.

Bourgeacq echoed this observation, pointing out too that UPS had changed its policy while the litigation was pending to eliminate the practice at issue here. “In short, these facts would not (or at least should not) arise today in light of the ADAAA’s proscriptions on accommodations.”

Question left unanswered. Three different policies were attacked in the litigation—the ADA accommodation process, DOT driver medical certification failures, and light-duty policies for people injured on the job (including the combined result of all three programs), Harvey explained. “I believe most employers have been following this case out of concern over the impact on the last of these three programs. Specifically, how would the ruling impact the employer’s light-duty or work-hardening program? I don’t think today’s decision answered that question. While the Court reversed the Fourth Circuit’s decision in favor of UPS, it did not direct a decision in favor of Young. Rather, UPS is going to be given an opportunity to explain the reasons for its policies and whether such explanation is a pretext for pregnancy discrimination. I’m interested to see how UPS justifies its policies and how the court rules on whether they are pretextual (either on a summary judgment motion or at trial).”

“But to go full circle, I doubt we will see a similar case. How many pregnant employees with significant work restrictions will there be in any workforce? How many will be handled in the normal ADA accommodation process? What will those numbers look like at the end? To even jeopardize a workers compensation work-hardening program, I suspect we’d have to see a virtual flood of pregnant employees taking up these duties, drastically driving up costs to unsustainable levels. I’m not sure we will see those numbers,” Harvey speculated.

“Moreover, how will courts respond to the justification that a worker’s compensation work-hardening program (I’m purposely avoiding the phrase ‘light duty’) is designed as a form of rehabilitation to get someone back to normal work duties? If this is the case, does this meet the standard of nonpretextual lawful conduct? The court references a percentage analysis (the percentage of nonpregnant employees participating in these programs vs. the percentage of pregnant employees). If a lot of accommodation is handled under a company’s ADA accommodation program, will a plaintiff like Young be able to meet that standard?”

Employer takeaway. “Although the question before the Court was limited to the narrow issue of UPS’ light-duty policy (which has since been revised), today’s holding could be interpreted as applying to a broader range of employer practices,” said Sally Barron, Of Counsel in the Memphis office of Fisher & Phillips. “What this means for employers is that pregnant employees may in effect enjoy a ‘most-favored nation’ status among the realm of impaired employees, and employers should review the reasons for any policy that might impose a burden on pregnant employees. If a policy makes accommodations for some workers but not others, it would be prudent to consider what accommodations might be made for a pregnant employee in order to avoid running afoul of the PDA.”

“The Young decision should prompt employers to examine their worker’s compensation light-duty policies and programs and possibly tweak them,” Harvey advised. “It also provides an incentive for companies to take similar approaches to their ADA accommodation policies with the eye of not over-accommodating employees by excusing the performance of essential job functions—something that employers shouldn’t do anyway.”

“As the Court held, if under McDonnell Douglas an employee can show a large percentage of nonpregnant employees receive more favorable treatment than pregnant employees under the practice or policy at issue, the case will go to a jury,” Bourgeacq said, noting that “the new burden-of- proof issue seemed to come out of nowhere.” His prediction: “Look for creative plaintiffs to routinely claim ‘significant burdens’ on challenged policies or practices and to argue for a more rigorous, ‘sufficiently strong’ burden of proof on employers to show legitimate nondiscriminatory reasons for the policies or practices. It could prove interesting especially if plaintiffs try to extrapolate that, improperly, to other nondiscrimination statutes.”