Supreme Court Announces New Test for Analyzing Disparate Treatment Pregnancy Discrimination Claims

March 25, 2015 – In a decision garnering support from both liberal and conservative Justices, the Supreme Court today in Young v. United Parcel Service interpreted the Pregnancy Discrimination Act (the “Act”) as creating a balancing test unique to pregnancy discrimination claims. Although the high Court intended to resolve uncertainty among the circuit courts as to the proper interpretation of the Act, its newly announced rule is far from clear.

Congress passed the Act to overturn the Supreme Court’s 1976 ruling in General Electric Co. v. Gilbert. The Gilbert Court held that a employee disability plan that provided benefits for nonoccupational illnesses and accidents, but not for conditions related to pregnancy, did not violate Title VII of the Civil Rights Act of 1964’s prohibition of sex discrimination. The Act amended the “Definitions” section – and only that section – of Title VII to make clear that the bar on sex discrimination likewise prohibits discrimination “because of or on the basis of pregnancy, childbirth, or related medical conditions.” In its second clause, the Act requires employers to treat “women affected by pregnancy … the same for all employment-related purposes … as other persons not so affected but similar in their ability or inability to work.” The proper interpretation of the second clause was the central issue in the Court’s Young decision.

Facts of Young v. UPS

Peggy Young was a part-time driver for UPS. Her job duties required her to lift parcels weighing up to 70 pounds without assistance, and up to 150 pounds with assistance. Young became pregnant in 2006; her doctor restricted her to lifting no more than 20 pounds during the first 20 weeks, and no more than 10 pounds for the duration, of her pregnancy. UPS told Young she did not qualify for a temporary alternative work assignment and placed her on unpaid leave.

Young sued, alleging UPS violated the Act by failing to accommodate her temporary lifting restriction. Notably, she alleged that UPS accommodated other drivers with similar restrictions not due to pregnancy. Young asserted a “disparate treatment” claim (i.e., a claim that UPS intentionally treated her less favorably than other employees, specifically because of her pregnancy) rather than a “disparate impact” claim (which involves a facially-neutral policy or practice that disproportionately burdens or harms a protected group).

UPS countered that it accommodated restrictions for only a few small classes of employees: (1) those who had become disabled while working, i.e., sustained on-the-job injuries; (2) those who had lost their Department of Transportation (“DOT”) certifications due to a failed medical exam, suspended driver’s license, or involvement in a motor vehicle accident; and (3) those who suffered from a disability covered by the Americans with Disabilities Act (“ADA”). According to UPS, because Young did not fall into any of these categories, employees in those groups were not the relevant comparators. That is, UPS argued that because it did not accommodate lifting restrictions for employees not in these categories, such as employees who had been injured during off-duty activities, it had not unlawfully discriminated against Young by not accommodating her restriction.

The key question for the Court, then, was which group of employees to compare Young to in determining whether she had been treated “the same … as other [nonpregnant] persons … similar in their ability … to work.” Should Young be compared to all UPS drivers, some of whom had similar lifting restrictions and whose conditions were accommodated, or to only those employees with lifting restrictions who did not fall into the categories of employees accommodated by UPS?

The Legal Framework

A plaintiff asserting a disparate treatment claim can prove she was discriminated against either through direct evidence that a policy, practice, or decision relies expressly on a protected characteristic, or through indirect evidence using the burden-shifting framework described by the Supreme Court in McDonnell Douglas Corp. v Green (described below). Young sought to prove her claim through both direct and indirect evidence, but the court quickly rejected her purported direct evidence, focusing instead on the McDonnell Douglas analysis.

The McDonnell Douglas framework involves three steps:

1. The plaintiff must first establish a prima facie case of discrimination by showing that (1) she belongs to the protected class, i.e., that she is or was pregnant; (2) she had been satisfactorily performing her job; (3) despite her adequate performance, the employer took adverse action against her, such as not accommodating her restrictions; and (4) similarly situated employees outside the protected class received more favorable treatment. As the Fourth Circuit Court of Appeals noted, the fourth prong of the prima facie case has also been described as requiring a showing that “the adverse employment action occurred under circumstances giving rise to an inference of unlawful discrimination.”

2. If the plaintiff makes this prima facie showing, then the burden shifts to the employer “to articulate some legitimate, nondiscriminatory reason” for treating employees outside the protected class better than employees within the protected class.

3. If the employer provides evidence of a nondiscriminatory reason for its conduct, the plaintiff has an opportunity to prove by that the legitimate reasons offered by the defendant were not its true reasons, but were merely a pretext for discrimination.

The Lower Court Decisions

The trial court awarded UPS summary judgment, holding that Young failed to make a prima facie showing of discrimination. Although there was little or no dispute that Young provided evidence of the first three McDonnell Douglas factors, the district court viewed the employees with whom Young compared herself – those who came within the on-the-job, DOT, or ADA categories and received accommodations – as too different from Young to qualify as “similarly situated comparators.”

Given the conclusion that Young did not prove her prima facie case, the court engaged in virtually no discussion of any legitimate, nondiscriminatory reason UPS asserted for its policy of not accommodating pregnant women. That lack of discussion makes it difficult to assess the court’s further holding that Young did not create a genuine factual dispute as to whether UPS’s asserted justification was pretextual.

The Fourth Circuit affirmed, concluding that UPS “crafted a pregnancy-blind policy.” The court went on to say that Young was unlike the categories of workers whose restrictions UPS accommodated but was rather more similar to “’an employee who injured his back while picking up his infant child or … an employee whose lifting limitation arose from her off-the-clock work as a volunteer firefighter,’ neither of whom would have been eligible for accommodation under UPS’ policies.”

The Supreme Court Reverses, on Dubious Reasoning

The Court could have reversed the Fourth Circuit’s decision by relying on evidence that UPS provided accommodations to employees who could not reasonably be distinguished from her on a nondiscriminatory basis – and holding that Young created a genuine factual dispute as to the fourth prong of the McDonnell Douglas prima facie case. Specifically, Young introduced evidence that other employees had received accommodations when it was unclear whether their injuries occurred on the job, and even in some cases when the injuries were clearly not job-related. She further pointed to the testimony of a long-time shop steward that the only requests for light duty due to physical restrictions “that became an issue” at UPS were those requests made by pregnant women. And the Court did, in fact, hold that “Young created a genuine dispute of material fact as to the fourth prong of the McDonnell Douglas analysis.

Rather than reversing on this straightforward ground, though, the Court engaged in a somewhat rudderless examination of the correct interpretation of the second clause of the Act. Young argued that the clause “requires an employer to provide the same accommodations to workplace disabilities caused by pregnancy that it provides to workplace disabilities that have other causes but have a similar effect on the ability to work.” That is, in Young’s view, if the employer accommodates any subset of workers whose disabilities render them similar in their ability to work to a pregnant employee, the Act requires the employer to provide the same accommodation to all pregnant women – even where the employer does not accommodate other subsets of workers with similar restrictions. UPS, by contrast, asserted that the second clause of the Act imposes no greater duty on employers than does the first clause, so that a court faced with a claim of pregnancy discrimination should “compare the accommodations an employer provides to pregnant women with the accommodations it provides to others within a facially neutral category (such as those with off-the-job injuries) to determine whether the employer has violated Title VII…”

The Court rejected both parties’ interpretations. As to Young’s, the Court reasoned that it would result in pregnant workers receiving more favorable treatment than other employees. If an employer granted accommodations to a few specific employees – such as those with particularly long tenure with the company or those performing highly hazardous duties, the employer would then have to provide similar accommodations to all pregnant workers with similar physical limitations, without regard to any other non-gender-related criteria. The Court disagreed, reasoning that “disparate-treatment law normally permits an employer to implement policies that are not intended to harm members of a protected class, even if their implementation sometimes harms those members, as long as the employer has a legitimate, nondiscriminatory, nonpretextual reason for doing so. There is no reason to believe Congress intended its language in the Pregnancy Discrimination Act to embody a significant deviation from this approach.”

The Court likewise rejected the interpretation advanced by UPS, which would have rendered the second clause of the Act duplicative of the first and therefore superfluous. “Simply including pregnancy among Title VII’s protected traits (i.e., accepting UPS’ interpretation) would not overturn Gilbert in full – in particular, it would not respond to Gilbert’s determination that an employer can treat pregnancy less favorably than diseases or disabilities resulting in a similar inability to work.”

The Court purported to base this conclusion on a rather cryptic statement in California Federal Savings & Loan Association v. Guerra that “the first clause of the Act reflects Congress’ disapproval of the reasoning in Gilbert by adding pregnancy to the definition of sex discrimination prohibited by Title VII. But the second clause was intended to do more than that – it was intended to overrule the holding in Gilbert and to illustrate how discrimination against pregnancy is to be remedied.”

Yet the Court failed to explain how this “illustration” applies to the facts of Young v. UPS. The holding in Gilbert was that a policy of providing benefits to employees with off-the-job injuries, illnesses, or conditions – except for pregnancy – did not unlawfully discriminate. UPS’s policy generally was not to provide accommodations for conditions, pregnancy or otherwise, that were not job-related.

The Court then attempted to apply its analysis to Young, discussing the McDonnell Douglas analysis. The one aspect of this discussion that may assist lower courts faced with claims of pregnancy discrimination is the statement that a plaintiff need not “show that those whom the employer favored and those whom the employer disfavored were similar in all but the protected ways” to make a prima facie case. That is, a plaintiff can meet her initial burden by showing that the employer accommodated some employees similar to her in their ability or inability to work – even if those employees differ from her in some potentially significant ways unrelated to pregnancy, such as their tenure with the company or the nature of their duties.

The confusion comes in with the court’s discussion of a newly-announced rule with respect to the third step in the McDonnell Douglas analysis:

If the employer offers an apparently “legitimate, nondiscriminatory” reason for its actions, the plaintiff may in turn show that the employer’s proffered reasons are in fact pretextual. We believe that the plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather – when considered along with the burden imposed – give rise to an inference of intentional discrimination.

The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. Here, for example, if the facts are as Young says they are, she can show that UPS accommodates most nonpregnant employees with lifting limitations while categorically failing to accommodate pregnant employees with lifting limitations. Young might also add that the fact that UPS has multiple policies that accommodate nonpregnant employees with lifting restrictions suggests that its reasons for failing to accommodate pregnant employees with lifting restrictions are not sufficiently strong – to the point that a jury could find that its reasons for failing to accommodate pregnant employees give rise to an inference of intentional discrimination.

Based on this reasoning, the Court framed the issue as, “why, when the employer accommodated so many, could it not accommodate pregnant women as well?” It remanded to the Fourth Circuit to determine, using the question as framed, whether UPS’s “reasons for having treated Young less favorably than … other nonpregnant employees were pretextual.”

Notably, the Court recognized that its balancing test – comparing the burden on pregnant employees against the strength of the employer’s justification – is unique to the pregnancy discrimination context. On the other hand, the Court asserted that the new test is “consistent with our longstanding rule that a plaintiff can use circumstantial proof to rebut an employer’s apparently legitimate, nondiscriminatory reasons for treating individuals within a protected class differently than those outside the protected class.”

The Court stated that “the continued focus on whether the plaintiff has introduced sufficient evidence to give rise to an inference of intentional discrimination avoids confusing the disparate-treatment and disparate-impact doctrines.” This seems difficult to square with the balancing test, though – or with the acknowledgment that the balancing test is “limited to the Pregnancy Discrimination Act context.” As noted by the dissenting Justices, courts in disparate treatment cases have always been permitted to consider a policy’s effects and justifications in assessing whether the policy was motivated by discriminatory animus. But a balancing of the policies against its justifications alone has not typically been viewed as sufficient to prove intentional discrimination. As Scalia put it in his dissent, under the majority’s analysis, “[e]ven if the effects and justifications of policies are not enough to show intent to discriminate under ordinary Title VII principles, they could (Poof!) still show intent to discriminate for purposes of the pregnancy same-treatment clause.”

Note also that Justice Alito, in his concurring opinion, concluded that the second clause of the Act imposes a “requirement of equal treatment irrespective of intent.” This view, if adopted by a majority of Justices, would eviscerate the distinction between disparate treatment and disparate impact.  The dissenting Justices (Scalia, Kennedy, and Thomas) argued with some force that the majority did destroy the distinction between the two forms of discrimination claims – thought he majority disavowed any such shift.

Scalia described the Court’s interpretation of the Act as “splendidly unconnected with the text.” “To ‘treat’ pregnant workers ‘the same … as other persons,’ we are told, means refraining from adopting policies that impose ‘significant burden[s]’ upon pregnant women without ‘sufficiently strong’ justifications. Where do the ‘significant burden’ and ‘sufficiently strong justification’ requirements come from?”

Scalia continued, pulling no punches in his criticism of the majority’s balancing test. He correctly reasoned that “the thrust of the Pregnancy Discrimination Act is that pregnancy discrimination is sex discrimination.” (Recall that the Act altered only the “Definitions” section of Title VII.) In Scalia’s view, “[r]eading the same-treatment clause to give pregnant women special protection unavailable to other women would clash with this central theme of the Act because it would mean that pregnancy discrimination differs from sex discrimination after all.”

The dissenting Justices took particular affront to the majority blurring the dichotomy disparate treatment and disparate impact. “Normally, liability for disparate treatment arises when an employment policy has a ‘discriminatory motive,’ while liability for disparate impact arises when the effects of an employment policy ‘fall more harshly on one group than another and cannot be justified by business necessity.’ In the topsy-turvy world created by today’s decision, however, a pregnant woman can establish disparate treatment by showing that the effects of her employer’s policy fall more harshly on pregnant women than on others (the policies ‘impose a significant burden on pregnant workers’) and are inadequately justified…”

This blurring could potentially have a major impact. “Disparate treatment and disparate impact claims come with different standards of liability, different defenses, and different remedies.” For instance only equitable relief – such as an order requiring the employer to discontinue the challenged policy and to adopt a new, fairer policy – is available to a plaintiff who successfully brings a disparate impact. By contrast, an employee who proves intentional discrimination, i.e., disparate treatment, may recover compensatory and punitive damages, as well as equitable remedies. Thus, the dissenting justices predicted, with good reason, that claims that in the past could only have been brought under a disparate-impact theory, will now be asserted as disparate-treatment claims.

In sum, the Court’s opinion in Young v. UPS appears to create more confusion than clarity. The Court purported to reject Young’s argument that the Pregnancy Discrimination Act requires employers to accommodate a pregnant employee’s work restrictions if it accommodates any other employee’s similar restrictions – but at the same time, the Court seemed to indicate that a showing that the employer accommodated any other employee’s restrictions would suffice for a prima facie showing under McDonnell Douglas. Perhaps more importantly, it remains to be seen how lower courts will grapple with the Young Court’s newly crafted approach to proving pretext in pregnancy discrimination cases.

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