‘Young’ Decision Is a Game Changer for Federal Pregnancy Discrimination Claims

June 3, 2015Articles New Jersey Law Journal

"Reprinted with permission from the June 3, 2015, issue of the New Jersey Law Journal. (c) 2015 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved."

On March 25, the United States Supreme Court handed down a much-anticipated decision in Young v. United Parcel Service. The Supreme Court's decision broke some new ground, but stopped short of the sweeping interpretation of the Pregnancy Discrimination Act (PDA) that the plaintiff advocated.

The plaintiff, Young, complained that United Parcel Service (UPS) violated the PDA because it failed to accommodate her lifting restrictions caused by her pregnancy, yet it offered light duty to drivers injured at work who were disabled under the Americans with Disabilities Act (ADA) or who lost their Department of Transportation certifications after failing a medical examination.

Specifically, she alleged a disparate treatment claim under the second clause of the PDA, which reads: "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."

The Fourth Circuit upheld the dismissal of Young's complaint, noting that she was not similarly situated to those other drivers who were offered accommodations.

Young urged the Supreme Court to adopt a broad view of the PDA, where an employer that accommodated even one disabled worker would be required to grant similar accommodations to pregnant workers. The good news for employers is that the court rejected this interpretation of the PDA. The other good news for employers is that the court noted that the EEOC's 2014 pregnancy guidance regarding accommodations was not binding.

However, the court's decision is not a total win for employers in two respects. First, the court's decision does not address claims that may be brought by pregnant employees under the revised, more expansive ADA (effective in 2009), which more broadly defines disabilities and under which a larger number of pregnant employees may be considered disabled.

Second, the court announced a modified McDonnell-Douglas standard under which a plaintiff can survive summary judgment if she can show the policy places a "significant burden" on pregnant employees in those cases where an employer's legitimate non-discriminatory reason for denying an accommodation is that it has a policy where light duty accommodations are only available to a subset of employees. A plaintiff may be able to establish that the employer's policy creates a significant burden where she can show that the employer accommodated a large percentage of nonpregnant workers while failing to accommodate pregnant workers who were similarly unable to work.

Employers and employees had been holding their collective breaths waiting to learn how the Supreme Court would rule on claims related to the employers' light-duty policies; specifically, those that may only allow a certain class of employees, i.e., those injured on the job, to be temporarily assigned light-duty policies. New Jersey courts had already dealt with the issue where it was claimed that such a light-duty policy discriminated against disabled employees and found that there was no disability discrimination where a light-duty policy was only extended to employees injured at work. The logic being that both nondisabled and disabled employees who required light duty due to a medical condition that was not job-related would be denied the light-duty position. Thus, there was no discrimination based on disability. Employers had hoped that the Young case would follow this logic as it applied to claims based under the PDA.

In fact, this new, modified McDonnell-Douglas standard differs from New Jersey and Third Circuit case law decided prior to Young. New Jersey state courts followed the position advanced by UPS; namely, that a policy or practice was not discriminatory under the PDA if it applied to both men and women. See Gerety v. Atlantic City Hilton Casino Resort, 184 N.J. 391 (2005). Similarly, the Third Circuit also declined to find a violation of the PDA where a plaintiff could not demonstrate that she was treated differently than non-pregnant workers. See In re Carnegie Center Associates, 129 F.3d 290 (3rd Cir. 1997).

With the newly articulated Young standard, courts are not simply going to be able to look at whether some nonpregnant employees were denied light duty accommodations. Instead, courts and, if cases go to trial, juries, are going to have to engage in fact-intensive analysis as to whether the employer's light-duty policy creates a "significant burden" on pregnant employees.

That said, employers should remember that the Supreme Court specifically noted that pregnant employees do not enjoy "most favored nation" status in that they do not have to be treated better than nonpregnant employees. Thus, even if an employer accommodates a large number of nonpregnant employees, an employer's policy may not violate the PDA if a large number of non-pregnant employees are not accommodated. The decision fails to set forth a bright-line test, which will mean that employers will need to reexamine light-duty policies and their particular workforce circumstances to see whether those policies create a significant burden on pregnant employees.

The Young decision also affects the Enforcement Guidance on Pregnancy Discrimination and Related Issues issued by the Equal Employment Opportunity Commission (EEOC) in July 2014. The guidance signaled a departure from some case law in that it took an expansive view of the PDA with regard to employee access to light duty and an employer's duty to accommodate a pregnant employee.

While the PDA requires an employer to offer benefits to pregnant workers on the same terms that it offers benefits to other workers "similar in their ability or inability to work," the EEOC took a strict position that an employer cannot deny a nondisabled pregnant worker light duty where it provides light duty to employees injured at work or who are disabled under the ADA. The guidance hinges on its interpretation of "similar in their ability or inability to work." The EEOC interprets "similar in their ability or inability to work" as simply meaning that a pregnant worker is unable to work. The Supreme Court stopped short of adopting this expansive view of the PDA, however. The Supreme Court also noted that the guidance was not binding. Accordingly, the EEOC will need to review the guidance to conform to the Young decision. In the meantime, the EEOC has not officially recalled the guidance, so employers should still try to ensure that their policies comply with the remaining portions of the guidance.

Although the newly articulated standard makes it easier for claimants to establish a claim under the PDA, it is doubtful that there will be an increase in claims brought under the PDA in New Jersey. The reason for this is the 2014 amendments to the New Jersey Law Against Discrimination (NJLAD).

The NJLAD now requires employers to reasonably accommodate women affected by pregnancy, so long as the accommodations do not put an undue hardship on the employer's business operations. Examples of reasonable accommodations that a pregnant employee may request include bathroom breaks, breaks to drink more water, periodic rest, assistance with manual labor, job restructuring or modified work schedules, and temporary transfers to less strenuous or hazardous work.

However, if the employer can show that providing reasonable accommodations would impose an undue hardship on the operation of its business, it would not be required to provide reasonable accommodations. Factors to consider as to whether providing accommodations imposes an undue hardship on the employer's business include: (1) the overall size of the employer's business with respect to the number of employees; (2) the number and type of facilities and size of budget; (3) the type of the employer's operations, including the composition and structure of the employer's workforce; (4) the nature and cost of the accommodation needed; and (5) the extent to which the accommodation would involve a waiver of an essential job requirement.

Since the NJLAD creates an affirmative obligation to consider light duty for pregnant employees and shifts the burden to employers to prove that a reasonable accommodation creates an undue hardship, it is likely that employees would choose to raise claims under state law, rather than federal law.

Further, under Title VII, compensatory and punitive damages are capped (excluding back pay and front pay, counsel fees and costs):

  • For employers with 15-100 employees, the limit is $50,000.
  • For employers with 101-200 employees, the limit is $100,000.
  • For employers with 201-500 employees, the limit is $200,000.
  • For employers with more than 500 employees, the limit is $300,000.
  • By contrast, the NJLAD does not have a cap on compensatory and punitive damages, making it more attractive for plaintiffs to raise a claim under the NJLAD.

    In short, although the Young decision alters the legal landscape for claims under the PDA, it is not likely to change the landscape in New Jersey where employers have additional obligations under state law.

    Stoneburner is a partner with Fox Rothschild in Roseland, and a member of the firm's Labor and Employment Department.

    "Reprinted with permission from the June 3, 2015, issue of the New Jersey Law Journal. (c) 2015 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved."