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With Child, Without Workplace Accommodation: Impact of the Recent EEOC v. Wal-Mart Stores East, L.P. Decision and the Biggest Takeaways for Employers

The Seventh Circuit threw a curveball to pregnant employee accommodation jurisprudence in its recent EEOC v. Walmart decision. The Court held on August 16, 2022, that employers have considerable leeway in excluding pregnant employees from some accommodation policies, so long as the employer can offer a legitimate, nondiscriminatory business reason for doing so.

Brief History of Treatment of Pregnant Employees

The United States has a complicated past regarding pregnant employees and their rights/accommodations in the workplace. In 1908, the Supreme Court in Muller v. Oregon ruled that limiting the working hours of all women was permissible, because “healthy mothers are essential to vigorous offspring, the physical well-being of woman becomes an object of public interest and care in order to preserve the strength and vigor of the race.” Traditionally, pregnancy was treated as a disability for purposes of employer policies. Critics argued, however, that pregnancy should not be treated like any other temporary disability because of its unique nature and health implications.

In the 1970s, the Supreme Court in Geduldig v. Aiello held that discrimination on the basis of pregnancy is not sex-discrimination in violation of the Constitution. Shortly after this decision, Congress amended Title VII of the Civil Rights Act of 1964 with the Pregnancy Discrimination Act (PDA). Among other things, the PDA required employers who provide health insurance and temporary disability plans to include pregnant employees. The PDA, however, left some questions be answered. For instance, the PDA allows employer policies which accommodate  some workers with non-pregnancy related disabilities but does not accommodate pregnancy-related conditions.

In 2015, the Supreme Court in Young v. UPS interpreted the PDA to impose a three-step inquiry as to whether an employer engaged in pregnancy discrimination: (1) the pregnant employee must show that the disability policy applies to others similar to their ability/inability to work; (2) the employer must then show that there was a legitimate, nondiscriminatory business reason for not including pregnant workers in the policy; and (3) the employee must prove the employer showed favorable treatment to non-pregnant employees. The Court in Young found that UPS’s “light duty” policy, which did not apply to pregnant workers, violated the PDA under this three-pronged test.

EEOC v. Wal-Mart Decision

Although the Supreme Court indicated in Young that more workplace protections for pregnant employees may be in the horizon, the Seventh Circuit went the other way in EEOC v. Wal-Mart. The facts in this case were similar to those in Young: the EEOC challenged Wal-Mart’s “Temporary Alternate Duty” Policy, which offered light duty to workers injured on the job who wished to earn their full wages while recovering. The Policy, however, did not apply to pregnant employees. Instead of offering pregnant employees light duty work, Wal-Mart required pregnant workers to go on unpaid leave for several months.

Using the three-prong test from Young, the Court found that Wal-Mart presented a legitimate business reason for the policy – that it was part of the company’s worker’s compensation policy to bring injured workers back to work as soon as possible while still complying with Wisconsin law (i.e., Wisconsin’s workers’ compensation laws). In response, the EEOC argued Title VII and Young required employers to explain why they excluded pregnant employees from the policy. The Court disagreed with the EEOC, holding Congress did not intend such a heightened standard for employers to comply with the PDA. Furthermore, the Court explained, this case is different from Young because UPS’s policy accommodated every other group of employees in need of accommodation, whereas Wal-Mart’s policy applied only to those injured on the job.

Best Practices for Employers

The Walmart decision indicates that employers may have more leeway with accommodation policies than initially thought. However, denying pregnant employees certain accommodations available to other employees may impact morale, consequently affecting employee retention and recruitment efforts. Therefore, employers should revisit their current policies and determine whether there is a legitimate and nondiscriminatory business reason for any physical accommodation policy that excludes pregnant employees, in compliance with the PDA. Employers should also train managers to recognize and implement accommodations for pregnant employees where needed.  

Employers who are amending or creating new “light duty” policies or other physical accommodation policies should ensure that such policies are in compliance with the PDA. Please note that states may have different requirements regarding equal treatment of pregnant employees pertaining to leave, accommodations, and/or scheduling.

Heads-up on PWFA

Employers should also be advised that pending legislation, the Pregnant Workers Fairness Act (PWFA), may impact employers, if passed. The Bill was passed in the House of Representatives, and is gaining bipartisan support in the Senate. If passed, the PWFA would prohibit employers from discriminating against qualified employees affected by pregnancy, childbirth, or related medical conditions.

In the meantime, however, employers should remember that establishing and implementing accommodation policies is much less costly than defending a discrimination suit, down the line.

If you need any further guidance regarding the impact of the Seventh Circuit’s decision in EEOC v. Wal-Mart, please feel free to contact Laurel Montag or any other member of DeWitt’s Labor and Employment Practice Group.

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