Nashville Gas Co. v. Satty
98 S. Ct. 347, 54 L. Ed. 2d 356, 1977 U.S. LEXIS 159 (1977)
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Rule of Law:
An employment policy that imposes a significant burden on female employees by depriving them of employment opportunities because of pregnancy, such as stripping their accumulated seniority, violates Title VII of the Civil Rights Act of 1964 unless justified by a business necessity. However, an employer's policy of denying sick pay benefits for pregnancy-related absences, while providing them for other non-job-related disabilities, is not a per se violation of Title VII.
Facts:
- Nashville Gas Co. had a policy requiring pregnant employees to take a formal leave of absence.
- Under this policy, employees on pregnancy leave lost all their previously accumulated job seniority, which was used for bidding on job openings.
- In contrast, employees on leave for any non-job-related disability other than pregnancy retained their accumulated seniority and continued to accrue it while absent.
- The company also had a policy of denying sick-leave pay to employees absent due to pregnancy, while providing it to employees absent for other non-job-related disabilities.
- Nora Satty, an employee since 1960, took maternity leave in December 1972.
- Upon seeking to return to work, her previous position had been eliminated.
- Satty unsuccessfully applied for three permanent positions, each of which was awarded to an employee who would have had less seniority than her if her pre-leave seniority had been counted.
Procedural Posture:
- Nora Satty sued Nashville Gas Co. in the U.S. District Court for the Middle District of Tennessee, alleging that its seniority and sick pay policies, among others, violated Title VII.
- The District Court, as the court of first instance, held that both the seniority and sick-pay policies were violations of Title VII.
- Nashville Gas Co., as the appellant, appealed the adverse rulings to the U.S. Court of Appeals for the Sixth Circuit.
- The Court of Appeals, an intermediate appellate court, affirmed the District Court's judgment.
- The U.S. Supreme Court granted a writ of certiorari to review the decision of the Court of Appeals.
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Issue:
Does an employer's policy violate Title VII of the Civil Rights Act of 1964 by (1) divesting female employees of their accumulated seniority upon returning from pregnancy leave and (2) denying sick pay to employees disabled by pregnancy while providing it for other non-job-related disabilities?
Opinions:
Majority - Mr. Justice Rehnquist
Yes, as to the seniority policy; No, as to the sick-pay policy. An employer’s policy of divesting pregnant employees of their seniority imposes a burden that deprives them of employment opportunities in violation of Title VII, while the denial of sick pay is a permissible exclusion from a benefits plan. The Court reasoned that the seniority policy violates § 703(a)(2) of Title VII. Unlike the benefits plan in General Electric Co. v. Gilbert, which merely withheld a benefit women could not receive, this policy imposes a substantial burden on women that men need not suffer. By stripping seniority, the policy deprives women of employment opportunities and adversely affects their employee status. The Court distinguished between withholding benefits and imposing burdens, stating the latter is impermissible under Title VII unless justified by a business necessity, which Nashville Gas Co. did not prove. Conversely, the Court found the sick-pay policy legally indistinguishable from the disability-insurance program upheld in Gilbert. It is a facially neutral, underinclusive benefits plan. The direct effect is a loss of income, not a deprivation of employment opportunities or status under § 703(a)(2). Therefore, to prove a violation, the plaintiff would have had to show that the exclusion of pregnancy was a mere pretext for invidious sex discrimination, which she failed to do.
Concurring - Mr. Justice Powell
Yes, I concur in the judgment. I agree with the Court's holding on the seniority policy, but I believe the sick-pay issue should be remanded for further factual development, as the plaintiff should have an opportunity to make a case under the new standard established by Gilbert. The case was tried before the Court's decision in General Electric Co. v. Gilbert. At that time, the respondent (Satty) had no reason to make the specific showing of gender-based discrimination that Gilbert now requires. The case should be remanded to allow the lower court to reconsider the sick-leave ruling and permit the respondent to present evidence that the 'package is in fact worth more to men than to women,' potentially by showing the combined effect of the mandatory leave and sick-pay denial resulted in a net loss of compensation for female employees.
Concurring - Mr. Justice Stevens
Yes, I concur in the judgment. The legal distinction between the two policies is best understood by whether the adverse effect extends beyond the term of the pregnancy leave. The seniority policy is unlawful because it has a permanent, adverse impact on the employee's status after she returns to work, disadvantaging her for the rest of her career compared to the rest of the workforce. This constitutes sex discrimination against formerly pregnant employees. In contrast, the denial of sick pay is permissible under the Gilbert rationale because its effect is confined to the temporary period of the maternity leave itself. Gilbert allows an employer to treat the leave period as a 'temporal gap' in employment, but it does not permit policies that permanently disadvantage the employee upon her return.
Analysis:
This case significantly clarified and limited the scope of General Electric Co. v. Gilbert. It established a crucial distinction between an employer's refusal to provide benefits for pregnancy (permissible under Gilbert) and an employer's imposition of burdens that harm employment opportunities because of pregnancy (impermissible under Title VII). By distinguishing between 'benefits' and 'burdens,' the Court preserved the disparate impact theory for pregnancy discrimination cases outside the narrow context of insurance-style benefit plans. This decision was a key development in employment discrimination law, although its specific holdings on benefits were superseded by Congress's passage of the Pregnancy Discrimination Act in 1978, which legislatively overturned Gilbert.
