News

The United States Court of Appeals for the Seventh Circuit recently delivered a win to employers under the Pregnancy Discrimination Act (the “PDA”) in Equal Employment Opportunity Commission v. Walmart Stores East, L.P., Case No. 21-1690.

Case Background

The EEOC accused Walmart of engaging in sex discrimination under the PDA (an amendment to the Title VII Civil Rights Act of 1964) by offering temporary light duty to employees who were injured on the job through its Temporary Alternate Duty Policy (the “TAD Policy”) but denying temporary light duty to pregnant employees. Rather than permit pregnant employees to do light duty, Walmart required pregnant workers (and those injured outside of work) to go on leave if they had lifting or other physical restrictions.

In the district court, after engaging in contentious discovery, both parties moved for summary judgment. The district court granted Walmart’s motion for summary judgment, dismissing the EEOC’s Title VII and PDA claims in full.

Seventh Circuit Appeal

The EEOC appealed the district court’s order to the Seventh Circuit, arguing that Walmart violated the PDA (and Title VII) by not making light duty available under the TAD policy to pregnant employees. Specifically, the EEOC attempted to prove that Walmart did not treat pregnant employees the same “as other persons not so affected but similar in their ability or inability to work,” as required by the PDA. 42 U.S.C. § 2000e(k).

A three-judge panel for the Seventh Circuit unanimously rejected the EEOC’s appeal and affirmed the district court’s dismissal of the lawsuit.

The Seventh Circuit referred to and relied on the Supreme Court’s most recent guidance under the PDA set forth in Young v. United Parcel Service, Inc., 575 U.S. 206 (2015). In Young, the Court adopted the burden shifting framework in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), and described the three steps required to prove discrimination under the PDA as relevant to this case:

• Step one: A plaintiff makes out a prima facie case by showing (1) that she belongs to a protected class, (2) that she sought an accommodation, (3) that the employer did not accommodate, and that (4) the employer accommodated others “similar in their ability or inability to work.”
   
• Step two: If the plaintiff can make a prima facie case, the burden shifts to the employer to offer a legitimate, non-discriminatory reason for denying the accommodation.
   
• Step three: A plaintiff can defeat summary judgment after the employer makes such a showing, 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,” which may give rise to an inference of intentional discrimination. Young, 575 U.S. at 229-30.

Steps One and Two

Here, as to step one, Walmart conceded that the EEOC satisfied its prima facie case by showing Walmart excluded pregnant employees from coverage under the TAD Policy.

Moving to step two, according to Walmart, its legitimate, non-discriminatory reason for only offering light duty to workers injured on the job was to reduce its overall costs and to improve employee morale. Walmart further explained that the TAD Policy reduced Walmart’s legal exposure by allowing the injured employee to continue earning their full wages instead of the reduced wages under the workers’ compensation system.

The EEOC argued for a heightened burden of production on employers under step two, which the Seventh Circuit rejected. The Seventh Circuit held that the PDA merely requires pregnant employees to be treated the same as others “similar in their ability or inability to work,” and that “it is a long stretch to” conclude the PDA requires such a heightened burden. The Seventh Circuit found that Walmart’s justification was enough to satisfy its burden under step two of the Young analysis.

In reaching its conclusion, the Seventh Circuit aligned itself with the Second Circuit’s decision in Legg v. Ulster County, 820 F.3d 67 (2d Cir. 2016), which held that an employer’s compliance with state workers’ compensation laws is a neutral reason for providing benefits to employees who are injured on the job, but not to pregnant employees.

Step Three

At step three, the Seventh Circuit concluded that the EEOC failed to meet its burden of showing that Walmart’s TAD Policy imposed a significant burden on pregnant employees and that Walmart’s legitimate, non-discriminatory reason was not sufficiently strong enough to justify the burden.

The EEOC attempted to show that the TAD Policy significantly burdened pregnant employees by demonstrating that Walmart denied light duty to 100% of pregnant workers and granted light duty to 100% of employees injured at work. The Seventh Circuit rejected the EEOC’s “circular” argument, and found that the EEOC offered no evidence showing that pregnant employees were treated unfavorably compared to other employees similar in their ability or inability to work (other than employees who were injured on the job). Unlike in Young, where the employer accommodated multiple groups of employees with restrictions similar to pregnant employees, here, Walmart only offered light duty to those injured on the job.

Therefore, the Seventh Circuit held that the EEOC could not meet its burden at step three. The Seventh Circuit affirmed summary judgment for Walmart, dismissing the case.

Takeaways for Employers

According to this decision, the PDA does not automatically require employers to provide all pregnant workers the same accommodations it offers to other groups. However, whether an employer may need to accommodate a pregnant employee depends on the circumstances. Employers should carefully review any light duty policies and practices to ensure they comply with the PDA.

Employers should also be mindful that state and local laws may require additional or different accommodations for pregnant employees.