When the Pregnancy Discrimination Act of 1978 became effective, companies began to count pregnancy time off when calculating the length of service of an employee for purposes of pension and other benefits. But some companies do not count time off that was taken prior to the enactment of the PDA. On 5/18/2009, the Supreme Court decided that such time off need not be counted when companies are now calculating retiree benefits based on length of service. The company did not intend to discriminate at the time by using the legal benefit accrual method that excluded pregnancy time off in calculating retirement benefits. Without such intent, federal law does not prohibit the differential calculation.
In addition, the PDA is presumed not to apply retroactively unless Congress clearly wanted to impose that potential unfairness to achieve countervailing benefits, which it did not in this instance. The PDA is prospective only for most purposes, as evidenced by its language and legislative history.
The Court also rejected an argument that the Ledbetter Fair Pay Act of 2009 makes each retirement check a new discriminatory act. Since the disallowance of pregnancy time in the calculation of benefits was legal prior to enactment of the PDA, pension checks today do not effectuate a discriminatory practice that gives rise to a right to sue.