The New Jersey Supreme Court ruled yesterday that the sex discrimination provisions of the state’s Law Against Discrimination (LAD) do not require an employer to provide pregnant employees more leave than other employees, if the employer applies its medical leave policy in a gender neutral and consistent fashion. According to the Court, “if an employer treats its pregnant employees no differently than comparable non-pregnant employees in need of extended medical leave, then the LAD is not transgressed.” The decision by a narrow 4-3 majority is a significant victory for New Jersey employers and provides long awaited clarification of a murky issue.
Hilton’s Medical Leave Policy
Hilton’s medical leave policy provides employees with 26 weeks of unpaid medical leave. Hilton applies its policy in a “strict, no-exceptions” manner: an employee who takes more than the maximum 26 weeks of leave is terminated, without regard to the employee’s gender or specific medical condition.
Due to medical complications, Christina Gerety had to commence leave early in her pregnancy. Gerety’s first 12 weeks of leave were charged against her federal Family and Medical Leave Act (FMLA) entitlement, and her following 14 weeks of leave were charged against the balance of her leave under Hilton’s 26-week medical leave policy. Upon the expiration of her 26 weeks of leave, Gerety had not yet delivered her twin babies and was not medically able to return to work. Accordingly, Hilton terminated her employment. Gerety delivered her babies 13 days later.
Gerety filed a lawsuit against Hilton alleging that the company’s medical leave policy violated the LAD’s prohibition against pregnancy discrimination, under both disparate treatment and disparate impact theories.
Policy Not Discriminatory
The Court quickly rejected Gerety’s disparate treatment claim on the basis that she was treated no differently than other non-pregnant employees who were unable to return to work for medical reasons. Stated differently, the policy did not single out pregnant employees for lesser treatment than other employees with non-pregnancy related medical conditions.
Turning to Gerety’s disparate impact claim, the Court adopted the well-settled framework, which requires proof that a facially neutral employment policy has the effect of treating one group less favorably than another without a supporting business necessity. Gerety argued that Hilton’s facially neutral 26-week medical leave policy negatively affected women, because only women can become pregnant and thus experience a need for more than 26 weeks of leave due to pregnancy-related complications.
The Court found that Hilton’s policy did not have a disparate impact on women, finding instead that the policy impacts men and women equally. For example, the Court noted that men can suffer from unique medical conditions, such as testicular cancer, and under Hilton’s policy, men are limited to the same 26 weeks of medical leave as pregnant women. In a significant and concise statement, the Court held that the LAD requires equal, not preferential, treatment.
Rejecting an outcome that some might label judicial activism, the Court observed that neither Congress nor the New Jersey Legislature has required employers to grant medical leave for the duration of an employee’s pregnancy. Under the FMLA, Congress has only legislated that employers provide up to 12 weeks of leave. As such, the Court declined to “legislate a new minimum medical leave” for pregnant employees.
Three justices dissented from the ruling, stating that in their view “an employer must reasonably accommodate the women in its workforce by extending leave for pregnancy when such leave is necessary for health reasons, unless the employer can demonstrate that business necessity prevents the accommodation.” Gerety v. Atlantic City Hilton Casino, No. A-33-04, New Jersey Supreme Court (July 25, 2005).
Preventive Measures and Unanswered Questions
Many New Jersey employers have adopted medical leave polices that mirror Hilton’s policy, providing a maximum of 26 weeks of medical leave, which is co-extensive with the maximum period of short term disability benefits required under the state’s Temporary Disability Benefits law. According to Mark Diana, a shareholder in Ogletree Deakins’ Morristown office: “The Gerety decision reinforces the need for employers to apply such medical leave policies in an evenhanded and gender neutral manner. Although pregnant employees are not entitled to preferential leave treatment, they are entitled to equal treatment. A critical component to the Court’s decision was its finding that Hilton applied its policy in a ‘strict, no-exceptions’ manner. Evidence that Hilton had relaxed its leave policy for employees with non-pregnancy related conditions likely would have resulted in a different outcome.”
The Gerety Court did not specifically address whether the LAD’s disability discrimination provisions, and specifically the law’s reasonable accommodation requirements, might require that pregnant employees be granted more than the 12 weeks of leave required by the FMLA or the 26 total weeks of leave provided for under Hilton’s policy. The Supreme Court has not yet addressed whether a normal pregnancy is a “disability” under the LAD, although at least one lower court has held that it is not and that an employer has no obligation to accommodate a pregnant employee by granting additional leave. (The Equal Employment Opportunity Commission has also held that a normal pregnancy is not a disability under the Americans with Disabilities Act. EEOC Interpretive Guidance to 29 C.F.R. Part 1630.2(h)). In the case of pregnancy with medical complications, however, an employee may claim to have a disability that requires accommodation in the form of leave exceeding the FMLA requirements.
Diana adds: “If a court were to hold that a troubled pregnancy such as Gerety’s is a disability within the meaning of the LAD, the court would still need to determine whether an employer’s policy of granting a maximum of 26 weeks medical leave (like Hilton’s policy) satisfies the employer’s obligation to accommodate the disabled pregnant employee.”
Additional Information
Should you have any questions about this ruling or other employment law related issues, please contact the Ogletree Deakins attorney with whom you normally work or the Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com.
Note: This article was published in the July 26, 2005 issue of the New Jersey eAuthority.