On March 25, 2015, in Young v. United Parcel Service, Inc., the US Supreme Court established a new standard for analyzing claims under the Pregnancy Discrimination Act (PDA). A divided court held that a pregnant worker can show that the employer's legitimate, non-discriminatory justifications are pretextual under the McDonnell Douglas burden-shifting framework if its accommodation policies impose a "significant burden" on pregnant workers and the employer's reasons are not "sufficiently strong." Over a scathing dissent by Justice Scalia, the Court vacated the US Court of Appeals for the Fourth Circuit's decision granting summary judgment to UPS and remanded the case for further consideration in light of the Court's new standard and interpretation of the statute. For more details about the decision, see Legal Update, SCOTUS Adopts New "Significant Burden" Test for Analyzing Pregnancy Discrimination Act Claims.

Practical Law asked Brian McDermott of Ogletree Deakins Nash Smoak & Stewart P.C. to discuss the implications of this decision and its likely impact on employers. Brian is a Shareholder in Ogletree Deakins' Indianapolis office. His practice focuses on representing public and private employers in individual, class and collective employment actions, litigation avoidance, training and counseling on employment-related issues.

The Young court's decision had at least three important components. First, it reaffirmed the importance and application of the McDonnell Douglas framework in employment law jurisprudence. Some lower courts have doubted whether the framework should continue to apply, but the Court embraced and reaffirmed its continued application.

Second, the Court's interpretation establishes a new standard for employers. Although it rejected the "most favored nation" view proposed by Young and the Solicitor General, the new "significant burden" standard will be one that employers and courts will grapple with going forward. In my view, the Court now contemplates balancing the burden imposed by an employer's policy against the employer's justifications for that policy. If the employer's legitimate, non-discriminatory reasons are sufficiently strong to justify the burden, then the employee cannot meet her burden of showing that the employer's policy was a pretext for discrimination under the McDonnell Douglas burden-shifting scheme.

Third, the Young Court eviscerated the EEOC's Enforcement Guidance on Pregnancy Discrimination (see EEOC: July 2014 Enforcement Guidance on Pregnancy Discrimination and Related Issues and Legal Update, EEOC Issues Updated Pregnancy Discrimination Enforcement Guidance). The Court refused to "significantly rely" on the Guidance because the:

An open question going forward is what constitutes a legitimate, non-discriminatory reason for treating pregnant and non-pregnant workers differently. The Court made clear that cost savings and inconvenience alone normally are not sufficient. This issue will be central to future pregnancy discrimination litigation. For example, an employer might reserve light-duty jobs for employees injured on the job. Many courts recognize that employers can treat workers' compensation injuries differently, primarily because of the sense of responsibility and obligation to an employee injured on the employer's premises. This may be one legitimate, non-discriminatory reason sufficient to justify special treatment of a subset of non-pregnant workers. Justice Alito's concurring opinion provides support for this argument. Time will tell.

Young dealt the EEOC's Guidance a significant blow. The Guidance, which supported Young's view of the PDA, was not accorded special or controlling weight, as Young and the Solicitor General urged. It is generally prudent for employers to be cognizant of the EEOC's enforcement position, but they should weigh the risks and benefits of strict adherence to any particular guidance. In this case, however, the Guidance's impact is nullified to the extent it conflicts with the Court's interpretation of the PDA. One caveat, of course, is that the EEOC will continue to be aggressive in eradicating pregnancy discrimination so it should top the list of employer objectives as well.

The Young court acknowledged that Young's claim arose before the ADA Amendments Act (ADAAA). Young's impact is limited when a pregnant employee can establish an ADAAA disability. Although pregnancy alone is normally not a disability, it can be where complications arise. Under the ADAAA, a temporary condition such as pregnancy can be a disability where it interferes with a major life function, such as the weight-lifting restrictions that were imposed on Young (see Disability Definition under the ADA and ADAAA Comparison Chart). Therefore, to the extent a pregnant employee is disabled under the ADAAA, she may be entitled to an accommodation even if she would not be under Young. In that sense, a reasonable accommodation under the ADA may grant pregnant employees "most favored nation" status, even though they are not entitled to that status under the PDA. The Young analysis is triggered when the pregnant employee does not have a disability under the ADAAA, and the employer treats non-disabled, non-pregnant workers differently than pregnant workers.

For employers that maintain policies or programs with benefits that are not available to pregnant workers, the Young case presents a challenge. Litigation examining the employer's justification for a policy in terms of the burden on pregnant workers likely will occur. Under the new balancing test, pregnant employees may have another avenue that allows them to reach a jury on an accommodation claim, even if the employer has demonstrated legitimate nondiscriminatory reasons for its policies.

Now is a good time for companies to examine their risks. After Young, actions an employer might consider taking include: