Case Name: Noreen HULTEEN; Eleanora Collet; Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 2007-08-17
Citations: 498 F.3d 1001
Docket Number: No. 04-16087
Parties: Noreen HULTEEN; Eleanora Collet; Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant.
Judges: Before: MARY M. SCHROEDER, Chief Circuit Judge, STEPHEN REINHARDT, DIARMUID F. O’SCANNLAIN, PAMELA ANN RYMER, HAWKINS, SUSAN P. GRABER, M. MARGARET McKEOWN, KIM McLANE WARDLAW, W. FLETCHER, RAYMOND C. FISHER, RONALD M. GOULD, RICHARD A. PAEZ, MARSHA S. BERZON, JAY S. BYBEE, and CONSUELO M. CALLAHAN, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 498
Pages: 1001–1031

Head Matter:
Noreen HULTEEN; Eleanora Collet; Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant.
No. 04-16087.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted En Banc Oct. 4, 2006.
Filed Aug. 17, 2007.
Joseph R. Guerra, Sidley Austin Brown & Wood, Washington, District of Columbia, for the defendant-appellant.
Henry S. Hewitt, Erickson, Beasley & Hewitt, Oakland, CA, and Blythe Mickel-son and M. Suzanne Murphy, Weinberg, Roger & Rosenfeld, Oakland, CA, Judith E. Kurtz, Law Offices of Judith E. Kurtz, San Francisco, CA, Mary K. O’Melveny, Communications Workers of America, AFL-CIO, Washington, DC, Noreen Farrell, Equal Rights Advocates, San Francisco, CA, for the plaintiffs-appellees.
Paul D. Ramshaw, Equal Employment Opportunity Commission, Washington, District of Columbia, amicus curiae.
Before: MARY M. SCHROEDER, Chief Circuit Judge, STEPHEN REINHARDT, DIARMUID F. O’SCANNLAIN, PAMELA ANN RYMER, HAWKINS, SUSAN P. GRABER, M. MARGARET McKEOWN, KIM McLANE WARDLAW, W. FLETCHER, RAYMOND C. FISHER, RONALD M. GOULD, RICHARD A. PAEZ, MARSHA S. BERZON, JAY S. BYBEE, and CONSUELO M. CALLAHAN, Circuit Judges.

Opinion:
WARDLAW, Circuit Judge,
with whom Chief Judge SCHROEDER, Judges REINHARDT, HAWKINS, GRABER, McKEOWN, WILLIAM A. FLETCHER, FISHER, GOULD, PAEZ, BERZON join, and with whom Judge RYMER joins as to Part II-B:
This appeal presents an issue previously decided on virtually identical facts sixteen years ago in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir.1991), cert. denied, 502 U.S. 1050, 112 S.Ct. 916, 116 L.Ed.2d 815 (1992). There, we held that Pacific Bell violated Title VII in calculating retirement benefits after the effective date of the Pregnancy Discrimination Act of 1978 ("PDA"), 42 U.S.C. § 2000e(k), when it gave service credit in those calculations for all pre-PDA temporary disability leave taken by employees except leave by reason of pregnancy. Pallas, 940 F.2d at 1326-27. Here, a three-judge panel of our court, in a now-withdrawn opinion, held that AT & T Corporation ("AT & T"), successor in interest to Pacific Bell and Pacific Telephone and Telegraph ("PT & T"), did not violate Title VII by engaging in identical conduct. The panel reasoned that Pallas no longer controlled because it was inconsistent with intervening Supreme Court authority governing retroactivity principles. Hulteen v. AT & T Corp., 441 F.3d 653, 664 (9th Cir.2006) (citing Landgraf v. USI Film Prods., 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994)). Because we conclude that Pallas is not "clearly irreconcilable" with intervening authority, see Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.2003) (en banc), we affirm the district court's application of Pallas to the undisputed facts presented here and its award of summary judgment against AT & T. We further hold that our conclusion in Pallas that calculation of service credit excluding time spent on pregnancy leave violates Title VII was, and is, correct.
I
Noreen Hulteen, Eleanora Collet, Linda Porter, Elizabeth Snyder and the Communications Workers of America, AFLCIO (collectively "Hulteen"), brought this suit to challenge AT & T's use of a facially discriminatory service credit policy to calculate employee pension and retirement benefits. Each of the individual plaintiffs took pregnancy leave between 1968 and 1976. They would have enjoyed more favorable benefits or retirement opportunities had they, at the time that they parted from AT & T, been given full service credit for their pre-PDA pregnancy leaves.
Congress passed the PDA in 1978. Amendments to the Civil Rights Act of 1964, Pub.L. No. 95-555, § 995, 92 Stat. 2076 (1978). The PDA clarified that Title VII prohibits discrimination "because of or on the basis of pregnancy, child-birth, or related medical conditions," as discrimination "because of sex." 42 U.S.C. § 2000e(k). The PDA further provides that "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work." Id. Thus, Title VII, as amended by the PDA, requires employers to accord women who take pregnancy leave the same benefits as employees who take other types of temporary disability leave.
From as early as 1914, AT & T, along with its predecessor companies PT & T and Pacific Bell, has used a Net Credited Service ("NCS") date to calculate employee benefits, including eligibility for early retirement and pension payment amounts. The NCS date is an employee's original hire date, adjusted forward in time for periods during which no service credit accrued. An earlier NCS date places an employee in a superior position for service-related determinations such as job bidding, vacation time and retirement benefits.
Before August 7, 1977, AT & T and its predecessor companies classified pregnancy leave as personal leave. An employee on personal leave received a maximum of thirty days NCS credit, whereas there was no limit on the amount of NCS credit for employees on temporary disability leave. Also, during that time, some female employees were forced to take pregnancy leave before the onset of pregnancy disability, even though other employees who anticipated a temporary disability could delay their leave until the onset of the disability. Employees on pregnancy leave who subsequently became temporarily disabled for reasons unrelated to pregnancy were ineligible for NCS credit beyond the thirty-day personal leave credit. By con trast, employees on temporary disability leave who suffered a new disability were eligible for NCS credit for the entire leave.
On August 7, 1977, PT & T adopted the Maternity Payment Plan ("MPP"). The MPP extended the maximum pregnancy NCS credit to thirty days before delivery and a maximum of six weeks after delivery. The MPP also allowed pregnant employees to work until the onset of the pregnancy disability. On April 29, 1979, the effective date of the PDA, PT & T adopted the Anticipated Disability Plan ("ADP"). The ADP replaced the MPP and provided service credit for pregnancy leave on the same terms as other temporary disability leave. No service credit adjustments or changes to the NCS date were made for female employees who had taken pregnancy leave under either the MPP or the pre-1977 system. In 1984, ownership of PT & T was transferred to AT & T. The NCS credit calculation method described above remains in force at AT & T, notwithstanding AT & T's operations within the Ninth Circuit and our controlling decision in Pallas.
Noreen Hulteen retired involuntarily in 1994 as part of an AT & T reduction in force. She has 210 days of uncredited pregnancy leave that resulted in reduced pension benefits. Eleanora Col-let retired voluntarily under an incentive program in 1998 with 261 days of uncredited pregnancy leave. Linda Porter is a current employee with seventy-three uncredited days from pregnancy leave and forced leave before the onset of her pregnancy disability. Elizabeth Snyder terminated her employment voluntarily in 2000, and has sixty-seven days of uncredited pregnancy and unrelated temporary disability occurring during her pregnancy leave. The AT & T plan administrator, in 2000, authorized a credit for Snyder's first thirty days of her 1974 pregnancy leave "as was the policy at the time," changing her NCS date from July 29, 1966 to June 29, 1966.
Between 1994 and 2002, each woman filed a charge with the United States Equal Employment Opportunity Commission ("EEOC"). CWA likewise filed a charge of discrimination with the EEOC on behalf of its bargaining unit employees. The EEOC issued a Letter of Determination finding reasonable cause to believe that AT & T had discriminated against Noreen Hulteen "and a class of other similarly-situated female employees whose adjusted [NCS] date has been used to determine eligibility for a service or disability pension, the amount of pension benefits, and eligibility for certain other benefits and programs, including early retirement offerings." The EEOC also issued a No tice of Right to Sue to each of the four named plaintiffs and CWA.
Hulteen brought suit, alleging, inter alia, that AT & T violated Title VII in its calculation of NCS credit. On cross-motions for summary judgment, the parties stipulated to all of the material facts. Applying Pallas, the district court granted Hulteen's motion for summary judgment on the Title VII claim. AT & T timely appealed, and on March 8, 2006, a panel of our court reversed the district court, holding that Pallas gave "the PDA impermissible retroactive effect under controlling law today." Hulteen, 441 F.3d at 655. Judge Rymer dissented, arguing that because there appears to be "no acceptable basis . to overrule Pallas, and AT & T offers no reason for distinguishing it, . Pallas remains binding and controls disposition of this case." Id. at 670. A majority of the active judges of this court voted in favor of rehearing en banc. We consider the appeal anew.
II
We review de novo the district court's grant of summary judgment. Qwest Commc'ns, Inc. v. City of Berkeley, 433 F.3d 1253, 1256 (9th Cir.2006). "We must determine, viewing the evidence in the light most favorable to[AT & T], the non-moving party, whether . the district court correctly applied the substantive law." Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004).
A
The district court correctly held that our decision in Pallas compels the conclusion that AT & T violated Title VII by failing to credit pre-PDA pregnancy leave when it calculated benefits owed Hulteen. Lana Pallas was a former Pacific Bell employee who took pregnancy leave before the PDA was enacted. Pallas, 940 F.2d at 1325. "In 1987, Pacific Bell instituted a new retirement benefit for management employees called the 'Early Retirement Opportunity.' " Id. at 1326. To qualify for the benefit, an eligible employee had to accrue twenty years of service as measured by the same NCS system applied to Hulteen. Id. Pallas was denied eligibility because a pregnancy-related leave taken in 1972 deprived her of the necessary amount of service credit by some three or four days. Id.
The district court dismissed Pallas's Title VII sex discrimination claim for failure to state a claim, and we reversed. In doing so, we criticized reliance on the Supreme Court's decisions holding that challenges based on disparate impacts resulting from a facially neutral bona fide seniority system must be brought during a limitations period running from the date the system was adopted. Id. at 1326-27(citing Lorance v. AT & T Techs., Inc., 490 U.S. 900, 911, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989) (holding that "when a seniority system is nondiserimi-natory in form and application, it is the allegedly discriminatory adoption which triggers the limitations period") (emphasis in original), and United Air Lines, Inc. v. Evans, 431 U.S. 553, 557-58, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977) ).
We found Lorance and Evans inapposite for two reasons. First, because the discriminatory program that gave rise to the lawsuit was instituted in 1987, Pallas's claim "could not have been brought earlier." Id.
Second, we concluded that, unlike the facially neutral seniority credit policy in Evans,
the net credit system used to calculate eligibility under the Early Retirement Opportunity is not facially neutral. The system used to determine eligibility facially discriminates against pregnant women. The system distinguishes between similarly situated employees: female employees who took leave prior to 1979 due to a pregnancy-related disability and employees who took leave prior to 1979 for other temporary disabilities.
Id. at 1327. We therefore held, relying on Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986), that Pacific Bell's decision to discriminate against Pallas in 1987 was actionable because "liability may be imposed" for a pre-Title VII discriminatory policy to the extent it is perpetuated in post-Title VII employment decisions. Pallas, 940 F.2d at 1327(citing Bazemore, 478 U.S. at 395, 106 S.Ct. 3000(Brennan, J., joined by all other Members of the Court, concurring in part) ("Each week's paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII.")).
The Court recently reaffirmed Bazemore in Ledbetter v. Goodyear Tire & Rubber Co., — U.S. -, 127 S.Ct. 2162, 2172-74, 167 L.Ed.2d 982 (2007). The Court distinguished Bazemore on the basis of Ledbetter's failure to show that her disparate treatment was the result of intentional discrimination during the charging period. Id. at 2174. The Court reiterated that "a freestanding violation may always be charged within its own charging period regardless of its connection to other violations." Id. It explained Bazemore as holding:
when an employer adopts a facially discriminatory pay structure that puts some employees on a lower scale because of race, the employer engages in intentional discrimination whenever it issues a check to one of these disfavored employees. An employer that adopts and intentionally retains such a pay structure can surely be regarded as intending to discriminate on the basis of race as long as the structure is used.
Id. at 2173. Pallas is true to Bazemore and Ledbetter: Pacific Bell adopted a policy that calculates pregnancy leave differently than other temporary disability leave, and it engages in intentional discrimination each time it applies the policy in a benefits calculation for an employee affected by pregnancy, even if the pregnancy occurred before the enactment of the PDA. 940 F.2d at 1327; accord Ledbetter, 127 S.Ct. at 2173; Bazemore, 478 U.S. at 395, 106 S.Ct. 3000.
In Pallas, we did not address whether the PDA had retroactive effect because Pallas's complaint alleged that a post-PDA determination — the calculation of benefits after the PDA was enacted — discriminated against women on the basis of their pre-PDA pregnancy leaves.
B
AT & T admits that under Pallas its current conduct in calculating retirement benefits excluding pre-PDA pregnancy leave violates Title VII. AT & T argued to our three-judge panel that Landgraf worked a "sea-change" in retroactivity principles. Thus, AT & T continued, Landgraf is intervening authority with which the decision in Pallas is "clearly irreconcilable," a retroactivity argument the panel majority embraced. However, as Judge Rymer's dissenting opinion ably points out, AT & T's Landgraf argument fails. We adopt Judge Rymer's reasoning:
[We] read Landgraf as refining, rather than sea-changing, the landscape[,] for the Court explicitly drew upon Justice Story's "influential definition" of retroac-tivity in Society for Propagation of the Gospel v. Wheeler, 22 F. Cas. 756, 766-69 (1814), to make clear how courts should determine whether a statute operates retroactively:
A statute does not operate "retrospectively" merely because it is applied in a case arising from conduct antedating the statute's enactment, or upsets expectations based in prior law. Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment. The conclusion that a particular rule operates "retroactively" comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event.
When a case implicates a federal statute enacted after the events in suit, the court's first task is to determine whether Congress has expressly prescribed the statute's reach. If Congress has done so, of course, there is no need to resort to judicial default rules. When, however, the statute contains no such express command, the court must determine whether the new statute would have retroactive effect, ie., whether it would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed. If the statute would operate retroactively, our traditional presumption teaches that it does not govern absent clear congressional intent favoring such a result.
Landgraf, 511 U.S. at 268, 269-70, 280 [114 S.Ct. 1483, 128 L.Ed.2d 229](internal citations omitted).
[We] do not believe that the reasoning or theory of Pallas is so irreconcilable with the reasoning or theory of Land-graf as to give [a three-judge] panel license to overrule it. Pallas held that the actionable conduct was PT & T's decision to discriminate against the employee on the basis of pregnancy when she applied for, and was denied, early retirement. The decision to deny benefits was made in the post-PDA world. As we emphasized in United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810 (9th Cir.1995), if "the law changes the legal consequences of conduct that takes place after the law goes into effect, the law operates on that conduct prospectively." Id. at 814. This being the case, and assuming (without deciding) that Congress intended the PDA to have prospective effect only, Pallas was premised on a discrete act — the decision to deny a retirement benefit — that gave rise to a current violation of the PDA. Given Pallas's finding of a current violation, the Act operated prospectively on that decision.
Hulteen, 441 F.3d at 666-67 (Rymer, J., dissenting).
Nor do we agree with AT & T's companion argument that Lockheed Corp. v. Spink, 517 U.S. 882, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996), rev'g 60 F.3d 616 (9th Cir.1995), a post-Landgraf decision, demonstrates that Pallas gave retroactive effect to the PDA. Again, we adopt Judge Rymer's analysis:
Spink involved 1986 amendments to the Age Discrimination in Employment Act of 1967, 29 U.S.C. § [§ ] 621, 623(i)(l), and the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1054(b)(1)(i), that prohibited employers from excluding new employees over age 60 from participating in their retirement plans. Spink had worked for Lockheed between 1939 and 1950, and began working there again in 1979 at the age of 61. He was excluded by Lockheed's retirement plan because he was over 60. After the 1986 amendments, Spink was allowed to participate in the plan, but was not credited with accrued benefits based on his years of service with Lockheed prior to the amendments' effective date. Spink sued. We held that denying credited service years that an older employee would otherwise have accumulated was unlawful under the amendments. In so doing, we observed that, "[t]o the extent our interpretation requires employers to include pre-enactment service years in calculating accrued benefits, it applies retroactively." 60 F.3d at 620, n. 1. AT & T seizes upon this remark to maintain that when the Supreme Court reversed our conclusion that Congress intended the statute to have retroactive effect, it necessarily agreed that requiring employers to include pre-enactment service in calculating accrued benefits was a retroactive application. [We] cannot read so much into the Spink opinions. Our observation in Spink I did not affect our ultimate decision in that case because the decision was "based on the retroactive intent of the statute manifested in its text." Id. The Supreme Court simply disagreed with our construction of the statute. Thus, its analysis' — like ours — was limited to Land-grafs first step.
Hulteen, 441 F.3d at 667-68 (Rymer, J., dissenting).
Thus, Landgraf and Spink do not implicate, much less contradict, the twin holdings of Pallas that the NCS system is facially discriminatory and that the post-PDA decision as to Pallas's eligibility is the relevant, actionable discriminatory employment practice.
AT & T also asserts incorrectly that Pallas must be overruled because it relied upon the "continuing violation" doctrine abrogated in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 114-15, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002) (holding an employee can only recover for discrete discriminatory acts that occur within the statutory filing period). As Judge Rymer explained:
Neither the reasoning nor theory of Morgan is irreconcilable with Pallas. Pallas held that the NCS system is facially discriminatory, an issue that was not presented in Morgan. Morgan sought damages, which Pallas did not. Further, Morgan proceeded on the basis of a continuing violation, whereas Pallas relied upon PT & T's decision to deny benefits as the discrete act that was actionable. As the Pallas court saw it, this was a current violation, not a continuing one.
Hulteen, 441 F.3d at 668 (Rymer, J., dissenting). Morgan is also inapposite because, as in Pallas, it is undisputed here that the charges were filed with the EEOC within the statutory filing period after the denial of retirement benefits.
Moreover, our decision in Pallas is consistent with Morgan's, holding that "[t]he existence of past acts . does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed." Morgan, 536 U.S. at 113, 122 S.Ct. 2061. In Morgan, the Court listed "termination, failure to promote, denial of transfer, or refusal to hire" as examples of employment decisions that are discrete acts, and explained that each one, if decided in a discriminatory fashion, "constitutes a separate actionable 'unlawful employment practice.' " Id. at 114, 122 S.Ct. 2061; see also Ledbetter, 127 S.Ct. at 2169(ex-plaining "if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed"). While Pacific Bell may have used unlawful calculations in many prior employment decisions, its denial of early retirement was a discrete independent act. See Pallas, 940 F.2d at 1327. Because Pallas timely filed a charge, the existence of past acts would not bar her (or here, Hulteen's) suit under Morgan or Ledbetter.
A three-judge panel must follow a prior circuit decision unless a subsequent decision by a relevant court of last resort either effectively overrules the decision in a case "closely on point" or undercuts the reasoning underlying the circuit precedent rendering the cases "clearly irreconcilable." Miller, 335 F.3d at 899-900. Be cause Pallas is not irreconcilable with Landgraf, Spink or Morgan, it is well-settled law that the panel was required to either follow Pallas or make a sua sponte en banc call. See, e.g., In re Complaint of Ross Island Sand & Gravel v. Matson, 226 F.3d 1015, 1018(9th Cir.2000) (per curiam) ("[AJbsent a rehearing en banc, we are without authority to overrule [controlling circuit precedent].").
"[T]he important doctrine of stare deci-sis . permits society to presume that bedrock principles are founded in the law rather than in the proclivities of individuals, and thereby contributes to the integrity of our constitutional system of government, both in appearance and in fact." Vasquez v. Hillery, 474 U.S. 254, 265-66, 106 S.Ct. 617, 88 L.Ed.2d 598 (1986). "[T]he labor of judges would be increased almost to the breaking point if every past decision could be reopened in every case." BENJAMIN N. CARDOZO, The Nature of the Judicial Prooess 149(Yale Univ. Press 1960). The danger we create when we depart lightly from our precedent is underscored by AT & T's admission here, that even sixteen years after Pallas was decided, it continues to operate its NCS system in a discriminatory fashion because of "its belief that the PDA does not apply retroactively" and "in order to preserve its ability to litigate the issue in its own right." AT & T's litigation position rests on the assumption that our precedent can be ignored. Because it cannot, we affirm the district court's summary judgment in favor of Hulteen.
III
A plain reading of Title VII supports the legal conclusion reached in Pallas. By passing the PDA, Congress clarified that discrimination "because of sex" under Title VII included discrimination "because of or on the basis of pregnancy, childbirth, or related medical conditions." 42 U.S.C. § 2000e(k). It further added the requirement that employers treat "women affected by pregnancy . the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work." Id.
In interpreting this additional requirement, we must begin with the text of the statute. Where congressional intent "has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 570, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982) (internal quotation omitted). And when "the meaning of the words seems to us to be intelligible upon a simple reading, . we shall spend no time upon generalities concerning the principles of [statutory] interpretation." United States v. M.H. Pulaski Co., 243 U.S. 97, 106, 37 S.Ct. 346, 61 L.Ed. 617 (1917).
The ordinary meaning of "affected" is "[a]cted upon, influenced, or changed." The American Heritage Dictionary of the English Language 28 (4th ed.2000); see also Black's Law Dictionary 62 (8th ed.2004) (defining "affect" as "[m]ost generally, to produce an effect on; to influence in some way"). Applying the ordinary meaning of the term "affected" here leads to the conclusion that although Hulteen was affected by pregnancy when she took pregnancy leave, she was again "affected by pregnancy" when AT & T calculated her retirement benefits in 1994, deliberately choosing to use an NCS date that would deprive her of benefits received by those who were not "affected by pregnancy" by excluding her earlier pregnancy leave from the later calculation of benefits. It was well within AT & T's ability and control to calculate Hulteen's benefits in 1994 giving her service credit for the time she spent on pregnancy leave, and to thus avoid violating the PDA. AT & T simply chose to continue its systematic discrimination against women, based on pregnancy, even after Congress made it illegal.
In 1991, Congress amended the Civil Rights Act to make it clear, if Pallas had not already done so, that an employer who adopts a seniority system for an intentionally discriminatory purpose commits an unlawful employment practice "when the seniority system is adopted, when an individual becomes subject to the seniority system, or when a person aggrieved is injured by the application of the seniority system or provision of the system." Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071, 1078-79(Nov. 21, 1991). Congress thus clarified that injury occurs at the time that the seniority system is applied to the aggrieved party because that is when the employee is actually harmed by the deprivation of benefits. See 42 U.S.C. § 2000e-5(e)(2). As the House Report accompanying the amendment noted, this amendment was intended to "overrule[ ] Lorance and permit[ ] person[s] to challenge discriminatory employment practices when those practices actually harm them." H.R. Rep. No. 102-40, pt. II, at 3 (1991), reprinted in 1991 U.S.C.C.A.N. 694, 695. Congress was concerned that, "[tjaken to its logical conclusion, the Lorance rule would bar all challenges to present day applications of discriminatory practices in existence when Title VII became law since, under the Lorance rule, the deadline for a timely charge would have expired before Title VII became effective." Id. at 23, reprinted in 1991 U.S.C.C.A.N. 694, 716. The Supreme Court recently acknowledged that this amendment was targeted at Lorance and designed to "allow[] Title VII liability [to arise] from an intentionally discriminatory seniority system both at the time of its adoption and at the time of its application." Ledbetter, 127 S.Ct. at 2169 n. 2.
AT & T applied its discriminatory seniority system to Hulteen in 1994, causing her to be deprived of early retirement benefits and thus injuring her. AT & T never asserted that it could not credit Hulteen with pregnancy leave when it denied and/or calculated her benefits. Indeed, AT & T and Hulteen stipulated not only to the number of days each plaintiff was penalized within the charging period for past pregnancies but also to AT & T's ability to add service credit to an employee's length of service. Instead of engaging in its discriminatory calculation and defending the EEOC charge and this litigation, AT & T could have simply credited the applicable number of days to each plaintiffs NCS date when it calculated her benefits.
AT & T, in fact, credited plaintiff Elizabeth Snyder thirty days from her 1974 pregnancy leave in 2000. In a March 1, 2000 letter, Pension Plan Administrator Michael L. Brown stated:
In preparing your claim for service credit for the period of your maternity leave of absence for review by the Employees' Benefit Committee, it was determined that you were not given service credit for the first 30 calendar days of your leave (as was the policy at the time). Therefore, I have authorized the Pension Service Center to adjust your Net Credited Service date by 30 days.
The Pension Service Center, on March 29, 2000, notified Snyder that "[ajfter a careful review of [her] service record history," her NCS date had been adjusted from July 29, 1966 to June 29, 1966. These letters demonstrate that in its determination of benefits, AT & T does not simply rely on pre-PDA NCS calculations. Rather, when AT & T determines benefits eligibility, it reviews an employee's entire work history and affirmatively chooses to apply "the policy at the time" that the leave occurred. Any assertion that the violations here are continuing effects of pre-PDA discrimination and thus "unfortunate event[s] in history which [have] no present legal consequences" is belied by this record. Ledbetter, 127 S.Ct. at 2168 (quoting Evans, 431 U.S. at 558, 97 S.Ct. 1885). That AT & T's practice of applying the discriminatory pre-PDA policies constitutes a separate and actionable act of discrimination is "too obvious to warrant extended discussion." Ledbetter, 127 S.Ct. at 2173 (quoting Bazemore, 478 U.S. at 395, 106 S.Ct. 3000).
AT & T asks us, sitting en banc, to overrule Pallas and follow the Seventh Circuit's approach in Ameritech Benefit Plan Committee v. Communication Workers of America, 220 F.3d 814 (7th Cir.2000). We decline to do so. The Seventh Circuit's analysis in Ameritech is problematic because, although it mentioned the Civil Rights Act of 1991, it failed to actually apply it.
In Ameritech, the Seventh Circuit considered a claim nearly identical to Pal-las's and Hulteen's made by two women who filed a charge with the EEOC when, due to an NCS system that, like Pacific Bell's and AT & T's here, failed to credit time spent on pregnancy leave, they were denied early retirement benefits in 1994. Id. at 817-18. The Seventh Circuit found that Ameritech's NCS system was a seniority system because it calculated "relative lengths of employment." Id. at 823(citing Cal. Brewers Ass'n v. Bryant, 444 U.S. 598, 606, 100 S.Ct. 814, 63 L.Ed.2d 55 (1980)). It next incorrectly concluded that the time of injury provisions of § 2000e-5(e)(2) were inapplicable because the plaintiffs failed to "show the kind of intentional discrimination that would trigger [this] exception to the statutory protection afforded to [bona fide] seniority systems[under 42 U.S.C. § 2000e-2(h) ]." Id. However, as we explained in Pallas, the NCS system "facially discriminates against pregnant women [because it] distinguishes between similarly situated employees." 940 F.2d at 1327. Facial discrimination is "by its very terms" intentional discrimination. Lovell v. Chandler, 303 F.3d 1039, 1057 (9th Cir.2002); see also UAW v. Johnson Controls, Inc., 499 U.S. 187, 199, 111 S.Ct. 1196, 113 L.Ed.2d 158 (1991) (holding "the absence of a malevolent motive does not convert a facially discriminatory policy into a neutral policy with a discriminatory effect"). The Seventh Circuit should have applied § 2000e-5(e)(2) to the Ameritech facts, which would have led it to the ineluctable conclusion that Ameritech had committed an unfair employment practice in 1994 when it denied early retirement benefits.
The Seventh Circuit compounded its error by also concluding that the system was immunized from challenge as an unlawful employment practice by 42 U.S.C. § 2000e-2(h), because a seniority system that perpetuates pre-PDA discrimination can nevertheless be a bona fide system, id. at 823(citing IBT, 431 U.S. at 352-53, 97 S.Ct. 1843), and thus nonactionable under § 2000e-2(h) of Title VII.
Section 2000e-2(h) provides:
Notwithstanding any other provision of this subchapter, it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, . provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin.... It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or eompen-sation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 206(d) of Title 29.
42 U.S.C. § 2000e-2(h). Under this section, unintentional discriminatory effects resulting from bona fide seniority systems are exempted from Title VII's definition of an unlawful employment practice. What the Seventh Circuit failed to note in Amer-itech is that the PDA, which was subsequently enacted to prohibit sex discrimination based on pregnancy, also expressly provides that "nothing in section 2000e-2(h) of this title shall be interpreted to permit otherwise." 42 U.S.C. § 2000e(k). Thus, the Ameritech decision runs contrary to this express legislative directive.
Neither the Supreme Court nor we have analyzed the interaction of these two Title VII provisions. By beginning § 2000e-2(h) with the phrase "[notwithstanding any other provision of this subchapter," Congress broadly exempted bona fide seniority systems from Title VII's coverage. However, in enacting the PDA in 1978, Congress could not have been more clear in expressing its intent to limit the scope of the bona fide seniority system exemption, when it stated that "nothing in section 2000e-2(h) of this title shall be interpreted to permit otherwise." 42 U.S.C. § 2000e(k). A later-enacted specific amendment, like the PDA, alters an earlier broad provision of the statute when the amendment states that it should control. See FDA v. Brown & Wil liamson Tobacco Corp., 529 U.S. 120, 143, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) ("The classic judicial task of reconciling many laws enacted over time, and getting them to make sense in combination, necessarily assumes that the implications of a statute may be altered by the implications of a later statute. This is particularly so where the scope of the earlier statute is broad but the subsequent statute[] more specifically address[es] the topic at hand.") (internal citation and quotations omitted); cf. Morton v. Mancari, 417 U.S. 535, 545-50, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974) (refusing to find an implied repeal of part of Title VII "in the absence of some affirmative showing of an intention to repeal"). We agree with the dissent that Congress knows how to specifically carve out exceptions in Title VII. See Dissent Op. at 1028-29. If Congress merely wanted to prevent the Bennett Amendment from being used to justify pregnancy-based discrimination, it could have tailored § 2000e(k)'s exception to cover only the Bennett Amendment instead of broadly excepting all of § 2000e-2(h).
Further, although Congress did not amend the text of § 2000e-2(h) in its 1978 amendments, it unequivocally expressed a policy that the bona fide seniority system exemption will not immunize employers from liability for seniority systems that discriminate based on pregnancy. " '[A] specific policy embodied in a later federal statute should control our construction of the [earlier] statute, even though it has not been expressly amended.' " Brown & Williamson Tobacco Corp., 529 U.S. at 143, 120 S.Ct. 1291 (second alteration in original) (quoting United States v. Estate of Romani, 523 U.S. 517, 530-31, 118 S.Ct. 1478, 140 L.Ed.2d 710 (1998)). The express text of, as well as the policy embodied in, the PDA thus preclude the application of § 2000e-2(h) in pregnancy discrimination suits under Title VII. Any argument predicated upon a supposed contrary legislative intent argument is thus irrelevant to the proper analysis. "[I]t is well-settled that 'reference to legislative history is inappropriate when the text of the statute is unambiguous.' " United States v. Sioux, 362 F.3d 1241, 1246 (9th Cir.2004) (quoting HUD v. Rucker, 535 U.S. 125, 132, 122 S.Ct. 1230, 152 L.Ed.2d 258 (2002)).
Therefore, the Seventh Circuit in Amer-itech misconstrued the PDA when it held that § 2000e-2(h) shielded Ameritech from liability for its facially discriminatory practices. We will not follow a decision that ignores a central provision of the PDA while purporting to apply it.
IY
The district court properly applied our decision in Pallas to conclude that AT & T's post-PDA benefits calculations violated the PDA. Pallas was, and remains, good law. We therefore affirm the district court's summary judgment in favor of Hulteen, Collet, Porter, Snyder and CWA on their Title VII sex discrimination claims.
AFFIRMED.
. We have jurisdiction to entertain Porter's claim even though the illegal employment action — her calculation of benefits — is yet to occur. When a plaintiff seeks declaratory and injunctive relief, as Porter has here, ripeness is evaluated by examining "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941); see also 42 U.S.C. § 2000e-5(g)(1) (If an employer "is intentionally engaging in an unlawful employment practice charged in the corn-plaint, the court may enjoin the [employer] from engaging in such unlawful employment practice."). Given AT & T's truculent refusal to credit employees for their pre-PDA pregnancy leave in its benefits calculations as it credits other disability leave (notwithstanding our decision in Pallas), Porter faces a real and immediate threat of AT & T making discriminatory employment decisions based on her NCS date.
. The remaining appellee, Communications Workers of America ("CWA"), is the collective bargaining representative for the majority of AT & T's non-management employees.
. Evans worked as a United Air Lines flight attendant for eighteen months, until she married in 1968 and was forced to resign pursuant to United's policy of prohibiting its female flight attendants from being married. 431 U.S. at 554, 97 S.Ct. 1885. While this policy was later found to violate Title VII, Evans was not a party to that suit. Id. at 554-55, 97 S.Ct. 1885. In 1972, four years after her resignation, United hired Evans as a new employee. Id. at 555, 97 S.Ct. 1885. Evans was not credited for her previous service pursuant to a new policy prohibiting prior seniority credit from being given to flight attendants, regardless of sex, if they resigned or their employment was "permanently severed for just cause." Id. at 555 n. 6, 97 S.Ct. 1885. Evans filed suit, seeking an award of seniority credit to 1966 and back pay lost because of United's discriminatory no marriage policy. Id. at 556 & n. 7, 97 S.Ct. 1885. The Court found United's 1972 policy was facially neutral because "both male and female employees who had service prior to February 1968, who resigned or were terminated . and who were later re-employed, also were treated as new employees receiving no seniority credit for their prior service." Id. at 557, 97 S.Ct. 1885. The Court held that the application of the facially neutral policy, which gives present effect to the past discriminatory act of forced resignation for married female flight attendants in 1968, was not actionable. Id. at 558, 97 S.Ct. 1885.
. Evans would be controlling if Pacific Bell credited neither pre-PDA pregnancy leave nor pre-PDA disability leave when it made its early retirement determinations in 1987. The dissent, by blurring the distinction between facially neutral and facially discriminatory employment policies, inappropriately relies on-Evims. See Dissent Op. at 1024-25.
. Ledbetter, as the Court's most recent pronouncement on Title VII, is relevant, but does not control this appeal. There, the Court considered whether an employee can recover for disparate pay received under a "facially nondiscriminatoiy and neutrally applied" policy, but which is the result of intentionally discriminatory pay decisions occurring outside the statutory filing period. 127 S.Ct. at 2174(quoting Lorance, 490 U.S. at 911, 109 S.Ct. 2261). Here, we are concerned with an employer who made benefits calculations during the statutory filing period and under a seniority system that intentionally discriminates against women affected by pregnancy.
. We reject as disingenuous AT & T's argument that Pallas "clearly upset the settled expectations" that it would not be required to credit pre-PDA pregnancy leave in the same manner as temporary disability leave when it made post-PDA retirement and pension decisions. Title VII, enacted in 1964, prohibited employers from discriminating on the basis of sex. 42 U.S.C. § 2000e-2(a)(1). Only one Supreme Court decision cast doubt on whether Title VII prohibited employers from discriminating on the basis of pregnancy: General Electric Co. v. Gilbert, 429 U.S. 125, 145-46, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976) (upholding a policy that denied coverage of pregnancy-related disabilities in its disability benefits plan). "When Congress amended Title VII in 1978, it unambiguously expressed its disapproval of both the holding and the reasoning of the Court in the Gilbert decision." Newport News Shipbldg. & Dry Dock Co. v. EEOC, 462 U.S. 669, 678, 103 S.Ct. 2622, 77 L.Ed.2d 89 (1983); see id. at 679, 103 S.Ct. 2622 (Many members of Congress "expressly agreed with the views of the dissenting Justices [in Gilbert']."). The PDA therefore did not alter Hulteen's or AT & T's rights or liabilities under Title VII, but corrected Gilbert's erroneous interpretation of Title VII. Id. at 678-79 & n. 17, 103 S.Ct. 2622. Thus, Pallas, decided in 1991, could not have upset AT & T's "settled expectations."
. AT & T also argues that Pallas should not be followed because it failed to cite and follow the purportedly controlling decision in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977) ("IBT"). AT & T argues that IBT forecloses Pallas's claim because the Court construed 42 U.S.C. § 2000e-2(h) as immunizing neutral seniority systems from challenge. Id. at 352-53, 97 S.Ct. 1843. We disagree. In Pallas, we cited Lorance which not only cited IBT, but also distinguished facially neutral from facially discriminatory seniority systems. Lorance, 490 U.S. at 905, 909, 911-12, 109 S.Ct. 2261. Pallas found the NCS system facially discriminatory because it treated similarly situated employees differently if the female employee took a pre-PDA pregnancy-related disability leave. Pallas, 940 F.2d at 1327.
. In Ameritech, decided nine years after Pal-las, the Seventh Circuit created an inter-circuit conflict over this issue without citing Pallas. Since then, the Eighth Circuit has rejected an analysis similar to that found in Ameritech. Cf. Maki v. Allete, Inc., 383 F.3d 740, 742-45 (8th Cir.2004) (holding that pension benefits calculated post-PDA using past discriminatory marriage and pregnancy policies violated Title VII, rejecting arguments that application of the PDA was impermissi-bly retroactive and timebarred because the discriminatory act occurred when the "pension benefits vested" and the "discriminatory provision . was applied to each plaintiff"). In Main, as in Pallas and here, the policy at issue was facially discriminatory. The dissent would have us disregard a well-reasoned decision by the Eighth Circuit in favor of the Seventh Circuit's Ameritech decision, which erroneously failed to apply the very legislation it purported to interpret. See Dissent Op. at 1019 n. 7.
. The statutory language, "[i]t shall not be an unlawful employment practice under this sub-chapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 206(d) of Title 29," is also known as the "Bennett Amendment."
. Section 2000e(k) post-dates Evans and IBT. Nor was it construed in any of the Supreme Court decisions concerning timeliness under Title VII. See Ledbetter, 127 S.Ct. at 2165-66 (sex-based salary discrimination); Morgan, 536 U.S. at 104, 122 S.Ct. 2061 (race discrimination); Lorance, 490 U.S. at 901-05, 109 S.Ct. 2261 (seniority policy that had a disparate impact on women unrelated to pregnancy); Bazemore, 478 U.S. at 387, 106 S.Ct. 3000 (race-based salary discrimination).
. The Sixth Circuit recently adopted part of Ameritech's analysis in Leffman v. Sprint Corp., 481 F.3d 428 (6th Cir.2007). Lehman was found ineligible for Special Early Retirement benefits in 2000 because of an uncredited pregnancy leave taken in 1976. Id. at 429. The court affirmed the district court's grant of summary judgment in favor of Sprint, relying on Evans, id. at 431-32, and Ameritech, id. at 433. The court failed to discuss the 1991 Civil Rights Amendments, however, and concluded that Leffman's claim was time-barred. Id. at 433(citing Sawchik v. E.I. DuPont Denemours & Co., 783 F.2d 635, 638 (6th Cir.1986)). The court made the same error as the Seventh Circuit in Ameritech, relying on § 2000e-2(h) without acknowledging that the PDA had carved out pregnancy discrimination from that exemption. Id. at 430-31. Finally, the court inexplicably justified its decision with the flawed conclusion that Sprint did not discriminate at all because it treated non-credited maternity leave like other non-credited leave. Id. at 433. This comparison was inapt because, in 1976, Sprint employees received credit for time spent on sick or disability leave for reasons other than pregnancy. The Leffman court missed the point that if Leffman had been allowed to take sick or disability leave for her 1976 pregnancy disability, she would have qualified for early retirement benefits in 2000 like other employees who received credited leave time when they were similarly unable to work for reasons other than pregnancy. See Leffman v. Sprint Corp., No. 3:04CV7222, 2006 WL 144549, at *1-2 (N.D.Ohio Jan.18, 2006). The dissent employs similarly faulty logic to conclude Hulteen cannot show intentional discrimination because AT & T's benefits calculation was made pursuant to her NCS date. See Dissent Op. at 1024. Like Leffman's, Hulteen's benefits would have been greater if AT & T had chosen when it calculated her retirement benefits post-PDA to treat her pre-PDA pregnancy leave the same as pre-PDA disability unrelated to pregnancy leave.