Oct. 25, 2022 – A company that offered light-duty assignments to workers injured on the job but not to pregnant workers did not violate a federal law prohibiting discrimination against pregnant workers, the U.S. Court of Appeals for the Seventh Circuit has ruled.

In EEOC v. Wal-Mart Stores East, L.P., No. 21-1690 (Aug. 16, 2022), a three-judge panel held that the employer’s light-duty assignment policy was a neutral and non-discriminatory way to provide an alternative to the state workers’ compensation system for workers injured on the job.

Light Duty Policy at Warehouse

Wal-Mart Stores East L.P. (Wal-Mart) operates a warehouse in Menominee. In 2014, Wal-Mart adopted a temporary alternate duty (TAD) policy.

Under the policy, the company offered light duty assignments to workers who were injured on the job, as way to allow them to keep working, earn full wages, and comply with medical restrictions instead of going through Wisconsin’s workers’ compensation system.

During the period at issue, Wal-Mart did not offer light duty assignments to workers whose doctors imposed physical restrictions because of pregnancy or off-the-job injuries. Instead, those workers had to take unpaid medical leave.

One employee, Evelynn Welch, pleaded with Wal-Mart to put her on a light-duty assignment. But her supervisor refused; he said granting her request would amount to favoritism.

Welch kept working until one day she began bleeding, and the fetal heart rate dropped. Welch eventually quit her job.

Lawsuit Alleges Sex Discrimination

The federal Equal Employment Opportunity Commission (EEOC) sued Wal-mart in the U.S. District Court for the Western District of Wisconsin in September 2018, on behalf of a class of pregnant workers at Wal-mart’s Menominee warehouse.

The EEOC claimed that Wal-Mart’s TAD policy violated the pregnant workers’ rights under Title VII of the Civil Rights Act of 1964 and the Pregnancy Discrimination Act.

Discovery was fiercely litigated, and the district court sanctioned the EEOC for violating discovery orders by dismissing the claims of two of the named complainants.

When the parties filed cross motions for summary judgment, the court granted Wal-Mart’s motion. The EEOC appealed.

Was Discrimination Intentional?

Writing for a three-judge panel, Judge David Hamilton noted that under the Pregnancy Discrimination Act, employers must treat pregnant workers the same as non-pregnant workers who have a similar ability or inability to work.

Under U.S. Supreme Court precedent, Young v. United Parcel Service, Inc., 575 U.S. 206, (1978), Hamilton explained, the question for the court of appeals was whether the nature of the TAD policy and the way in which it burdened pregnant workers showed that Wal-Mart had intentionally discriminated against pregnant workers.

Wal-Mart conceded that the EEOC had made a prima facie showing that: 1) the named complainants belonged to the class protected by the Pregnancy Discrimination Act and 2) had sought accommodations; and 3) Wal-Mart didn’t accommodate the complainants but 4) did accommodate other workers who had a similar inability to work.

Legitimate Purpose for Discrimination?

But Wal-Mart argued that it had a legitimate and non-discriminatory purpose for denying accommodation to the pregnant workers. Specifically, Wal-Mart argued that the TAD policy:

•          boosted the morale of injured workers;

•          allowed injured workers to remain productive by shrinking the time it took them to recover;

•          lowered the company’s cost, because it didn’t have to hire replacement workers; and

•          narrowed the company’s legal exposure because injured workers received their full wages from the company instead of reduced wages through the workers’ compensation system.

Judge Hamilton noted that the U.S. Court of Appeals for the Second Circuit had considered a challenge to a similar policy adopted by a county corrections agency, and held that “‘compliance with a state workers’ compensation scheme is a neutral reason for providing benefits to employees injured on the job but not pregnant employees.’”

That reasoning applied to Wal-Mart’s case, Hamilton concluded.

“Offering temporary light duty to workers injured on the job pursuant to a state workers’ compensation law is a ‘legitimate, nondiscriminatory’ justification for denying accommodations under the TAD Policy to everyone else, such as individuals not injured on the job, including pregnant women,” Judge Hamilton wrote.

‘A Long Stretch’

The EEOC argued that under the Pregnancy Discrimination Act, Wal-Mart must show more – it must also explain why it excluded pregnant workers from light duty assignments under the TAD policy.

The court of appeals disagreed.

“The second clause of the Act clarifies that pregnant women must ‘be treated the same’ as others ‘similar in their ability or inability to work,’ but it is a long stretch to say that this text requires a particular, heightened burden on employers in Young’s step two,” Hamilton wrote.

“From Wal-Mart’s standpoint, it has chosen for sound reasons to offer a benefit to a certain category of workers, those injured on the job, without intending to discriminate against anyone else with physical limitations, whether caused by off-the-job injuries, illness, pregnancy, or anything else, to whom its reasons don’t’ apply,” Judge Hamilton wrote.

Furthermore, Hamilton wrote, “the EEOC has not offered evidence of comparators who were similar to pregnant women in their ability or inability to work and who benefitted from light duty, other than workers injured on the job.”

‘Strong Medicine’

The appeals court held that the district court had not abused its discretion by dismissing two complainants from the lawsuit as a means of sanctioning EEOC for violating the court’s discovery orders.

Hamilton noted that the district court had warned the EEOC on several occasions that it would dismiss the two complainants if the EEOC did not timely provide copies of their medical records to Wal-Mart.

“The district court’s initial and measured responses to the EEOC’s failure were well within its discretion, as were the repeated and clear warnings that it would not indulge further delays,” Judge Hamilton wrote.

“The dismissal of [the two complainants] was strong medicine but reasonable under the circumstances.”