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Walmart Pregnancy Accommodation Win in EEOC Lawsuit Upheld (1)

Aug. 16, 2022, 3:19 PM

Wal-Mart Stores East LP convinced the Seventh Circuit on Tuesday that its temporary light duty policy lawfully only covered workers injured on the job, and didn’t illegally exclude pregnant employees.

The Equal Employment Opportunity Commission, which sued on behalf of female employees at a Walmart distribution center in Wisconsin, didn’t show that any non-pregnant workers who were similar to pregnant women in their ability or inability to work, including those injured outside of the workplace, were accommodated with light duty, the court said.

The EEOC was wrong that the retailer needed to specifically explain why pregnancy was excluded under its temporary alternate duty policy, not just why the policy was limited to those hurt while working, the US Court of Appeals for the Seventh Circuit said.

According to Walmart, the policy was limited to workers injured on the job to help reduce its costs and exposure under state workers’ compensation law, to build employee morale, and for related purposes. That’s enough under the test the U.S. Supreme Court established in 2015 in Young v. United Parcel Service Inc. for assessing pregnancy accommodation claims, Judge David F. Hamilton said.

He rejected the EEOC’s argument that employers must meet a heightened burden of production at step two of the modified proof scheme laid out in Young.

The Second Circuit previously held that compliance with state workers’ compensation requirements is an adequate justification at Young’s second step, the judge said. “We agree,” he said.

Young expressly stated that the Pregnancy Discrimination Act doesn’t give pregnancy “most-favored nation status” in the workplace, the judge said.

The policy also excluded all other employees who weren’t hurt on the job but who, like those with on-the-job injuries and pregnant employees, were limited in their ability to work, Hamilton said. That wasn’t true in Young, which was the reason why the Supreme Court vacated summary judgment for the employer in that case, Hamilton said.

Without evidence that pregnant workers were treated unfavorably compared to any workers similar in their ability or inability to work, the EEOC couldn’t meet its burden at step three of Young’s proof scheme, the Seventh Circuit said.

The court also rejected the EEOC’s contention that two of the women for whom it sought to sue were improperly excluded from the case as a discovery sanction.

The district court assented to the agency’s request to control the production of the medical records for all women on whose behalf it sued, yet it failed to meet the discovery deadlines for those two workers despite warnings, Hamilton said. Dismissing allegations relating to those two women as a discovery sanction “was strong medicine but reasonable under the circumstances,” he said.

The EEOC likewise failed to show it was wrongly denied additional discovery, including regarding Walmart’s decision to later change the temporary alternate duty policy to make pregnant workers eligible for temporary light duty, Hamilton said.

Judges Daniel A. Manion and Michael B. Brennan joined the opinion.

EEOC attorneys in Washington represented the commission. King & Spalding LLP represented Walmart.

The case is EEOC v. Wal-Mart Stores East, LP, 7th Cir., No. 21-01690, 8/16/22.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Carmen Castro-Pagán at ccastro-pagan@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com