Hillesland v. Paccar, Inc.

722 P.2d 1239, 80 Or. App. 286

• Court: Court of Appeals of Oregon
• Decided: July 16, 1986
• Docket: A8303 01871; CA A32125
• Status: Published

Opinions

NEWMAN, J.

Plaintiff appeals a summary judgment for defendant, her employer, in this action for sex discrimination. 42 USC §2000 et seq (1982); ORS 659.030.¹ When defendant terminated plaintiff s employment on November 13, 1981, as part of a general lay-off, plaintiff was pregnant. She became aware of her pregnancy a few weeks later. The baby was born more than three months after the termination.

The facts are not in dispute. Defendant offered a health insurance policy to its employes which included basic hospital, surgical and major medical benefits. Plaintiff contributed to and was covered by the plan. Under the plan, employes and their dependents were reimbursed for 100 percent of the charges for basic medical benefits with the exception that wives of male employes were reimbursed for pregnancy-related charges at the rate of 80 percent of the customary charges.² The employes benefit handbook states:

“Pregnancy for female employees is covered the same as any other illness under the program.”

Under the plan an employe could not continue coverage after three months following termination. Benefits for dependents terminated at the same time as those for employes, except for pregnancy benefits for dependent spouses. The spouse of a male employe was covered for maternity expenses throughout her pregnancy, even if it extended for more than three months after her husband’s termination. The handbook states:

“Maternity benefits apply only to a pregnancy which begins while the coverage is in effect. Benefits will be extended for nine months following the end of the month in which employment terminates to cover a pregnancy beginning while the coverage was in force.”

Plaintiff participated in the three-month continuation of the medical plan and then sought medical benefits for her pregnancy from employer equal to those provided to wives of male employes under the plan. Employer rejected her claim. On March 19, 1982, plaintiff filed sex discrimination charges with the Oregon Bureau of Labor and the United States Equal Employment Opportunity Commission (EEOC). On August 19, 1982, the Bureau determined that there was substantial evidence of discrimination, but on January 18, 1983, it issued an amended determination, finding no substantial evidence of discrimination, and a “right to sue” letter. Plaintiff then brought this action, alleging discrimination because of sex under ORS 659.030(1) (b) and ORS 659.029 and under Title VII of the Civil Rights Act of 1964, 42 USC §2000 et seq and the Pregnancy Discrimination Act, 42 USC §2000e(k).

The parties filed cross-motions for summary judgment. The court denied plaintiffs motion and granted defendant’s, ruling that defendant had violated neither Title VII nor the Oregon statute, and entered judgment for defendant. The cross-motions for summary judgment raise the same issue. Although denial of a motion for summary judgment ordinarily is not reviewable, the two motions simply urge opposite contentions on a point of law based on undisputed facts, and reversal of the court’s order would result in affirmance of at least the legal basis for plaintiffs motion. Defendant cross-appeals, contending that the court erred when it denied its petition for attorney fees. On the appeal, we reverse; on the cross-appeal, we affirm.

Plaintiff argues that the package of benefits that a male employe receives is more advantageous than the package of benefits that a female employe receives, because a terminated male employe’s pregnant spouse may receive pregnancy benefits beyond the three months continuation of the health plan but a terminated female employe may not. Defendant argues, on the other hand, that plaintiff received medical benefits for pregnancy identical to those benefits given to male employes. Defendant relies on Newport News Shipbuilding & Dry Dock v. EEOC, supra n 2, and asserts that (1) benefits to a female employe may be different from those to a spouse of a male employe; and (2) plaintiff confuses discrimination between employes which the law forbids with discrimination between an employe and a non-employe spouse which, defendant asserts, the law allows.

In General Electric Co. v. Gilbert, 429 US 125, 97 S Ct 401, 50 L Ed 2d 343 (1976), the employer’s disability plan specifically excluded pregnancy-related disability from coverage. Female employes were denied disability benefits under the company’s disability plan when they were out of work due to pregnancy. The Supreme Court held that the pregnancy exclusion was not sex discrimination in violation of Title VII. To overrule that decision, Congress amended Title VII of the Civil Rights Act of 1964 and added the “Pregnancy Discrimination Act,” reading:

“The terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and 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, and nothing in section 2000e-2(h) of this title shall be interpreted to permit otherwise.” 42 USC §2000e(k).

In 1977, the legislature enacted ORS 659.029, modeled on subsection (k). It provides:

“For purposes of ORS 659.030, the phrase ‘because of sex’ includes, but is not limited to, because of pregnancy, childbirth and related medical conditions or occurrences. Women affected by pregnancy, childbirth or related medical conditions or occurrences shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefits programs, as other persons not so affected but similar in their ability or inability to work by reason of physical condition, and nothing in this section shall be interpreted to permit otherwise.”

In Newport News the employer’s health benefit plan provided the same hospitalization coverage for male and female employes for all medical conditions, except that it provided less hospitalization coverage for pregnancy to the spouse of a male employe than it provided to a female employe. The Court stated that Title VII forbids discrimination in compensation, terms, conditions or privileges of employment because of sex and that that includes health insurance for spouses of employes. It described the disparity in the plan as follows:

“[Employer’s] plan provides limited pregnancy-related benefits for employees’ wives, and affords more extensive coverage for employees’ spouses for all other medical conditions requiring hospitalization. Thus the husbands of female employees receive a specified level of hospitalization coverage for all conditions; the wives of male employees receive such coverage except for pregnancy-related conditions.” 462 US at 683. (Footnotes omitted.)

It concluded:

“Under the proper test, petitioner’s plan is unlawful, because the protection it affords to married male employees is less comprehensive than the protection it affords to married female employees.” 462 US at 676.

The Court rejected the employer’s contention that the prohibition of the law did not extend to discrimination against pregnant spouses of employes because the statute applies to discrimination in employment. The employer’s plan discriminated against male employes because of sex, under 42 USC §2000e(k), because it

“unlawfully gives male employees a benefit package for their dependents that is less inclusive than the dependency coverage provided to married female employees.

“There is no merit to petitioner’s argument that the prohibitions of Title VII do not extend to discrimination against pregnant spouses because the statute applies only to discrimination in employment. A two-step analysis demonstrates the fallacy in this contention. The Pregnancy Discrimination Act has now made clear that, for all Title VII purposes, discrimination based on a woman’s pregnancy is, on its face, discrimination because of her sex. And since the sex of the spouse is always the opposite of the sex of the employee, it follows inexorably that discrimination against female spouses in the provision of fringe benefits is also discrimination against male employees. Cf. Wengler v. Druggists Mutual Ins. Co., 446 U.S. 142, 147 (1980). By making clear that an employer could not discriminate on the basis of an employee’s pregnancy, Congress did not erase the original prohibition against discrimination on the basis of an employee’s sex.” 462 US at 684. (Emphasis supplied; footnote omitted.)

We find that defendant’s plan discriminates against plaintiff because of her sex, because the package of benefits she, as a married female employe, receives is less comprehensive than the package of benefits the married male employe receives. The latter’s wife, if pregnant at the time of his discharge, is covered for medical costs associated with that pregnancy for which plaintiff, pregnant at the time of her discharge, is not covered. The disparity results because defendant’s plan explicitly treats pregnancy of the male employe’s spouse differently from all other medical risks, including the risk of the female employe’s pregnancy, which is covered only for three months after discharge. The employer’s plan, therefore, gives married male employes a package of medical benefits that is more favorable than the package of medical benefits provided to married female employes. It singles out pregnancy as a covered risk in a manner that adversely affects female employes as against male employes and, therefore, discriminates against female employes because of sex under Title VII. See Newport News Shipbuilding. & Dry Dock v. EEOC, supra, 462 US at 685 n 26.³

Furthermore, an EEOC regulation clearly supports the conclusion that Title VII prohibits such discrimination. 29 CFR §1604.9(d) (1985) provides:

“It shall be an unlawful employment practice for an employer to make available benefits for the wives and families of male employees where the same benefits are not made available for the husbands and families of female employees; or to make available benefits for the wives of male employees which are not made available for female employees; or to make available benefits to the husbands of female employees which are not made available for male employees. An example of such an unlawful employment practice is a situation in which wives of male employees receive maternity benefits while female employees receive no such benefits.” (Emphasis supplied.)

That regulation, issued in 1975, predates the Pregnancy Discrimination Act, the regulations issued to implement it, 29 CFR §1604.10 (1985), and the decision in Newport News. Defendant argues that it is “outdated.” We disagree. EEOC has not modified or withdrawn it; it is still in effect. Moreover, it does not conflict with later regulations and is consistent with Newport News. Indeed, the Supreme Court cited this regulation, seemingly with approval, in Newport News, 462 US at 682 n 22. Accordingly, we hold that plaintiff is entitled to recover under Title VII.⁴

The dissent offers an alternative analysis of Newport News. It claims that the critical comparison is not between the relative benefit packages available to male and female employes, but rather between the relative benefits available to male and female dependent spouses. Although the dissent recognizes that defendant’s plan discriminates, it also argues that, because the discrimination is primarily against the male spouse of the female employe, the remedy sought by plaintiff is improper. Neither the court’s reasoning in Newport News nor the language of that opinion supports the dissent’s position. It is also inconsistent with Title VII, which only addresses discrimination against employes: male spouses have no remedy independent of the female employe’s remedy for an inequitable benefit package. Finally, the dissent’s analysis insulates the discrimination here, which the dissent concedes exists, from any effective redress. Certainly the proper remedy cannot be to give pregnancy benefits to dependent husbands. The alternative “remedy,” under the dissent’s analysis, is to take pregnancy benefits away from dependent wives, which contradicts a principal purpose of the Pregnancy Discrimination Act and leaves substantial doubt that anyone would have an interest in enforcing such a “remedy.”

We also do not accept the dissent’s application of our analysis to the hypothetical situation where an employer offers full benefits, including pregnancy benefits, to employes and no benefits to dependents. Contrary to the dissent’s assertion, such a plan under our analysis would not be discriminatory, even though female employes receive a package which includes pregnancy benefits which male employes do not receive. As explained in n 3, supra, when the difference in benefit packages offered male and female employes results from a gender neutral difference in the terms of coverage between employes and dependents, a benefit plan would not be discriminatory.⁵

We also hold that plaintiff is entitled to recover under ORS 659.029 and ORS 659.030. We take into account the relevant federal law and its legislative history. See School District No. 1 v. Nilsen, 271 Or 461, 534 P2d 1135 (1975). The parties agree that ORS 659.029 and ORS 659.030 should be interpreted in the same way as Title VII of the Civil Rights Act of 1964 and the Pregnancy Discrimination Act. It is an unlawful employment practice under the Oregon statutes, as it is under Title VII, to make available pregnancy benefits for the wives of male employes which are not available for female employes. The trial court erred in granting summary judgment for defendant and in denying summary judgment for plaintiff.

Defendant’s cross-appeal is without merit.

On the appeal, .reversed and remanded with instructions to enter judgment for plaintiff; on the cross-appeal, affirmed.

1 42 USC §2000e-2 (a)(1) (1982) provides that it is an unlawful employment practice for an employer

“to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s * * * sex * * * »)

ORS 659.030 provides that it is an unlawful employment practice for an employer

“because of * * * sex * * * to discriminate against [an] individual in compensation or in terms, conditions or privileges of employment.”

2 The provision of equal medical coverage to dependents and employes with the exception of reduced benefits for a pregnancy-related condition of spouses of male employes is exactly the disparity in benefits found unlawful in Newport News Shipbuilding & Dry Dock v. EEOC, 462 US 669, 103 S Ct 2622, 77 L Ed 2d 89 (1983). That aspect of employer’s health plan, which is discriminatory against male employes, is not involved in this case.

3 Defendant argues that we should not compare total benefit packages. It relies on note 25 in the Court’s opinion, which reads:

“This reasoning does not require that a medical insurance plan treat the pregnancies of employees’ wives the same as the pregnancies of female employees. For example, as the EEOC recognizes, * * * an employer might provide full coverage for employees and no coverage at all for dependents. Similarly, a disability plan covering employees’ children may exclude or limit maternity benefits. Although the distinction between pregnancy and other conditions is, according to the 1978 Act, discrimination ‘on the basis of sex,’ the exclusion affects male and female employees equally since both may have pregnant dependent daughters. The EEOC’s guidelines permit differential treatment of the pregnancies of dependents who are not spouses.” 462 US at 684. (Emphasis in original.)

We read that note to state that an employer’s health plan may treat the pregnancy of a male employe’s spouse differently from the pregnancy of a female employe only if the disparity results from a gender-neutral difference in the terms of coverages. For example, if an employer does not provide any medical coverage to spouses of employes, it need not provide for the risk of pregnancy of spouses. It is in this sense only that a plan may treat the pregnancy of an employe’s spouse differently from the pregnancy of an employe. The note also states that medical risks based on pregnancy of dependents can be treated differently if the dependents covered are not spouses because that difference affects male and female employes equally. Both male and female employes, for example, can have pregnant daughters. The note, however, does not state that we should not compare medical benefit packages of employes and their spouses when, as here, (1) the employes are of different sexes, (2) the medical plan does cover medical risks of the employes and their spouses and (3) the medical plan explicitly covers a medical risk of pregnancy differently for one set of the spouses than for the other. Indeed, Newport News made just such a comparison of packages.

4 The legislative history of the Pregnancy Discrimination Act supports plaintiffs claim. The purpose of the act is to prohibit any discrimination on the basis of sex and pregnancy and to protect female employes against all forms of sex discrimination. Congress enacted the act to overrule General Electric Co. v. Gilbert, supra, and to return to previously established Title VII principles, one of which is set out in 29 CFR §1604.9(d). See S. Rep No. 331, 95th Cong., 1st Sess. 2, 5-6 (1977).

5 Similarly, there is no discrimination in the situation set out in “question 22” quoted in the dissent, 80 Or App at 302, because the difference in coverage is gender neutral.