Skip to main content
Article

Do your parental leave policies discriminate?

Beware of policies that create disparate results based on gender

Financial, Executive and Professional Risks (FINEX)
N/A

By Paige M. Neel and Joann D. Nilsson | May 19, 2020

As paid parental leave policies become more common, employers must be cautious that they do not potentially overstep any anti-discrimination laws.

The prevalence of paid parental leave for non-birthmothers has markedly increased in the United States as they play a critical role in employee attraction, retention, inclusion and diversity (I&D) strategies. Only five years ago, as few as one-fourth of employers offered some form of paid leave to parents on the birth or adoption of a child.1 According to the 2020 Willis Towers Watson Survey2, 58% of employers now offer some form of paid leave to parents on the birth or adoption of a child. As these policies become more predominant, employers must be cautious that these policies do not potentially run afoul of Title VII and other anti-discrimination laws.

Many employers have policies that draw distinctions between leave related to pregnancy and leave related to childcare and bonding. Although this type of policy may result in disparate leave availability based on gender and has the potential for bias related to child birth, if crafted properly such policies do not necessarily violate Title VII. The EEOC issued guidance in 2015 addressing this issue.3 Interpreting Title VII, the EEOC guidance stated that leave related to pregnancy, childbirth or related medical conditions can be limited to women affected by those conditions, however, parental leave must be provided to similarly situated genders on the same terms. The EEOC offered an example of a non-discriminatory policy which provides parents irrespective of gender six weeks of parental leave, but offers only birthmothers ten weeks of medical leave for conditions related to pregnancy or childbirth.

Although in effect this policy results in female employees receiving 16 weeks of leave on the birth of child while male employees receive only six weeks, the EEOC guidance states that such a policy is compliant with Title VII. Comparatively, a policy which provides birthmothers ten weeks of medical leave for conditions related to pregnancy or childbirth and six additional weeks of parental leave but offers no leave to other parents who are not birthmothers according to the EEOC guidance, would violate Title VII. Employers seeking to craft a parental leave policy that distinguishes between medical and parental leave should follow the EEOC guidance.

A much thornier issue exists where employers attempt to distinguish between leave for primary or secondary caregivers as relates to parental leave. These policies typically seek to distinguish between the primary and secondary caregiver for a child, and offer disparate amounts of leave accordingly. Although the EEOC guidance does not specifically address this type of policy, it does state that” “[i]f…an employer extends leave to new mothers beyond the period of recuperation from childbirth (e.g. to provide the mothers time to bond with and/or care for the baby), it cannot lawfully fail to provide an equivalent amount of leave to new fathers for the same purpose.” This statement strongly suggests the EEOC will closely scrutinize a policy making this distinction, even if such policies are not discriminatory on their face. According to the Bureau of Labor Statistics4 61.1% have both parents employed. Distinguishing who is primary versus secondary can change based on the day of the week and most employers need to depend on the parent to self-identify.

An illustrative case can be found in the class action suit Rotondo v. JPMorgan Chase Bank, N.A., 19-cv-2328, S.D. OH, filed in 2019 in the United States District Court for the Southern District of Ohio, Eastern Division. The named plaintiff, Derek Rotondo, was an employee of JPMorgan Chase Bank. JPMorgan’s policy at the time provided a generous 16 weeks of paid parental-leave to primary caregivers of newborn children. However, the policy provided only two weeks of leave to secondary caregivers. After the birth of his child, Rotondo informed JPMorgan’s human resources department of his intention to be the primary caregiver of his child, and requested 16 weeks of paid leave per the JPMorgan policy. Rotondo was informed, in writing, that JPMorgan presumed that the mother would be the primary caregiver unless a father could show either that the mother had returned to work, or that the mother was medically unable to provide childcare.

In 2017, Rotondo filed a charge with the EEOC alleging that JPMorgan had discriminated against him on the basis of sex by denying his request for parental leave. Over the next two years, JPMorgan and Rotondo engaged in settlement negotiations and informal discovery procedures. Rotondo and JPMorgan reached an agreement regarding a class settlement in May 2019. To obtain court approval of the class settlement, Rotondo filed a federal class action suit on behalf of himself and all similarly situated employees against JPMorgan. A recommendation for approval of the settlement was issued by Magistrate Judge Chelsey M. Vascura on November 20, 2019. The recommendation of the Magistrate was formally adopted by the District Court on December 2, 2019.

The settlement created a $5 million fund to compensate the putative class members. Putative class members is a legal term of art referring to the unknown but believed to exist class members. The settlement called for Rotondo himself to receive $20,000. As part of the settlement, JPMorgan agreed that it would not reduce the amount of parental leave offered for the next four years. The settlement requires JPMorgan to maintain a gender-neutral parental leave policy, but does not require JPMorgan to change the policy at issue in the case. JPMorgan also agreed to provide training and monitoring to ensure the gender-neutral application of its leave policy.

Employers utilizing a parental leave policy that distinguishes between primary and secondary leave policies should certainly take note of the obvious lesson of the Rotondo case – do not maintain a presumption regarding primary caregiver status on the basis of gender.

Employers should also consider the broader trends that the Rotondo case and the 2015 EEOC guidance represent. Although policies like those in the Rotondo case may be facially neutral, the EEOC and the plaintiff’s bar will be looking for discrimination in their actual practice. Employers maintaining or enacting such policies should train their managers and human resources to not discriminate in the application of the parental leave policies. Willis Towers Watson recommends best practice for parental leave policies that distinguish only between medical and parental leave, as opposed to primary and secondary caregiver.

Parental leave policies are an important attraction and retention benefit offered to employees and often play a critical role to I&D strategies. As more employers enact parental leave policies, they should keep in mind the potential Title VII implications to avoid unnecessary exposure as well as broader talent and I&D strategies.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Footnotes

1https://www.mercer.us/our-thinking/healthcare/the-pressure-is-on-to-modernize-time-off-benefits-6-survey-findings.html

22020 Willis Towers Watson Emerging Trends in Health Care Survey, United States

3https://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm

4https://www.bls.gov/opub/ted/2017/employment-in-families-with-children-in-2016.htm

Authors

Shareholder
Clausen Miller P.C.

FINEX – Claims & Legal Group

Contact Us
Related content tags, list of links Article Financial, Executive and Professional Risks (FINEX)