Pacific Bell to Pay $26 Million to Settle Pregnancy-Leave Suit
SBC Communications Inc.’s Pacific Bell has agreed to pay an estimated $26 million to settle a 10-year-old lawsuit filed on behalf of about 10,000 female employees whose pensions were shortchanged when they took pregnancy leave, a company official said Friday.
Under the deal, Pacific Bell agreed to boost the pension benefits of female phone company employees in California and Nevada who had lost service credits when they took time off to have babies.
The women contended that the company’s practice violated federal and state civil rights laws. PacBell, which provides local telephone service in the Western United States, denied any wrongdoing but said it was time to resolve the matter.
“We think that Pacific Bell’s actions all along were entirely appropriate,” company spokesman John Britton said. “But we have accepted a negative court decision. We think it is now time to resolve this matter and move forward.”
Legal experts and labor officials said Friday that the settlement in the closely watched case could help fashion deals in similar suits pending in courts across the nation. “This should set a pattern for other companies to come forward and settle,” said Bill Quirk, a spokesman for the Communication Workers of America, which is monitoring other suits filed on behalf of its members. “This helps to level the playing field.”
In the last two decades, the issue of pension benefits and pregnancy has captured the attention of working women, who make up nearly 47% of the U.S. work force. Women who became working mothers decades ago and are now eligible for pensions discovered that they were deprived of service credits when they took pregnancy leave--unlike other employees who took disability leave.
The PacBell suit was filed in San Francisco in 1989, the first in California to address the issue of pension benefits and pregnancy. Similar suits have been filed in New York, Cincinnati and other parts of the country. Some have been settled, according to lawyers, but none at anything like the figure agreed to by Pacific Bell.
“This is a very big settlement for these women, many of whom were in low-paying service jobs,” said Beth Parker, an attorney with Equal Rights Advocates, a San Francisco-based public advocacy group that specializes in sex discrimination cases.
The settlement would apply to women who were on Pacific Bell’s payroll as of Jan. 1, 1984, Parker said.
The issue of pregnancy benefits is seen as particularly significant in the telecommunications industry, which employed large numbers of women in low-paying jobs such as telephone operators and secretaries.
Pacific Bell changed its pregnancy leave policy in 1979 to comply with the new law but failed to correct its past practices and restore credit to female employees, according to lawyers.
Lena Pallas, the former Pacific Bell employee who filed the initial suit against the company, said she was forced to take personal leave when she gave birth to a daughter in 1972. When she applied for early retirement in 1987, she was told she was four days short because the company had not granted her service credit during part of her pregnancy leave.
“It’s hard for women now to understand what we were dealing with,” Pallas told the San Francisco Chronicle.
Pallas, who worked at the phone company for four more years after being denied entry into the early-retirement program, said Pacific Bell’s own doctors had urged her to stay out of work for more than a month longer than she originally planned after she had a caesarean section.
She left PacBell in 1991 and works for another firm. Her mother, who also worked for PacBell and is 69, is among those who will be eligible for benefits from the settlement.
