Recent Settlement Suggests Shift Toward More Parental Leave Parity

August 26, 2019

A recent legal settlement over a parental leave dispute may encourage employers to move toward more gender-neutral parental leave policies. JPMorgan Chase settled a class action lawsuit filed by the American Civil Liberties Union (ACLU) on behalf of male employees who argued the banking company’s parental leave policy was inequitable to new fathers. The $5 million settlement garnered national attention. HR professionals predict the JPMorgan settlement and recent similar settlements may push employers to make leave benefits available to new fathers on par with the benefits traditionally available only to their female colleagues.

Not a ‘Primary Caregiver’

JPMorgan’s parental leave policy provided up to 16 weeks of paid parental leave to employees who were primary caregivers while providing only two weeks of paid parental leave to nonprimary caregivers. Derek Rotondo sought to take 16 weeks of paid parental leave following the birth of his second child. However, he was told that JPMorgan presumptively considered mothers to be primary caregivers and as a father, he would qualify as a primary caregiver only if he showed that his wife (1) was incapacitated or (2) had returned to work. Under JPMorgan’s policy, he didn’t qualify as a primary caregiver because his wife had recovered normally from childbirth and was a teacher with summers off and wasn’t returning to work.

Federal law requires employees who bring certain discrimination claims to exhaust their administrative remedies by filing a charge with the Equal Employment Opportunity Commission (EEOC) before filing a lawsuit in federal court. Accordingly, Rotondo filed a discrimination charge against JPMorgan with the EEOC on June 15, 2017. He received a right-to-sue letter from the agency on February 8, 2019.

The ACLU subsequently filed a class action lawsuit on behalf of Rotondo and similarly situated JPMorgan employees in Ohio federal district court on May 30, 2019. The complaint alleged that the employer’s policies and practices constituted sex-based classification and stereotypes that violate Title VII and equivalent antidiscrimination laws in a number of states.

The Settlement

The lawsuit was short-lived—the settlement was announced on the same day the claims were filed in federal court. In settling the lawsuit, JPMorgan agreed to pay $5 million and maintain a gender-neutral parental leave policy. The company did not admit wrongdoing. Lawyers from the ACLU report they reached the highest recorded settlement in a parental leave discrimination lawsuit in the United States.

CNN and Turner Broadcasting settled a similar EEOC charge brought by a male CNN correspondent in 2015. The employee was prevented from disclosing the amount of the settlement under the terms of his agreement with CNN. Estée Lauder Companies paid $1.1 million to settle a lawsuit over unequal parental leave benefits filed by male employees in Pennsylvania federal district court in the summer of 2018. Presumably, more litigation involving this issue will follow in the future.

EEOC Guidelines

The EEOC hasn’t updated its “Enforcement Guidance on Pregnancy Discrimination and Related Issues” since the JPMorgan settlement was announced. The most recent guidance was updated on June 25, 2015. However, it remains germane and helpful for employers that are drafting or revisiting their parental leave guidelines.

Specifically, the EEOC guidelines provide that “leave related to pregnancy, childbirth, or related conditions can be limited to women affected by those conditions.” However, “parental leave must be provided to similarly situated men and women on the same terms.” In other words, employers should distinguish medical or disability-related medical leave, which is geared toward allowing mothers to physically recover from childbirth, from any other paid leave intended to permit employees to care for and bond with a new child. The latter type of leave should be equivalent for new mothers and new fathers.

Bottom Line

A $5 million settlement is bound to get employers’ attention. The JPMorgan settlement is reason enough to take a second look at your parental leave policies. At a minimum, you should confirm that your policies comply with current EEOC guidelines addressing parental leave. Parental leave in the United States compared to the rest of the world has been a hot topic for some time. However, as U.S. employers move toward more generous paid parental leave policies to allow employees time to bond with new children, you should keep in mind that those policies must be equal for fathers and mothers.

This article, slightly modified to note recent updates, was featured in the August 2019 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

For more information about "Recent Settlement Suggests Shift Toward More Parental Leave Parity," contact Jennifer M. Luther at jluther@axley.com or 608.283.6776.