What the EEOC’s Recent Lawsuit Regarding Parental Leave Means for Employers by Jessica A. H. Howell

01-Nov-2017

What the EEOC’s Recent Lawsuit Regarding Parental Leave Means for Employers

By Jessica A.H. Howell

            The United States Equal Employment Opportunity Commission (“EEOC”) is a federal agency that administers and enforces civil rights laws against instances of workplace discrimination. Recently, the EEOC filed suit against a cosmetics company for administering and implementing parental leave benefits in a manner that discriminated based on sex. This lawsuit is the first of its kind, but it likely will not be the last. To ensure compliance with federal law and avoid legal challenges, employers should review their current parental leave policies and tread carefully when implementing new policies.

EEOC v. Estee Lauder Companies, Inc.

In late August of this year, the EEOC filed suit against Estee Lauder Companies, Inc. (“Estee Lauder”) in a Pennsylvania federal court. Estee Lauder, one of the world’s largest cosmetics companies, also owns Bobbi Brown, MAC, and La Mer, and holds licenses for Tory Burch, Tom Ford, and Michael Kors fragrances. The EEOC alleges that Estee Lauder unlawfully engaged in sex discrimination by automatically providing male employees who are new fathers less paid parental leave than female employees who are new mothers.

Estee Lauder’s parental leave policy, adopted in 2013, provides four different paid parental leave benefits—maternity leave, primary caregiver leave and secondary caregiver leave for “child bonding” purposes, adoption leave, and a transition period. Primary caregivers are given six weeks of paid leave for child bonding, and secondary caregivers are permitted two weeks. New mothers are eligible for both maternity leave and primary or secondary caregiver leave. Under the transition period benefits, primary caregivers are given four weeks of flexible scheduling after taking paid parental leave and upon returning to work. Employees who qualify for secondary caregiver leave are not eligible for transition benefits.

While the designation between primary and secondary caregivers is not on its face based on sex, the EEOC claims that Estee Lauder’s administration and implementation of its parental leave policies is based on sex. The EEOC alleges Estee Lauder allows a mother to obtain greater leave benefits even if she is a secondary caregiver because she may qualify under a separate maternity leave policy that offers enhanced benefits. Moreover, the EEOC claims that Estee Lauder denied “primary caregiver” benefits to fathers who were, in fact, the primary caregivers of their families. The EEOC claims this practice violates the Civil Rights Act of 1964 and the Equal Pay Act of 1963, which prohibit discrimination in pay or benefits based on sex.

Additionally, the EEOC alleges female employees are given more flexible arrangements when they return to work after expiration of the child bonding period. Specifically, the EEOC claims Estee Lauder only offers transition time to new mothers. According to the EEOC, this practice amounts to sex discrimination.

Turning to the specific facts of the case, the EEOC alleges that Christopher Sullivan, a male employee at an Estee Lauder retail store in Maryland, requested six weeks of paid leave in 2015 after his child was born. Estee Lauder denied Sullivan’s request and only gave him two weeks of paid leave to bond with his child. Sullivan informed Estee Lauder that he would be the child’s primary caregiver, but was told that the “primary caregiver” designation only applied in surrogacy situations. Sullivan filed an EEOC complaint and the EEOC’s Washington Field Office investigated the charge of discrimination. After first attempting to reach a pre-litigation settlement agreement, the EEOC filed suit in U.S. District Court for the Eastern District of Pennsylvania.

The EEOC seeks relief for the affected employee and other male employees who were denied equal parental leave benefits based on their sex. Specifically, the EEOC is seeking injunctive relief, back pay, compensatory damages, and punitive damages.

EEOC Washington Field Office Acting Director Mindy Weinstein commended Estee Lauder for its parental leave policy and flexible work arrangements insofar as the company’s intention. “It is wonderful when employers provide paid parental leave and flexible work arrangement.” However, Weinstein added, “federal law requires equal pay, including benefits, for equal work, and that applies to men as well as women.”

Parental Leave Policies

According to a study from the Society for Human Resource Management, organizations that provide paid parental leave on average gave mothers forty-one days of paid maternity leave and gave fathers twenty-two days of paid paternity leave. These benefits are not the norm. Only 14% of American employees have access to paid parental leave and only 17% of employers offer paid parental leave. Globally, the United States is behind on paid parental leave. In fact, the United States is the only nation among forty-one developed nations in which employees are not entitled to paid parental leave.

Some companies go above and beyond to offer generous parental leave benefits. For instance, Bank of America offers new parents (mothers and fathers alike) sixteen weeks of paid parental leave. What’s more, the Bill & Melinda Gates Foundation offers one year (fifty-two weeks) of paid parental leave to both mothers and fathers. Netflix also offers up to one year of paid parental leave, regardless of sex.

Many companies with impressive parental leave benefits, however, offer different policies based on sex. For example, Patagonia provides sixteen weeks of paid maternity leave and twelve weeks of paid paternity leave. Such policies, albeit generous, run the risk of legal challenges.

Insights for Employers

EEOC's suit against Estee Lauder is the agency's first lawsuit against a parental leave policy, according to EEOC spokeswoman Kimberly Smith-Brown. However, EEOC Philadelphia District Office Regional Attorney stated that addressing sex-based pay discrimination, including benefits such as paid leave, “is a priority issue for the Commission.” According to the EEOC’s press release on this lawsuit, “enforcement of equal pay laws, including targeting compensation systems and practices that discriminate based on gender, is one of six national priorities identified by the Commission’s Strategic Enforcement Plan.” Thus, this lawsuit is likely to be the first of many challenges to company parental leave policies, especially given the recent corporate trend of offering generous parental leave benefits to employees. While high-profile companies have been making headlines in recent years for providing impressive parental leave policies, a great deal of uncertainty surrounds the legal implications of these policies--specifically with regard to gender neutrality.

Employers should recognize the difference between parental leave and leave related to physical limitations resulting from pregnancy or childbirth. The latter can be limited to women affected by medical conditions relating to pregnancy or childbirth. However, parental leave must be provided to both men and women on the same terms.

Employers should review their parental leave policies to ensure that male and female employees are treated consistently. And if an employer hopes to increase paid paternity leave, it should only do so if it can increase the benefit for both mothers and fathers. Even the most well-intentioned policies can run afoul of federal protections against discrimination.