Diversity Insight

What EEOC’s recent lawsuit over parental leave means for employers

by Jessica A.H. Howell

The Equal Employment Opportunity Commission (EEOC) is a federal agency that administers and enforces civil rights laws when individuals claim workplace discrimination. Recently, the EEOC filed suit against a cosmetics company for implementing and administering parental leave benefits in a discriminatory manner based on sex. The lawsuit is the first of its kind, but it likely won’t be the last. To ensure compliance with federal law and avoid legal challenges, review your parental leave policies and tread carefully when implementing new policies.  Parents want to spend time with baby

EEOC sues Estée Lauder

In late August 2017, the EEOC filed suit against Estée Lauder Companies, Inc., in Pennsylvania federal court. Estée 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 Estée 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.

Estée 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 transition period benefits. 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 allowed four weeks of flexible scheduling after they take paid parental leave and return to work. Employees who qualify for secondary caregiver leave are not eligible for transition benefits.

The EEOC claims that although the distinction between primary and secondary caregivers isn’t overtly based on sex, Estée Lauder’s implementation and administration of its parental leave policies is based on sex. The EEOC alleges that Estée Lauder allows a mother access to more leave benefits even if she’s a secondary caregiver because she may qualify for enhanced benefits under a separate maternity leave policy. Moreover, the EEOC claims that Estée Lauder has denied primary caregiver benefits to fathers who are in fact the primary caregivers in their families. The EEOC says that practice violates Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963 (EPA), which prohibit discrimination in pay or benefits based on sex.

Additionally, the EEOC alleges that female employees are given more flexible scheduling arrangements when they return to work after the child bonding period expires. Specifically, the agency claims the company offers transition time only to new mothers. According to the EEOC, that amounts to sex discrimination.

Turning to the specific facts of the case, the EEOC alleges that Christopher Sullivan, a male employee at an Estée Lauder retail store in Maryland, requested six weeks of paid leave in 2015 after his child was born. Estée Lauder denied his request and gave him only two weeks of paid leave to bond with his child. Sullivan informed the company that he would be the child’s primary caregiver but was told that the “primary caregiver” designation applies only in surrogacy situations.

Sullivan filed an EEOC complaint, and the EEOC’s Washington Field Office investigated his charge of discrimination. After attempting to reach a prelitigation settlement agreement, the agency filed suit in the U.S. District Court for the Eastern District of Pennsylvania. The EEOC is seeking relief for Sullivan and other male employees who were denied equal parental leave benefits based on their sex. Specifically, it is asking for injunctive relief, back pay, compensatory damages, and punitive damages.

Mindy Weinstein, acting director of the EEOC’s Washington Field Office, commended Estée Lauder for its parental leave policy and flexible work arrangements, stating, “It is wonderful when employers provide paid parental leave and flexible work arrangements.” However, she 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 by the Society for Human Resource Management (SHRM), organizations that provide paid parental leave give mothers 41 days of paid maternity leave and allow fathers 22 days of paid paternity leave on average. However, parental leave benefits are not the norm. Only 14 percent of American employees have access to paid parental leave, and only 17 percent 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 41 developed nations in which employees aren’t 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) 16 weeks of paid parental leave. What’s more, the Bill & Melinda Gates Foundation offers one year (52 weeks) of paid parental leave to both mothers and fathers. Netflix also offers up to one year of paid parental leave, regardless of sex.

However, many companies with impressive parental leave benefits offer different policies based on sex. For example, Patagonia provides 16 weeks of paid maternity leave and 12 weeks of paid paternity leave. Such policies, albeit generous, run the risk of legal challenges.

Insights for employers

The EEOC’s suit against Estée Lauder is the agency’s first lawsuit challenging a parental leave policy, according to spokeswoman Kimberly Smith-Brown. However, the EEOC Philadelphia District Office regional attorney stated that addressing sex-based pay discrimination, including benefits like paid leave, “is a priority issue for the Commission.”

According to the EEOC’s press release on the Estée Lauder 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 [EEOC’s] Strategic Enforcement Plan.” Consequently, this lawsuit is likely to be the first of many challenges to companies’ 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 for implementing impressive parental leave policies in recent years, 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 related to pregnancy or childbirth. However, parental leave must be provided to both men and women on the same terms.

Review your parental leave policies to ensure that they treat male and female employees consistently. And if you hope to increase paid paternity leave, you should do so only if you can increase the benefit for both mothers and fathers. Even the most well-intentioned policies can run afoul of federal protections against discrimination.

Jessica A.H. Howell is an attorney at Greener Burke Shoemaker Oberrecht, P.A. She may be contacted at jhowell@greenerlaw.com.