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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEU

ISSUE DATE

March 30, 1987

RESCISSIONS

 

EXPIRATION DATE

March 31, 1988

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 14-87

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

DONALD J. KULICK
Administrator
Regional Management

 

SUBJECT

:

U.S. Supreme Court Decision in Wimberly v. Labor and Industrial Commission of Missouri

 

  1. Purpose. To advise State aqencies of the U.S. Supreme Court's decision in Wimberly v. Labor and IndustrialRelations Commission of Missouri, decided on January 21, 1987.

  2. References. Section 3304(a)(12) of the Federal Unemployment Tax Act; Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976--P.L. 94-566, (including Supplement #1--Questions and Answers, issued December 7, 1976).

  3. Background. Section 3304 (a)(12) was added to the Federal Unempoyment Tax Act (FUTA) in 1976. This section provides, as a condition for the Secretary of Labor's certification of a State to the Secretary of the Treasury, that "no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy."

    The Department of Labor has interpreted Section 3304 (a)(12), FUTA, to require that entitlement to benefits of pregnant claimants be determined on the same basis and under the same provisions applicable to all otherclaimants. This interpretation was issued to States in the Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976--P.L. 94-566 (p.62). The interpretation states that pregnant claimants may not be treated differently under the law from other claimants. Unemployment benefits must be paid or denied not on the basis of pregnancy, but on the basis of whether the claimant meets State law eligibility provisions.

    Eligibility provisions related to separation from work vary significantly among the States. Under some State laws, benefits are denied if a claimant leaves work voluntarily without good cause attributable to the employer. Under this type of law, claimants who leave work due to pregnancy or illness associated with pregnancy would ordinarily be denied benefits. Such denials have been challenged in the courts and conflicting decisions issued. The U.S. Supreme Court decision in Wimberly v. Labor and Industrial Commission of Missouri now resolves this question, upholding the Department's view of the statute and specifically holding that Section 3304(a)(12), FUTA, does not require States to afford preferential treatment to claimants,on account of pregnancy.

  4. U.S. Supreme Court Decision in Wimberly v. Labor and Industrial Relations Commission of Missouri. The case involves a Missouri claimant who asked for a leave of absence due to pregnancy. In accordance with company policy, she was granted a leave without any guarantee of reinstatement; i.e., she would be rehired only if a job was available. When she sought reinstatement and was told that no jobs were available, she filed a claim for unemployment benefits.

    The State agency denied benefits on the basis that she had quit because of pregnancy and, therefore, had left work voluntarily without good cause attributable to her work or her employer. After extensive State litigation, the agency's decision was upheld by the Missouri Supreme Court. The U.S. Supreme Court agreed to hear the case because the Missouri Supreme Court's decision conflicted with the Fourth Circuit decision in Brown v. Porcher, 660 F.2d 1001 (1981), cert. denied. 459 U.S. 1150 (1983). The U.S. Supreme Court decision was issued January 21, 1987.

    In summary, the Supreme Court held that since Section 3304(a)(12), FUTA, does not require States to afford preferential treatment to women on account of pregnancy, the Missouri statute is consistent with Federal law. The Court held that the language in Section 3304(a)(12), FUTA, clearly indicates Congress intended only to prohibit States from singling out pregnancy for unfavorable treatment and not to mandate preferential treatment. The Court further held that Missouri's application of its law to work separations involving pregnant claimants is supported by the legislative history and the Department of Labor's interpretation of this Federal law section. Citing the interpretation issued in the Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976--P.L. 94-566, the Court stated that the interpretation clearly establishes Section 3304(a)(12), FUTA, as an antidiscrimination provision, and that it does not mandate preferential treatment.

  5. Effect of Supreme Court Decision. The Supreme Court's decision implicitly overrules lower court decisions mandating preferential treatment of pregnant claimants. This includes the decision, specifically mentioned in Wimberly, of the Court of Appeals for the Fourth Circuit in Brown v. Porcher. In Brown, the Court of Appeals held that regardless of how other claimants are treated under South Carolina law, Section 3304(a)(12), FUTA, required that women who are able and available for work may not be denied benefits solely because they left work on account of pregnancy. This decision was appealed to the U.S. Supreme Court, but the Court declined to hear the case.

  6. Action Required. State agency administrators are requested to provide the above information to appropriate staff. In addition, States should review their law and procedures to determine if they are consistent with the Department of Labor's original interpretation as set forth in the Draft Language and Commentary to Implement the Unemployment Compensation Amendments of 1976--P.L. 94-566, (including Supplement#1 --Questions and Answers, Issued December 7, 1976), and the Supreme Court's decision in Wimberly. States are not precluded from giving claimants preferential treatment on account of pregnancy, but Section 3304(a)(12), FUTA, may no longer be said to require preferential treatment.

  7. Inquiries. Please direct inquiries to the appropriate Regional office.

  8. Attachment. U.S. Supreme Court Decision in Wimberly v. Labor and Industrial Relations Commission of Missouri.