In May 2019, JP Morgan Chase reached a tentative settlement of $5 million dollars to resolve a class action lawsuit alleging the bank’s parental leave policy was biased against dads. It is the largest recorded settlement in a U.S. parental leave discrimination complaint.
At the time the lawsuit was filed, JP Morgan Chase’s policy offered 16 weeks of paid parental leave to primary caregivers and two weeks of paid leave to other caregivers. Derek Rotondo, the lead plaintiff in the lawsuit, brought the complaint against JP Morgan Chase alleging that the organization made it very difficult for fathers to qualify as primary caregivers.
Rotondo had applied for the 16-week benefit a few weeks before the birth of his second child Lincoln and was told in writing per his legal filings “per our policy, birth mothers are what we consider as the primary caregivers.” The exceptions were if his spouse returned to work before the end of 16 weeks, in which case he could use the balance of the time, or if his wife was medically unable to provide childcare. Because Rotondo’s wife is a teacher, had the summer off, and wasn’t incapacitated, he could not qualify. He was subsequently denied for the 16 weeks paid leave and was provided the two weeks of paid leave provided to other caregivers.
As a result of the denial of his leave, Rotondo filed the discrimination lawsuit. In the EEOC claim, he stated the bank’s policy “relies on and enforces sex-based stereotypes that women are and should be caretakers of children, and that women do and should remain at home to care for a child following that child’s birth. While men are not and should not be caretakers and instead do and should return to work shortly after the birth of their child.” Therefore, JP Morgan Chase’s stance on leave violated federal law regarding sex discrimination in the workplace.
JP Morgan Chase indicated that their policy was always intended to be gender neutral. As part of their proposed settlement, it will create a $5 million fund to compensate up to 5,000 fathers who were not offered the longer leave benefit. In addition, there will be education to ensure their policy is administered in a gender-neutral practice and monitoring to ensure both male and female employees are encouraged to take leave. Since the case was filed, JP Morgan Chase has increased the parental leave available to nonprimary caregivers to six weeks.
In June 2015, the EEOC released pregnancy discrimination guidance. In that guidance the EEOC states that leave related to pregnancy, childbirth, or related medical 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. As an example, if an employer extends leave to new mothers beyond the period of medical recuperation from childbirth in order to bond with and/or care for a baby, they must provide an equivalent amount of leave to new fathers for the same purpose. Therefore, employers need to make sure they carefully distinguish between leave for birth and recovery from birth from leave intended to bond or care for a new baby.
So, what does this mean for employers? The number of parental leave discrimination lawsuits is on the rise. In July 2018, Estée Lauder, was required to pay $1,100,000 to resolve a lawsuit charging sex discrimination against male employees. The EEOC alleged that Estée Lauder discriminated against a class of male employees by providing these fathers less paid leave to bond with a newborn than it provided new mothers.
According to an article written by attorneys for the law firm Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, P.C, when employers are designing parental leave policies, they should keep the following in mind:
- Provide parental leave for child-bonding to similarly situated men and women on the same terms. Whether a policy provides unpaid leave, paid time off, flexible work arrangements, or other benefits, child-bonding entitlements should be equally available to employees regardless of gender lines.
- Consider a Simple Policy. The most conservative approach from a legal risk perspective is to simplify the parental leave policy by providing eligible employees with the same benefits across the board.
- Clearly distinguish between parental leave and medical leave related to pregnancy/childbirth complications. Employers can offer different benefits to birth mothers for medical reasons. For example, it is fine if a company’s short-term disability insurance provides paid benefits to birth mothers, but this disability leave should be treated separately from the universal parental leave entitlement. Or, an employer can offer a certain amount of time off for recovering from childbirth to birth mothers only (6-8 weeks is a standard range). But if that employer also offers an additional amount of leave for women to care for their newborn child, the employer must offer the same leave to men and adoptive parents.
- Avoid policies that are facially neutral but favor women in practice. There are risks of having a policy that has requirements or definitions that result in differential treatment of male and female employees. Many employers use a primary and secondary caregiver framework for parental leave, in which the primary caregiver – as defined by the policy and certified by the employee – is entitled to greater benefits than the secondary caregiver. Such a policy is still compliant so long as it is truly gender-neutral, including but not assuming that a female employee is the primary caregiver or slanting the definition of primary caregiver in the favor of female employees.
- Make the company culture reflect the policy. The company’s culture should promote and support all eligible employees to enjoy parental leave benefits. Employers should educate and train human resources employees and managers on the scope of, and philosophy behind, their parental leave benefits. If male employees are technically allowed to take paid parental leave, but get the message – whether explicit or implicit – that doing so is frowned upon and could derail their career opportunities, the policy is essentially meaningless to them and exposes the company to discrimination claims.
Additional ASE Resources
ASE Handbook Development- If you would like your parental and/or maternity leave policy reviewed, revised, or a new policy created ASE can help. Contact Mike Burns.
Sources: Employee Benefit News 5/30/2019, National Law Review 1/4/2019, NY Times 5/30/2019