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Feminists Pleased, Businesses Worried by Maternity-Leave Ruling

January 13, 1987

LOS ANGELES (AP) _ The U.S. Supreme Court’s ruling upholding state laws that require maternity leaves won praise from some feminists Tuesday. But business people called the decision a disaster for small businesses that could add billions of dollars a year in extra payroll costs and force some companies to fail.

″We are quite thrilled,″ said Shireen Miles, president of the California chapter of the National Organization for Women. ″It was a win for women.″

She estimated that 85 percent of all women become pregnant during their working lives.

The Supreme Court, in a 6-3 ruling, upheld a California law requiring employers to give female workers up to four months of unpaid maternity leave and reinstate them to the same job when they want to return to work. Connecticut, Hawaii, Illinois, Massachusetts, Montana, New Hampshire, Ohio and Washington have similar laws, according to court documents.

The case involved a challenge to the California law by Los Angeles-based CalFed Inc., the parent of California Federal Savings & Loan Association. CalFed was sued by one of its receptionists, Lilian Garland, for having filled her job with someone else while she was on maternity leave.

″Thank God,″ said Ms. Garland, who eventually got her job back at CalFed in late 1982 but resigned last year to go into real estate. ″It’s taken so long. I’m ecstatic.″

Ms. Garland’s attorney, Pat Shiu of the Employment Law Center in San Francisco, said the court’s decision ″has given a green light to other state legislatures interested in enacting similar laws.″

She said the California law was the first hurdle in gaining even broader rights for working parents, such as legislation now pending in the California Legislature and in Congress.

Attorney General John Van de Kamp, whose office defended the state law on behalf of Gov. George Deukmejian’s administration and the state Fair Employment and Housing Commission, called the ruling ″a great victory for working women in California.″

The case split women’s-rights groups. On the national level, NOW and the American Civil Liberties Union joined the challenge to the California law, saying they opposed preferential treatment and wanted the benefits extended to all disabled workers. Some members of both groups in California backed the state law, saying it protected women in the work force.

However, business groups said the ruling could have substantial adverse effects, especially on small companies.

″It is a disaster,″ said Don Butler, president of the Los Angeles-based Merchants & Manufacturers Association, which represents about 2,500 business in Southern California.

Small businesses and the service sector that relies heavily on female employees will be hit especially hard, he said.

Although the California law calls for unpaid maternity leave, employers face substantial costs in hiring temporary workers to fill the jobs until regular employees return, he said.

For instance, he said, a company might pay $6 an hour to its regular word processor but would have to pay $18 an hour for one from a service that provides temporary workers.

The law also could drive up companies’ unemployment compensation insurance, which is based on the number of workers terminated.

″In California alone, the cost could be hundreds of millions of dollars,″ Butler said. ″Nationwide, it could be in the billions.″

Fred Main, an attorney for the California Chamber of Commerce, also said the maternity-leave rule would be hardest on small employers, noting that large companies usually have enough workers to be able to shift personnel to fill a temporary need.

California has about 500,000 businesses, and an estimated 95 percent of those have 50 or fewer employees.

William Callendar, general counsel of CalFed, said the costs could be substantial even for large businesses if the maternity-leave law is extended to other disabled workers, men and women.

The state Fair Employment and Housing Department stopped enforcing the law when it was struck down in March 1984 by U.S. District Judge Manuel Real in Los Angeles. It resumed taking cases when the law was reinstated by an appellate court decision that became final in August 1985, and has received about 30 complaints a month, Deputy Director Earl Sullaway said.

He said most of the cases had been settled with an agreement by employers to follow the law. In the remaining cases, estimated by Sullaway at less than 20, prosecutions have been delayed pending the Supreme Court ruling and now will proceed before the Fair Employment and Housing Commission, which can order reinstatement and back pay.

Officials indicated it was unresolved what would happen to workers hired to fill the jobs of those on maternity leave, if the displaced workers are ordered reinstated.

However they said that one effect of Tuesday’s ruling likely would be to cause companies filling positions of pregnant workers to do so only on a temporary basis.

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