Rhett v Carnegie Center Petition Writ of Centiorari

    No. 97-

In The

upreme Court of tfje ®ntteb I§>tate3
October Term, 1997

Deborah Rhett,
Petitioner,

v.

Carnegie Center Associates,

Respondent.

On Petition for Writ of Certiorari to the 
United States Court of Appeals for the Third Circuit

PETITION FOR A WRIT OF CERTIORARI

Elaine R. Jones 
Director-Counsel 
Theodore M. Shaw 

*Norman J. Chachkin 
Charles Stephen Ralston 
Catherine B. Powell 
NAACP Legal Defense and 

Educational Fund, Inc.
99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

* Counsel of Record

Lanier E. Williams 
Christopher Morkides 

P.O. Box 6584 
Philadelphia, PA 19138 
(215) 848-7239

Yvonne M. Williams 
NAACP Legal Defense and 

Educational Fund, Inc. 
1275 K Street, N.W.
Suite 301
Washington, DC 20005 
(202) 682-1300

Counsel for Petitioner

PRESS OF BYRON S. ADAMS ♦  WASHINGTON, D.C. ♦1-800-347-8208



Questions Presented

1. Does a company that allows an employee to take 
an unpaid pregnancy leave, but then abolishes her job as 
part of a reduction-in-force solely on the ground of her 
being on leave from the workplace, violate Title VII and 
the Pregnancy Discrimination Act of 1978, 42 U.S.C. § 
2000e(k), which defines discrimination "on the basis of 
sex" to include discrimination "on the basis of pregnancy, 
childbirth, or related medical conditions"?

2. Does an employer’s admission that in carrying 
out a reduction-in-force, it terminated an employee while 
she was on pregnancy leave because of her absence from 
the workplace, constitute "direct evidence" of 
discrimination on the basis of pregnancy and because of 
sex under the principles of Trans World Airlines v. 
Thurston, 469 U.S. I l l  (1985)?

3. Under the McDonnell Douglas Corp. v. Green, 
411 U.S. 792 (1973) line of decisions, after a plaintiff 
challenging her employer’s decision to terminate her while 
she was on pregnancy leave establishes a prima facie case, 
does an employer satisfy the requirement that it articulate 
a "legitimate, nondiscriminatory reason" for that decision 
by asserting that the plaintiff was fired because of her 
absence from the workplace on that leave?

4. Under the McDonnell Douglas Corp. v. Green 
line of decisions, is proof of "pretext" in a pregnancy 
discrimination case limited to a showing that the employer 
treated the plaintiff differently than non-pregnant 
employees on disability leave?



parties

The parties are all shown in the caption. 
Respondent is not a publicly held corporation but is a 
partnership.



Ill

Questions Presented ................................................... i

P a r tie s ...............................................................................ii

Table of Authorities ....................................................... iv

Opinions Below ............................................................  1

Jurisdiction........................................................................ 2

Statute Involved ............................................................... 2

Statement of the C a se ......................................................3

A. Proceedings Below............................................ 3

B. Statement of Facts.............................................4

C. The Bankruptcy Court’s Ruling........................6

D. The District Court’s Decision..........................6

E. The Decision of the Court of Appeals........ 7

Reasons for Granting the Writ ................................  10

I. Certiorari Should Be Granted To Resolve 
An Important Question As To The 
Meaning Of The Pregnancy Discrimination 
Act Concerning Which The Circuits Are In 
Conflict ............................................................  10

Table of Contents
Page



IV

II. This Case Presents Important Issues 
Concerning The Allocation Of Evidentiary 
Burdens Under Thurston And McDonnell 
Douglas /Burdine  In Employment  
Discrimination Cases .....................................  17

Conclusion.........................    22

APPENDIX -

Opinion of the Court of A ppeals..............................  la

Opinion of the District Court ..................... .. 48a

Opinion of the Bankruptcy C ourt............................ 78a

Order Denying Petition for R ehearing..................  93a

Judgm ent....................................   95a

T a b l e  o f  A u t h o r it ie s

Cases:

California Federal Savings & Loan Ass’n v. Guerra,
479 U.S. 272 (1987) . . . . ................................ 11

City of Los Angeles Dep’t of Water & Power v. Manhart, 
435 U.S. 702 (1978) ............................   13

Table of Contents (continued)

Page



Table of Authorities (continued)
Page

Cases (continued):

Commissioner v. Estate of Bosch,
387 U.S. 456 (1967).......................................... 16

Cmokrak v. Evangelical Health Systems Corp.,
819 F. Supp. 737 (N.D. 111. 1973)................  12n

Cushing v. Moore,
970 F.2d 1103 (2d Cir. 1992).......................... 16

EEOC v. Alton Packaging Corp.,
901 F.2d 920 (11th Cir. 1990) .......................  19

Ensley-Gaines v. Runyon,
100 F.3d 1220 (6th Cir. 1996) .....................  12n

Foster v. Dalton,
71 F.3d 52 (1st Cir. 1995) ............................ 20n

Fumco Construction Corp. v. Waters,
483 U.S. 567 (1978).......................................... 22

Griffin v. Carlin,
755 F.2d 1516 (11th Cir. 1985)..................... 20n

Hogan v. Pierce,
31 Fair Empl. Prac. Cas. (BNA) 115 
(D.D.C. 1983)......... .......................................  20n

International Union, UAW v. Johnson Controls, Inc. 
499 U.S. 187 (1991)..................................... 1 2



VI

Table of Authorities (continued)
Page

Cases (continued):

Lane v. Wilson,
307 U.S. 268 (1939).......................................... 12

Lowe v. City of Monrovia,
775 F.2d 998, as amended, 784 F.2d 1407 
(9th Cir. 1986) ................................................. 19

Maganuco v. Leyden Community High School Dist. 212, 
939 F.2d 440 (7th Cir. 1991) ................ .. 12n

McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973) ............i, 10, 17, 18, 19, 20

Miree v. DeKalb County
433 U.S. 25 (1977) ......................... ...............  16

Newport News Shipbuilding & Dry Dock Co. v. EEOC,
462 U.S. 669 (1983)................................... 11, 22

Oil Workers Union v. Mobil Oil Corp.,
426 U.S. 407 (1976)................................   16

Patterson v. McLean Credit Union,
491 U.S. 164 (1989).............. ................... 22

Ramsey v. City & County of Denver,
907 F.2d 1004 (10th Cir. 1990), cert, denied,
506 U.S. 907 (1992).......................................... 19

Ratchford v. Gay Lib,
434 U.S. 1080 (1978).......................................  16



vii

Table of Authorities (continued)
Page

Cases (continued):

Rinaldi v. United States
434 U.S. 22 (1977) .........................................  16

Segar v. Smith,
738 F.2d 1249 (D.C. Cir. 1984), cert, denied 
sub nom. Meese v. Segar, 471 U.S. 1115 
(1985) .............................................. ...............  20

Smith v. F. W. Morse & Co., Inc.,
76 F.3d 413 (1st Cir. 1996) ..................... 12n, 15

St. Mary’s Honor Center v. Hicks,
509 U.S. 502 (1993)................................... 19, 22

Teahan v. Metro-North Commuter R.R. Co.,
951 F.2d 511 (2d Cir. 1991), cert, denied,
506 U.S. 815 (1992)..................................... 9, 16

Texas Department of Community Affairs v. Burdine,
450 U.S. 248 (1981)................  10, 17, 18, 19, 20

Trans World Airlines v. Thurston,
469 U.S. I l l  (1985) ..................... i, 17, 18, 19,

Troupe v. May Dep’t Stores Co.,
20 F.3d 734 (7th Cir. 1994) ............................ 15

United States Postal Service Board of Governors v. Aikens, 
460 U.S. 711 (1983).........................................  22



VU1

Table of Authorities (continued)
Page

Statutes:

28 U.S.C. § 1254(1)........................................................2

42 U.S.C. § 1981 ....................................................... .. 3n

Civil Rights Act of 1964, Title VII,
Pub. L. No. 88-352, § 701, 78 Stat. 253
(1964), codified at 42 U.S.C. § 2000e . 2, 3, 17

Family and Medical Leave Act,
Pub. L. No. 103-3, 107 Stat. 6 (1993), 
codified at 29 U.S.C. §§ 2501 et seq............... 14n

Pregnancy Discrimination Act of 1978,
Pub. L. No. 95-555, 92 Stat. 2076 (1978), 
codified at 42 U.S.C. § 2000e(k) ............passim

Rehabilitation Act of 1973,
29 U.S.C. § 794 .......................................  15, 16

Other Authorities:

Economics and Statistics Admin., Bureau of the Census,
U.S. Dep’t of Commerce, Statistical Abstract 
of the United States 1997 (1997)................... 14n

Lex K. Larson, Employment Discrimination (2d ed.
1995)................................................................. 15



In  The

Supreme Court of tije Umteb States;
O c t o b e r  T e r m , 1997 

No. 97-

D e b o r a h  R h e t t , 

v.
Petitioner,

Ca r n e g ie  C e n t e r  A sso c ia t e s ,
Respondent.

On Petition for Writ of Certiorari to the United States 
Court of Appeals for the Third Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioner Deborah Rhett respectfully prays that a 
writ of certiorari issue to review the judgment of the 
Court of Appeals for the Third Circuit entered in this 
proceeding on December 30, 1997.

O pin io n s  Be l o w

The opinion of the United States Court of Appeals 
for the Third Circuit is reported at 129 F.3d 290 and is set 
out at pages la-47a of the Appendix hereto ("App."). The 
Opinion of the United States District Court for the 
District of New Jersey is unreported and is set out at 
pages 48a-77a of the Appendix. The Opinion of the 
Bankruptcy Court for the District of New Jersey is 
unreported and is set out at pages 78a-92a of the 
Appendix. The Order of the Court of Appeals denying 
petitioner’s timely Petition for Rehearing and denying, by 
an equally divided court, the suggestion for rehearing en



2

banc, is unreported and is set out at pages 93a-94a of the 
Appendix. The Judgment of the Court of Appeals, issued 
in lieu of a mandate, and dated December 30, 1997, is set 
out at pages 95a-96a of the Appendix.

J u r is d ic t io n

The opinion of the Third Circuit was entered 
October 31, 1997. Petitioner filed a timely petition for 
rehearing and suggestion for rehearing en banc, which was 
denied on December 22, 1997. (App. 95a-96a.) Justice 
Souter, as Circuit Justice, granted petitioner’s motion to 
extend the time for filing the petition for a writ of 
certiorari to and including April 21, 1997. This Court has 
jurisdiction to hear this case pursuant to 28 U.S.C. § 
1254(1).

St a t u t e  In v o l v e d

This case involves Title VII of the Civil Rights Act 
of 1964, as amended by the Pregnancy Discrimination 
Act, 42 U.S.C. § 2000e(k),1 which provides in pertinent 
part:

The terms "because of sex" or "on the basis of sex" 
include, but are not limited to, because of or on 
the basis of pregnancy, childbirth, or related 
medical conditions; and women affected by 
pregnancy, childbirth, or related medical conditions 
shall be treated the same for all employment- 
related purposes, including receipt of benefits 
under fringe benefit programs, as other persons 
not so affected but similar in their ability or 
inability to work, and nothing in section 703(h) 
shall be interpreted to permit otherwise. *

'July 2, 1964, P.L. 88-352, Title VII, § 701, 78 Stat. 253; Oct. 31, 
1978, P.L. 95-555, § 1, 92 Stat. 2076.



3

St a t e m e n t  o f  t h e  Ca se

A. Proceedings Below.

Petitioner Deborah Rhett filed an action on 
November 26, 1993, in the United States District Court 
for the District of New Jersey under Title VII of the Civil 
Rights Act of 1964, as amended, and the New Jersey Law 
Against Discrimination against her former employer, 
respondent Carnegie Center Associates (hereinafter 
"Carnegie").2 The complaint alleged discrimination on 
the basis of her gender, race, and marital status when 
petitioner was terminated from her employment during a 
reduction in force at the company.

Because Carnegie was then undergoing bankruptcy 
reorganization, the Title VII action was automatically 
stayed and petitioner pursued the matter by filing a proof 
of claim with the bankruptcy court on February 19, 1994. 
The district court terminated the Title VII action without 
prejudice and the case continued in the bankruptcy court. 
The bankruptcy court held a three-day bench trial and 
found in Carnegie’s favor. (App. 78a-92a.)

The district court affirmed the decision of the 
bankruptcy court. (App. 48a-77a.) Petitioner appealed to 
the Court of Appeals for the Third Circuit, which 
affirmed the decision of the district court by a divided 
vote. (App. la-47a.) Petitioner timely sought rehearing 
and rehearing en banc, which were denied, with the 
suggestion for rehearing en banc being denied by an 
equally divided court. (App. 93a-94a.)

2The complaint also alleged jurisdiction pursuant to 42 U.S.C. § 
1981 with regard to petitioner’s claims of racial discrimination. Those 
claims are not at issue in this proceeding.



4

B. Statement of Facts.3

Petitioner was initially employed by respondent 
Carnegie in April, 1989, and became a full-time 
permanent secretary in Carnegie’s Accounting/Finance 
Department on July 17, 1989. She received a salary 
increase of $1,500 in January, 1990, based on her 
satisfactory performance. (App. 2a, 80a.)

In June, 1990, petitioner informed her supervisors 
and co-workers that she was pregnant. (App. 2a, 82a.) 
On December 18, 1990, she circulated a memorandum to 
managerial officers (including Carnegie’s owner, Alan 
Landis, its controller, Keith Gormisky, and the chief 
financial officer and counsel, Gary Turndorf), stating that 
she planned to be on maternity leave from December 21, 
1990, until about April 15, 1991. (App. 21-31, 83a.) 
Carnegie hired a temporary secretary, whom petitioner 
trained prior to starting her leave, to fill in while she was 
gone.

Carnegie did not have a written maternity leave 
policy, but Turndorf testified that its practice was to "try 
to hold it open for them if we could" so that "[w]hen they 
wanted to come back, if they contacted us and there was 
something open that was suitable, we would offer it to 
them." (App. 3a, 82a.) During Rhett’s absence (until her 
termination), Carnegie continued her medical coverage 
(App. 3a n.l, 8a, 85a), and its records indicated that she 
was still an employee of the corporation. (App. 3a n.l.)4

3We here set forth only the facts relevant to the issues raised in 
this Petition.

4While the bankruptcy court and the district court viewed 
petitioner as "not working for the company" once her pregnancy leave 
had started (App. 70a, 92a), the court of appeals did not affirm their 
judgments on this ground. Instead, the panel noted, "it appears that



5

Carnegie was experiencing financial difficulties 
before petitioner took her maternity leave, and these 
difficulties worsened while she was out on leave. The 
company was forced to make staff cutbacks to decrease 
costs and eliminated several positions just before 
petitioner was scheduled to return to work. Specifically, 
Carnegie decided to reduce the number of secretarial 
positions, and Gormisky wrote petitioner on March 26, 
1991, to tell her that her position had been eliminated.3 
This was the first indication to petitioner that she would 
not be able to return to work after her pregnancy leave. 
(App. 84a Hf 32, 33.)

Turndorf testified that Carnegie did not make a 
performance-based evaluation as to which secretaries 
should be retained to fill the remaining number of 
positions within the company (App. 3a; see also supra note 
5) but rather did not consider petitioner to be an 
employee of the corporation once she took leave, so that 
petitioner was not "let go" when Gormisky wrote to her 
on March 26, 1991. (App. 70a (quoting trial testimony).)

Petitioner remained "under medical care" at the 
time Gormisky sent her the notice that her position was 5

Rhett was an employee of Carnegie on an unpaid leave of absence" 
at the time of her termination. (App. 8a.)

5The bankruptcy court suggested that prior to abolition of Rhett’s 
job there had been five secretarial slots. (App. 89a.) The court of 
appeals described the reduction as "from four to three." (App. 4a.) 
The difference is unimportant to the disposition of this case because 
it is undisputed that the secretarial positions were interchangeable 
(see App. 80a 11 7) and that Rhett’s job was not eliminated because 
the position was uniquely unnecessary or because her qualifications 
were adjudged inferior to those of other incumbent secretaries — but 
simply because "she was not working for the company at the time" she 
was on leave. (App. 3a-4a, 92a.)



6

being abolished. (App. 4a, 8a.) However, after she 
received that letter, petitioner asked about two other 
positions with Carnegie and was told that they were not 
available to her. Carnegie did not interview petitioner or 
consider hiring her for any other position. (App. 4a.)

C. The Bankruptcy Court’s Ruling.

The bankruptcy court rejected petitioner’s Title VII 
claim. In its view, petitioner had failed to establish a 
prima facie case since her employment ended when she 
"left to have a baby" and she "had no absolute right to 
keep her job." (App. 88a.) Even assuming the existence 
of a prima facie case, the bankruptcy judge concluded that 
petitioner’s claim failed because she could not establish 
that Carnegie’s reduction in force was pretextual: "the 
uncontradicted testimony of the debtor establishes that 
the debtor had to let someone in the secretarial group go 
and the fact that Rhett was not working for the company 
at the time made it logical that she be the one." (App. 
92a.)

D. The District Court’s Decision.

The district court affirmed the bankruptcy court’s 
determination. It agreed that petitioner had not 
established a prima facie case because: 1 2

(1) Carnegie had no leave policy but only an 
"informal [practice of rehiring] . . . 
individuals [on maternity leave] if the 
circumstances at the time of the employee’s 
return warranted doing so" (App. 67a);

(2) Carnegie "did not consider [petitioner] to 
be an employee there on March 26, 1991 
when Gormisky notified her that Cfarnegie] 
abolished her position" (App. 70a); and



7

(3) the bankruptcy court’s finding that "the 
secretarial position held by appellant was 
abolished for legitimate, non-discriminatory 
reasons" (Carnegie’s "severe financial 
difficulties") was "not clearly erroneous" 
(App. 73a).

E. The Decision of the Court of Appeals.

As previously indicated, the court of appeals 
concluded that petitioner remained "an employee of 
Carnegie on an unpaid leave of absence" until March 26, 
1991. (App. 8a.) Accordingly, the court of appeals 
framed the issue on appeal as "whether an employee’s 
absence on maternity leave can be a legitimate non- 
discriminatory reason for her termination." (App. 5a.)6

The court recognized that "Carnegie terminated an 
employee who had performed satisfactorily solely because 
of an economically justified reduction in force while she 
was away on maternity leave." (App. 11a.) In addition, 
"Carnegie had need after Rhett was gone for an employee 
to do the type of work she did before it eliminated her 
position" (App. 12a), and "fired Rhett because she was 
on leave rather than . . . [deciding] which secretary’s 
position to abolish on the basis of seniority or m erit. . . 
(App. 14a.)

Nevertheless, a majority of the court of appeals 
panel held that Carnegie’s action in selecting petitioner 
for termination did not directly violate the Pregnancy

6The court of appeals held that "the bankruptcy and district courts 
erred in finding that Rhett did not make out a prima facie case of 
pregnancy discrimination" but ruled that "the error was harmless 
[because] Carnegie asserted a legitimate non-discriminatory reason 
for Rhett’s termination, that she was away on leave [and] Rhett has 
not satisfied her burden of showing that this reason was pretextual." 
(App. 14a-15a.)



8

Discrimination Act (PDA) because "the mere 
consideration of an employee’s absence on maternity 
leave is [not] a per se violation of the PDA." (App. 7a 
n.3, 13a.)

Even though petitioner’s absence from the 
workplace while on leave was caused by "pregnancy or 
related medical conditions," the court ruled that petitioner 
could obtain relief only by "showing that Carnegie treated 
her differently than it would have treated a non-pregnant 
employee absent on disability leave." (App. 13a.)

We acknowledge that arguably it was unfair for 
Carnegie to fire Rhett because she was on leave 
rather than to decide which secretary’s position to 
abolish on the basis of seniority or merit, but it 
was not illegal for it to do so unless it would not 
have eliminated the position of another employee 
on disability leave who was not pregnant.

(App. 14a.) At the same time, the panel majority 
conceded that such a showing "was difficult . . . because 
Carnegie never has had an employee on disability leave 
for a protracted period for a reason other than 
pregnancy." (App. 13a.)

Judge McKee dissented at length on the ground 
that, because petitioner’s absence was due solely to her 
pregnancy, it was illegal sex discrimination to select her 
for termination because of that absence. (App. 19a-47a.)

Pregnancy and absence are not, however, 
analytically distinct, and an employer can not 
punish for the absence occasioned by pregnancy 
under Title VII. As noted above, that statute 
states that it is an unlawful employment practice to 
"discharge any individual . . .  or otherwise 
discriminate . . . because of sex," 42 U.S.C. §2000e- 
2(a)(1), and, after the PDA, that includes



9

discrimination "on the basis of pregnancy . . .  or 
related medical conditions." 42 U.S.C. §2000e(k). 
That protection is meaningless unless it is intended 
to extend to the "temporary" absence from 
employment that is unavoidable in most 
pregnancies. Thus, the absence endemic to 
pregnancy, unlike factors that may sometimes be a 
proxy for age, has to be protected under the facts 
of this case.

(App. 38a.) In Judge McKee’s view, "Carnegie’s action 
[wa]s the functional equivalent of terminating Rhett 
because she was pregnant," just as the Second Circuit held 
in Teahan v. Metro-North Commuter R.R. Co., 951 F.2d 
511 (2d Cir. 1991), cert, denied, 506 U.S. 815 (1992) that 
"‘an employer "relies" on a handicap when it justifies [its 
employment decision] based on conduct caused by that 
handicap.’" (App. 44a-45a.) For that reason, Judge 
McKee would have "remanded for a determination of 
whether Rhett would have been selected for termination 
based upon factors other than her absence." (App. 47a.)

As noted above, the judges of the Third Circuit 
were equally divided, by a 6-6 vote, as to whether to grant 
rehearing en banc on this issue.7

7Judge Wellford, of the Sixth Circuit, sat by designation on the 
panel and was the deciding vote to affirm the lower courts’ decisions. 
He did not participate in the vote whether to grant rehearing en banc.



10

Reasons for Granting the Writ 

I.
C e r t io r a r i Sh o u l d  Be  G r a n t e d  T o  R e s o l v e  A n  
Im p o r t a n t  Q u e s t io n  A s T o  T h e  M e a n in g  O f  T h e  

P r e g n a n c y  D is c r im in a t io n  A c t  C o n c e r n in g  
W h ic h  T h e  C ir c u it s  A r e  In  C o n f l ic t

This case presents an important question as to the 
correct interpretation of the Pregnancy Discrimination 
Act that should be resolved by this Court. The decision 
below is based on a narrow reading of the statute that 
makes its first clause meaningless and surplus.

The court of appeals recognized that Title VII bars 
"employment discrimination based on an individual 
employee’s sex" and that the Pregnancy Discrimination 
Act amended Title VII so that "[tjhere is employment 
discrimination whenever an employee’s pregnancy is a 
motivating factor for the employer’s adverse employment 
decision." (App. 6a.) Yet in essence, the court of appeals 
held that a pregnant woman’s absence from work, even 
though indisputably because of her pregnancy and a 
related medical condition, constituted a "legitimate, 
nondiscriminatory reason" for choosing her to be 
terminated while retaining non-pregnant employees in 
positions interchangeable with hers. The court thus drew 
a distinction between "pregnancy" and absence resulting 
directly from pregnancy, establishing that distinction as 
the line between permitted conduct and prohibited 
discrimination.

Having found that the employer had advanced a 
"legitimate, nondiscriminatory reason" that met its burden 
under McDonnell Douglas Corp. v. Green, 411 U.S. 792 
(1973) and Texas Department of Community Affairs v. 
Burdine, 450 U.S. 248 (1981), the court below further held 
that the only way that petitioner could show pretext was



11

to demonstrate that other employees were absent because 
of disability at the time of a reduction in force at the 
company but were not terminated.

By these holdings, the court of appeals collapsed 
the two clauses of the PDA, and rendered the first 
meaningless. The first clause of the statute (see supra p. 
2) provides that discrimination "because of sex" shall 
include discrimination "because of or on the basis of 
pregnancy, childbirth, or related medical conditions." The 
second clause, separated by a semi-colon, provides that 
"women affected by pregnancy, childbirth, or related 
medical conditions shall be treated the same for all 
employment-related purposes . . .  as other persons not so 
affected but similar in their ability or inability to work." 
The plain meaning of the first clause is that the 
discriminatory treatment of a woman because of her 
pregnancy constitutes discrimination based on sex in 
violation of the statute.

This Court and individual Justices have recognized 
the broad sweep of the first clause:

[T]he first clause of the PDA reflects Congress’ 
disapproval of the reasoning in Gilbert [citation 
omitted]. Rather than imposing a limitation on 
the remedial purpose of the PDA, we believe that 
the second clause was intended to overrule the 
holding in Gilbert and to illustrate how 
discrimination against pregnancy is to be remedied.

California Federal Savings & Loan Ass’n v. Guerra, 479 
U.S. 272, 284-85 (1987). "The meaning of the first clause 
is not limited by the specific language in the second 
clause, which explains the application of the general 
principle to women employees." Newport News 
Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 688 
(1983) (Rehnquist, J., dissenting). In contrast to this



12

Court’s understanding of the statutory structure, decisions 
of the lower courts exhibit great confusion.8

In the present case, petitioner Rhett was absent 
from work solely because of her pregnancy and a related 
medical condition; to terminate her because of her 
absence was to terminate her because of her pregnancy, 
a violation of the statute on its face.

The contrary conclusion of the court below brings 
to mind Justice Frankfurter’s observation, in a different 
context, that the Fourteenth Amendment "nullifies 
sophisticated as well as simple-minded modes of 
discrimination," Lane v. Wilson, 307 U.S. 268, 275 (1939). 
This Court has consistently eschewed an unduly literal or 
mechanical interpretation of Title VII’s proscription of 
discriminatory treatment. E.g., International Union, UAW 
v. Johnson Controls, Inc., 499 U.S. 187, 188-89 (1991) ("In 
its use of the words ‘capable of bearing children’ in the 
1982 policy statement as the criterion for exclusion, 
Johnson Controls explicitly classifies on the basis of 
potential for pregnancy. Under the PDA, such a

8Compare, e.g., Maganuco v. Leyden Community High School Dist. 
212, 939 F.2d 440, 444 (7th Cir. 1991) (PDA’s "scope is limited to 
policies which impact or treat medical conditions relating to 
pregnancy and childbirth less favorably than other disabilities"); 
Cmokrak v. Evangelical Health Systems Corp., 819 F. Supp. 737, 741 
(N.D. 111. 1993) (suggesting that two clauses of statute generate 
"seemingly irreconcilable interpretations"); with, e.g., Ensley-Gaines v. 
Runyon, 100 F.3d 1220, 1226 (6th Cir. 1996) (second clause 
”provide[s] additional protection to those ‘women affected by 
pregnancy, childbirth or related medical conditions’"); Smith v. F.W. 
Morse & Co., Inc., 76 F.3d 413, 424 (1st Cir. 1996) (reading PDA to 
protect employees from discharge because of "short-term inability to 
work [that] is bound up with the very nature of pregnancy and 
childbirth," and to allow "an employer [to] discharge an employee 
while she is on a pregnancy-induced leave so long as it does so for 
legitimate reasons unrelated to her gravidity").



13

classification must be regarded, for Title VII purposes, in 
the same light as explicit sex discrimination"); City of Los 
Angeles Dep’t of Water & Power v. Manhart, 435 U.S. 702, 
7809 (1978) ("Actuarial studies could unquestionably 
identify differences in life expectancy based on race or 
national origin, as well as sex. But a statute that was 
designed to make race irrelevant in the employment 
market, see Griggs v. Duke Power Co., 401 U.S. 424, 436, 
could not reasonably be construed to permit a take-home 
pay differential based on a racial classification") 
(footnotes omitted).

The court below interpreted the PDA to make 
illegal only a policy or practice of treating a pregnant 
woman differently from a non-pregnant but otherwise 
disabled employee. Such disparate treatment obviously 
falls within the plain language of the second clause but 
hardly can be said to delimit the scope of either clause.9

Whether the PDA should be interpreted narrowly, 
as did the Third Circuit, or broadly to cover employment 
decisions that are based on conditions, such as absences 
from the job site, that are inherent in pregnancy is a 
question of great importance. A narrow interpretation 
will mean that during the absences that inevitably occur 
during every pregnancy, women will be subject to being 
terminated or otherwise adversely affected because they

9The court of appeals read the second clause more narrowly that 
its language requires. The statute is not limited, in its terms, to a 
comparison to other employees suffering a disability. Rather, it 
encompasses treatment different from that accorded any "other 
persons not so affected [by pregnancy] but similar in their ability or 
inability to work.” Here, petitioner contends, the proper comparison 
group includes the other incumbents of the secretarial positions 
interchangeable with hers, each of whom was not "affected" by 
pregnancy at the time of the reduction in force, but each of whom 
was (unlike petitioner) kept on as an employee.



14

are absent.10 The only circumstances in which they can 
be protected from discrimination caused by effects of 
pregnancy will be in the rare instances in which an 
employer can be shown not to subject employees who are 
given leave for other reasons to adverse treatment.

The courts of appeals are in conflict over the 
question whether an adverse employment decision may 
legally be based on some action or behavior by an 
employee that is inextricably connected to a characteristic 
or condition protected by an anti-discrimination statute. 
In the present case, the sole basis articulated by Carnegie 
for terminating petitioner was her absence from the 
workplace due to her pregnancy and the unpaid leave

10As the majority of the court below noted, the Family and 
Medical Leave Act (FMLA) requires employers (as that term is 
defined in the statute) to grant leave (which may be unpaid leave) to 
employees for medical conditions or childbirth and, except for certain 
highly compensated employees, to restore employees who have taken 
such leave to the same or an equivalent position upon their return to 
work. 29 U.S.C. §§ 2612(a)(1)(A), (D), 2612(c), 2614(a), (b). The 
FMLA has no impact upon this case. Rhett’s termination preceded 
its enactment in 1993 and the statute did not take effect until that 
year, see Pub. L. No. 103-3, § 405, 107 Stat. 6, 26 (1993). Moreover, 
as the court below recognized (App. 19a n.5), the law excludes 
companies with fewer than 50 employees from its definition of 
"employer," 29 U.S.C. § 2611(4), and Carnegie has fewer than 50 
employees.

Notwithstanding enactment of the FMLA, PDA protections 
against discrimination based on pregnancy continue to be of critical 
importance to large numbers of individual workers. In 1994, the 
Bureau of the Census reported that there were more than 25.3 
million individuals in the United States employed by firms that had 
less than 20 employees in all, out of a total of more than 96 million 
workers. (Census statistics do not distinguish among firms employing 
more than 20 but less than 100 workers.) ECONOMICS AND 
Statistics Admin., Bureau of the Census, U.S. Dep’t  of 
Commerce, Statistical Abstract of the United States 1997, 
at 544 (Table No. 844) (1997).



15

which (in the view taken by the court below) she was 
granted. The court below held that despite the 
connection between petitioner’s pregnancy and that leave, 
the company had advanced a nondiscriminatory reason for 
discharging her. Compare, e.g., 3 LEX K. LARSON, 
E m p l o y m e n t  D is c r im in a t io n  § 47.07[3] at 47-51 (2d 
ed. 1995) ("Some leave accompanying childbirth is a 
necessity, and a policy of denying it, with discharge as the 
alternative, is tantamount to a policy of outright discharge 
for pregnancy").

The Third Circuit followed the interpretation of 
the PDA by the Seventh Circuit in Troupe v. May Dep’t 
Stores Co., 20 F.3d 734, 738 (7th Cir. 1994), which held 
that a pregnant employee could be discharged because of 
repeated instances of tardiness, even though the tardiness 
was caused by her pregnancy. (App. at pp. 9a-10a.) The 
First Circuit, on the other hand, would have come to a 
contrary result. Both the majority and the dissent below 
recognized the inconsistency between Troupe and Smith v. 
F.W. Morse & Co., 76 F.3d 413 (1st Cir. 1996). The First 
Circuit interpreted the PDA as requiring that "an 
employer must put an employee’s pregnancy (including her 
departure on maternity leave) to one side in making its 
employment decisions." 76 F.3d at 424, quoted at App. p. 
10a and 42a (emphasis added by the court below).11

As the dissent below also noted, the decisions in 
this case and in Troupe are also in conflict with decisions 
of the Second Circuit interpreting the Rehabilitation Act 
of 1973, 29 U.S.C. § 794. (App. at pp. 43a-47a) In *

"In Smith the First Circuit held that the elimination of the 
plaintiffs job during a reorganization did not violate the PDA 
because the employer did not take the action because the plaintiff 
was absent, but for reasons unrelated to her pregnancy, i.e., her 
position was unique.



16

Teahan v. Metro-North Commuter R.R. Co., 951 F.2d 511 
(2d Cir. 1991), cert, denied, 506 U.S. 815 (1992), the 
Second Circuit held that it violated the Act for an 
employer to fire an employee because of absenteeism that 
resulted from a handicap. Similarly, in Cushing v. Moore, 
970 F.2d 1103, 1108 (2d Cir. 1992), the Second Circuit 
reiterated the rule that if "an employee’s conduct (such as 
absenteeism), which forms the articulated basis for a job 
termination is actually caused by a handicap," then there 
is a violation of the Rehabilitation Act.

The importance of the issue presented by this case 
is vividly demonstrated by the 6-6 vote by the Third 
Circuit over whether to grant rehearing en banc. This 
Court has granted certiorari on a number of occasions 
where there has been a split among the judges in a circuit 
and the case involves an important issue unresolved by 
this Court. See Oil Workers Union v. Mobil Oil Corp., 426 
U.S. 407, 412 (1976) (reviewing an 8-6 en banc decision); 
Miree v. DeKalb County, 433 U.S. 25 (1977); (reviewing an 
8-6 en banc decision); Rinaldi v. United States, 434 U.S. 22 
(1977) (reviewing a 7-6 en banc decision). As Chief 
Justice Rehnquist has stated:

The sharp split amongst the judges who considered 
this case below demonstrates that our past 
precedents do not conclusively address the issues 
central to this dispute. In the same manner that 
we expect considered and deliberate treatment by 
these courts, we have a concomitant responsibility 
to aid them where confusion or uncertainty in the 
law prevails.

Ratchford v. Gay Lib, 434 U.S. 1080, 1082 (1978) 
(Rehnquist, J., dissenting.) This is particularly true when 
the case involves a recurring and important issue or where 
there is "widespread conflict among the circuits." 
Commissioner v. Estate of Bosch, 387 U.S. 456, 457 (1967).



17

II.
T h is  Ca s e  P r e s e n t s  Im p o r t a n t  Issu es  C o n c e r n in g  
Th e  A l l o c a t io n  o f  E v id e n t ia r y  B u r d e n s  U n d e r  

Th u r s t o n  a n d  M cD o n n e l l  D o u g l a s /B u r d in e  in  
E m p l o y m e n t  D is c r im in a t io n  Ca ses

As discussed above, the central issue in this case is 
whether the termination of an employee because of 
conduct (here, absence from work) caused by pregnancy 
or some other protected characteristic, violates federal 
anti-discrimination laws, specifically Title VII of the Civil 
Rights Act of 1964 as amended by the Pregnancy 
Discrimination Act. The decision of the court of appeals 
that there was no violation in these circumstances infected 
its resolution of the remaining evidentiary issues in the 
case and resulted in the application by the court of 
incorrect evidentiary rules that conflict with this Court’s 
decisions in Trans World Airlines v. Thurston, 469 U.S. I l l  
(1985), McDonnell Douglas Corp. v. Green, 411 U.S. 792 
(1973), and Texas Department of Community Affairs v. 
Burdine, 450 U.S. 248 (1981). This case therefore raises 
important issues involving the allocation of the burden of 
proof in actions brought under Title VII and other federal 
anti-discrimination statutes.

1. Petitioner argued below that the elimination of 
her position because she was absent from the workplace 
due to her pregnancy and childbirth was a direct violation 
of the PDA, since absence from work is unavoidably 
connected with the condition of pregnancy. She 
maintained that, for this reason, the case should have 
been analyzed and decided under the rule of Thurston, 
rather than according to the McDonnell Douglas/Burdine 
approach. The court of appeals, however, held not only 
that terminating an employee because of her absence on 
leave resulting from her pregnancy was not a per se



18

violation of the PDA, but also that these facts did not 
constitute direct evidence of discrimination under the 
PDA making Thurston inapplicable. Instead, the court 
applied the McDonnell Douglas /Burdine analysis and 
concluded that Ms. Rhett’s absence, even though caused 
by pregnancy, constituted a "legitimate, nondiscriminatory" 
reason for the termination.

The court below thereby made the same error as 
the district court originally did in Thurston: applying the 
McDonnell Douglas/Burdine approach, which is "designed 
to assure that the ‘plaintiff [has] his day in court despite 
the unavailability of direct evidence,’" to a case in which 
there is direct evidence of discrimination, Thurston, 469 
U.S. at 121. In Thurston this Court recognized that a rule 
or practice is "discriminatory on its face" if an employment 
decision — there the availability of transfer to flight 
engineer status — "depends upon" a protected status or 
characteristic — there, the employee’s age. Id. Here, it is 
equally undeniable that when Carnegie selected Deborah 
Rhett for termination because of her absence from the 
workplace even though that absence resulted from her 
pregnancy, it made the termination decision "depend 
upon" pregnancy. Hence, as in Thurston, there is "direct 
evidence" of discrimination that the courts below did not 
credit.

The issue of what constitutes direct evidence of 
discrimination is one of great importance. The practical 
consequence of applying one or the other evidentiary 
rules to a case is vividly illustrated by the present matter. 
If Thurston governs, then the burden of proof shifts to the 
employer to demonstrate that it had an affirmative 
defense or that there was a valid reason for terminating 
the petitioner even if no consideration is given to her 
pregnancy or pregnancy leave. 469 U.S. at 121-25. If the 
McDonnell Douglas/Burdine paradigm governs, the burden



19

that the reason proffered was pretextual and that the real 
reason for the termination decision was intentional 
discrimination. St. Mary’s Honor Center v. Hicks, 509 U.S. 
502 (1993).

Obviously, a formal, written policy that is 
discriminatory on its face is direct evidence of 
discrimination. Thurston, 469 U.S. at 121 (policy 
conditioning transfer rights on age of pilots is 
discriminatory on its face). Similarly, discriminatory 
remarks made by a supervisor or other official responsible 
for the employment decision at issue have been held to 
constitute direct evidence of discrimination, making 
McDonnell Douglas /Burdine inapplicable. See, e.g.,EEOC 
v. Alton Packaging Corp., 901 F.2d 920 (11th Cir. 1990); 
Lowe v. City of Monrovia, 775 F.2d 998, as amended, 784 
F.2d 1407 (9th Cir. 1986). But see Ramsey v. City & 
County of Denver, 907 F.2d 1004 (10th Cir. 1990) 
(comments must establish an existing policy of 
discriminatory treatment, not personal bias of supervisor 
or official, in order to be direct evidence of 
discrimination; otherwise, proof only permits trier to draw 
McDonnell Douglas inference of discrimination), cert, 
denied, 506 U.S. 907 (1992). This case presents the issue 
of whether an employment decision based on conduct or 
a characteristic inherently linked to protected group status 
under anti-discrimination law, such as absence due to 
pregnancy, constitutes direct evidence of discrimination. 
This is a question that this Court has not previously 
addressed and that should be resolved for the guidance of 
the lower courts.

2. Once having incorrectly determined to analyze 
the record according to the principles of McDonnell 
Douglas and Burdine, the court of appeals compounded its 
error by holding that Carnegie sufficiently met its burden 
of production in response to petitioner’s prima facie case



20

(see supra note 6) by articulating — as its "legitimate, 
nondiscriminatory reason" for her termination — her 
absence from work (while on pregnancy leave). Wholly 
apart from the question whether that basis for selecting 
which employee will be terminated was "discriminatory on 
its face," it is readily apparent that using absence from the 
jobsite as the criterion for termination would necessarily 
affect pregnant (or post-partum) employees more severely 
than employees who were not pregnant. The reason 
articulated by the employer, Carnegie, was thus inherently 
not "nondiscriminatory," because it had the effect of 
selecting the petitioner as the one to be terminated 
because she belonged to a protected group. See, e.g., 
Griffin v. Carlin, 155 F.2d 1516, 1526-28 (11th Cir. 1985); 
Segar v. Smith, 738 F.2d 1249, 1268-70 (D.C. Cir. 1984) 
(proof of intentional discrimination cannot be overcome 
by reliance on an employment practice that has a 
disparate impact upon protected group), cert, denied sub 
nom. Meese v. Segar, 471 U.S. 1115 (1985).

Whether an employer may meet its burden of 
production by relying upon a practice neutral on its face 
(in the sense that it does not overtly and explicitly identify 
status as a member of a group protected by anti- 
discrimination laws as the criterion for being affected by 
an adverse employment action), but discriminatory in its 
disproportionate application to employees within 
protected classes, is an important issue in the enforcement 
of the anti-discrimination laws that is unresolved by 
decisions of this Court.12

nCompare Foster v. Dalton, 71 F.3d 52, 55, 57 (1st Cir. 1995) 
(employer met production burden after plaintiff established prima 
facie case "by proffering a nondiscriminatory, if unsavory, reason for 
the personnel action: preselection of a friend of the appointing 
officer"; plaintiff did not "show that cronyism, when practiced in a 
particular workplace, regularly yields a racially discriminatory result")



21

3. Finally, as a result of the improper application 
of this Court’s precedents as outlined above, the court of 
appeals reached the question whether, analyzing the 
record under McDonnell Douglas /Burdine, petitioner 
proved that the assertedly "legitimate, nondiscriminatory 
reason" was pretextual. Here again, the court of appeals’ 
cramped reading of the two clauses of the PDA caused it 
to announce an evidentiary principle in conflict with the 
governing decisions of this Court (App. 13a-15a):

Rhett has not made a showing that Carnegie 
treated her differently than it would have treated 
a non-pregnant employee absent on disability 
leave. . . . Thus, we must affirm the district court’s
denial of her PDA claim for the reasons indicated.

* * *
In view of our analysis, we conclude that 

although the bankruptcy and district courts erred 
in finding that Rhett did not make out a prima 
facie case of pregnancy discrimination (because 
they did not apply the Armbruster reduction in 
force analytical framework), the error was 
harmless. Carnegie asserted a legitimate non­
discriminatory reason for Rhett’s termination, that 
she was away on leave. Rhett has not satisfied her 
burden of showing that this reason was pretextual. 
Therefore, we will affirm insofar as this case 
involves the termination of Rhett’s position.

with Hogan v. Pierce, 31 Fair Empl. Prac. Cas. (BNA) 115, 126-27 
(D.D.C. 1983) ("when the federal government is involved, deviation 
from legally mandated civil service procedures and requirements 
cannot form the basis of a legitimate, lawful explanation sufficient to 
overcome a prima facie case of discrimination"; alternatively, while 
"the reasons given for the non-selection of [plaintiff] may have met 
the Burdine standards of articulating a legitimate and lawful non­
discriminatory reasonf], the Court holds that they were pretexts for 
discrimination").



22

This Court has consistently held that the trier of 
fact should consider any evidence introduced by a 
petitioner to demonstrate pretext, rather than looking for 
some talismanic showing of a particular kind. See St. 
Mary’s Honor Center v. Hicks, 509 U.S. 502, 519 (1993) 
('McDonnellDouglas methodology was ‘"never intended to 
be rigid, mechanized, or ritualistic"’"); Patterson v. McLean 
Credit Union, 491 U.S. 164, 187-88 (1989) ("petitioner is 
not limited to presenting evidence of a certain type"); 
United States Postal Service Board of Governors v. Aikens, 
460 U.S. 711, 715 (1983); Fumco Construction Corp. v. 
Waters, 483 U.S. 567, 577 (1978). The ruling below 
demonstrates that the point has still not been clearly 
understood. The Court should grant review in order to 
clarify and underscore its importance.

C o n c l u sio n

This Court granted certiorari in Newport News 
Shipbuilding & Dry Dock Co. v. EEOC because the case 
presented an "important question" involving the 
interpretation of the Pregnancy Discrimination Act that 
"had been decided differently" by the circuits. 462 U.S. at 
675. The present case involves equally important 
questions concerning which there is conflict and confusion 
among the circuits. It provides the opportunity for the 
Court to give needed guidance to the lower federal courts 
in the application of an act affecting the rights of millions 
of employees whose absences from work are inherent 
characteristics of their pregnancies.



23

For the foregoing reasons, the petition for a writ of 
certiorari should be granted and the decision of the court 
below reversed.

Respectfully submitted,

E l a in e  R. J o n e s  
Director-Counsel 
T h e o d o r e  M . Sh a w

* N o r m a n  J. C h a c h k in  
Ch a r l e s  St e p h e n  R a l s t o n  
C a t h e r in e  B. P o w e l l

NAACP L e g a l  D e f e n s e  
a n d  E d u c a t io n a l  F u n d , 
In c .

99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

* Counsel of Record

L a n ie r  E . W il l ia m s  
Ch r is t o p h e r  M o r k id e s  

P.O. BOX 6584 
P h il a d e l p h ia , PA 19138 
(215) 848-7239

Y v o n n e  M. W il l ia m s  
NAACP L e g a l  D e f e n s e  

a n d  E d u c a t io n a l  F u n d , 
In c .

1275 K Street, N.W.
Suite 301
Washington, DC 20005 
(202) 682-1300

Counsel for Petitioner



APPENDIX



Opinion of the Court of Appeals

BEFORE: GREENBERG, MCKEE, AND 
WELLFORD,*
Circuit Judges

(Filed: October 31, 1997)

*  *  *

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This case comes on before this court on appeal from 
the district court’s order affirming a bankruptcy court 
order expunging the claim of the appellant Deborah 
Rhett, a black female, which arose out of the 
termination of her employment when her employer, 
appellee Carnegie Center Associates (Carnegie), 
abolished her position. The bankruptcy court had 
subject matter jurisdiction under 28 U.S.C. § 
157(b)(2)(B), (O) and 28 U.S.C. § 1334(b). The district 
court had appellate jurisdiction over the bankruptcy 
court’s order pursuant to 28 U.S.C. § 158. We have 
jurisdiction under 28 U.S.C. § 1291, 28 U.S.C. § 158(d), 
and 42 U.S.C. § 2000e-5(j).

’Honorable Harry W. Wellford, Senior Judge of the 
United States Court of Appeals for the Sixth Circuit, 
sitting by designation.



2a

A. FACTUAL AND PROCEDURAL HISTORY

The facts in the case were developed at the trial of 
the adversary proceeding in the bankruptcy court. 
Rhett began working for Carnegie, a real estate 
company Allan Landis owned and controlled, as a 
temporary secretary in April 1989. She became a full­
tim e p e rm a n e n t se c re ta ry  in C a rn e g ie ’s 
Accounting/Finance Department on July 17, 1989, and 
received a salary increase of $1,500 in January 1990 
based on her satisfactory performance.

In June 1990, Rhett informed her supervisors and 
co-workers that she was pregnant. When she told Keith 
Gormisky, the controller, and Gary Tumdorf, the chief 
financial officer and counsel, of her pregnancy both 
asked if she was going to get married. Turndorf 
commented that being a single parent was difficult, and 
Rhett claimed that Gormisky said that getting married 
was: "in society’s eyes . . . the right thing to do." 
Nevertheless, Turndorf testified that the fact that Rhett 
was unmarried played no role in Carnegie’s later 
decision to abolish her position. Rhett also claimed 
that Gormisky became irate with her just before she left 
on maternity leave and stated that she was on "thin ice." 
The bankruptcy court, apparently attributing this 
comment to Turndorf, found it related to his view of 
the quality of Rhett’s work.

Rhett circulated a memo to the managerial officers 
(including Landis, Turndorf and Gormisky) on 
December 18, 1990, stating that she planned to be on



3a

maternity leave from December 21, 1990, until about 
April 15, 1991. Carnegie hired a temporary secretary 
to fill in while she was gone. Carnegie did not have 
a formal maternity leave policy, but Turndorf testified 
that its practice was to "try and hold it open for them 
if we could" so that ”[w]hen they wanted to come back, 
if they contacted us and there was something open that 
was suitable, we would offer it to them." See 
bankruptcy court opinion at 5-6 (discussing two 
employees who left on maternity leave and subsequently 
returned to the same or similar positions).

Carnegie had experienced financial difficulties prior 
to Rhett’s departure that worsened while she was gone, 
forcing it to make staff cutbacks to decrease costs. 
Consequently, just before Rhett originally had planned 
to return, Carnegie eliminated several positions, 
including Rhett’s secretarial position, and terminated 
several employees, including her supervisor, Geoff 
Hammond. On March 26,1991, Gormisky wrote Rhett 
to tell her that her position had been eliminated.1 
Turndorf testified that Carnegie did not make a 
performance-based evaluation as to which secretary’s 
employment it should terminate because it did not 
consider Rhett an employee at that time and it was easy *

^ a r c h  26,1991, is the date Carnegie listed with the 
EEOC as Rhett’s "Date of Termination." In addition, 
Rhett’s medical coverage continued with Carnegie until 
this date, as two weeks later she received COBRA 
information. The bankruptcy and district courts, 
however, found that Carnegie did not consider Rhett an 
employee at the time it abolished her position.



4a

to abolish her former position by not hiring any more 
temps, thus reducing the number of secretaries from 
four to three. At that time Rhett was still away from 
work because she was under medical care (counseling) 
for post-partum depression, which she continued until 
June of 1991. When Rhett called Gormisky after 
receiving the letter, he reiterated that her position had 
been abolished. She asked about two other positions 
with Carnegie and was told they were not available to 
her. In fact, Carnegie did not interview Rhett, or 
consider hiring her, for any other position.

Rhett filed a suit in the district court under Title VII 
and the New Jersey Law Against Discrimination against 
Carnegie on November 26,1993, alleging discrimination 
on the basis of her race, gender, and marital status.2 
The district court action was automatically stayed 
because Carnegie was undergoing bankruptcy 
reorganization. Thus, Rhett pursued the matter by 
filing a proof of claim with the bankruptcy court on 
February 19, 1994. Thereafter the district court 
terminated the district court action without prejudice 
and the case continued as an adversary proceeding in 
the bankruptcy court. The bankruptcy court found in 
Carnegie’s favor after a three-day bench trial. It held 
that Carnegie had to reduce costs because of financial 
difficulties and that it eliminated staff at both the 
management and support levels. The court held that 
Carnegie abolished Rhett’s position for the legitimate

2She also made a claim under 42 U.S.C. § 1981 but 
she has not advanced that claim in these proceedings so 
we do not discuss it.



5a

non-discriminatory reason that she was away from work, 
and not because of discrimination on the basis of race, 
gender or pregnancy. The court further held that she 
was not qualified for any of the other positions for 
which she asserted Carnegie should have interviewed 
her. The district court affirmed in an opinion and 
order entered August 6, 1996, holding that the 
bankruptcy court’s factual findings were not clearly 
erroneous and these findings "compelled the conclusion 
that the secretarial position held by appellant was 
abolished for legitimate, non-discriminatory reasons." 
Rhett then appealed to this court.

The main issue on this appeal is whether an 
employee’s absence on maternity leave can be a 
legitimate non-discriminatory reason for her 
termination. Inasmuch as the district court sat as an 
appellate court, we exercise plenary review of its 
decision. Universal Minerals, Inc. V  C. A. Hughes & 
Co., 669 F.2d 98, 101-102 (3d Cir. 1981). Findings of 
fact by the bankruptcy judge, however, are only 
reversible if clearly erroneous. Bankruptcy Rule 8013.

B. PREGNANCY, RACIAL AND GENDER 
DISCRIMINATION

On this appeal Rhett claims that Carnegie 
terminated her employment because of her pregnancy 
and on account of her race and gender in violation of 
Title VII and the New Jersey Law Against 
Discrimination. We confine our discussion to Title VII 
because her state law claims are analyzed in the same 
way as her Title VII claims. See Marzano v. Computer 
Science Corp., 91 F.3d 495, 502 (3d Cir. 1996). Indeed,



6 a

Rhett apparently recognizes this point because she does 
not cite a single New Jersey state court opinion in 
either of her briefs on this appeal.

Title VII prohibits employment discrimination based 
on an individual employee’s sex. 42 U.S.C. §2000e-2(a). 
The Pregnancy Discrimination Act ("PDA"), a 1978 
amendment to Title VII, states:

The terms ‘because of sex’ or ‘on the basis of sex’ 
include, but are not limited to, because of or on the 
basis of pregnancy, childbirth, or related medical 
conditions; and women affected by pregnancy, 
childbirth, or related medical conditions shall be 
treated the same for all employment-related 
purposes . . .  as other persons not so affected but 
similar in their ability or inability to work. . . .

42 U.S.C. §2000e(k). There is employment 
discrimination whenever an employee’s pregnancy is a 
motivating factor for the employer’s adverse 
employment decision. 42 U.S.C. §2000e-2(m).

The bankruptcy and district courts analyzed Rhett’s 
claim as being based on circumstantial evidence 
implicating the burden shifting framework of McDonnell 
Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817 
(1973). In a Title VII case such as this one involving a 
reduction in force, in order to make out a prima facie 
case the plaintiff must show that (1) she belonged to a 
protected class, (2) she was qualified for the position 
from which she was terminated, (3) she was terminated 
and (4) persons outside of the protected class were 
retained. See Armbruster v. Unisys Corp., 32 F.3d 768,



7a

777 (3d Cir. 1994). While neither court made specific 
reference to the applicability of the modified McDonnell 
Douglas framework in reduction in force situations, the 
record clearly establishes that Carnegie did reduce its 
force, so we will apply the appropriate framework. 
Once the plaintiff establishes a prima facie case, the 
burden shifts to the defendant to articulate a legitimate 
non-discriminatory reason for the plaintiffs 
termination. Texas Dep’t of Community Affairs v. 
Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 1093 
(1981). If the defendant articulates such a reason, the 
plaintiff then must prove that the facially legitimate 
reason was a pretext for a discriminatory motive. Id?

The bankruptcy and district courts held that Rhett 
did not establish a prima facie case. We disagree with 
this conclusion but are satisfied that the courts’ error is 
harmless because the bankruptcy court considered the 
issues relevant to a reduction in force analysis at a trial 
and made the requisite findings for such an analysis.

3Rhett argues that this case involves a per se 
violation of the PDA, so that she has presented direct 
evidence of discrimination. Accordingly, in her view we 
should analyze the case under Trans World Airlines, Inc. 
v. Thurston, 469 U.S. I l l ,  105 S.Ct. 613 (1985), rather 
than under McDonnell Douglas. We reject this 
argument because, as we discuss below, consideration 
of an employee’s absence on maternity leave is not a 
per se violation of the PDA. Furthermore, the 
bankruptcy and district courts did consider Rhett’s 
claim of direct evidence of discrimination and properly 
rejected it. Thus, this is a McDonnell Douglas case.



8a

Thus, insofar as this case involves a reduction in force, 
we focus on Carnegie’s reason for terminating Rhett’s 
employment.

This case largely boils down to a dispute over one 
issue: whether terminating an employee because she is 
absent on maternity leave is a violation of the PDA. 
The bankruptcy and district courts found that Carnegie 
eliminated Rhett’s position because she was not at her 
place of employment at that time, not because of her 
pregnancy. Carnegie argues, and the bankruptcy and 
district courts found at least implicitly, that Rhett was 
not employed by Carnegie at the time Carnegie 
eliminated her position. Rhett asserts that she was an 
employee on unpaid leave at that time. Carnegie had 
no formal maternity leave policy, but it did have a 
practice of allowing employees to return from leave to 
the same or similar position if one was available. It is 
undisputed that Carnegie maintained Rhett’s medical 
insurance until it eliminated her position on March 26, 
1991. Therefore, it appears that Rhett was an 
employee of Carnegie on an unpaid leave of absence 
who sought reinstatement. We need not, however, 
definitely so determine because even assuming that 
Carnegie still employed Rhett when it abolished her 
position, under the Armbruster reduction in force 
framework, she is not entitled to relief.

Regulations promulgated under Title VII provide:

Disabilities caused or contributed to by pregnancy, 
childbirth, or related medical conditions, for all job- 
related purposes, shall be treated the same as 
disabilities caused or contributed to by other medical



9a

conditions . . . .  Written or unwritten employment 
policies and practices involving matters such as the 
commencement and duration of leave . . . [and] 
reinstatement . . . shall be applied to disability due 
to pregnancy . . .  on the same terms and conditions 
as they are applied to other disabilities.

29 C.F.R. §1604.10(b). The interpretive question and 
answer section accompanying the regulation specifies 
that an employer must hold open the job of a woman 
absent because of pregnancy "on the same basis as jobs 
are held open for employees on sick or disability leave 
for other reasons." 29 C.F.R. Pt. 1604 App. Question 
9. On the other hand, the PDA does not require that 
employers treat pregnant employees better than other 
temporarily disabled employees. Troupe v. May Dep’t 
Stores Co., 20 F.3d 734, 738 (7th Cir. 1994); Maganuco 
v. Leyden Community High Sch. Dist. 212, 939 F.2d 440, 
444 (7th Cir. 1991); H. Rep. No. 95-948 at 4-5 (1978), 
reprinted, 1978 U.S.C.C.A.N. 4749, 4752-53 (basic 
principles of the PDA); see also California Fed. Sav. and 
Loan A ss’n v. Guerra, 479 U.S. 272, 289 & n.29, 107 
S.Ct. 683, 694 & n.29 (1987) (holding that the PDA 
neither requires nor prohibits states from mandating 
maternity leave and reinstatement policies).

Rhett argues that Carnegie terminated her 
employment solely because of her absence and her 
absence was due solely to her pregnancy and related 
medical conditions. Consequently, in her view Carnegie 
terminated her employment because of her pregnancy. 
The Supreme Court has held that under the Age 
Discrimination in Employment Act an employer must 
ignore an employee’s age in certain employment



10a

decisions, but not any other characteristics such as 
pension expense. Hazen Paper Co. v. Biggins, 507 U.S. 
604, 612, 113 S.Ct. 1701, 1707 (1993). The Court of 
Appeals for the Seventh Circuit has held, by analogy to 
Hazen, that the PDA "requires the employer to ignore 
an employee’s pregnancy, b u t ... not her absence from 
work, unless the employer overlooks the comparable 
absences of non-pregnant employees . . . ." Troupe, 20 
F.3d at 738. This holding is entirely consistent with the 
plain language of the PDA and the regulations we 
discuss above. This view eliminates Rhett’s theory of 
transitivity, that if A (termination) is caused by B 
(absence) which is caused by C (pregnancy), then C 
causes A. Other courts similarly have held that "the 
PDA does not force employers to pretend that absent 
employees are present whenever their absences are 
caused by pregnancy." Cmokrak v. Evangelical Health 
Sys. Corp., 819 F. Supp. 737, 743 (N.D. 111. 1993).

We recognize that Smith v. F.W. Morse & Co., 76 
F.3d 413 (1st Cir. 1996), includes language contrary to 
that of Troupe for in Smith the court said that "an 
employer must put an employee’s pregnancy (including 
her departure on maternity leave) to one side in making 
its employment decisions." Id. at 424 (emphasis added). 
In Smith, the pregnant employee was assured before 
she went on maternity leave that her position was 
secure, but the employer then eliminated her position 
during a reorganization while she was away. Id. at 418- 
19. The court’s holding, however, was that the 
elimination of the position was not an act of pregnancy 
discrimination merely because the employer discovered 
that the position was superfluous while the employee



11a

was on maternity leave; thus there was no causal nexus 
between her termination and her pregnancy. Id. at 424-
25.

Notwithstanding the passage in Smith which we have 
quoted, Carnegie argues that Smith applies here 
because in its view Smith demonstrates that its action in 
terminating Rhett’s employment was justified as it, like 
the employer in Smith, had a legitimate non-pregnancy 
based reason to discharge the pregnant employee. 
Smith may be distinguished, however, because Carnegie 
eliminated Rhett’s position, rather than that of one of 
the other secretaries, because she was away on 
maternity leave. While it was apparent that one of the 
secretary positions was not needed, it was only Rhett’s 
absence which led to her termination. Carnegie has 
made no showing that Rhett’s position would have been 
eliminated if she had not been away at the time. 
Indeed, Carnegie made no comparative evaluation of 
the secretaries’ performance. In Smith, the particular 
position of the pregnant employee was shown to be 
superfluous while she was away. Smith, unlike this case, 
did not involve a choice by the employer as to which of 
several similar positions to eliminate.

This case is unusual in that Carnegie terminated an 
employee who had performed satisfactorily solely 
because of an economically justified reduction in force 
while she was away on maternity leave. See Geier v. 
Medtronic, Inc., 99 F.3d 238, 243 (7th Cir. 1996) (fired 
pregnant employee not qualified because she could not 
meet required performance quotas); Troupe, 20 F.3d at 
735 (pregnant employee fired for chronic tardiness



12a

prior to maternity leave); Soreo-Yasher v. First Office 
Management, 926 F. Supp. 646, 649 (N.D. Ohio 1996) 
(employee replaced while on maternity leave because of 
business need and company had written policy of not 
guaranteeing reinstatement after any leave of absence); 
Morrissey v. Symbol Techs., Inc., 910 F. Supp. 117, 121 
(E.D.N.Y. 1996) (fired employee’s maternity leave 
extended beyond time for which employer’s policy 
guaranteed reinstatement); Rudolph v. Hechinger Co., 
884 F. Supp. 184, 186, 188 (D. Md. 1995)(employee 
terminated while on maternity leave because of reasons 
independent of her absence); Ulloa v. American Express 
Travel Related Servs. Co., 822 F. Supp 1566, 1570-71 
(S.D. Fla. 1993) (employee terminated in reduction in 
force while on maternity leave because her leave 
extended beyond time for which reinstatement 
guaranteed); Cmokrak, 819 F. Supp. at 743 (employer 
justification for demoting employee while on maternity 
leave could be pretext); Felts v. Radio Distrib. Co., 637 
F. Supp. 229, 233 (N.D. 111. 1985) (employer 
justification of termination because of financial 
difficulties was a pretext). Furthermore, in this case 
Carnegie had need after Rhett was gone for an 
employee to do the type of work she did before it 
eliminated her position.

Nevertheless, the law covering this case is clear for 
the view of the Court of Appeals of the Seventh Circuit 
which it set forth in Troupe, that an employer 
legitimately can consider an employee’s absence on 
maternity leave in making an adverse employment 
decision, is consistent with and, indeed, is compelled by 
the plain language of the PDA. Thus, Troupe properly



13a

requires the plaintiff employee seeking to recover under 
the PDA to show that the employer treated her 
differently than non-pregnant employees on disability 
leave. See 29 C.F.R. § 1604.10. While we do not 
ignore the contrary suggestion in Smith, we do not find 
it controlling because it is inconsistent with the 
language of the PDA. Thus, we cannot find, as Rhett 
urges, that the mere consideration of an employee’s 
absence on maternity leave is a per se violation of the 
PDA. In short, the PDA does not require an employer 
to reinstate an employee merely because she has been 
absent on maternity leave. Rather, the PDA is a shield 
against discrimination, not a sword in the hands of a 
pregnant employee.

Rhett has not made a showing that Carnegie treated 
her differently than it would have treated a non­
pregnant employee absent on disability leave. Of 
course, it was difficult for her to make such a showing 
because Carnegie never has had an employee on 
disability leave for a protracted period for a reason 
other than pregnancy. Thus, we must affirm the district 
court’s denial of her PDA claim for the reasons 
indicated. See Ulloa v. American Express Travel Related 
Servs. Co., 822 F. Supp. at 1571 (Employer is entitled to 
judgment when employee "has failed to show by a 
preponderance of the evidence that she received 
disparate treatment when compared to non-pregnant 
employees.").

The PDA does not require an employer to grant 
maternity leave or to reinstate an employee after a 
maternity leave. The PDA merely requires that an 
employer treat a pregnant woman in the same fashion



14a

as any other temporarily disabled employee. In this 
regard, we point out that it is not unlawful under the 
Americans with Disabilities Act for an employer when 
reducing its force to discharge an employee away from 
work by reason of a temporary disability. See Sanders 
v. Ameson Prods., Inc., 91 F.3d 1351, 1354 (9th Cir. 
1996); Rogers v. International Marine Terminals, Inc., 87 
F.3d 755, 759 (5th Cir. 1996). We acknowledge that 
arguably it was unfair for Carnegie to fire Rhett 
because she was on leave rather than to decide which 
secretary’s position to abolish on the basis of seniority 
or merit, but it was not illegal for it to do so unless it 
would not have eliminated the position of another 
employee on disability leave who was not pregnant. 
The PDA does not require fairness. See Ulloa v. 
American Express Travel Related Servs. Co., 822 F. Supp. 
at 1571.

Judge McKee in his dissent seems to believe that we 
are equating "pregnancy with a temporary disability 
under the ADA." Dissent at 25. Of course, we are 
doing no such thing. Rather, we are holding that it is 
not unlawful under the PDA to terminate an employee 
absent by reason of pregnancy if the employer would 
have terminated an employee absent by reason of a 
different temporary disability. Thus, notwithstanding the 
intricate reasoning of the dissent, this case at bottom is 
quite straightforward and uncomplicated.

In view of our analysis, we conclude that although 
the bankruptcy and district courts erred in finding that 
Rhett did not make out a prima facie case of pregnancy 
discrimination (because they did not apply the



15a

Armbruster reduction in force analytical framework), the 
error was harmless. Carnegie asserted a legitimate non- 
discriminatory reason for Rhett’s termination, that she 
was away on leave. Rhett has not satisfied her burden 
of showing that this reason was pretextual. Therefore, 
we will affirm insofar as this case involves the 
termination of Rhett’s position. Of course, our analysis 
requires that we affirm the district court in its rejection 
of her race and gender claims as well, based on the 
elimination of her position.4

In reaching our result, we have not overlooked 
Rhett’s argument that this case is somehow different 
than a case based on a claim of discrimination 
predicated either on race or gender, because she bases 
her claim on both race and gender. This argument adds

4We are aware that Rhett alleged certain comments 
by her superiors which could lead to an inference of 
discrimination against her, but in holding that there is 
no evidence of racial or gender discrimination, the 
bankruptcy court implicitly found that Rhett’s testimony 
that Turndorf and Gormisky were abusive toward her 
regarding her status as an unwed mother was not 
credible, or that the explanation and denials by 
Turndorf and Gormisky were more credible. We 
cannot hold this factual finding clearly erroneous. 
Thus, there was no error in not inferring discrimination 
on the basis of these remarks. In any event, Carnegie 
articulated a legitimate non-discriminatory reason for 
terminating Rhett and the bankruptcy court, in an 
unassailable finding, accepted that reason.



16a

nothing to her case because regardless of the basis for 
her claim of discrimination, she cannot establish that 
the legitimate reason that Carnegie proffered for 
terminating her was pretextual. Furthermore, we have 
not ignored Rhett’s argument that Carnegie’s 
termination of her position had a discriminatory impact 
of her based on her race. Rather, we reject this 
contention as entirely insubstantial for an employee is 
not insulated from having her position lawfully 
terminated merely because she happens to be a 
minority.

Rhett also argues that Carnegie should have 
considered her for alternate positions. She says that 
the positions of property management administrative 
assistant, secretary to Landis and receptionist became 
open while she was on maternity leave and she was 
qualified for all of them. It is not disputed that she was 
not considered for any of these positions. But the 
bankruptcy court found as a fact, and the district court 
affirmed, that Rhett was not qualified for the property 
management position or the position of assistant or 
secretary to Landis. The bankruptcy court also found 
that Rhett never indicated that she would take a lower 
paying or temporary job. Rhett argues that these 
factual findings are clearly erroneous.

Rhett has offered no more than her own opinion 
that she was qualified for the property manager 
position. Gormisky testified that the position required 
more than basic secretarial skills and he did not believe 
that Rhett adequately could perform in the job. 
Tumdorf also testified that he would not have hired her 
for that position because he did not feel she would



17a

perform well. This is more than enough support for 
the bankruptcy court’s finding that Rhett was not 
qualified. Similarly, Rhett asserts that she was qualified 
to be Landis’s personal secretary because of her 
extensive secretarial experience. The bankruptcy 
court’s finding that Rhett was not qualified for this job 
is supported by Turndorfs testimony that the job 
required a special attitude and ability to anticipate 
Landis’s needs which Rhett did not have. Inasmuch as 
the bankruptcy court was not clearly erroneous in 
finding Rhett not qualified for these positions, she has 
not made out a prima facie case of discrimination 
because of Carnegie’s failure to hire or interview her.

On the other hand, it is clear that Rhett was 
qualified for the position of receptionist. But the 
bankruptcy court held that she never expressed an 
interest in this job, which paid less than her prior 
position. Since this is a failure to hire situation, rather 
than a discharge situation, under McDonnell Douglas 
Rhett must show that she applied for the position. It 
is undisputed that Rhett did not apply for this position, 
or even express any interest in it.

Rhett argues that Carnegie had an affirmative duty 
to contact her (but cites no case for this proposition), 
and she would have expressed an interest if she had 
been contacted. The receptionist position was the 
lowest paying job in the office. It was not unreasonable 
for Carnegie to assume that Rhett would not accept 
this position, especially when she did not express any 
interest in it. On this point we observe that the 
bankruptcy court found that Rhett obtained a position 
with the Robert Wood Johnson Foundation and started



18a

work there on January 29, 1992, and earned $22,500 in 
1992. Thus, it is understandable why Rhett did not 
seek a position as a receptionist as she was capable of 
obtaining more financially rewarding employment. 
Further, Tumdorf testified that it was customary for 
employees returning from maternity leave to contact 
Carnegie, rather than Carnegie contacting them when 
a position opened up. Given this custom, we cannot 
find any error in the lower courts’ conclusion that Rhett 
failed to state a prima facie case of discrimination 
because she was not given any of these positions.

C. CONCLUSION

We hold, in agreement with the Court of Appeals 
for the Seventh Circuit, the plain language of the PDA, 
and the regulations under the PDA, that an employee 
alleging a PDA violation must show that her employer 
treated her differently than it would have treated an 
employee on leave for a temporary disability other than 
pregnancy. It is not a violation of the PDA for an 
employer to consider an employee’s absence on 
maternity leave in making an adverse employment 
decision if it also would have considered the absence of 
an employee on a different type of disability leave in 
the same way. Inasmuch as Carnegie asserted that 
Rhett’s absence from work, rather than her pregnancy, 
was the reason for her termination, and Rhett has 
failed to show that this assertion was pretextual, her



19a

claim fails.5

In view of our conclusions, we will affirm the 
judgment of the district court entered August 6, 1996.

McKEE, Circuit Judge, dissenting.

I agree that Deborah Rhett’s claim of racial 
discrimination was properly dismissed. However, I 
respectfully dissent because I believe that the district 
court erred in affirming the bankruptcy court’s dismissal 
of Rhett’s claim of sex discrimination. The bankruptcy 
court concluded that "the uncontradicted testimony of 
the debtor establishes that the debtor had to let 
someone in the secretarial group go and the fact that 
Rhett was not working for the company at the time 
made it logical that she be the one." Bankr Ct. Op. at 
15 (1996). I believe that the issue is not whether the 
employer had a logical reason for choosing Rhett (It 
clearly did.), but whether doing so when her absence 
was due solely to her pregnancy was illegal sex 
discrimination under Title VII of the Civil Rights Act 
of 1964 ("Title VII"), 42 U.S.C. §2000e-2(a). I fear that 
the majority’s failure to hold that it did constitute sex 
discrimination will eviscerate the protections Congress 
intended when it enacted the Pregnancy Discrimination

5We note, however, that there are federal and state 
laws which do require parental leave and reinstatement. 
See 29 U.S.C. §§2612, 2614; N.J. Stat. Ann. §34:llB-4, 
-7 (West Supp. 1997). These laws are not applicable in 
this case because Carnegie has fewer that 50 employees. 
29 U.S.C. §2611 (4)(a); N.J. Stat. Ann. §34:llB-3f.



20a

Act of 1978 ("PDA"), 42 U.S.C. §2000e(k), as an 
amendment to Title VII.

I. BACKGROUND OF THE PREGNANCY 
DISCRIMINATION ACT

Title VII makes it an unlawful employment practice 
for an employer

to discriminate against any individual with respect to 
his compensation, terms, conditions, or privileges of 
employment, because of such individual’s . . . sex

§2000e-2(a)(l). Congress created the Equal 
Employment Opportunity Commission ("EEOC") to 
implement Title VII and the EEOC developed 
guidelines through which employers and employees 
could better understand the protections afforded under 
Title VII. Those guidelines "implemented the Title VII 
prohibition of sex discrimination", H.R. Rep. No. 95- 
948, at 2 (1978), reprinted in 1978 U.S.C.C.A.N. 4749, 
4752, and they expressly extend the protection of Title 
VII to conditions caused by pregnancy.

Disabilities caused or contributed to by pregnancy, 
childbirth, or related medical conditions, for all job- 
related purposes, shall be treated the same as 
disabilities caused or contributed to by other medical 
conditions . . . .  Written or unwritten employment 
policies and practices involving matters such as the 
commencement and duration of leave, the 
availability of extensions, the accrual of seniority and 
other benefits and privileges, reinstatement, and 
payment under any health or disability insurance or



21a

sick leave plan, formal or informal, shall be applied 
to disability due to pregnancy, childbirth or related 
medical conditions on the same terms and 
conditions as they are applied to other disabilities

29 C.F.R. §1604.10(b). The guidelines also contain an 
interpretive question and answer section in which the 
following exchange is made:

Q: Must an employer hold open the job of an
employee who is absent on leave because she is 
tem porarily disabled by pregnancy-related 
conditions?

A: Unless the employee on leave has informed the 
employer that she does not intend to return to work, 
her job must be held open for her return on the 
same basis as jobs are held open for employees on 
sick or disability leave for other reasons.

29 C.F.R. pt. 1604, app. Question 9. The majority 
concludes that this means that Carnegie Center 
Associates ("Carnegie") can terminate Rhett for her 
absence, even though it is caused by pregnancy, so long 
as Carnegie would have terminated an absent employee 
who was not pregnant. See Maj. Op. at 7-8.

However, the circumstances leading to Title VIFs 
current proscriptions against sex discrimination 
undermine the majority’s analysis. Title VII, as 
originally enacted, did not explicitly define sex 
discrimination to include disparate treatment based 
upon, or related to, pregnancy. As a result, some



22a

courts adopted a narrow view of the extent to which 
Title VII’s proscription against sexual discrimination 
included disparate treatment based upon pregnancy and 
related conditions. In General Electric v. Gilbert, 429 
U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976), the 
Supreme Court held that an insurance plan that 
excluded coverage for pregnancy-related disabilities did 
not constitute illegal gender-based discrimination. 
There, an employers disability plan provided coverage 
for nonoccupational sickness and accidents, but 
excluded coverage for pregnancy and pregnancy-related 
disabilities. The plan did, though, include coverage for 
nonoccupational disabilities and medical procedures 
common to men, e.g. prostatectomies, vasectomies and 
circumcisions. Gilbert, 429 U.S. at 145-46. A group of 
employees sued under Title VII, alleging that the 
insurance plan was illegal sexual discrimination because 
it excluded a class of disabilities unique to women. The 
district court held that the plan did constitute illegal sex 
discrimination in violation of Title VII and the Court of 
Appeals for the Fourth Circuit affirmed. However, 
prior to the decision of the court of appeals, but 
subsequent to the decision of the district court, the 
Supreme Court decided Geduldig v. Aiello, 417 U.S. 
484, 94 S.Ct. 2485, 41 L.Ed.2d 256 (1974).

In Geduldig, the Supreme Court upheld the validity 
of a nearly identical insurance policy against an attack 
under the Equal Protection Clause of the Fourteenth 
Amendment. The Court in Geduldig reasoned that the 
challenged policy was simply a business decision as to 
which risks an employer would insure. "The program 
divides potential recipients into two groups pregnant 
women and nonpregnant persons. While the first group



23a

is exclusively female, the second includes members of 
both sexes." Geduldig, 417 U.S. at 496-97 n. 20 The 
Court in Gilbert upheld the challenged disability plan 
based upon its earlier holding in Geduldig. The Court 
reasoned that, even though Geduldig was based upon an 
equal protection argument, and Gilbert was brought 
under Title VII, the logic of Geduldig still applied. 
Accordingly, the Court held that since there was no risk 
from which women were protected and men were not 
and no risk from which men were protected that 
women were not, the exclusion of pregnancy-related 
disabilities did not invalidate the Gilbert policy under 
Title VII. The majority minimized the relevance of the 
EEOC guidelines when considering what Congress 
intended under Title VII.

Justice Brennan dissented, arguing that the Court’s 
analysis was "simplistic and misleading" because the 
plan included procedures that were specific to men 
while excluding pregnancy-related procedures that were 
unique to women. 429 U.S. at 252 (Brennan, J., 
dissenting). He noted that "pregnancy affords the only 
disability, sex-specific, or otherwise, that is excluded 
from coverage." Id. Accordingly, he did not think that 
the classification could be saved from a finding of 
illegal discrimination under Title VII merely because it 
was a "facially neutral classification." Id. at 154. He 
concluded that the Court erred in accepting the 
employer’s explanation that the plan merely excluded 
certain risks from coverage in a nondiscriminatory way. 
"[T]he demonstration of purposeful discrimination is 
not the only ground for recovery under Title VII. . . . 
[A] prima facie violation of Title VII . . . also is



24a

established by demonstrating that a facially neutral 
classification has the effect of discriminating against 
members of a defined class." Id. at 153-54.

According to Justice Brennan, "the determinative 
question must be whether the social policies and aims 
to be furthered by Title VII and filtered through the 
phrase ‘to discriminate’ contained in §703(a)(l) fairly 
forbid an ultimate pattern of coverage that insures all 
risks except a commonplace one that is applicable to 
women but not to men." Id. at 154. He noted that the 
Court had previously recognized th a t"discrimination is 
a social phenomenon encased in a social context and 
therefore, unavoidably takes its meaning from the desired 
end products o f the relevant legislative enactment, end 
products that may demand due consideration to the 
uniqueness of ‘disadvantaged’ individuals." Id. at 159, 
(discussing Lau v. Nichols, 414 U.S. 563, 94 S.Ct. 786, 
39 L.Ed.2d 1 (1974) (emphasis added). Justice 
Brennan concluded that the EEOC guidelines were 
"reasonable responses to the uniform testimony of 
governmental investigations which show that pregnancy 
exclusions built into disability programs both financially 
burden women workers and act to break down the 
continuity of the employment relationship, thereby 
exacerbating women’s comparatively transient role in 
the labor force." Id. at 158. Justice Brennan believed 
that the EEOC guidelines, "[i]n dictating pregnancy 
coverage under Title VII," had "merely settled upon a 
solution now accepted by every other Western industrial 
country." Id. (citing Dept, of Health, Education, and 
Welfare, Social Security Programs Throughout the World,



25a

(Research Project No. 40) pp. ix, xviii, xix (1971).1 
Congress reacted to Gilbert by enacting the Pregnancy 
Discrimination Act. See Newport News Shipbuilding and 
Dry Dock Co. v. EEOC, 462 U.S. 669, 678, 103 S.Ct. 
2622, 2628, 77 L.Ed.2d 89 (1983). That act amended 
the "Definitions" section of Title VII in part as follows:

The terms ‘because of sex’ or ‘on the basis of sex’ 
include, but are not limited to, because of or on the 
basis of pregnancy, childbirth, or related medical 
conditions; and women affected by pregnancy, 
childbirth, or related medical conditions shall be 
treated the same for all employment-related 
purposes . . .  as other persons not so affected but 
similar in their ability or inability to 
work . . . .

42 U.S.C. §2000e(k).

When Congress amended Title VII in 1978, it 
unambiguously expressed its disapproval of both the 
holding and the reasoning of the Court in the Gilbert 
decision . . . .  The House Report stated, ‘It is the 
Committee’s view that the dissenting Justices 
correctly interpreted the Act.’ Similarly, the Senate 
Report quoted passages from the two dissenting 
opinions, stating that they ‘correctly express both the 
principle and the meaning of Title VII.’ *

Justice Stevens also dissented, but his analysis was 
based upon the policies in question treating the risk of 
absenteeism caused by pregnancy differently than any 
other kind of absence. Id. at 161.



26a

Newport News, 462 U.S. at 678. (citing H.R. Rep. No. 
95-948 and S. Rep. No. 95-331, at 2-3 (1977).

II. INTERPLAY OF THE PDA AND THE 
AMERICANS WITH DISABILITIES ACT ("ADA")

The majority sums up its position as follows: "[t]he 
PDA merely requires that an employer treat a pregnant 
woman the same as any other temporarily disabled 
employee. In this regard we point out that it is not 
unlawful under the Americans with Disabilities Act for 
an employer when reducing its force to discharge an 
employee away from work by reason of a temporary 
disability." Maj. Op. at 11. Thus, the majority equates 
pregnancy-related disability with temporary disabilities 
under the ADA, and that analogy drives the majority’s 
analysis. I

I do not think that Rhett’s claim can be decided by 
simply stating that the PDA requires her to be treated 
the same as any other employee and reasoning that her 
position can be terminated because an absent 
nonpregnant employee could have his or her position 
terminated under the facts of this case. Although the 
case law and EEOC guidelines refer to Title VII’s 
requirement that pregnant employees be treated the 
same as other employees, those cases usually involve 
determining whether employee benefits or insurance 
policies discriminate by excluding pregnant employees 
or affording them less protection than afforded 
nonpregnant employees. That was the issue in Gilbert 
and Newport News. For example, in Gilbert, Justice 
Brennan stated in his dissent: "A realistic understanding



27a

of conditions found in today’s labor environment 
warrants taking pregnancy into account in fashioning 
disability policies . . . Contemporary disability programs 
are not creatures of a social or cultural vacuum devoid 
of stereotypes and signals concerning the pregnant 
woman employee." 429 U.S. at 160. The Court struck 
down the challenged health insurance policies in 
Newport News because they were the "mirror image of 
the plan at issue in Gilbert." Newport News, 462 U.S. at 
685. See also Arizona Governing Committee for Tax 
Deferred Annuity and Deferred Compensation Plans v. 
Norris, 463 U.S. 1073, 1074, 103 S.Ct. 3492, 3494, 77 
L.Ed.2d 1236 (1983) (An employer who offers "its 
employees the option of receiving retirement benefits 
from one of several companies selected by the 
employer, all of which pay a woman lower monthly 
retirement benefits than a man who has made the same 
contributions," violates Title VII.).

Thus, in the health insurance and employee benefits 
context it is now clear that pregnancy-related conditions 
must be treated the same as conditions that are not 
pregnancy-related. However, a simple example 
demonstrates the danger of carrying that basic premise 
too far beyond the insurance or benefits context.

Historically, employers have been reluctant to hire 
women or have afforded women different conditions of 
employment because of a generalized belief that a 
female employee would likely leave her job to raise a 
family. Accordingly, there was a reluctance to devote 
resources to train or to teach them a job related skill. I

I doubt that an employer is precluded from refusing



28a

to hire a male employee because of a reasonable belief 
that the potential employee will leave shortly after he 
is hired. However, I think few would argue that the 
same employer could refuse to hire a female job 
applicant out of a concern that she would soon become 
pregnant and leave her job to raise a family. Similarly, 
absent a contract provision to the contrary, an employer 
could terminate a male employee who missed two 
weeks of work during his first year on the job in 
violation of a policy prohibiting more than one week of 
sick leave during the employee’s first year on the job.2 
However, I think it clear that the PDA would prohibit 
that same employer from terminating a female 
employee who missed the same two weeks because of 
pregnancy or a pregnancy-related condition. Those two 
employees can not be treated the same because 
Congress has already differentiated their situations by 
enacting the PDA. One can not avoid a claim of 
discrimination by treating persons who are not similarly 
situated the same. Yet, this is what the majority’s 
analysis does. The majority’s reasoning would allow an 
employer to terminate a female employee because she 
missed a crucial meeting with an important client if a 
male employee would be terminated, even if the female 
missed the meeting because she was in labor delivering 
a baby, or suffering from a pregnancy-related condition. 
Although it may not be fair to terminate the male, it

2As I discuss below, if the employee’s condition was 
"temporary" he would not be covered by the Americans 
with Disabilities Act and could be terminated absent a 
contract that prevented such an action on the part of 
the employer.



29a

would not be illegal. It is illegal to terminate the 
female because of the PDA. CF. California Savings and 
Loan v. Guerra, 479 U.S. 272, 292 n.42, 107 S.Ct. 683, 
695, 93 L.Ed.2d 613 (1987) (”[W]e conclude that in 
enacting the PDA Congress did not intend to prohibit 
all favorable treatment of pregnancy . . . .").

The majority notes that pregnancy is a temporary 
condition that gives rise to a temporary disability. It 
argues that since the PDA bars discrimination based 
upon pregnancy, it merely requires that pregnant 
employees be treated the same as all other temporarily 
disabled employees, thereby limiting the comparison 
group for pregnant employees to nonpregnant 
employees who have suffered a temporary disability. 
The majority concludes that, despite her temporary 
disability due to pregnancy, Rhett can be terminated 
unless Carnegie would not terminate a male employee 
who was similarly "temporarily" disabled. See Maj. Op. 
at 11. That analysis rests upon equating a protected, 
but temporary, condition (pregnancy) with a temporary 
unprotected disability under the ADA. The ADA does 
not shield a non-pregnant employee from termination 
because temporary disabilities are excluded from the 
ADA. Regulations that were promulgated pursuant to 
the ADA define disability as:

(1) A physical or mental impairment that 
substantially limits one or more of the major life 
activities of such individual; (2) a record of such an 
impairment; or (3) being regarded as having such an 
impairment.

29 C.F.R. § 1630.2(g). "Substantially limits" is defined



30a

to mean:

(i) Unable to perform a major life activity that the 
average person in the general population can 
perform; or

(ii) Significantly restricted as to the condition, 
manner, or duration under which an individual can 
perform a particular major life activity as compared 
to the condition, manner, or duration under which 
the average person in the general population can 
perform that same major life activity.

§ 1630.2 (j)(l). Several factors have been identified to 
assist in determining whether a particular "disability" is 
of such severity as to come within the protection 
intended under the ADA. These factors include:

(i) The nature and severity of the impairment;

(ii) The duration or expected duration of the 
impairment; and

(iii) The permanent or long term impact, or the 
expected permanent or long term impact of or 
resulting from the impairment.

§1630.2(j)(2). "Disabilities" that are temporary do not, 
by definition, rise to the level of substantially limiting a 
major life function. See Rogers v. International Marine 
Terminals Inc., 87 F.3d 755, 758 (5th Cir. 1996) 
("[Tjemporary conditions that are not chronic usually 
do not rise to the level of a ‘disability.’") and (Taylor v. 
Dover Elevator Systems, Inc. 917 F.Supp. 455, 461 (N.D.



31a

Miss. 1996) ("[Temporary injuries with no permanent 
effects are ordinarily not considered disabilities under 
the ADA.") (citing Evans v. City o f Dallas, 861 F.2d 846, 
852-53 (5th Cir. 1988); Rakestraw v. Carpenter Co., 898 
F.Supp. 386, 390 (N.D. Miss. 1995); Oswalt v Sara Lee 
Corp., 889 F.Supp. 253, 257 (N.D. Miss. 1995), aff’d, 74 
F.3d 91 (5th Cir. 1996)).

However, just as temporary disabilities are excluded 
from the protections of the ADA by definition, 
temporary pregnancy-related conditions are explicitly 
covered by Title VII’s prohibition against sex 
discrimination under the PDA. Accordingly, the 
protection afforded pregnancy-related conditions can 
not be equated with that afforded temporary disabilities 
merely because pregnancy is temporary. To do so 
under the facts of this case is contrary to the mandate 
of the statute, effectively amends the PDA and forces 
Rhett to rely upon the ADA which provides no 
protection for pregnancy related conditions because of 
their temporary nature.

The majority relies on Rogers and Sanders v. Ameson 
Prods., Inc., 91 F.3d 1351, 1354 (9th Cir. 1996), cert, 
denied, 117 S.Ct. 1247, 137 L.Ed.2d 329 (1997), to 
substantiate its claim that the temporarily disabled 
e m p l o y e e  r e s i d e s  o u t s i d e  o f  s t a t u t o r y  
protection—regardless of whether the temporary 
disability is due to pregnancy. See Maj. Op. at 11. In 
Rogers, an employee ("Rogers") sued under the ADA 
when he was laid off pursuant to a reduction in force 
("RIF'). Rogers had been absent because of health 
problems related to an ankle surgery. The court held



32a

that Rogers was not protected by the ADA because he 
was not "disabled" within the meaning of the statute. 
"In sum, Rogers’ ankle afflictions were temporary and 
did not constitute a permanent disability . . . .  The 
EEOC regulations concur, that ‘temporary, non-chronic 
impairments of short duration, with little or no long 
term or permanent impact, are usually not disabilities.’" 
87 F.3d at 759 (quoting 29 C.F.R. § 1630.2(j) 
(Appendix)). However, the fact that they are not 
"disabilities" under the ADA does not mean that they 
are not protected under the PDA, if they are 
pregnancy-related.

Similarly, in Sanders, employee Sidney Sanders 
("Sanders") was terminated while on leave for a cancer- 
related psychological disorder. While he was away 
other employees assumed his responsibilities and 
employer Anreson Products decided to replace Sanders 
rather than allow him to return at the end of his sick 
leave. Athough Sanders suffered from cancer, he 
conceded that this absence was related only to his 
psychological disorder that was temporary. 
Accordingly, the court framed the issue before it as 
"whether Sanders’ temporary psychological impairment 
qualifies as a disability under the ADA." Id. at 1353. 
The court held that it did not because that impairment 
did not "substantially limit" a major life function. Id.

If Congress intended to equate pregnancy with a 
temporary disability under the ADA, it afforded 
pregnant women precious little protection when it 
enacted the PDA. Pregnancy is by its nature 
temporary. Holding that it is therefore the equivalent 
of a "temporary disability" is hardly consistent with "the



33a

social policies and aims to be furthered by Title VII 
and filtered through the phrase “to discriminate’ 
contained in [that Act]" Gilbert, 429 U.S. at 155 
(Brennan, J., dissenting). Accordingly, we can only give 
effect to the intent behind this statute by viewing the 
term "temporarily disabled" as it applies to pregnancy 
as referring to the duration of the disability, not to the 
quality of it.

The majority also relies upon Troupe v. May Dept. 
Stores Co., 20 F.3d 734, 738 (7th Cir. 1994). However, 
I am not persuaded by the reasoning of Troupe and 
believe that we should be guided instead by Smith v. 
F.W. Morse & Co., Inc., 76 F.3d 413 (1st Cir. 1996).

III. T R O U P E  v. M A Y  D E P T  S T O R E S  CO.

In Troupe, pregnant employee Kimberly Hern 
Troupe was fired from a Lord & Taylor department 
store for tardiness due to pregnancy. Troupe sued her 
employer, May Department Stores (doing business as 
Lord & Taylor), alleging illegal sex discrimination 
under Title VII. The district court granted Lord & 
Taylor's motion for summary judgment and Troupe 
appealed. On appeal, the Court of Appeals for the 
Seventh Circuit affirmed, noting that "[t]he great, the 
undeniable fact is the plaintiffs tardiness." Id. at 737. 
The court analogized the plaintiffs plight to that of a 
hypothetical Black employee who is fired after a kidney 
transplant because the employer either wants to avoid 
paying the employee while on sick leave or doubts that 
the employee will return. The court reasoned that, in 
firing the Black employee, the employer may be



34a

breaking a contract, but it would not be violating Title 
VII’s protections against racial discrimination as long as 
the employer would also fire a similarly situated White 
employee.3 Id. at 738. The failure of the Troupe 
analogy, however, is that absence from work is not 
endemic to a protected racial trait. Absence is, 
however, endemic to "pregnancy, childbirth, or related 
medical conditions." §2000e(k). Indeed, the historical 
underpinnings of Title VII suggest that it was the fear 
that women would get pregnant and be absent from 
their jobs that was, at least in part, responsible for the 
longstanding discrimination against women (especially 
younger women) in the workplace.

As noted above, employers have assumed that 
female employees may become pregnant and that 
pregnancy would make them unavailable for work. See 
Gilbert, 429 U.S. at 150 n .l (Brennan, J., dissenting). 
("General Electric’s disability program was developed in

3The Seventh Circuit notes that "[ejmployers can 
treat pregnant women as badly as they treat non­
pregnant employees, even to the point of ‘conditioning 
the availability of an employment benefit on an 
employee’s decision to return to work after the end of 
the medical disability that pregnancy causes.’" Troupe, 
20 F.3d at 738 (quoting Maganuco v. Leyden Community 
High School Dist. 212,939 F.2d 440,445 (7th Cir. 1991). 
In treating pregnant women as badly as other 
nonpregnant employees, an employer cannot, however, 
impose policies that disparately impact pregnant women 
because of their pregnancy. See Maganuco, 939 F.2d at 
445.



35a

an earlier era when women openly were presumed to 
play only a minor and temporary role in the labor force. 
As originally conceived in 1926, General Electric 
offered no benefit plan to its female employees because 
‘women did not recognize the responsibilities in life, for 
they were probably hoping to get married soon and 
leave the company.”') (quoting D. Loth, Swope, G.E.: 
Story o f Gerard Swope and General Electric in American 
Business (1958)). Yet, here the majority finds that"[i]t 
is not a violation of the PDA for an employer to 
consider an employee’s absence on maternity leave in 
making an adverse employment decision if it also would 
have considered the absence of an employee on a 
different type of disability leave in the same way." Maj. 
Op. at 14. This is a simplistic interpretation of the 
PDA and the EEOC guidelines. In a different Title 
VII context, the Supreme Court noted that interpreting 
the prohibitions of Title VII to only prohibit overt 
intentional discrimination would leave employers free 
to enact facially neutral policies based on factors that 
were a proxy for race and thereby circumvent Title 
VII’s protection. See Griggs v. Duke Power, 401 U.S. 
424, 430, 91 S.Ct. 849, 853, 28 L.Ed.2d (1971). The 
approach taken in Troupe, under the PDA, and adopted 
by the majority here, suffers from the same infirmity.

It is jurisprudential sleight of hand to suggest that 
the PDA does not require that pregnant women be 
treated better than their male counterpart. That is a 
misleading statement of the issue. Thus, the court in 
Troupe misses the analytical mark when it states that 
"[ejmployers can treat pregnant women as badly as they 
treat similarly affected but nonpregnant employees," 20 
F3d at 738, unless it defines "similarly affected"



36a

employees as other employees having a protected trait 
that is endemic to the behavior at issue. However, 
Troupe fails to do so and assumes that the pregnant 
employee is the "equal" of her nonpregnant coworker. 
Similarly, the majority erroneously concludes that "the 
PDA does not require that employers treat pregnant 
employees better than other temporarily disabled 
employees." See Maj. Op. at 8.

Relying upon Hazen Paper Company v. Biggins, 507 
U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993), the 
majority states that "[t]he Supreme Court has held that 
under the Age Discrimination in Employment Act an 
employer must ignore an employee’s age in certain 
employment decisions, but not any other characteristics 
such as pension expense." Maj. Op. at 8. However, I 
believe the Hazen Paper requires that we reject Troupe. 
In Hazen Paper, a 62 year old employee sued his 
employer, alleging that he had been terminated based 
upon age discrimination, in violation of the Age 
Discrimination in Employment Act ("ADEA"), 26 
U.S.C. §626, and the Employment Retirement Income 
Security Act ("ERISA"), 29 U.S.C. §1140. A jury found 
for the employee on both claims, and the employee 
appealed. The Court of Appeals for the First Circuit 
affirmed, relying heavily on evidence that the plaintiff 
had been fired in order to prevent his pension from 
vesting. The court determined that the jury could have 
concluded that "age was inextricably intertwined with 
the decision to fire [the plaintiff]. If it were not for 
[his] age . . .  his pension rights would not have been 
within a hairbreadth of vesting," 953 F.2d 1405, 1412 
(1st Cir. 1992), and he would not have been fired. The 
Supreme Court reversed as to the ADEA claim. The



37a

court reasoned that firing an older employee to prevent 
pension benefits from vesting based on years of service 
does not amount to "willful" age discrimination under 
the ADEA. 507 U.S. at 608. The court stated, "[W]e 
now clarify that there is no disparate treatment under 
the ADEA when the factor motivating the employer is 
some feature other than the employee’s age." Id. at 
609. The case before it was a disparate treatment case 
and the Court concluded that "a disparate treatment 
claim cannot succeed unless the employee’s protected 
trait actually played a role in that process and had a 
determinative influence on the outcome." Id. at 611.

Disparate treatment, thus defined, captures the 
essence of what Congress sought to prohibit in the 
ADEA. It is the very essence of age discrimination 
for an older employee to be fired because the 
employer believes that productivity and competence 
decline with old age . . . .

Thus the ADEA commands that ‘employers are to 
evaluate [older] employees . . .  on their merits and 
not their age.’ The employer cannot rely on age as 
a proxy for an employee’s remaining characteristics, 
such as productivity, but must instead focus on those 
factors directly.

When the employer’s decision is wholly motivated 
by factors other than age, the problem of inaccurate 
and stigmatizing stereotypes disappears. This is true 
even if the motivating factor is correlated with age, 
as pension status typically is . . .  . Because age and 
years of service are analytically distinct, an employer 
can take account of one while ignoring the other,



38a

and thus it is incorrect to say that a decision based 
on years of service is necessarily ‘age based.’

507 U.S. at 610-611.

Pregnancy and absence are not, however, analytically 
distinct, and an employer can not punish for the 
absence occasioned by pregnancy under Title VII. As 
noted above, that statute states that it is an unlawful 
employment practice to "discharge any individual. . .  or 
otherwise discriminate . . . because . . .  of sex," 42 
U.S.C. §2000e-2(a)(l), and, after the PDA, that 
includes discrimination "on the basis of pregnancy . . . 
or related medical conditions." 42 U.S.C. §2000e(k). 
That protection is meaningless unless it is intended to 
extend to the "temporary" absence from employment 
that is unavoidable in most pregnancies. Thus, the 
absence endemic to pregnancy, unlike factors that may 
sometimes be a proxy for age, has to be protected 
under the facts of this case. In Hazen Paper, it was the 
employee’s years of service, not his age, that occasioned 
the vesting of his pension. The Court was very careful 
to note that

[W]e do not consider the special case where an 
employee is about to ves t . . .  as a result of his age, 
rather than years of service, and the employer fires 
the employee in order to prevent vesting. That case 
is not presented here. Our holding is simply that an 
employer does not violate the ADEA just by 
interfering with an older employee’s pension benefits 
that would have vested by virtue of years of service.

507 U.S. at 613. I believe that Rhett’s situation under



39a

the PDA is much closer to the situation of an employee 
whose pension is vesting because of age than to the 
plight of the plaintiff in Hazen Paper. Accordingly, the 
holding in Hazen Paper does not assist the majority 
nearly as much as first appears.4

"[I]n using the broad phrase ‘women affected by 
pregnancy, childbirth and related medical condition,’ 
the [PDA] makes clear that its protection extends to 
the whole range o f matters concerning the childbearing 
process." H.R. Rep. 95-948 (emphasis added). The 
holding in Troupe, and the majority’s holding here, 
remove a substantial portion of the protection Congress 
intended. Troupe’s position was terminated because of

4I do not mean to suggest by this that the PDA 
requires an employer to necessarily take affirmative 
steps to make it easier for a pregnant employee to 
work. See Troupe, 20 F.3d at 738 ("The Pregnancy 
Discrimination Act does not . . . require employers to 
. . . take . . . steps to make it easier for pregnant 
women to work."). The PDA does not provide for 
accommodation as does the ADA.

Nor do I suggest that an employee who is pregnant 
can not be fired for reasons that are not occasioned by 
pregnancy. For example, if Carnegie decided in good 
faith, to eliminate everyone with a certain salary grade 
based upon its business judgment, Rhett could be 
terminated if she was at that salary grade whether she 
was on pregnancy leave or not because the termination 
would not be based upon a factor endemic to her 
pregnancy.



40a

conditions related to pregnancy (tardiness occasioned 
by her morning sickness). I do not understand, 
therefore, why she was not terminated "because of . . . 
her pregnancy," §2000e(k), in violation of Title VII.

I believe that we should reject the holding in Troupe, 
and adopt instead the analysis set forth in Smith, 76 
F.3d 413. There, a female employee ("Smith") worked 
for a small company that was undergoing restructuring. 
She informed the owner of the company that she was 
pregnant and would be taking maternity leave. 
Although the company had no maternity leave policy, 
Smith was assured that her job was secure and the 
company would simply divide her duties amongst its 
remaining employees in her absence. The company 
made this commitment even though it expected her 
absence to cause "the sky to fall." Id. at 418. The 
company also held regular "reality check" meetings in 
the hope that they could minimize the impact of the 
absence of such a key employee. However, to the 
company’s great surprise the sky did not fall. In fact, 
"the plant functioned very well," id. at 419, in Smith’s 
absence. Soon after Smith gave birth, she informed the 
general manager, Maryann Guimond, that she wished 
to return to work a week earlier than planned. At that 
time, Guimond made inquiries of Smith and Smith’s 
sister (who also worked for the company) regarding 
Smith’s plans to have children in the future. Days later, 
Guimond determined that Smith’s position was 
superfluous and eliminated it. Smith’s duties were then 
given to another employee who had been functioning as 
the operations manger.

Smith sued, alleging, among other things, violation



41a

of Title VII. The Title VII claim was decided in a 
bench trial in the district court, and that court entered 
judgment for the employer as a matter of law. Smith 
appealed, and the Court of Appeals for the First 
Circuit affirmed. Smith argued that the company had 
violated Title VII because her absence on pregnancy 
leave afforded the company the opportunity to learn 
that it could afford to eliminate her position. The court 
disagreed because it concluded that the employer would 
have eliminated the position regardless of Smith’s 
pregnancy, and agreed with the employer’s argument 
that "even if Smith had not been on maternity leave she 
would have been flattened by the downsizing 
steamroller." Id. at 419. The Court reasoned that

[Tjhere is little doubt that an employer, consistent 
with its business judgment, may eliminate positions 
during the course of a downsizing without violating 
Title VII even though these positions are held by 
members of protected groups (pregnant women 
included)" (citing LeBlanc v. Great Am. Ins. Co., 6 
F.3d 836, 844-45 (1st Cir. 1993), cert, denied, 511 
U.S. 1018, 114 S.Ct. 1398, 128 L.Ed.2d 72 (1994); 
Goldman v. First Nat’l Bank, 985 F.2d 1113, 1118-19 
(1st Cir. 1993); Montana v. First Fed. Sav. & Loan 
A ss’n, 869 F.2d 100, 105, 107 (2d Cir. 1989); Bister 
v. Continental Group, Inc., 859 F.2d 1108-1115 (2d 
Cir. 1988); Pearlstein v. Staten Island Univ. Hosp., 
886 F.Supp. 260, 268-69 (E.D.N.Y. 1995)) . . . . 
[T]he flip side of the coin, however, is that an 
employer who selectively cleans house cannot hide 
behind convenient euphemisms such as "downsizing" 
or "streamlining." Whether or not trimming the fat



42a

from a company's organizational chart is a prudent 
practice in a particular business environment, the 
employer’s decision to eliminate specific positions 
must not be tainted by a discriminatory animus.

Id. at 422 (citing Goldman, 985 F.2d at 1118 n.4; 
Maresco v. Evans Chemetics, 964 F.2d 106, 111 (2d Cir. 
1992); Mesnick, 950 F.2d at 825; Pearlstein, 886 F.Supp. 
at 268-69.). The court held that the "employer may 
discharge an employee while she is on a pregnancy- 
induced leave so long as it does so for legitimate 
reasons unrelated to her gravidity." Id. at 424. Smith’s 
employer had selected her merely because it realized 
that her position was not nearly as valuable as her 
supervisors previously believed. The fact that her 
absence on maternity leave afforded the employer an 
opportunity to learn just how expendable her position 
was did not mean that she was terminated "because of 
her pregnancy."

However, and most significantly for purposes of our 
analysis, the court also stated:

Title VII mandates that an employer must put an 
employee’s pregnancy (including her departure on 
maternity leave) to one side in making its 
employment decisions — but the statute does not 
command that an employer bury its head in the sand 
and struthiously refrain from implementing business 
judgments simply because they effect a parturient 
employee.

Id. at 424 (citing Troupe, 20 F.3d at 738) (emphasis



43a

added). The court added that "[a]t bottom, Title VII 
requires a causal nexus between the employer’s state of 
mind and the protected trait (here, pregnancy)." Id. at 
425. In Smith, the nexus did not exist because the 
decision to eliminate the employee’s job was based 
upon the importance (or lack thereof) of the job. 
Here, however, the decision to eliminate Rhett’s job 
was based solely upon her pregnancy related absence. 
That causal nexis runs afoul of Title VII’s prohibition 
of sex discrimination.

Carnegie clearly did not put Rhett’s departure on 
maternity leave to one side when deciding to terminate 
her. Rhett’s absence from work was so inextricably 
intertwined with pregnancy, her protected trait, as to 
make the two inseparable. In its "theory of transitivity," 
the majority separates the events in this case into 
discrete entities that suggest the causal relationship 
between Rhett’s pregnancy and her termination. The 
majority too easily rejects this position. See Maj. Op. 
at 8 ("This view eliminates Rhett’s theory of transitivity, 
that if A (termination) is caused by B (absence) which 
is caused by C (pregnancy), then C causes A.").

IV. TERMINATION BECAUSE OF PREGNANCY

An employer can not insulate itself from the reach 
of Title VII by an action that appears neutral, yet has 
the functional effect of disparately treating an 
individual based upon a protected trait. See Griggs, 401 
U.S. at 430. Carnegie’s action is the functional 
equivalent of terminating Rhett because she was 
pregnant. See Teahan v. Metro-North Commuter R.R.



44a

Co, 951 F.2d 511 (2d Cir. 1991).

In Teahan, an employee suffering from alcoholism 
brought an action against his employer alleging that his 
discharge for excessive absenteeism was in violation of 
§504 of the Rehabilitation Act of 1973, 29 U.S.C. §794, 
because his absences had been caused by that disease. 
Summary judgment was entered in favor of the 
employer because the district court concluded that 
there was no issue of material fact as to whether 
Teahan "was terminated ‘solely by reason o f  his 
handicap." Id. at 514. The district court concluded that 
the employer "had not relied on Teahan’s handicap . . . 
[and had] a nondiscriminatory reason for firing him 
(excessive absenteeism)." Id. Teahan appealed.

On appeal, Teahan argued that "because the ground 
upon which he was terminated was his excessive 
absenteeism, and since his absenteeism was ‘caused by’ 
his substance abuse problem, the district court 
improperly shifted the burden to him to present 
evidence of pretext." Id. The Court of Appeals for the 
Second Circuit agreed, stating that "it does not 
inevitably follow that termination for conduct resulting 
from a handicap is not termination ‘solely by reason o f 
that handicap."5 Id. at 515. Indeed, "an employer

5The "solely by reason of' inquiry, the court 
explained, is "designed to weed out [ ] claims where an 
employer can point to conduct or circumstances that 
are causally unrelated to the plaintiff’s handicap." Id. 
at 516 (emphasis added). In the context of the PDA, 
the analogue is the "because of or on the basis of



45a

‘relies’ on a handicap when it justifies [its employment 
decision] based on conduct caused by that handicap."* 6 
Id. Because the district court erred in concluding that 
Teahan had not established that he was fired "solely by 
reason of his handicap," his employer never had to 
satisfy its burden of "demonstrating that [Teahan’s 
handicap] was relevant to the job qualifications." Id. at 
515. Accordingly, the court remanded the case for 
further proceedings.7 Similarly, in Cushing v. Moore,

pregnancy" inquiry.

The court accepted that the plaintiffs excessive 
absences were "caused by" his alcoholism because its 
review on appeal required that it examine all facts in 
the light most favorable to Teahan. The court 
recognized, however, that "the causal connection 
between absenteeism and alcoholism is ordinarily a 
question of fact." Teahan, 951 F.2d at 515.

6Under the Rehabilitation Act, "[t]he question then 
becomes whether the employee is qualified despite his 
or her handicap to perform the essential functions of 
the job." Id. The employer bears that burden: "[A]fter 
complainant proves a prima facie case, the employer is 
required to rebut the inference that the handicap was 
improperly considered by first demonstrating that it was 
relevant to the job qualifications." Id. at 515.

7Other courts of appeals have refused to adopt 
Teahan’s rationale. See e.g., William v. Widnall, 79 F.3d 
1003 (10th Cir. 1996); Maddox v. University of 
Tennessee, 62 F.3d 843 (6th Cir. 1995). However, in all



46a

970 F.2d 1103, 1108 (2nd Cir. 1992), the court stated 
that "the key determination becomes the factual issue 
of whether an employee's conduct (such as 
absenteeism), which forms the articulated basis for a 
job termination, is actually caused by a handicap (such 
as substance abuse)" (citing Teahan, 951 F.2d at 517; 
Hogarth v. Thornburgh, 833 F. Supp. 1077, 1085 
(S.D.N.Y. 1993) (”[I]f a handicap manifests itself in 
certain behavior, and an employee is discharged 
because of that behavior, he has been terminated ‘solely 
by reason o f  the handicap."); and Ambrosino v.

cases, the employee had exhibited either egregious or 
criminal conduct. See e.g., Maddox, 62 F.3d at 845 
(assistant coach at University of Tennessee fired 
because of the bad publicity that the university was 
subjected to after he was arrested for DUI). Because 
of the nature of the conduct involved, these courts were 
unwilling to "adopt an interpretation of the 
[Rehabilitation Act] which would require an employer 
to accept egregious behavior by [a disabled employee] 
when that same behavior, exhibited by a nondisabled 
employee, would require termination." Williams, 79 
F.3d at 1007. Hius, "[a]t first blush, it may appear that 
the Second Circuit is out of synchronization with the 
others. However, distinction lies in the categorization 
of the conduct. . . .  [In the cases rejecting Teahan,] the 
conduct [at issue] is . . . misconduct." Taylor, 917 
F.Supp. at 462 (emphasis added). Rhett’s case does not 
implicate the concerns of those courts that have 
rejected Teahan.



47a

Metropolitan Life Insur. Co., 899 F.Supp. 438, 444 
(N.D.Cal. 1995) (The court chose to follow the line of 
cases holding that "termination based on conduct 
caused by chemical dependency and status which results 
from the dependency and/or the conduct caused by the 
dependency is termination based on the disability of 
chemical dependency."). However, that consideration 
is not present here, and I believe that this matter 
should be remanded for a determination of whether 
Rhett would have been selected for termination based 
upon factors other than her absence. Although it is for 
the employer, and not a court, to determine how best 
to select those positions that will be eliminated in a 
reduction in force, Title VII requires this employer to 
adopt criteria that put Rhett’s pregnancy-related 
absence aside and allow for an individualized 
determination driven by her own capabilities.

V. CONCLUSION

For the reasons stated above, I would reverse the 
decision of the district court and remand this matter to 
the bankruptcy court for a determination of whether 
Rhett would have been terminated had her pregnancy- 
related absence been put aside.

A True Copy:
Teste:

Clerk o f the United States Court o f 
Appeals for the Third Circuit



48a

Opinion of the District Court

BROWN, District Judge

This matter comes before the Court on the appeal 
of plaintiff Deborah Rhett from the January 9, 1996 
Order of the United States Bankruptcy Court for the 
District of New Jersey in the above-captioned matter.1 
For the reasons set forth herein, the Court will affirm 
the Bankruptcy Court’s decision and January 9, 1996 
Order in all respects.

I. BACKGROUND

In this action, appellant Deborah Rhett ("appellant" 
or "Rhett") claims that she was discharged from 
employment by appellee because of her race and 
gender. Rhett is an African-American female who was 
employed by appellee Carnegie Center Associates 
("appellee" or "CCA") from April, 1989 to March 26, 
1991.2 She is a graduate of Burlington High School

'The January 9, 1996 Order was based on findings 
of fact and conclusions of law that the Bankruptcy 
Court rendered in a decision filed on or around 
December 21, 1995.

“Appellant challenges only the Bankruptcy Court’s 
ultimate factual conclusions, not the Bankruptcy Court’s 
findings as to the underlying facts, all of which are set 
out in its written decision of December 21, 1995. See 
Appendix to Brief of Appellant Deborah Rhett Vol. I,



49a

and has considerable secretarial and clerical experience. 
Throughout her various employment experiences, she 
received training in computer operations and in other 
areas.

CCA is owned and controlled by Alan Landis, and 
is operated from an office in Carnegie Center in 
Princeton, New Jersey. There is no dispute that Landis 
has final authority over all significant employment 
decisions. Thus, the parties agree that "[njeither Gary 
Turndorf [n]or Keith Gormisky [was] involved in the 
decision to terminate Rhett’s employment; the decision 
was made solely by Alan Landis." See Appellant’s Brief 
at 9 1122; Appendix to Brief of Appellant Vol. II, at 
329-10 to 329-329-12 (direct testimony of Gary 
Turndorf).

When Rhett commenced employment with CCA in 
April, 1989, she worked a full-time schedule as a 
temporary secretary. On July 17, 1989, CCA hired 
Rhett as a permanent secretary in its accounting/finance 
department. Her duties included, inter alia, word 
processing, filing, statistical typing and answering the 
telephone. She worked for several CCA executives, 
including Geoff Hammond. Rhett alleges that when 
she was promoted to a full-time position, she was 
promised a performance review in six months and an 
annual raise of $1500 if her performance was 
satisfactory.

at 6-14.



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In January, 1990, she received a favorable review 
and her salary was raised by $1500, to $25,000 per year. 
She also received in 1990 an additional $5000 for 
overtime work. At no time did CCA tell Rhett that her 
performance was deficient.

Rhett worked with several other employees, all of 
whom are white. Evelyn Angulites was a secretary 
already employed by CCA when Rhett began work 
there. Barbara MacGregor was Landis’s personal 
secretary, and had longer tenure as such than Rhett had 
in her job. When MacGregor took maternity leave, 
Rachel Drexinger replaced her from January, 1991 to 
June, 1991. MacGregor sought to return to CCA as 
Drexinger was leaving the company, and MacGregor 
thus regained her position. Kathy Buchanan was also 
a secretary for CCA, and had been employed there 
longer than Rhett. Kristen Wolf started with CCA 
when Rhett began to work full-time. In December,
1990, Wolf became a secretary for several senior 
officers at CCA, and later an administrative assistant. 
Kathleen Cohen was also Landis’s personal secretary 
and administrative assistant. Cohen left CCA in April,
1991, and Tammi Medoff, who was not previously 
employed by CCA, replaced her. Linda Kraus was an 
accounts payable supervisor who, after maternity leave, 
returned as an accounts payable clerk.

In June, 1990, Rhett informed her supervisor and 
other management employees that she was pregnant. 
Specifically, she informed Keith Gormisky, the 
Controller of CCA and an executive who assigned her 
work. Rhett alleges that Gormisky responded by asking 
her whether she intended to get married. She further



51a

alleges that when she answered no, he said "[i]n 
society’s eyes that’s the right thing to do. You should 
get married." Rhett also asserts that when she 
informed Gary Turndorf, Chief Financial Officer and 
General Counsel to CCA that she was pregnant, he also 
asked whether she would get married. Turndorf claims 
he only commented on the difficulty of being a single 
parent.

On or around December 18, 1990, Rhett sent a 
memorandum to her supervisors, including Gormisky, 
Turndorf, Landis, John Dempsy and Robert Mack, 
notifying them that she was about to take maternity 
leave and that she intended to return on or about April 
15, 1991. Appendix to Brief of Appellant Deborah 
Rhett ("Appellant’s Appendix") Vol. II, at 471. She 
took maternity leave on or around December 18th or 
20th.

CCA had no formal policy regarding maternity 
leave. Instead, the record indicates, and the 
Bankruptcy Court correctly concluded, that CCA 
typically tried to rehire or find a position for someone 
seeking to return from maternity leave. That does not 
mean, however, that someone taking maternity leave 
was guaranteed a position when she was prepared to 
return to CCA. In appellant’s case, unrebutted 
testimony indicates that CCA sought to keep 
appellant’s position open by placing a temporary 
employee in Rhett’s position until CCA abolished it in 
March, 1991. Testimony of Gary Turndorf, Appellant’s 
Appendix Vol. II, at 75-23 to 76-76-1 ("I think that Ms. 
Rhett had expressed a desire after she had her baby, 
and we tried to accommodate that desire by hiring



52a

temporaries to keep the position open for her.").

At some point while Rhett was still employed by 
CCA, the company began to experience severe financial 
difficulties. The trial testimony makes clear that by 
1990, CCA was receiving many calls daily from vendors 
seeking satisfaction of overdue payments. CCA asserts 
that in an effort to contract its operations and reduce 
its operating expenses, it eliminated several positions, 
including Rhett’s. On or about March 26, 1991, 
Gormisky sent a letter to Rhett informing her as 
follows:

Before you left to have your baby, I am sure 
you were aware of the financial difficulties 
which we were experiencing at Carnegie Center 
and elsewhere. We have been struggling to 
meet our obligations, and have made a number 
of contractions in our staff. Unfortunately, this 
includes your position. I am writing to tell you 
this so that you can make other plans.

If there is a change in our situation, I will 
contact you. In the meantime, if we can help 
you in any way, we will try to do so.

March 26, 1991 Letter from Keith Gormisky to 
Deborah Rhett, Appellant’s Appendix Vol. II, at 472.

CCA also released several supervisory employees 
around this period. These included Hammond, who 
was released in December, 1990, Eugene Gold in 
March, 1991, Dave O’Connor in April, 1991, and Peter 
Clark in June, 1991. Additionally, CCA froze all



53a

salaries and decreased the remaining executives’ 
compensation.

Rhett sued CCA in this Court on or about 
November 26, 1993, and the action was docketed as 
Civ. No. 93-5251 (AET). Rhett alleges that CCA 
discriminated against her based on her race and gender, 
in violation of Title VII of the Civil Rights Act of 1964, 
as amended 42 U.S.C. § 2000e et seq. and the New 
Jersey Law Against Discrimination, N.J.S.A. 10:5-12(a) 
et seq., by terminating her employment and denying her 
other employment opportunities. She claims that she 
was terminated, and not considered for other 
employment positions with CCA, because of her race 
and because she was on maternity leave.3 Rhett 
asserted that CCA should have considered her for the 
following positions: (1) property management
administrative assistant; (2) secretary to Landis; and (3)

3The gist of Rhett’s gender discrimination claim is 
that she was discharged, and not considered for other 
positions with CCA, because she was out on maternity 
leave when CCA began to decrease its staff. The 
Bankruptcy Court stated that "the uncontradicted 
testimony of the debtor establishes that the debtor had 
to let someone in the secretarial group go and the fact 
that Rhett was not working for the company at the time 
made it logical that she be the one." Appellant’s 
Appendix Vol. I, at 15. The Bankruptcy Court did not 
find that termination under those circumstances 
presented any Title VII or NJLAD issue.



54a

receptionist.4 5 She seeks reinstatement, back pay, front 
pay, compensatory damages, punitive damages, 
attorneys fees and costs.

CCA subsequently filed a petition pursuant to 
Chapter 11 of the Bankruptcy Code, and Rhett’s 
prepetition claim was automatically stayed pursuant to 
11 U.S.C. § 362(a). Rhett filed her proof of claim with 
the Bankruptcy Court on February 19, 1994. On 
May 19, 1994 the District Court entered an Order 
administratively terminating Civ. No. 93-5251 without 
prejudice.

CCA moved to expunge Rhett’s claim before the 
Bankruptcy Court, which conducted a bench trial on 
Rhett’s claims on October 20,1995, November 29,1995 
and November 30,19955 In a written decision filed on

4The Bankruptcy Court concluded that "the 
testimony of the debtor, through the statements of 
Tumdorf, make it clear that she was not qualified for 
any of those jobs. Each of the positions required 
personal qualities that Rhett had not previously 
demonstrated." Appellant’s Appendix Vol. I, at 13.

5At an initial hearing on debtor’s motion to expunge 
the claim, the Bankruptcy Court determined that it was 
a contested matter as defined by FED. R. BANKR. P. 
9014, and that it should proceed as an adversary 
proceeding. The Bankruptcy Court had jurisdiction 
over the matter pursuant to 28 U.S.C. § 1334(b) and 28 
U.S.C. § 157(b)(2)(B) & (O). Appellant’s Appendix 
Vol. I, at 2.



55a

or around December 21, 1995, the Bankruptcy Court 
found that "[tjhere is not a scintilla of evidence that any 
person at Carnegie who had the power to hire or fire, 
discriminated against Rhett on the basis of her race. 
The evidence is to the contrary." Memorandum 
Opinion of Hon. William H. Gindin, Appellant’s 
Appendix Vol. I, at 14. The Bankruptcy Court also 
found that "[tjhere is not a scintilla of evidence that any 
person at Carnegie who had the power to hire or fire 
discriminated against Rhett on the grounds that she was 
a single and/or unwed mother. The evidence is to the 
contrary." Id. The Bankruptcy Court entered an Order, 
dated January 9,1996, expunging Rhett’s discrimination 
claims.

Rhett filed a timely appeal from the Bankruptcy 
Court’s January 9, 1996 Order. Rhett argues that the 
Bankruptcy Court’s decision must be reversed for 
several reasons. First, she contends that the 
Bankruptcy Court applied incorrect legal principles to 
her claims by limiting its consideration to the disparate 
treatment analysis set forth in McDonnell Douglas Cotp. 
v. Green, 411 U.S. 792, 802 (1973), instead of also 
considering the disparate impact analysis that she insists 
is the appropriate standard for discharge claims. 
Second, Rhett maintains that the Bankruptcy Court 
committed factual and legal error by failing to find that 
CCA violated Title VII and the New Jersey Law 
Against Discrimination ("NJLAD”) under the direct and 
mixed-motive standards. Third, she contends that the 
Bankruptcy Court erred as a matter of law and fact in 
finding that she had not established a prima facie case 
of gender and race discrimination. Fourth, Rhett 
argues that the Bankruptcy Court erred as a matter of



56a

law and fact by finding that CCA had articulated a 
legitimate, non-discriminatory reason to terminate 
Rhett. Finally, Rhett argues that the Bankruptcy Court 
failed to consider whether Rhett had established that 
CCA’s proffered justification for her termination was 
pretextual.

II. DISCUSSION

A. STANDARD OF REVIEW

In an appeal from a bankruptcy court’s decision, the 
district court applies two different standards of review. 
The district court reviews factual findings of the 
bankruptcy courts under a clearly erroneous standard. 
See In re Sharon Steel Corp., 871 F.2d 1217, 1222 (3d 
Cir. 1989); FED. R. Bankr. P. 8013. A bankruptcy 
court’s conclusions of law, however, are subject to de 
novo review. See In re Sharon Steel Corp., 871 F.2d at 
1222; Fed . R. Bankr. P. 8013.

The matter before the Court requires us to 
determine whether the Bankruptcy Court correctly 
found no direct or circumstantial case of discrimination 
against appellant. This determination involves reaching 
a conclusion as to an ultimate fact. See Memorandum 
Opinion of Hon. William H. Gindin, Appellant’s 
Appendix Vol. I, at 14. An ultimate fact "‘is a legal 
concept with a factual component’. . . and ‘is usually 
expressed in the language of a standard enunciated by 
case-law rule or by statute, e.g., an actor’s conduct was 
negligent; the injuiy occurred in the course of 
employment; the rate is reasonable. . . .  In re Sharon 
Steel Corp., 871 F.2d 1217,1223 (3d Cir. 1989) (quoting



57a

Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 
98, 102 (3d Cir. 1981)).

When reviewing an ultimate finding, the Court 
"‘must accept the trial court’s findings of historical or 
narrative facts [as to which there is no dispute here] 
unless they are clearly erroneous, but [it] must exercise 
a plenary review of the trial court’s choice and 
interpretation of legal precepts and its application of 
those precepts to the historical facts.’" Id. (quoting 
Universal Minerals, Inc., 669 F.2d at 103). See also 
United States v. McCombs, 30 F.3d 310, 317 (2d Cir. 
1994) ("[W]hen the issue is the trial court’s application 
of a legal standard to facts undisputed or reasonably 
found out review is not limited by the clearly erroneous 
standard and we will not shy away from plenary review 
. . . . " )  (quoting In re Hygrade Envelope Corp., 366 F.2d 
584, 588 (2d Cir. 1966)); De La Cruz v. Cohen, 191 B.R. 
599, 604 (D.N.J. 1996) (same).

B. OVERVIEW OF TITLE VII AND NJLAD

Title VII of the Civil Rights Act of 1964 reads 
in pertinent part as follows:

(a) It shall be an unlawful employment practice 
for an employer—
(1) to fail or refuse to hire or to discharge any 
individual, or otherwise to discriminate against 
any individual with respect to his compensation, 
terms, conditions, or privileges of employment, 
because of such individual’s race, color, 
religion, sex, or national origin; or
(2) to limit, segregate or classify [its] employees



58a

or applicants for employment in any way which 
would deprive or tend to deprive any individual 
of employment opportunities or otherwise 
adversely affect his status as an employee, 
because of such individual’s race, color, 
religion, sex or national origin.

42 U.S.C. § 2000e-2(a) (1982).

In 1978, Congress added the Pregnancy 
Discrimination Act ("PDA") to the definitional section 
of Title VII. It provides in relevant part as follows:

The terms "because of sex" or "on the basis of 
sex" include, but are not limited to, because of 
or on the basis of pregnancy, childbirth, or 
related medical conditions; and women affected 
by pregnancy, childbirth, or related medical 
conditions shall be treated the same for all 
employment-related purposes, including receipt 
of benefits under fringe benefit programs, as 
other persons not so affected but similar in 
their ability or inability to work. . . .

Id. § 2000e(k).

Congress enacted the PDA "‘to prevent the 
differential treatment of women in all aspects of 
employment based on the condition of pregnancy.’" 
EEOC  v. Ackerman, Hood & McQueen, 956 F.2d 944, 
947 (10th Cir. 1992) (quoting Carney v. Martin Luther



59a

Home, Inc., 824 F.2d 643, 646 (8th Cir. 1987)).6 See 
also California Fed. Sav. & Loan A ss’n v. Guerra, 479 
U.S. 272, 285-86 (1987) ("The Reports, debates, and 
hearings make abundantly clear that Congress intended 
the PDA to provide relief for working women and to 
end discrimination against pregnant workers.").

The PDA therefore requires courts to determine 
whether the employer treats pregnancy or pregnancy- 
related conditions differently than other conditions. 
Newport News Shipbuilding and Dry Dock Co. v. EEOC, 
462 U.S. 669, 684 (1983) ("The 1978 Act makes clear 
that it is discriminatory to treat pregnancy-related 
conditions less favorably than other medical 
conditions.")

The New Jersey Law Against Discrimination 
similarly prohibits discrimination based on gender, race, 
religion or national origin, and recognizes that 
individuals have a civil right in not being discriminated 
against. N.J.S.A. 10:5-4. NJLAD provides as well that 
employers may not "because of the race . . . marital 
status or sex . . .  of any individual. . . refuse to hire or 
employ or to bar or to discharge . . . from employment 
such individual.. . N.J.S.A. 10:5-12(a). The analysis 
of a claim under NJLAD is similar to that under Title

6Congress took this legislative action after the 
Supreme Court, in General Electric Co. v. Gilbert, 429 
U.S. 125-145-46 (1976), held that Title VII did not 
proscribe discrimination based on pregnancy. 
Pregnancy Discrimination Act of 1978, Pub. L. 95-555, 
§ 1, 92 Stat. 2076, 2076 (1978).



60a

VII. See, e.g., Erickson v. Marsh & McLennan Co., 117 
N.J. 539 (1990); Shaner v. Horizon Bancorp., 116 N.J. 
433 (1989); Peper v. Princeton Univ. Board o f Trustees, 
77 N.J. 55 (1978). See also Abrams v. Lightolier Inc., 50 
F.3d 1204, 1212 (3d Cir. 1995); Khair v. Campbell Soup 
Co., 893 F. Supp. 316, 331 (D.N.J. 1995).

A Title VII claimant can demonstrate an alleged 
violation in either of two ways. First, a plaintiff can 
argue a disparate impact theory of discrimination. A 
disparate impact violation requires the claimant to show 
that the employer utilized a specific employment 
practice that, while facially neutral, caused "a 
substantial adverse impact on a protected group, and 
which cannot be justified as serving a legitimate 
business goal of the employer." EEOC v. Metal Service 
Co., 892 F.2d 341, 346 (3d Cir. 1990). .See also Wards 
Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 644 
(1989). The claimant need not prove that the employer 
intended to discriminate. Wards Cove Packing, 490 U.S. 
at 644; Metal Service Co., 892 F.2d at 346-47. Under 
the disparate impact theory, a statistical imbalance 
alone will not suffice; plaintiff must point to a specific 
discriminatory hiring or employment practice. See 
Watson v. Fort Worth Bank and Trust, 487 U.S. 977, 994 
(1988) ("[W]e note that the plaintiffs burden in 
establishing a prima facie case goes beyond the need to 
show that there are statistical disparities in the 
employer's work force. The plaintiff must begin by 
identifying the specific employment practice that is 
challenged. . . . Especially in cases where an employer 
combines subjective criteria with the use of more rigid 
standardized rules or tests, the plaintiff is in our view



61a

responsible for isolating and identifying the specific 
employment practices that are allegedly responsible for 
any statistical disparities.").7

Alternatively, a plaintiff may establish that she 
suffered discrimination under the disparate treatment 
analysis. To establish a disparate treatment violation, 
an individual of a protected group must demonstrate 
that she was singled out and treated less favorably than 
similarly situated colleagues because of an 
impermissible criterion under Title VII. Intemat’l 
Brotherhood o f Teamsters v. United States, 431 U.S. 324, 
335-36 & n.15 (1977); Metal Service Co., 892 F.2d at 
347. "Unlike the disparate impact theory, proof of the 
employer’s discriminatory motive is critical under this 
analysis." Id.

7The Bankruptcy Court did not consider plaintiffs’ 
Title VII claims under a disparate impact analysis. 
Appellant contends that the Bankruptcy court 
committed error in not doing so, stating that "[t]he 
Court improperly limited its analysis of the evidence to 
the disparate treatment method." Appellant’s Brief at 
17. However, she does not allege a facially neutral 
employment practice adversely impacting a protected 
group, nor a statistical imbalance in the CCA 
workforce, nor does she make any further argument 
regarding a disparate impact theory. Therefore, the 
Court can not find that the Bankruptcy Court 
committed error in finding no prima facie case under 
the disparate impact theory.



62a

The means by which a plaintiff can establish 
disparate treatment will depend on the availability of 
direct evidence. If she can not establish intentional 
discrimination by the evidentiary equivalent of a 
"smoking gun," she may resort to the burden-shifting 
analysis set forth in McDonnell Douglas Corp. v. Green, 
411 U.S. 792 (1973) and Texas Dep’t o f Community 
Affairs v. Burdine, 450 U.S. 248, 254-56 (1981), which 
allows the plaintiff to establish a Title VII violation 
through circumstantial evidence. See Smith v. F.W. 
Morse & Co., Inc., 76 F.3d 413, 420-21 (9th Cir. 1996); 
Camey v. Martin Luther Home, Inc., 824 F.2d 643, 648 
(8th Cir. 1987) (noting that the McDonnell Douglas test 
is inappropriate where there is direct evidence of 
discrimination).

A plaintiff bringing a Title VII or NJLAD claim for 
disparate treatment via circumstantial evidence must 
first set forth a prima facie case by showing that: (1) 
she is a member of a protected class; (2) she was 
qualified for the position of employment from which 
she was terminated; (3) she suffered some sort of 
adverse employment action; and (4) there was some 
causal nexus between the adverse employment action 
and plaintiffs status as a member of the protected class. 
McDonnell Douglas Corp., 411 U.S. at 802-05; Andersen 
v. Exxon Co., U.S.A., 89 N.J. 438, 492 (1982) (adopting 
the McDonnell Douglas Corp. test). See also Gorham v. 
Amer. Tel. & Tel Co., 762 F. Supp. 1138, 1143 (D.N.J. 
1991). In the context of the PDA,

a plaintiff can establish a prima facie case of
pregnancy discrimination by showing that (1)



63a

she is pregnant (or has indicated an intention to 
become pregnant), (2) her job performance has 
been satisfactory, but (3) the employer 
nonetheless dismissed her from her position (or 
took some other adverse employment action 
against her) while (4) continuing to have her 
duties performed by a comparably qualified 
person.

Smith, 76 F.3d at 421 (citations omitted).

In a pretext case, after plaintiff has established her 
prima facie case, the burden shifts to defendant to 
advance a legitimate, nondiscriminatory justification for 
its actions. St. Mary’s Honor Center v. Hicks, 509 U.S. 
502, 515-16 (1993); Burdine, 450 U.S. at 252-54. See 
also McKenna v. Pacific Rail Service, 32 F.3d 820 (3d 
Cir. 1994) (predicting that the New Jersey Supreme 
Court would adopt the United States Supreme Court’s 
decision in St. Mary’s Honor Center v. Hicks). If 
defendant carries its burden, any presumption of 
discrimination drops from the case, and plaintiff must 
prove that the justifications proffered by defendant 
were merely a pretext for discrimination. Burdine, 450 
U.S. at 256 (holding that plaintiff must then satisfy 
ultimate burden of proving discrimination "by showing 
that the employer’s proffered explanation is unworthy 
of credence"); Griffiths, 988 F.2d at 469; Lockhart v. 
Westinghouse Credit Corp., 879 F.2d 43, 49 (3d Cir. 
1989). In this sense, it should be noted that "the 
defendant, rather than attempting to prove an 
affirmative defense, supplies an explanation." Griffiths, 
988 F.2d at 469. It is not enough for plaintiff to shed



64a

doubt on the proffered nondiscriminatory justification 
advanced by the employer; rather, the plaintiff must 
establish her theory of intentional discrimination. 
Mardell v. Harleysville Life Insur. Co., 31 F.3d 1221, 
1225 (3d Cir. 1994); Sorba v. Pennsylvania Drilling Co., 
821 F.2d 200, 202 (3d Cir. 1987), cert, denied, 484 U.S. 
1019 (1988). That the factfinder might reject the 
proffered nondiscriminatory reason does not compel a 
verdict for the plaintiff, who still must prove that the 
illegitimate factor was a determinative reason for the 
adverse employment action. Mardell, 31 F.3d at 1225 
(citing Hicks, 113 S. Ct. at 2749).

In a mixed-motive case, plaintiff seeks to prove that 
the adverse employment decision was a consequence of 
both legitimate reasons and discriminatory motives. 
Griffiths v. Cigna Corp., 988 F.2d 457, 469 (3d Cir.), 
cert, denied, 114 S. Ct. 186 (1993). The plaintiff asserts 
not that legitimate reasons proffered by the employer 
were untrue or not a factor in the employer’s action, 
but that other, discriminatory motives were also 
factored into the decision. Price Waterhouse v. Hopkins, 
490 U.S. 228, 241-45 (1989). A plaintiff in a mixed- 
motives case relying on circumstantial evidence, to shift 
the burden to the employer, must tie the evidence 
directly to the alleged discriminatory animus. See 
Ostrowski v. Atlantic Mutual Insur. Co., 968 F.2d 171, 
182 (2d Cir. 1992) ("[Pjurely statistical evidence would 
not warrant [shifting the burden]; nor would evidence 
merely of the plaintiffs qualification for and the 
availability of a given position; nor would ‘stray’ 
remarks in the working place by persons who are not 
involved in the pertinent decisionmaking.") See also



65a

Hook v. Ernst & Young, 28 F.3d 366, 373-74 (3d Cir. 
1994) ("Absent evidence that could ‘fairly be said to 
"directly reflect"’ the alleged unlawful basis, the case 
should be treated as a pretext case.") (quoting Griffiths, 
988 F.2d at 470; Ostrowski, 968 F.2d at 181-82).

If the mixed-motives plaintiff bears her initial 
burden of establishing aprima facie case of employment 
discrimination, defendant may avoid liability by showing 
that it would have reached the same decision even had 
the forbidden consideration not been a factor in the 
employment action. Price Waterhouse, 490 U.S. at 243- 
44; Ezold v. Wolf, Schorr & Solis-Cohen, 983 F.2d 509, 
521-22 (3d Cir. 1992).

C. RHETTS APPEAL 

1. Direct Evidence

Rhett first contends that the Bankruptcy Court 
should have measured her claims against the direct 
evidence standard. She posits that with respect to her 
claims of discharge due to race and gender 
discrimination, the Bankruptcy Court should have 
applied the standards for either a direct evidence or a 
mixed-motives situation. Rhett makes a similar 
argument with respect to whether CCA’s failure to 
consider her for other positions violated Title VII and 
NJLAD.

Rhett argues that several factors established direct 
evidence of discrimination of gender discrimination in



66a

violation of the PDA.8 First, she points to the 
Bankruptcy Court’s finding that "the uncontradicted 
testimony of the debtor establishes that the debtor had 
to let someone in the secretarial group go and the fact 
that Rhett was not working for the company at the time 
made it logical that she be the one." Appellant’s Brief 
at 28 (quoting Memorandum Opinion of William H. 
Gindin, C.J., U.S.B.C., Appellant’s Appendix Vol. I, at 
15). Appellant also insists that direct evidence of 
discrimination lies in CCA’s "selection of Rhett for 
termination for the sole reason that she was the one on 
pregnancy leave is evidence of direct discrimination 
against her." Id. at 29. Finally, appellant asserts that 
CCA’s failure to consider her for other employment 
positions, "in contradiction of its policy," evidences 
direct discrimination.

As noted supra, the Bankruptcy Court determined 
that plaintiff had introduced no evidence to establish 
that CCA discriminated against Rhett based on her 
pregnancy or her race. See supra pages 5-6 (quoting 
Memorandum Opinion of William H. Gindin, C.J., 
U.S.B.C., Appellant’s Appendix Vol. I, at 14). Thus, 
while it may be that the Bankruptcy Court did not

8Rhett has evidently disregarded her direct evidence 
theory of racial discrimination in this appeal. She fails 
to reference any direct evidence that the Bankruptcy 
Court might have overlooked in determining there was 
no racial discrimination; nor does she point to any 
other instance of error by the Bankruptcy Court in this 
regard. See In re Abijoe Realry (sic) Corp., 943 F.2d 
121, 123 n.l (1st Cir. 1991).



67a

specifically assess Rhett’s claims against the direct 
evidence standard, it is clear that had the Court done 
so, it would have reached the same conclusion. The 
issue is thus whether the Bankruptcy Court erred as a 
matter of law in concluding that the foregoing factors 
did not directly evidence discrimination.

If Rhett established a prima facie case of direct 
discrimination, a second issue would arise as to whether 
the Bankruptcy Court erred by failing to shift the 
burden of persuasion to defendant and requiring CCA 
to establish, through the production of credible 
evidence, that it would have made the same decision 
even if it had not taken the protected characteristic into 
account. Smith, 76 F.3d at 421; Robinson v. 
Southeastern Pennsylvania Transportation Authority, 982 
F.2d 892, 899 (3d Cir. 1993). The defendant would 
nonetheless remain liable for declaratory relief, 
injunctive relief, attorney’s fees and costs of suit. See 
infra note 9. The burden would shift to CCA only if 
Rhett established a prima facie case of direct 
discrimination.

This Court agrees with the Bankruptcy Court that 
Rhett did not establish a prima facie case of direct 
discrimination on the basis of either her race or her 
gender. While she refers repeatedly to an established 
policy of rehiring employees on leave, it is clear the 
policy, if any, was merely an informal one by which 
CCA would rehire individuals if the circumstances at 
the time of the employee’s return warranted doing so. 
Appellant has produced no written employment 
handbook or other policy declaration in which CCA



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guarantees that an employee returning from leave, 
pregnancy or otherwise, will be rehired. Moreover, the 
testimony adduced at trial from appellant’s former 
colleagues reinforces the Bankruptcy Court’s conclusion 
that no such formal policy existed. See, e.g., Testimony 
of Brenda Sirkis, Appellant’s Appendix Vol. I, at 38-15 
to 38-18 ("Q: When you left to have your baby, do you 
know whether or not the position was available to you 
two years later when you went back? A: No. It wasn’t 
discussed."); Testimony of Gary Turndorf, Appellant’s 
Appendix Vol. II, at 93-2 to 93-9 ("[AJpart from 
pregnancy, I can’t think of a case where people left for 
any prolonged interval, apart from just leaving. And so 
in the case of pregnancy, if an employee indicated a 
desire to come back, we would try and hold it open for 
them if we could, and hold it open. When they wanted 
to come back, if they contacted us and there was 
something open that was suitable, we would offer it to 
them.”). Thus, the crux of appellant’s direct 
discrimination case—that CCA breached a formal 
policy of rehiring employees ready to return from 
maternity leave because appellant was unmarried and 
on pregnancy leave—is entirely unsubstantiated. CCA 
had no formal leave policy and it sought to hold her 
position open for several months after she left in 
December, 1990. Additionally, it abolished the position 
only after she had already given birth and was ready to 
return, not while she was still pregnant.

The only other evidence to which appellant points 
in support of her direct discrimination theory are 
comments allegedly made by Turndorf and Gormisky 
when she told them of her pregnancy. These are 
insufficient to support a direct discrimination claim. It



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is well settled that stray remarks in the workplace, 
particularly by those who do not have authority to make 
personnel decisions such as Gormisky and Tumdorf, see 
supra page 2, do not establish a prima facie case of 
direct discrimination. Hook, 28 F.3d at 373, Ostrowski, 
968 F.2d at 182. Thus, with respect to Rhett’s direct 
discrimination case, we agree with the Bankruptcy 
Court that there was no evidence that anyone with 
authority to hire or fire CCA personnel discriminated 
against her. It follows that the Bankruptcy Court did 
not err in not requiring defendant to establish that it 
would have made the same employment decision had it 
not taken the impermissible criterion into account.

The remaining facts to which appellant points in 
support of her direct discrimination case, including the 
abolition of her position while she was still on leave and 
CCA’s failure to consider her for other positions, are by 
no means directly discriminatory and will be considered 
infra.

2. Application of McDonnell Douglas Factors

Appellant also challenges the Bankruptcy Court's 
conclusion that plaintiff failed to establish a prima facie 
case of discrimination, based on either race or the 
PDA, under McDonnell Douglas. Plaintiffs first 
argument in this regard is that the Bankruptcy Court 
erred as a matter of law in applying the McDonnell 
Douglas standard here because that test applies only to 
failure-to-hire, not discharge, claims. Although Rhett 
contends that the Bankruptcy Court should have 
applied a modified standard, Appellant’s Brief at 18,



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she fails to identify those standards. In any event, this 
argument is meritless, as the Supreme Court injected 
no such limitation in McDonnell Douglas, and numerous 
subsequent decisions have utilized that test in discharge 
cases. See, e.g., Smith, 76 F.3d at 420-21 (applying 
McDonnell Douglas test to claims of wrongful discharge 
and failure to rehire under PDA); Griffiths v. CIGNA 
Corp., 988 F.2d 457, 468-69 (3d Cir.) (applying 
McDonnell Douglas test to pretext claim for discharge), 
cert, denied, 114 S. Ct. 186 (1993); Jackson v. Univ. of 
Pittsburgh, 826 F.2d 230, 233-34 (3d Cir. 1987) (same), 
cert, denied, 484 U.S. 1020 (1988). Additionally, her 
claims appear to present a failure to rehire case as 
much as they do one for discharge, particularly since 
there was unrebutted testimony at trial that CCA did 
not consider her to be an employee there on March 26, 
1991 when Gormisky notified her that CCA abolished 
her position. Testimony of Gary Turndorf, Appellant’s 
Appendix Vol. II, at 70-1 to 70-4 ("Well, let go is a 
funny way to put it in the case of Ms. Rhett, because 
we considered that she was not an employee at the time 
that we terminated that position or contracted that part 
of the company.").

The next issue is whether the Bankruptcy Court 
correctly held that CCA’s decision to abolish the 
secretarial position that appellant had held, because she 
was out on maternity leave when CCA decided to 
contract the support staff, did not establish a case of 
pretextual discrimination. The Ninth Circuit had 
occasion to consider a similar issue in Smith v. F.W. 
Morse & Co., Inc., 16 F.3d 413,424-425 (9th Cir. 1996). 
In that case, plaintiff Kathy Smith was employed as a



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manager with defendant F.W. Morse & Co., a 
manufacturer of custom components for high 
technology. Id. at 418. In December, 1988, she told 
defendant that she intended to take maternity leave in 
or around April, 1989. Id. Between December, 1988 
and April, 1989, F.W. Morse & Co. underwent a 
management reorganization that reduced the number of 
second-level managers from seven to five. Id. As 
Smith was about to begin maternity leave, the owner of 
F.W. Morse, which had no formal maternity policy, 
assured her that her position was secure. Id.

On May 1, 1989, Smith visited the plant and told 
the general manager that she would like to return to 
work earlier than expected. Id. at 419. The general 
manager asked Smith whether she wished to have more 
children, to which Smith responded affirmatively. Id. 
The following day, the general manager asked Smith’s 
sister, also a plant employee, about Smith’s plans to 
have a larger family. Id. When Smith learned of this 
conversation and confronted the general manager about 
it, the general manager assured Smith her position was 
secure. Id. However, on May 11, 1989, the general 
manager informed Smith that her position was 
superfluous and had been eliminated. Id.

The district court entered judgment for defendant, 
and Smith appealed arguing, inter alia, that her absence 
on maternity leave was the primary motivating factor in 
her discharge and that F.W. Morse & Co. consequently 
discriminated against her in violation of Title VII and 
the PDA. Id. at 424. The Ninth Circuit disagreed, 
noting that while Title VII prohibits an employer from



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discharging an employee in retaliation for taking 
maternity leave, see 42 U.S.C. § 2000e(k), "an employer 
may discharge an employee while she is on a 
pregnancy-induced leave so long as it does so for 
legitimate reasons unrelated to her gravidity." Id. The 
Ninth Circuit stated as follows:

Title VII mandates that an employer must put 
an employee’s pregnancy (including her 
departure on maternity leave) to one side in 
making its employment decisions—but the 
statute does not command that an employer 
bury its head in the sand and struthiously 
refrain from implementing business judgments 
simply because they affect a parturient 
employee. . . .  At bottom, Title VII requires a 
causal nexus between the employer’s state of 
mind and the protected trait (here, pregnancy).
The mere coincidence between the trait and the 
employment decision may give rise to an 
inference of discriminatory animus . . . but it is 
not enough to establish a per se violation of the 
statute. . . . [The] employee (pregnant or not) 
runs a risk of suffering the ordinary slings and 
arrows that suffuse the workplace every day she 
goes to work and every day she stays away. 
Title VII is neither a shield against this broad 
spectrum of employer actions nor a statutory 
guaranty of full employment, come what may.

Smith, 76 F.3d at 424-25. See also Troupe v. May Dep’t 
Stores Co., 20 F.3d 734, 738 (7th Cir. 1994) (holding 
that the PDA "requires the employer to ignore an 
employee’s pregnancy, but . . . not her absence from



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work"); Cmokrak v. Evangelical Health Systems Corp., 
819 F.Supp. 737, 743 (N.D. 111. 1993) (noting that "the 
PDA does not force employers to pretend that absent 
employees are present whenever their absences are 
caused by pregnancy").

Similarly, in this case, the Bankruptcy Court 
reached several factual findings, which are reviewed 
only for clear error, that compelled the conclusion that 
the secretarial position held by appellant was abolished 
for legitimate, non-discriminatory reasons. That CCA 
was experiencing severe financial difficulties by 1990 
and through 1991 is manifest from the record and 
further reflected by CCA’s current Chapter 11 status. 
As a result, CCA contracted its staff on both 
management and support staff levels, and decreased or 
froze the remaining executives’ salaries. Based on these 
factual findings, which are not clearly erroneous, the 
Court agrees that appellant’s "discharge" claim under 
Title VII is meritless.

The Bankruptcy Court also found as matter of fact 
that appellant was not qualified for the administrative 
assistant, accounts payable supervisor or property 
manager positions. The Bankruptcy Court stated as 
follows:

[T]he testimony of the debtor, through the 
statements of Tumdorf, make it clear that she 
was not qualified for any of those jobs. Each of 
the positions required personal qualities that 
Rhett had not previously demonstrated. In the 
case of the administrative assistant, the basic 
requirement of the job was to act as an



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assistant to Landis. He required someone who 
worked with him and anticipated his 
requirements. Appointment to this position 
was his choice and it cannot be said that Rhett 
showed any of those qualities which he 
required. With respect to the job of accounts 
payable supervisor, it was clear from the cross 
examination of Rhett that she did not 
understand the nature of the position. As 
indicated in the findings of fact, she claimed 
not to know that the company was in trouble.
As in many situations where a company is on 
the brink of financial collapse, the accounts 
payable supervisor clearly requires juggling 
skills in the handling of trade creditors. One 
who could not consider the grave financial 
problems of the debtor certainly could not 
make the decisions with respect to the priorities 
of payment. There was also some suggestion 
that Rhett might be able to function as 
property manager. There was no evidence that 
she was even remotely qualified for that 
position.

Memorandum Opinion of William H. Gindin, C.J., 
U.S.B.C., Appellant’s Appendix Vol. I, at 13-14,

The record and testimony adduced at trial before 
the Bankruptcy Court support these conclusions. The 
foregoing review of the Bankruptcy Court’s decision 
therefore compels the Court to reject appellant’s 
contention that the Bankruptcy Court failed to consider 
whether she established a pretextual discharge case. 
The bulk of the Bankruptcy Court’s analysis clearly



75 a

involved an application of the McDonnell Douglas 
standard and culminated in the Bankruptcy Court’s 
conclusion that she had not satisfied those factors and 
thus not succeeded in demonstrating pretextual 
discrimination. See Memorandum Opinion of William 
H. Gindin, C.J., U.S.B.C., Appellant’s Appendix Vol. I, 
at 12-14.

The Court is similarly constrained to reject Rhett’s 
argument that the Bankruptcy Court failed to consider 
her circumstantial case of racial discrimination under 
the McDonnell Douglas standards. Appellant has 
referenced no factual or legal error by the Bankrutpcy 
Court in this regard, beyond an amorphous assertion 
that three of the other secretaries were white and other 
individuals who remained at CCA after the staff 
reductions were white. Even if this allegation were 
sufficient to constitute a statistical imbalance, which it 
is not, it is well settled that a statistical imbalance alone 
will not suffice to establish a prima jade  disparate 
impact or circumstantial case of discrimination. See 
supra pages 9-10 (quoting Watson, 487 U.S. at 994). 
See also Griffiths, 988 F.2d at 470; Ostrowski, 968 F.2d 
at 182.

3. Mixed-Motives Standard

Finally, appellant argues that the Bankruptcy Court 
did not properly apply the standard for a mixed-motives 
claim of discrimination. While appellant argues that



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the Bankruptcy Court misstated the standard,9 we can 
find no reversible error here. Having concluded that 
CCA did not discriminate against plaintiff under the 
PDA in abolishing her position while she was on leave 
or in not hiring her for another position, the 
Bankruptcy Court found no discriminatory animus that 
tainted an otherwise legitimate business decision. For 
the reasons set forth above, supra pages 16-19, this 
Court agrees.

9Relying on Price Waterhouse, the Bankruptcy Court 
stated that even if the employer took the protected 
characteristic into account in rendering the adverse 
employment decision, it could escape liability upon a 
showing that had the employer not, the result would 
have been the same. Memorandum Opinion of William 
H. Gindin, C.J., U.S.B.C., Appellant’s Appendix Vol. I, 
at 15 (citing Price Waterhouse, 490 U.S. at 242). The 
Civil Rights Act of 1991, however, partially overruled 
Price Waterhouse by providing that even if the employer 
demonstrates that it would have reached the same 
decision absent discriminatory motive, the aggrieved 
party might still recover declaratory and injunctive 
relief, attorneys’ fees and costs. 42 U.S.C. § 2000e- 
5(g)(2)(B), as amended by the Civil Rights Act of 1991, 
section 107(b). See also Robinson v. Southeastern 
Pennsylvania Transportation Authority, 982 F. 2d 892,899 
(3d Cir. 1993).



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III. CONCLUSION

For the reasons set forth above, the Court will 
affirm the January 9, 1996 Order of the Bankruptcy 
court in all respect. An appropriate form of Order is 
filed herewith.

GARRETT E. BROWN, JR., U.S.D.J.



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Opinion of the Bankruptcy Court

HONORABLE WILLIAM H. GINDIN. CHIEF JUDGE

PROCEDURAL HISTORY

This matter comes before the court on a motion by 
the debtor (Carnegie or debtor) to expunge the claim 
of Deborah Rhett (Rhett or creditor) in the amount of 
$150,000.00 based upon a claim of discrimination on 
the part of the debtor. The creditor claims that the 
debtor failed to permit her to return to work after she 
gave birth to her child because she was (1) black, (2) 
unmarried, and (3) away from work for more than 
three months as a result of her pregnancy and delivery. 
After the hearing, the court determined that the matter 
was a "contested matter" as defined by Fed. R. Bankr. P. 
9014, that it should proceed in the same manner as an 
adversary proceeding, and that Part VII of the said 
rules should apply. This court has jurisdiction pursuant 
to the provisions of 28 U.S.C §1334(b) and 28 U.S.C. 
§157(b)(2)(B) & (O).

FACTS

The matter was heard by the court on October 20, 
November 29 and November 30, 1995. The creditor 
offered one witness, Brenda Sirkus (Sirkus), in addition 
to herself (Rhett), as well as portions of a deposition 
taken of the debtor’s witnesses. The debtor relied upon 
the testimony of Gary Tumdorf (Tumdorf), Chief



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Financial Officer and Counsel to the debtor, as well as 
Keith Gormisky (Gormisky), Controller of the debtor 
partnership.

As a result of the aforesaid testimony, the court 
makes the following findings of fact:

1. Carnegie is one of a number of entities owned or 
controlled by one Alan Landis (Landis) and operated 
from one office located in Carnegie Center, Princeton 
(West Windsor), New Jersey. Some of the entities are 
debtors before this court while others are not.

2. Landis controls all of the entities and makes all 
of the significant decisions concerning hiring, firing, and 
compensation. Neither Turndorf or Gormisky had any 
hiring or firing authority.

3. Rhett is a black woman, now approximately 
thirty-five years old and in apparent good health.

4. Rhett was employed by Carnegie as a temporary 
employee beginning in March or April of 1989.

5. Rhett is a graduate of Burlington High School 
and has extensive employment experience as an 
accounting clerk, billing clerk, payable clerk, and 
secretary. She has experience in dealing with clients 
over the telephone and working on continuity for a 
radio station. She also has brief experience in retail, 
including the supervision of some part-time employees.

6. On July 17, 1989, she became a permanent 
secretary with the debtor. As a secretary, her duties



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included typing of correspondence, statistical typing, 
answering the telephone, filing, and other secretarial 
duties. On occasion, she did some ordering of supplies 
and directed messages of tenant complaints to the 
appropriate executive. She specifically worked for 
several executives, including Geoff Hammond 
(Hammond).

7. The operation of Carnegie was very loose. 
There were a limited number of employees and all 
secretaries and office personnel covered for one 
another to the extent that they were able.

8. In January of 1990, Rhett received an increase 
of $1,500.00 in her salary, bringing her to $25,000.00. 
During 1990, she also received an additional $5,000.00 
in overtime. Benefits were minimal, but they included 
a health plan and a small pension plan to which she was 
required to contribute if she wished to participate. She 
received two weeks of vacation which she took in daily 
increments and some sick time which she rarely used. 
She was allowed no personal days. On occasion, she 
did extra typing for others and was given her lunch in 
lieu of payment.

9. Rhett’s job performance was adequate, and she 
was never told that it was deficient in any way. She 
apparently never received a performance review.

10. The procedure was that staff employees were 
given annual raises of 3 to 4%. If their performance 
was exceptional, more could be given.

11. In the summer of 1990, Rhett felt that she was



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doing more work than she had done when she started 
and requested a salary increase. She was assured that 
her request would be given consideration, but she never 
heard and did not receive a raise.

12. Kristen Wolf (Wolf) was given a retroactive 
increase of $2,000.00 on April 18, 1990, (Exhibits J-l 
and J-2 in evidence) and a further increase of 4% on 
March 29, 1991 (Exhibit P-12 in evidence). Both of 
these increases were approved by Landis.

13. Evelyn Angulites (Angulites) was a secretary 
employed at the time Rhett started working at 
Carnegie. While she held herself out as the one in 
charge of the office, she had in fact, no more authority 
than any other secretary. She did some additional 
ordering of supplies, but only because she was more 
familiar with the routine. When she left in the summer 
of 1990, Rhett took on some of her tasks.

14. Wolf started as a receptionist at the same time 
Rhett started on a full time basis. In December 1990, 
Wolf was designated as a secretary and worked for 
several senior people. She later became an 
administrative assistant.

15. Barbara MacGregor (MacGregor) served as 
personal secretary to Landis and, as such, worked for 
him in many different ways. She had a longer tenure in 
the job than Rhett had in her job. When she left, she 
was replaced by Rachel Drexinger (Drexinger). When 
she sought to return, it coincidentally came at the time 
Drexinger was about to leave voluntarily and she was 
given her job back.



82a

16. Kathy Buchanan, was also a secretary and had 
been employed longer than Rhett.

17. Sirkus left in order to have a baby and returned 
as a temporary employee.

18. Kathleen Cohen (Cohen) was also a personal 
secretary and administrative assistant to Landis. She 
exhibited special skills in handling that job. She was 
replaced by Tammi Medoff when she left in April, 
1991.

19. Linda Kraus (Kraus) was an accounts payable 
supervisor when she left to have a baby. When she 
returned, she was employed as an accounts payable 
clerk.

20. There were two other black employees in the 
Landis groups; one was a supervisor. There were 
approximately 25 employees in the entire group.

21. Rhett was not qualified to be an accounts 
payable supervisor, an administrative assistant as 
described in C-6, or a private secretary to Landis.

22. In June of 1990, Rhett informed her co-workers 
and supervisors that she was pregnant, and that she 
would be looking to take maternity "leave".

23. Carnegie has no regular maternity "leave" 
policy. As a rule, the debtor tries to rehire or find a 
spot for any employee to the best of its ability when the 
person returns.



83a

24. When Rhett told Gormisky that she was going 
to have a baby, he asked her if she was going to get 
married. When she told him that she was not, he 
remarked that she would be better off married. 
Gormisky knew that she had a boyfriend who was 
already married.

25. Tumdorf did not think that Rhett was a good 
employee and in December 1990, he told her that she 
was on "thin ice". Rhett stated that she thought that 
this had to do with her return to work, but it appears 
from the feelings that Tumdorf had about her work, 
that he was telling her that her work was not as good as 
it should be.

26. On December 18, 1990, Rhett advised the 
people for whom she worked that she was leaving on 
"maternity leave" on December 21, 1990, and that she 
planned to return on April 15, 1991. Copies of her 
memorandum were sent to several executives including 
Tumdorf and Landis. She made it clear that she 
wanted to return. Rhett received no response to her 
memorandum. It is also clear that Rhett was happy in 
her job and felt that she was a good employee who had 
no reason to believe that she could not come back.

27. Rhett left on December 21, 1990. Before she 
left, she trained a temporary employee to take her 
place. The temporary employee remained until March, 
1991.

28. Carnegie was one of several Landis companies 
which was formed for the financing and administration 
of single asset real estate holdings. Beginning with the



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downturn in real estate in New Jersey in 1987, the 
companies began to experience severe financial 
difficulties. The existence of such difficulties was 
known to all employees. Sirkus knew and, in spite of a 
specific claim to the contrary, this court finds that 
Rhett knew of the trouble.

29. In December, 1990, several supervisory 
employees, including Hammond, were let go. Eugene 
Gold was let go in March of 1981, Dave O’Conner in 
April, 1991, and Peter Clark in June of 1991. All 
salaries were frozen and executives took a substantial 
decrease in salaries.

30. During the time before Rhett left, there had 
been many calls from vendors to whom money was 
owed seeking payment of outstanding bills.

31. While Rhett was out, Carnegie tried to keep 
Rhett’s position open for as long as it could with 
temporary employees.

32. In early March, Rhett visited the premises of 
Carnegie to show her baby to her co-workers. Nothing 
was said to her at that time about termination.

33. On March 26, 1991, Gormisky wrote to Rhett 
telling her that her position had been eliminated 
(Exhibit C-5 in evidence). This was the first time that 
Rhett had knowledge that she would not have a job.

34. Immediately upon receipt of the letter from 
Gormisky, Rhett called him. Gormisky just reiterated 
the contents of the letter. Rhett also asked about the



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accounts payable position, but she was told that it was 
not available to her. She asserts that she asked about 
the administrative assistant position and the court finds 
that she was told that it was not available to her. The 
court also finds that Rhett did not indicate that she 
would take a lower paying or temporary job, and she 
was not asked.

35. After the letter of March 26, Carnegie sent the 
necessary information concerning the continuing 
benefits (COBRA) to Rhett.

36. Rhett suffered from some form of post-partum 
depression and was under medical care until June 1991. 
No evidence was adduced indicating a relationship 
between the medical care and her termination other 
than the testimony from Rhett that she was hurt and 
embarrassed and has yet to tell her family that she was 
terminated.

37. For the year of 1991, Rhett earned $11,873.00 
of which $8,740.00 was in unemployment benefits. 
(Stipulated).

38. On January 29, 1992, Rhett commenced work 
for the Robert Wood Johnson Foundation. She earned 
$22,500.00 in 1992; $23,000.00 in 1993; $24,000.00 in 
1994; and $25,500.00 in 1995. In addition, she has had 
more vacation time, more sick time and the right to 
take personal days. She has a significantly better health 
plan than she had at Carnegie and a drug plan where 
previously she had none. She gets life insurance and a 
noncontributing 401k plan which has a present value in 
excess of $9,100.00. Most valuable of all is that her



86a

compensation package includes a free lunch. Rhett 
loves her job and considers it better than the one she 
left.

39. There is not a scintilla of evidence that any 
person at Carnegie who had the power to hire or fire, 
discriminated against Rhett on the basis of her race. 
The evidence is to the contrary.

40. There is not a scintilla of evidence that any 
person at Carnegie who had the power to hire or fire 
discriminated against Rhett on the grounds that she was 
a single and/or unwed mother. The evidence is to the 
contrary.

41. A timely complaint was brought by Rhett 
before the Equal Employment Opportunity Commission 
which declined to take action.

DISCUSSION

N.J.S.A. 10:5-4 prohibits discrimination on the basis 
of race. It further provides that the right not to be 
discriminated against "is recognized as and declared to 
be a civil right." Id. Furthermore, N.J.S.A. 10:5-12(a) 
prohibits "an employer, because of the race ... marital 
status or sex ... of any individual... to refuse to hire or 
employ or to bar or to discharge ... from employment 
such individual..." The law of New Jersey is clear. 42 
U.S.C. § 2000e-2(a) defines the same conduct as an 
"unlawful employment practice." Additionally, 42 
U.S.C. 2000e(k) defines sex to include "pregnancy, 
childbirth or related medical conditions." The federal



87a

law is likewise clear. The question before this court is 
whether or not Deborah Rhett found herself without a 
job because of her race or her position as an unwed 
pregnant woman who left her job to have her child.

To the extent that the statutes require some act or 
statement to establish such discrimination, none has 
been shown in this case. The issues are, however, far 
more complex. Initially, it must be noted that an action 
before the Equal Employment Opportunity Commission 
is a jurisdictional prerequisite to the filing of the claim 
in this action. An adverse decision or a failure to act 
by the Commission, however, does not preclude the 
assertion of a claim in this court. McDonnell Douglas 
Corporation v. Green, 411 U.S. 792, 798, 93 S.Ct. 1817, 
1822 (1973); Fekete v. United States Steel Corp., 424 F.2d 
331, 1336 (3d Cir., 1970).

There are two basic approaches to the 
determination of discrimination which must be 
analyzed. The first of these is known as the disparate 
impact theory of racial discrimination. A violation of 
the statute based upon this theory is shown when an 
employer uses a specific employment practice which, 
although it appears to be neutral on its face, actually 
causes a "substantial adverse impact upon a protected 
group." Equal Opportunity Employment Commission v. 
Metal Service Company, 892 F.2d 341, 346 (3rd Cir., 
1990). It must appear that the practice does not serve 
a legitimate goal of the employer. Wards Cove Packing 
Co., Inc. v. Atonio, 490 U.S. 642, 659, 109 S.Ct. 2115, 
2126 (1989). The burden of proof of such disparate 
impact must be shown by the complainant, and the 
employer need only produce a legitimate business



88a

justification. Id. Under this theory, there is no need 
for proof of intentional discrimination. Watson v. Fort 
Worth Bank and Trust, 487 U.S. 917, 985, 108 S.Ct. 
2777, 2784 (1988); Wards Cove, Supra at 645.

The disparate treatment theory takes a different 
approach. Under this alternative claim, the employee 
must show that he or she is a member of a protected 
group, and that the particular employee has been 
"singled out and treated less favorably than others 
similarly situated on the basis of an impermissible 
criterion." Metal Service Company, Supra at 347. In 
this type of case, the employee must make a prima facie 
case showing that the employer’s motive was 
discriminatory. Id. No such proof was forthcoming in 
the trial of the case at bar. In fact, Rhett’s testimony 
is to the contrary. She felt that there was no 
discrimination against blacks, and while there were few 
blacks in the firm, they were well treated. In fact, a 
black was promoted to a supervisory role in a related 
Landis company. As to the issue of whether Rhett was 
treated differently as a single pregnant woman, the only 
evidence adduced at trial clearly showed that an 
individual who left to have a baby had no absolute right 
to keep her job. In fact, the debtor here tried to keep 
the position for her, but was unable to do so.

The McDonnell Douglas case also establishes the 
necessary burden of proof and elements of the cause of 
action. The complainant must show:

(i) that he belongs to a racial minority, (ii) that 
he applied and was qualified for a job for which 
the employer was seeking applicants; (iii) that,



89a

despite his qualifications, he was rejected; and 
(iv) that, after his rejection, the position 
remained open and the employer continued to 
seek applicants from persons of complainant’s 
qualifications.

McDonnell Douglas, Supra at 802. Each of these 
elements must be examined in the light of the testimony 
adduced at the trial. The first prong of the test is easy. 
Rhett is black and is clearly a member of a racial 
minority. As an unwed pregnant woman leaving work 
to have her baby, she likewise fits into a group against 
which discrimination might take place. The second 
prong is less clear. There was no evidence adduced at 
trial that the employer was actually seeking applicants. 
While the position was apparently kept open until the 
time that the debtor sent the letter indicating that her 
job had been eliminated, it is clear that after March 26, 
1991, there were only four secretaries where there had 
previously been five. The debtor filled other positions 
such as the administrative assistant and accounts 
payable supervisor slots, but no one was hired as a 
secretary.

Rhett argues that she was qualified for the positions 
of administrative assistant, accounts payable supervisor, 
or property manager. However, the testimony of the 
debtor, through the statements of Tumdorf, make it 
clear that she was not qualified for any of those jobs. 
Each of the positions required personal qualities that 
Rhett had not previously demonstrated. In the case of 
the administrative assistant, the basic requirement of 
the job was to act as an assistant to Landis. He 
required someone who worked with him and



90a

anticipated his requirements. Appointment to this 
position was his choice and it cannot be said that Rhett 
showed any of those qualities which he required. With 
respect to the job of accounts payable supervisor, it was 
clear from the cross examination of Rhett that she did 
not understand the nature of the position. As indicated 
in the findings of fact, she claimed not to know that the 
company was in trouble. As in many situations where 
a company is on the brink of financial collapse, the 
accounts payable supervisor clearly requires juggling 
skills in the handling of trade creditors. One who could 
not consider the grave financial problems of the debtor 
certainly could not make the decisions with respect to 
priorities of payment. There was also some suggestion 
that Rhett might be able to function as property 
manager. There was no evidence that she was even 
remotely qualified for that position. The final part of 
the test deals with the question of whether or not the 
employer continued to seek applicants. It is clear 
beyond any doubt that the employer did not continue 
to seek applicants. In fact, the debtor, whom it was 
testified hated to fire anyone, let several administrative 
and executive employees go and downsized the entire 
operation in an effort to cut costs.

Assuming arguendo that the complainant had made 
out a prima facie case of all four of the McDonnell 
Douglas requirements, the burden of proof shifts "to the 
em p loyer to  a r t ic u la te  som e le g itim a te , 
nondiscriminatory reason" for its action. Id. Such a 
reason must, in the words of Justice Powell, "be 
recognized as a reasonable basis for a refusal to hire." 
Id. at 802-3. This court, dealing as it does with 
insolvent and failing businesses on a daily basis, can



91a

think of no more legitimate reason for a discharge than 
the necessity of reducing the work force of a company 
in trouble. While it is clear that the company did not 
take final action until such time as Rhett was almost 
ready to return, the evidence was that three of the 
people for whom Rhett did significant work were let go 
in December, 1990, March 1991 and April, 1991. It 
should be noted that even if the trier of the fact is 
unable to accept the justification set forth by the debtor 
(certainly not the case here), there is not necessarily a 
requirement that the court find discrimination without 
full compliance with the requirements of the burden of 
proof. St. Mary’s Honor Center; et al. v. Hicks, 113 S.Ct. 
2742, 2755, 125 L.Ed.2d. 407 (1993). Even the four 
dissenting justices in that case concede that the burden 
of showing that the explanation proffered by the 
employer is "unworthy of credence," remains on the one 
complaining of the discrimination. St. Mary’s, Supra at 
2762; Texas Department of Community Affairs v. 
Burdine, 450 U.S. 248, 252, 101 S.Ct. 1089, 1093 (1981); 
See also, McKenna v. Pacific Rail Service, 32 F. 3rd 820, 
825-6 (3rd Cir., 1994).

It is also important to note that the Supreme Court 
in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 
1775 (1989) dealt with the problem which arises when 
the discrimination forms a portion of the reason for the 
action by the employer. There, Justice Brennan 
speaking for a six to three majority, rejected a "but for" 
test, and insisted that the employer show by a 
preponderance of the credible evidence that even if the 
employer had not taken the protected class situation, 
the result would have been the same. Price Waterhouse,



92a

Supra at 242. Thus in the instant case, the 
uncontradicted testimony of the debtor establishes that 
the debtor had to let someone in the secretarial group 
go and the fact that Rhett was not working for the 
company at the time made it logical that she be the 
one.

In view of the determination of the factual issues by 
the court, it is unnecessary to make conclusions 
concerning the damage issues raised by Rhett.

CONCLUSION

Based upon the findings of fact and conclusions of 
law set forth herein, this court find that the creditor, 
Deborah Rhett, has failed to establish her claim, and 
that the claim should and is hereby expunged.

Counsel for the debtor shall submit an appropriate 
form of order within ten days.

December 21st 1995.

WILLIAM H. GINDIN 
CHIEF JUDGE



93a

UNITED STATES COURT OF APPEALS 
FOR THE THIRD CIRCUIT

No. 96-5566

IN RE:

CARNEGIE CENTER ASSOCIATES, 

Debtor

DEBORAH RHETT, 

Appellant

v.

CARNEGIE CENTER ASSOCIATES

On Appeal from the United States District Court 
for the District of New Jersey 

(D.C. Civ. No. 96-00852)

SUR PETITION FOR REHEARING



94a

BEFORE: SLO VITER, Chief Judge, and BECKER, 
STAPLETON, MANSMANN, GREENBERG, 

SCIRICA, COWEN, NYGAARD, AU TO , ROTH, 
LEWIS, MCKEE, 

and WELLFORD*, Circuit Judges

The petition for rehearing filed by the appellant, 
Deborah Rhett, in the above captioned matter having 
been submitted to the judges who participated in the 
decision of this court and to all the other available 
circuit judges of the court in regular active service, and 
no judge who concurred in the decision having asked 
for rehearing, and a majority of the circuit judges of the 
circuit in regular active service not having voted for 
rehearing by the court en banc, the petition for 
rehearing is denied. Chief Judge Sloviter and Judges 
Mansmann, Nygaard, Roth, Lewis, and McKee would 
grant rehearing by the court en banc.

BY THE COURT:

Circuit Judge

DATED: DEC 22 1997

‘Honorable Harry W. Wellford, Senior Judge of the 
United States Court of Appeals for the Sixth Circuit, 
sitting by designation.



95a

UNITED STATES COURT OF APPEALS 
FOR THE THIRD CIRCUIT

No. 96-5566

IN RE:

CARNEGIE CENTER ASSOCIATES,

Debtor

DEBORAH RHETT,

Appellant

v.

CARNEGIE CENTER ASSOCIATES

On Appeal from the United States District Court 
for the District of New Jersey 

(D.C. Civ. No. 96-00852) *

Present: Greenberg, McKee, and Wellford,*
Circuit Judges



96a

JUDGMENT

This cause came on to be heard on the record from 
the United States District Court for the District of New 
Jersey and was argued by counsel on June 23, 1997.

On consideration whereof, it is now here ordered 
and adjudged by this Court that the judgment of the 
said District Court entered August 6, 1996, be, and the 
same is hereby affirmed. Costs taxed against appellant. 
All of the above in accordance with the opinion of this 
Court.

ATTEST:

Clerk

Dated:

Certified as a true copy and issued in lieu of a formal 
mandate on December 30, 1997.

Teste: /s

Chief Deputy Clerk, U.S. Court of Appeals for the 
Third Circuit.