Compliance November 10, 2002

Court Agreement Gives Verizon Women Pension Credits

October 11, 2002 (PLANSPONSOR.com) - Verizon Communications Inc. will credit the pension accounts of thousands of current and former female employees who took pregnancy or maternity leave, entitling them to millions of dollars in benefits - one of the largest such agreements of its kind.

Reported by

Fred Schneyer

The pension credits agreement comes as part of an out-of-court settlement with the US Equal Opportunity Employment Commission (EEOC) that won the approval of US District Judge Denny Chin of the Southern District of New York, according to a story in the New York Law Journal.

Up to 12,500 women in New York, 12 other states and the District of Columbia who worked for the New York-based company will receive service credit for time off from work to have or raise a baby, the EEOC said.

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The agreement approved by Chin resolves lawsuits brought by the EEOC in 1997 and 1999 against Bell Atlantic and NYNEX (now Verizon). The agency, which has estimated that employees could receive benefits worth more than $10 million, said it is one of the largest settlements ever on the issue.

From 1965 to 1979, the company did not give service credit to female employees on pregnancy or maternity leave, in contrast to men on disability or in military service, who were given full credit, the Law Journal story said. Service credit is used to determine when employees are eligible for their pension and how much they will get.

Under the court agreement, which formalizes a settlement reached earlier this year, women will get two to seven weeks of additional service credit per pregnancy. Some employees who missed out on early retirement may get up to 12 weeks of credit, the Law Journal said.

According to the Law Journal story, Verizon maintains that its policies complied with the law at the time, company spokeswoman Sharon Cohen-Hagan said. The company settled the case, she said, because it did not want to drag out the litigation any further. She added that the company considered the amount of the settlement non-material.

The company began changing its policy in 1978, when Congress passed the Pregnancy Discrimination Act, making it illegal to fire, demote or refuse to hire women because they are pregnant. Under the law, expectant and new mothers in the work force are also entitled to the same benefits given to temporarily disabled employees.