Noreen HULTEEN; Eleanora Collet, Linda Porter; Elizabeth Snyder; Communications Workers of America, Plaintiffs-Appellees, v. AT & T CORPORATION, Defendant-Appellant, 441 F.3d 653

PLAGER, Circuit Judge: This is a Title VII Civil Rights case. It requires us to decide whether AT & T, in making current retirement benefits determinations, discriminates in violation of Title VII against women who took pregnancy-related leaves before 1979.1979 was the year when the Pregnancy Discrimination Act of 1978(PDA), an amendment to Title VII, became effective. Prior to the PDA, an AT & T employee on pregnancy leave was not awarded service credit for the entire period of her absence, whereas employees on other temporary disability leaves received full service credit for that time period.

Although AT & T today awards full credit for pregnancy leaves, plaintiffs in this case, four female employees and the Communications Workers of America (CWA), complain that the company’s failure to give employees full service credit for their pre-PDA leaves affects their eligibility for and computation of retirement benefits and is therefore a present violation of the PDA. AT & T marshaled a number of arguments based on the current state of the law. The district court, while acknowledging the “great logical and legal force” of AT & T’s arguments, felt compelled by this court’s decision in Pallas v.

Pacific Bell, 940 F.2d 1324 (9th Cir.1991), to conclude that AT & T’s post-PDA benefits determinations violated the PDA. The district court therefore granted

summary judgment in plaintiffs’ favor on their Title VII claims. Because the result reached by the district court gives the PDA impermissible retroactive effect under controlling law today, we reverse the judgment of the district court. BACKGROUND Noreen Hulteen, Eleanora Collet, Linda Porter, and Elizabeth Snyder were longtime employees of Pacific Telephone and Telegraph (PT & T), a Bell System operating company that was transferred to AT & T when the former Bell system was broken up in 1984. They continued to work for AT & T thereafter.

PT & T and, in turn, AT & T maintain a “Net Credited Service” (NCS) date for all employees. The NCS date consists of an employee’s original hire date and adjustments for periods during which no service credit is accrued. Periods of leave or other breaks in service that are not credited result in a later NCS date than the employee’s original hire date. The NCS date is used to determine benefits for which employees may qualify, including the amount of pension payments, eligibility for early retirement, qualification for voluntary termination packages, job bidding, shift preferences, and seniority for layoffs.

Hulteen, Collet, Porter and Snyder took pregnancy leaves between 1968 and 1976. Before August 7, 1977, PT & T treated pregnancy leaves as personal leaves for which the employee was given a maximum of 30 days of service credit; at the same time, employees on disability leave for reasons other than pregnancy received full service credit for the entire period of their absence.

Also, female employees who took a personal leave because of pregnancy and became temporarily disabled while on that leave for reasons unrelated to pregnancy were ineligible for sickness or disability benefits or for NCS credit in excess of 30 days. On August 7,1977, PT & T adopted the Maternity Payment Plan (MPP) under which pregnant employees could begin a pregnancy leave at any mutually convenient time and were eligible for disability benefits for up to six weeks of leave. They received service credit for this period, but beyond this, absence became a personal leave.

Employees whose pregnancy-related disability lasted longer than six weeks and who then had a second disability received no service credit for the period of the second disability. Employees on non-pregnancy-related disability leave received full service credit for the entire period of their disability absence, including for leave resulting from disability for a different reason from the initial disability.

On April 29, 1979, the effective date of the PDA, PT & T adopted the Anticipated Disability Plan (ADP), which superseded the MPP and provided service credit for pregnancy leaves on the same basis as leaves taken for other temporary disabilities.

No adjustment was made to the service credit calculations of employees who had been subject to pre-MPP policies when the MPP was adopted, or for pre-ADP Calculations when the ADP was adopted. ■ In 1982 the United States District Court for the District of Columbia entered a consent decree and Modified Final Judgment to resolve the government’s antitrust suit against AT & T. United, States v. Am. Tel. & Tel. Co., 552 F.Supp. 131 (D.D.C.1982), aff'd sub nom., Maryland v. United States, 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983).

Among other things, the judgment required recognition of pre-divestiture employment service by the newly-created regional telephone holding companies and their subsidiaries, including PT & T. It resulted in a Plan of Reorganization that was approved by the court in 1983. United States v. Western Elec. Co., 569 F.Supp. 1057 (D.D.C.1983), aff'd sub' nom., California v. United States, 464 U.S. 1013, 104 S.Ct. 542, 78 L.Ed.2d 719 (1983).

The Plan of Reorganization specifies that “all employees will carry with them all pre-divestiture Bell System service regardless of the organizational unit or corporation by which they are employed immediately after divestiture.” It also states that “[a]ll employees and retirees of any pre-divesti-ture Bell System entity will have the same pension benefit entitlements immediately after divestiture as they had immediately prior to divestiture under the existing [Bell System pension plans].” Over the years, collective bargaining agreements between AT & T and the CWA have contained provisions recognizing the use of NCS as established by company practice to determine various employment-related benefits.

AT & T has continued to utilize employees’ NCS dates as the basis for computing benefits and determining other rights negotiated in collective bargaining agreements. Hulteen’s employment was terminated June 1, 1994 through a reduction in force; Collet retired early under a Voluntary Retirement Incentive Program on December 31, 1998; Porter is a current employee who has not yet retired; and Snyder voluntarily terminated her employment on April 28, 2000 pursuant to a Voluntary Termination Plan.

Calculation of their benefits or the date of their retirement opportunities would have been more favorable had AT & T or PT & T credited some or all of the previously uncredited time they were off work due to pregnancy leaves prior to 1979. Each filed a charge with the Equal Employment Opportunity Commission (EEOC). The first of these charges was filed in 1994. The EEOC issued a Letter of Determination finding reasonable cause to believe that AT & T discriminated by determining eligibility for benefits and retirement offerings based on the applicable NCS date.

The CWA likewise filed a charge of discrimination on behalf of its bargaining unit employees. The EEOC issued a notice of right to sue to all claimants. Hulteen, Collet, Porter, and Snyder then filed suit in 2001 on their own behalf and on behalf of a class of similarly situated employees. The CWA joined. The parties filed cross-motions for

summary judgment on plaintiffs’ Title VII claims. Although the district court found AT & T’s arguments “compelling,” it considered itself bound by Pallas and obligated to follow it. Accordingly, plaintiffs’ motion was granted. The district court certified the order for interlocutory appeal, and we granted AT & T’s petition for permission to appeal pursuant to 28 U.S.C. § 1292(b). DISCUSSION The arguments and the briefs in this case were focused on whether the outcome is dictated by this court’s 1991 Pallas decision.

The issue before us, however, is not Pallas, but Hulteen — whether the trial court erred in this case in holding for the Hulteen plaintiffs. To sustain their Title VII cause of action, plaintiffs on appeal must do two things: one, find some way to have the pre-PDA leaves credited under post-PDA rules; and two, since the alleged unlawful practice occurred prior to 1979, find a hook on which to base their lawsuit that is recent enough to avoid the statute of limitations requiring that charges be filed with the EEOC within 180 days “after the alleged unlawful employment practice occurred.” 42 U.S.C. § 2000e-5(e)(l).

The first is the retroactivity problem; the second the statute of limitations problem. The ultimate question to be answered in this appeal is, in light of controlling law, what is the correct result? Controlling law in this case, as in all cases governed by federal law, is what Congress has enacted and what the Supreme Court has said regarding the key matters on which the case turns. The congressional enactment at issue is Title VII, as amended from time to time. There are several recent Supreme Court decisions of direct relevance.

Once we understand the terms of controlling law, we can then determine whether there is circuit precedent that is inconsistent. If so, we will have no choice but to ignore such precedent, or, to put it more delicately, conclude that such precedent is not binding. I.

Retroactivity “The presumption against statutory retroactivity is founded upon sound considerations of general policy and practice, and accords with long held and widely shared expectations about the usual operation of legislation.” With those words the Supreme Court in 1994 concluded a thorough review and restatement of the law governing the retroactivity of congressional enactments. Landgraf v. USI Film Prods., 511 U.S. 244, 293, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). Restatement may be the wrong word — ‘sea change’ may be more accurate.

Before Landgraf, notions such as “manifest injustice” and similar equitable phrases were all the guidance the lower courts had, not to mention lines of cases pointing in opposite directions creating what the Court referred to as an “apparent tension” between the expressions used in the cases. Id. at 264, 114 S.Ct. 1483; compare Bradley v. Sch. Bd. of Richmond, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), with Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988).

After Landgraf the rules are unambiguous: in the absence of a clear expression of intent by Congress that a particular legislative enactment is to apply to events that occurred before the effective date of the legislation, the default rule is no retroactive application: “prospectivity remains the appropriate default rule.” Id. at 272, 114 S.Ct. 1483. As with all general rules, there are exceptions. When the issue is a court’s jurisdiction, id. at 274, 114 S.Ct. 1483, or a change in procedural rules, id. at 275, 114 S.Ct. 1483, intervening statutes may when appropriate be applied to current cases.

But when dealing with the rights and property interests of the individual, the “principle that the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal appeal.” In a free, dynamic society, creativity in both commercial and artistic endeavors is fostered by a rule of law that gives people confidence about the legal consequences of their actions. Id. at 265-66, 114 S.Ct. 1483 (citation omitted).

In the case before us, we are dealing with contractual or property rights related to established pension and other retirement obligations of the employer and benefits of the employees, rights which the Court described as “[t]he largest category of cases in which we have applied the presumption against statutory retroactivity ..., matters in which predictability and stability are of prime importance.” Id. at 271, 114 S.Ct. 1483. Before the PDA, the counting rules applied by AT & T (and its related companies — hereafter collectively AT &

T) did not grant the same degree of service credit for pregnancy leaves that were awarded other temporary disabilities. As objectionable as that may seem now, those counting rules at the time were legal, and had been expressly so held under the then-existing Title VII. See Gen. Elec. Co. v. Gilbert, 429 U.S. 125, 136, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976). The PDA, effective in 1979, was intended to prohibit future use of that accounting distinction.

Thereafter, and in accordance with the PDA, AT & T’s service credit rules were amended to treat all subsequent pregnancy leaves in the same manner as other disability leaves. Plaintiffs’ union, the CWA, negotiated in 1979 what it viewed as PDA-compliant service credit rules. The CWA has prospectively incorporated these service credit rules into its national collective bargaining agreements with AT & T ever since.

In order for the plaintiffs to obtain service credit for their pre-1979 pregnancy disability leaves (in excess of that amount the system then granted), i.e., for their NCS dates to be readjusted back, one of two things must happen. The employer could voluntarily decide to grant the additional credits, or the law could compel the employer to do so on the grounds that refusal to do so is a violation of law. The first obviously has not happened.

The second can be arrived at by either of two theories — (1) the denial of full disability credit for the pre-1979 maternity leaves, lawful at the time, has been made unlawful as a matter of law, and must be corrected; or (2) the denial today of the benefits the full credits would have earned constitutes a new, post-1979, wrong. We address each of these theories in turn. A. Has there been a change in the law such as to make unlawful the denial of full disability credits for pre-1979 pregnancy leaves (taken before enactment of the PDA)? The law cited by plaintiffs as controlling this case is the PDA.

There is nothing in the text of the PDA to indicate a clear congressional intent that the provisions of the statute are to be applied in such a way as to change the legal consequences of conduct that occurred prior to the statute’s enactment. The relevant conduct is the employer’s practice, pre-PDA, of giving only limited service credit for pregnancy leaves, and the acceptance of that practice by the affected employees (and their union representatives). It is widely understood that there is nothing in the PDA that suggests a congressional intent to make the statute retroactive. Wambheim v. J.C.

Penney Co., 642 F.2d 362, 363 n. 1 (9th Cir.1981); see also Whitehead v. Okla. Gas & Elec. Co., 187 F.3d 1184, 1193 (10th Cir.1999); Schwabenbauer v. Bd. of Educ., 667 F.2d 305, 310 n. 7 (2d Cir.1981); Condit v. United Air Lines, Inc., 631 F.2d 1136, 1139-40 (4th Cir.1980). Indeed, the most the plaintiffs could offer on this issue is that “Congress did not clearly intend the PDA to be prospective only.” Appellees’ Br. at 44 n. 9. That obviously falls far short of the Land-graf test for congressionally-mandated ret-roactivity.

As the Supreme Court explained in its Landgraf decision, a statute has retroactive effect when the new provision attaches new legal consequences to events completed before its enactment. Before that can happen, there must be clear congressional intent to make the statute retroactive, otherwise the default rule applies: the statute will not be given retroactive effect.

Since there is an absence of clear congressional intent to the contrary, the default rule applies here and the result is that theory number 1 — that the new law, the 1979 PDA, has made the pre-1979 pregnancy leave counting method unlawful — is legally without foundation and must be rejected. B.

Plaintiffs recognize the problem with theory number 1, and thus rest their case on theory number 2: it is not the initial crediting of’the leave period that is the offense, but the later — much later — award of retirement or other benefits: “[t]he only acts alleged as unlawful here are AT & T’s decisions denying equal benefits when each of the plaintiffs and similarly situated female employees retired or were terminated in the mid-1990s and thereafter— decisions made long after the PDA came into effect.” Appellees’ Br. at 49.

In plaintiffs’ view, since the benefits are keyed to the service credits, the calculation of benefits without full credit for the pregnancy leaves, regardless of when the leaves occurred, is a current act of discrimination in violation of Title VII. Enforcing the requirement that pregnancy leaves be given full credit regardless of when they occurred, as plaintiffs insist, would provide an attractive result. It gives the plaintiffs the same benefits their post-PDA colleagues receive under essentially the same circumstances, and it carries forward the purpose of the change in law.

In Landgraf, however, the Supreme Court noted the latter point, but rejected it as a basis for decision: “It will frequently be true, as petitioner and amici forcefully argue here, that retroactive application of a new statute would vindicate its purpose more fully. That consideration, however, is not sufficient to rebut the presumption against retroactivity.” Landgraf, 511 U.S. at 285-86, 114 S.Ct. 1483. With regard to giving the plaintiffs the same benefits their post-PDA colleagues have, that seemingly equitable resolution of the case also has problems — we must consider the consequences of such a ruling.

To get that result requires that we do indirectly what we cannot do directly— make the PDA retroactive. That such a result is only reachable by a retroactive application of the PDA can be illustrated by restating plaintiffs’ argument with specific reference to the facts of their case: is it unlawful to give retirement or other benefits today to some women based on full maternity disability leave credit (leaves occurring post-PDA), while denying equal benefits to women who received for their maternity leaves only partial credit (pre-PDA leaves)?

If the answer is yes, that it is unlawful to have disparate benefits awarded, it can only be because the pre-PDA leaves are entitled to full, rather than partial credit. And since the pre-PDA partial leave credit system was lawful at the time the credits were awarded, the change in their legal status must be because the later-enacted PDA has the effect of changing that status. That is retroactivity. The key is differentiating cause from effect.

If an action has the effect of causing a later consequence, and if the action, though permissible at the time, is subsequently made impermissible by a change in law, it cannot be the rule that such change will always make the consequences of the original action also impermissible. If that were the rule, every change in law would have retroactive consequences, and Landgraf s presumption against retroactivity would be meaningless.

However, because cause and effect may not always be so clear in specific fact situations, and because the equities of the case may argue for a result that corrects for past discrimination, application of the rule in different cases requires careful analysis. Assume a case in which black employees are paid lower wages than white employees for equal work. A statute is passed that, prospectively, prohibits such discrimination in employment.

Thereafter, though the employer no longer distinguishes between black and white employees in terms of entrance salaries, across-the-board raises, and percentage raises, some pre-existing salary disparities between blacks and whites remain and are reflected in the actual wages being received on an ongoing basis. The continuation of prior wage discrimination into current wages is not permissible: “While recovery may not be permitted for pre-1972 acts of discrimination, to the extent that this discrimination was perpetuated after 1972, liability may be imposed.” Bazemore v.

Friday, 478 U.S. 385, 395, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986). It was the current wages reflecting racial differences that put the employer in violation of current law: “Our holding in no sense gives legal effect to the pre-1972 actions, but ... focuses on the present salary structure, which is illegal if it is a mere continuation of the pre-1965 discriminatory pay structure.” Id. at 396, 106 S.Ct. 3000 n. 6. Contrast that case with one in which an employee is terminated from her employment for a reason (that she married) that later is declared an unlawful practice under Title VII.

Later she is rehired, but the employer treats her as a new hire and refuses to grant her any seniority rights as a result of her prior employment. Plaintiff alleges, inter alia, that her current seniority status gives present effect to the past illegal act and therefore perpetuates the consequences of forbidden discrimination. Plaintiffs suit fails: Respondent is correct in pointing out that the seniority system gives present effect to a past act of discrimination.... [The employer’s] seniority system does indeed have a continuing impact on her pay and fringe benefits.

But the emphasis should not be placed on mere continuity; the critical question is whether any present violation exists. United Air Lines, Inc. v. Evans, 431 U.S. 553, 558, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977). The Court could find no current violation of Title VII by the employer. The dissent’s argument, that her cause of action accrued at the time her seniority rights were recomputed after she was rehired, was unavailing. Id. at 561, 97 S.Ct. 1885 (Marshall, J., dissenting).

Admittedly, the differences among the cases are sometimes subtle, but recognizing subtle yet controlling differences is what judging is about. In this case, though neither of the cases discussed above is four-square with the plaintiffs’ situation, there is no Bazemore-type of ongoing or continuing effect felt by plaintiffs throughout their employment.

The effect of that initial accounting method is felt only at the endpoint, when retirement and other specific benefits are finally calculated based on those initial actions. “ ‘The proper focus is upon the time of the discriminatory acts, not upon the time at which the consequences of the acts became most painful.’ ” Del. State Coll. v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980) (quoting Abramson v. Univ. of Haw., 594 F.2d 202, 209 (9th Cir.1979)).

Unless we are to make the PDA apply retroactively to these plaintiffs’ pre-PDA accounting — a remedy the Court denied in Evans — -plaintiffs have failed to show a current violation of Title VII. C. Plaintiffs, however, have still a further argument as to why the current calculation of benefits is a violation of Title VII. They describe the NCS system as applied to them as “facially discriminatory,” presumably meaning a system that treats similarly situated employees differently.

In their brief before the court they make this allegation repeatedly — the quoted term appears something over fifty times in a variety of contextual formulas: e.g., “the seniority system in effect today remains facially discriminatory on the basis of pregnancy,” Appellees’ Br. at 32; “[AT & T] cannot claim the protection of § 703(h) [of Title VII] for employment decisions made under a ‘bona fide’ seniority system, because AT & T’s NCS system is facially discriminatory,” Appellees’ Br. at 14.

Labeling AT & T’s seniority system as facially discriminatory allows plaintiffs to argue that each application of the system to calculate benefits is a new act of discrimination and thus a present violation of Title VII. See Lorance v. AT & T Techs., Inc., 490 U.S. 900, 912 n. 5, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989); Bazemore, 478 U.S. at 395, 106 S.Ct. 3000. The problem with plaintiffs’ position that the NCS system is facially discriminatory is that it necessarily depends, again, on a retroactive application of the PDA.

Plaintiffs allege that, as female employees who took pregnancy leaves prior to the enactment of the PDA, they were treated differently from employees who took leave for other temporary disabilities during the same time period. These two groups, however, are not similarly situated. Employees in the latter group were not female employees who took pregnancy leaves, but were female and male employees who took other types of disability leaves and, under the lawful rules then in effect, were entitled to accrue seniority for the duration of their leaves.

Female employees who took pregnancy leaves under AT & T’s lawful pre-PDA policy accrued service credit only for a portion of their leaves. As earlier mentioned, though this is objectionable in light of later understandings, because it was legal to distinguish between the two reasons for leaves prior to the PDA the two groups were not similarly situated.

The failure to award employees full service credit for their pregnancy leaves could be labeled facially discriminatory only if employees in both groups were similarly situated, e.g., if all were legally entitled to receive full credit for their leaves before the enactment of the PDA. But that would be true only if the PDA were given impermissible retroactive effect.

By the same token, distinguishing between one set of female employees who took pregnancy leaves post-PDA and the other set who took pre-PDA pregnancy leaves cannot constitute facial diserimination either, unless the pre-PDA set is entitled to the same benefits as the post-PDA set. That can only be true if the PDA is applied retroactively to the pre-PDA accounting method. In sum, no matter how the situation of these plaintiffs is viewed, the “facially discriminatory” label can only be correctly applied by making the pre-PDA leave accounting unlawful.

AT & T, citing plaintiffs brief, offers a somewhat more technical explanation of “facially discriminatory” and why plaintiffs use of the term is inapplicable: “a policy discriminates on its face only ‘if “discrimination is apparent from the terms of the policy itself’ and does not require “refer-enc[e to] a fact outside the policy.’ ” [Appellees’ Br.] at 25 (quoting DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 727 (3d Cir.1995)).” Reply Br. at 3.

AT & T argues that nothing on the face of the NCS system or AT & T’s pension plans discriminates on the basis of gender or pregnancy — they simply require that pension benefits be calculated based on NCS dates. Id. Under either view of “facially discriminatory,” plaintiffs’ argument that each application of the NCS system is a new current violation of Title VII, based as it is on unsubstantiated labeling of current actions by the defendants as “facially discriminatory,” is unpersuasive and must fail. II. Statute of Limitations The above analysis disposes of the matter before us.

The analysis also disposes of another issue in the case relating to the statute of limitations. In terms of the applicable statute of limitations, absent the ‘current violation’ theory which as we have seen is not available under current law, plaintiffs’ cause of action, if they had one, must have arisen either (1) at the time, pre-1979, when the initial account-ings for the pregnancy leaves were made (on the theory such accounting was then illegal), or (2) at the latest when the PDA became effective in 1979 (on the theory that under pre-Landgraf rules the statute was retroactive).

Either way, the filing of a complaint in 1994 is clearly time-barred. See 42 U.S.C. § 2000e-5(e)(l). For that reason, as well as the absence of retroactive effect of the PDA, plaintiffs do not have a cause of action for a violation by defendants of Title VII. III. Pallas v. Pacific Bell We turn finally to the question of Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir.1991), and its relationship to the outcome in this case. The trial court rested its judgment in plaintiffs’ favor on this circuit’s decision in Pallas, which on similar facts ruled the pre-PDA calculations non-compliant.

The Pallas case arose when, in 1987, Pacific Bell instituted a new retirement benefit for management employees called the Early Retirement Opportunity. Plaintiff, otherwise eligible for the benefit, was denied the benefit because under the employer’s NCS system (the same system as in this case) she was several days short of the necessary service credit required to obtain the benefit. She had had a pregnancy-related leave in 1972, which under the rules in effect then (pre-PDA) was treated as a personal leave; had it been credited as other disability leaves, she would have been eligible for the retirement benefit.

Pallas sued her employer to get the missing credit. The district court dismissed her suit as time-barred — the relevant action, the pregnancy leave, had occurred in 1972 and this was now some fifteen years later.

This court on appeal reversed, holding that it was not time-barred: In 1987, Pacific Bell instituted a program that adopted, and thereby perpetuated, acts of discrimination which occurred prior to the enactment of the [PDA], While the act of discriminating against Pallas in 1972 is not, itself, actionable, Pacific Bell is liable for its decision to discriminate against Pallas in 1987 on the basis of pregnancy. Pallas’ complaint states a valid claim under Title VII. Pallas, 940 F.2d at 1327.

Thus it would appear that Pacific Bell’s 1987 use of the 1972 pregnancy leave accounting constituted a new and current violation of Title VII. For the reasons explained above, that necessarily implicates a retroactive application of the 1979 PDA. Stating with certainty the basis for the Pallas result is made awkward by the fact that the court did not address the underlying retroactive effect it had given to the PDA. Of course, Pallas was decided before the Supreme Court’s decision in Landgraf, and neither the parties nor the court had the benefit of that clarification of retroac-tivity law.

The Pallas court did cite and discuss with favor the decision by the Supreme Court in Bazemore v. Friday. For the reasons explained earlier, we do not believe Bazemore is the correct analogy for the case before us. The Supreme Court in Bazemore focused on the pay disparities that remained after the enactment of Title VII: “Each week’s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII.” 478 U.S. at 395-96, 106 S.Ct. 3000.

In this case there is no ongoing “pattern or practice” to be pointed to, and no current continuing violation. IV. Conclusion There is little doubt that these plaintiffs and others similarly affected by the pre-PDA policies of their employer regarding pregnancy leaves were treated less generously than other employees who took disability leaves. The impact of these policies is even more apparent in the case of an employee, like Ms. Hulteen, who, while on pregnancy leave, was hospitalized for a medical problem unrelated to her pregnancy.

The employer, PT & T, denied her the unrelated disability leave to which she would otherwise have been entitled had she not already been on maternity leave. Deserving as these plaintiffs would seem to be of some accommodation in determining their current benefits, the question before us is not whether the employer owes these plaintiffs an accommodation, but whether the law compels it.

Because the PDA cannot be applied retroactively either to invalidate the original accounting scheme for pregnancy leaves or to create a current violation of Title VII by this defendant, and because plaintiffs’ suit is not based on a facially discriminatory retirement system and is thus time-barred, and because under controlling law today the Pallas precedent cannot be viewed as binding on this panel, we must reverse the judgment of the trial court and direct that plaintiffs’ suit under Title VII be dismissed for failure to state a claim on which relief can be granted. REVERSED. . 42 U.S.C. § 2000e et seq. .

Title VII makes it an unlawful employment practice for an employer to discriminate against any individual because of such individual’s sex. 42 U.S.C. § 2000e-2(a).

Congress amended Title VII in 1978 to provide: 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 2000e-2(

h) of this title shall be interpreted to permit otherwise. 42 U.S.C. § 2000e(k). . It is hornbook law that decisions of circuit courts of appeals yield to conflicting decisions of the Supreme Court. Both the Ninth Circuit and the Federal Circuit, as well as other circuits, recognize that a panel is bound to follow the latter, not the former. See Miller v. Gammie, 335 F.3d 889, 899-900 (9th Cir. 2003) (en banc); Tex. Am. Oil Corp. v. United States Dep't of Energy, 44 F.3d 1557, 1561 (Fed.Cir.1995) (en banc); Finkel v. Stratton Corp., 962 F.2d 169, 174-75 (2d Cir.1992). .

Though described as a "default” rule, the Court noted in Landgraf that there may be due process or other constitutional limitations on Congress’s ability to apply legislation retroactively. . Compare Shea v. Rice, 409 F.3d 448, 451-53 (D.C.Cir.2005) (holding that Title VII cause of action exists under Bazemore when plaintiff alleged a persistent discriminatory salary structure), and Anderson v. Zubieta, 180 F.3d 329, 334-37 (D.C.Cir.1999) (holding continued application of disparate pay policy actionable under Title VII), with Del. State Coll. v.

Ricks, 449 U.S. 250, 257-58, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980) (holding that loss of teaching position was only the delayed consequence of allegedly discriminatory denial of tenure and was not a current Title VII violation), and Carter v. West Publ’g Co., 225 F.3d 1258 (11th Cir.2000) (holding that dividend payments resulting from earlier allegedly discriminatory practice of offering only men the opportunity to purchase company stock were not actionable wrongs under Title VII). . See Shea v. Rice, 409 F.3d 448, 451-53 (D.C.Cir.2005) (Williams, J., concurring) ("[Nat'l R.R.

Passenger Corp. v.] Morgan ... explicitly preserved Bazemore, which Morgan described as addressing 'a discriminatory salary structure.’ 536 U.S. [101,] 112, 122 S.Ct. 2061, 153 L.Ed.2d 106[ (2002)].... It would be very odd to use such a term for the facts in Evans [or Lorance v. AT & T Techs., 490 U.S. 900, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989)].... The acts [in those cases] had consequences under the employer's non-discrimi-natoiy seniority system, to be sure, but they could hardly be described as launching a two-class pay structure based on a forbidden criterion.”). .

See Gilbert, 429 U.S. at 140, 97 S.Ct. 401 (describing pre-PDA pregnancy leave practice as involving "no facial gender-based discrimination”). . Accord Ameritech Benefit Plan Comm. v. Comm’n Workers of Am., 220 F.3d 814 (7th Cir.2000).