In the case of Nashville Gas Co. v. Satty, the U.S Supreme Court ruled in 1977 that policies which impose greater economic burdens on one gender over another violate Title VII of the Civil Rights Act of 1964, even if they are not overtly discriminatory. The lawsuit was brought by a group of female employees who had been denied accumulated seniority when they returned to work after pregnancy leaves - a benefit granted to other temporarily disabled employees at Nashville Gas Company. The company argued that its policy did not discriminate because it treated male and female employees equally: neither could accrue seniority while on leave for personal reasons (including disability). However, since only women can become pregnant, this policy disproportionately affected them economically compared to their male counterparts who took leave for other disabilities but retained their accrued seniority status upon return. Therefore, despite being facially neutral with respect to sex discrimination under Title VII's disparate treatment theory, such practice constituted unlawful disparate impact against women.

The dissenting opinion in the Nashville Gas Co. v. Satty case argued that the majority's decision was inconsistent with previous interpretations of Title VII of the Civil Rights Act, which prohibits employment discrimination based on race, color, religion, sex and national origin. The dissenters believed that there was no evidence to suggest that Nashville Gas Company had a discriminatory policy against pregnant women as they were not denied any benefits available to other employees who also took non-medical leaves of absence for personal reasons. They contended that pregnancy should be treated like any other temporary disability or condition requiring leave from work under company policies; thus it would not constitute gender-based discrimination if all employees are subject to same rules regarding reinstatement and seniority loss after taking such leaves.