Diversity & Inclusion

Supreme Court Lowers Bar for Adverse Actions

Can an employee sue under Title VII of the Civil Rights Act of 1964 to challenge a lateral transfer, even if the transfer doesn’t result in a loss of pay? According to a recent U.S. Supreme Court decision, the answer is yes. Employers transfer employees, or take other actions, for a variety of reasons. Until recently, as long as those decisions didn’t significantly or materially affect the employees’ terms and conditions of employment, they didn’t have a viable discrimination claim. That standard is no longer the law of the land. Now, if there was “some harm” as a result of a transfer or another action, and the action was based on an employee’s protected characteristic, they can assert a discrimination claim.

Transfer Leads to Loss of Prestige

From 2008 to 2017, Sergeant Jatonya Clayborn Muldrow worked in a coveted position in the specialized Intelligence Division of the St. Louis Police Department. In 2017, her new commander replaced her with a male officer and transferred her to a uniformed role in another department.

Although Muldrow’s rank and pay remained unaltered, the responsibilities, privileges, and schedule of her new position significantly differed. In her previous role, she worked in a “premier position” with high-ranking officials on department priorities in the Intelligence Division. Her new role, she claimed, was less prestigious and focused more on administrative tasks.

After the transfer, Muldrow supervised the day-to-day activities of neighborhood patrol officers, including approving their arrests, reviewing their reports, and handling other administrative matters. She even did some patrol work herself. As a result of the transfer, she lost her Federal Bureau of Investigation (FBI) status and the car that came with it, and she went from a regular Monday-through-Friday schedule to working a “rotating schedule,” including weekend shifts.

Suit Material

Muldrow filed suit under Title VII, alleging her reassignment constituted sex-based discrimination affecting her employment terms, conditions, or privileges.

The district court dismissed her claim without a trial, and the U.S. 8th Circuit Court of Appeals affirmed. Both courts held she had to, but could not, show the transfer had caused her a “materially significant disadvantage.” The decisions were in line with the majority of courts that had addressed the standard for discrimination, requiring proof of significant harm or disadvantage resulting from the disputed job transfer.

Supreme Court Finds Some Harm

On April 17, 2024, the U.S. Supreme Court reversed, holding the lower courts used too stringent of a standard when evaluating Muldrow’s claim. The Court explained that an employee alleging discrimination under Title VII must only demonstrate “some harm” regarding the associated employment term or condition rather than a significant disadvantage.

Reviewing the text of Title VII, the Court noted that “discriminate against” meant to treat someone worse based on their sex or other protected categories. The decision stressed that the statute as written didn’t demand evidence of significant harm but only some disadvantage based on the individual’s protected status.

Practical Implications for Employers

The Court’s decision broadens the interpretation of what can be considered discriminatory under Title VII and, as a result, lowers the bar for the types of actions that can be considered discriminatory. In light of the decision, you must consider your actions carefully, even in situations when an employee suffers no loss of pay or other material change in employment terms and conditions.

A seemingly innocent job transfer that results in no loss of pay, seniority, or title could be viewed as discriminatory if the employee suffers “some” harm. The lowered standard applies to any decision that might negatively impact an employee.

That said, the action only violates the law if it’s based on an individual’s protected status, such as race, sex, or religion. The best way to avoid the perception of discrimination is to ensure you document a legitimate, nondiscriminatory reason for the action. For example, before transferring an employee, be sure the manager or supervisor can explain why the transfer is necessary or appropriate. If the transfer is based on performance issues, it’s helpful to document the issues before the transfer occurs.

Ultimately, there’s no way to completely eliminate the risk of a lawsuit, but you can substantially mitigate the risks by ensuring you have objective, documented reasons for the actions you take.

Mark Wiletsky is an attorney with Holland & Hart LLP in Boulder, Colorado, and can be reached at mbwiletsky@hollandhart.com.

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