Employers, Take Note: Transferring an Employee to Another Position with the Same Rank and Pay May Now Get You Sued Under Title VII

The range of employment decisions subject to Title VII scrutiny continues to grow.  As discussed in previous posts, the Fifth Circuit recently overturned its prior precedent limiting Title VII discrimination claims to “ultimate employment decisions,” finding that Title VII’s protections extend to any adverse employment action that materially impacts the “terms, conditions, and privileges” of employment.  Now, the United States Supreme Court has lowered the bar even further for Title VII plaintiffs complaining about discriminatory job transfers.

UPDATE: EEOC Releases Final Rules for Accommodating Pregnancy or Related Conditions

This week, the Equal Employment Opportunity Commission (“EEOC”) issued its final rules and accompanying interpretive guidance for implementation of the Pregnant Workers Fairness Act (“PWFA”). The PWFA, a new federal law that became effective in June 2023, requires most employers with 15 or more employees to provide reasonable accommodations to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship. While the PWFA builds upon existing protections against pregnancy discrimination under Title VII and the Americans with Disabilities Act, it fills in identified gaps in the legal protections for employees.

“Terms, Conditions, or Privileges”: Fifth Circuit Applies New Hamilton Standard to Find Potential Discrimination in School District’s Failure to Pay for Superintendent Leadership Academy

As mentioned in our prior post about the Fifth Circuit’s August 2023 opinion in Hamilton v. Dallas County, employees no longer must allege discrimination in an “ultimate employment decision” to state a claim under Title VII. Instead, Hamilton established a new standard more closely tied to the statutory language of Title VII that allows employees to state a viable Title VII discrimination claim based on allegations that they faced discrimination in any “adverse employment decision.” Under Title VII, actionable “adverse employment decisions” include discrimination in hiring, firing, compensation, or in the “terms, conditions, or privileges” of employment.

In light of the new Hamilton standard, questions arose as to what kinds of adverse employment decisions would give rise to actionable Title VII claims. In its post-Hamilton case of Harrison v. Brookhaven School District, 82 F.4th 427, the Fifth Circuit provided some guidance as to what constitutes an actionable “term, condition, or privilege” of employment.

The Fifth Circuit Adopts a New Standard for Discrimination Claims and Allows Suits Based on Workplace Actions that Affect the “Terms, Conditions, and Privileges of Employment”

The Fifth Circuit Court of Appeals has broadened the scope of employment actions that may become grounds for an employment discrimination lawsuit and reversed its longstanding precedent that previously required plaintiffs to show they experienced a discriminatory ultimate employment decision, such as being hired, granted leave, discharged, promoted, or compensation issues. On August 18, 2023, the Fifth Circuit issued an en banc decision in the Felesia Hamilton, et al. v. Dallas County case and adopted a new threshold for discrimination lawsuits. The Fifth Circuit will now allow plaintiffs to sue if they claim that discrimination affected the “terms, conditions, and privileges” of their employment. This is a lower threshold than the prior “ultimate employment decision” standard.

The Fifth Circuit noted that “de minimis workplace trifles” are still insufficient to establish a discrimination claim. The Court, however, declined to give lower courts and employers more guidance on the threshold that will now apply in discrimination lawsuits and suggested the standard will be fine-tuned in future decisions. As is, the Fifth Circuit’s decision may lead to an increased number of employment discrimination lawsuits and make it more difficult for employers to obtain dismissal of claims at early stages of litigation.