Supreme Court Adopts New Standard for Establishing Adverse Employment Action Element in Title VII Cases

To prevail on a claim of unlawful employment discrimination, a plaintiff must establish that the employer took an “adverse employment action” because of the employee’s protected class.  The Supreme Court’s April 17, 2024 decision in Muldrow v. City of St. Louis, Missouri rejected the “materially significant disadvantage” standard frequently applied by federal courts in determining the extent of harm necessary for an employee to establish that a job transfer is an adverse employment action for purposes of Title VII of the Civil Rights Act of 1964 (Title VII) and ruled that an employee may establish that a job transfer was an adverse employment action, even absent a finding of material harm. A plaintiff may now proceed with a claim by showing that the employee experienced only some disadvantage at work.  While the Muldrow case concerned a job transfer, the Court’s reasoning appears to apply to other employment actions as well.

Background of Muldrow v. City of St. Louis, Missouri

Sergeant Jatonya Clayborn Muldrow was a plainclothes officer for the St. Louis Police Department for over a decade when, against her wishes, she was transferred from the Department’s specialized Intelligence Division. She was replaced with a male police officer and assigned to a different district. While her rank and pay remained the same, the responsibilities, perks, and schedule of her new job changed. Instead of working with high-ranking officers in the Intelligence Division, Muldrow was required to wear a uniform and was tasked with supervising the day-to-day activities of neighborhood patrol.  In doing so, she lost access to, among other things, a more predictable work schedule, FBI credentials, and a take-home vehicle. Overall, Muldrow alleged that she had been moved into a less “prestigious” and more “administrative” role.

Muldrow filed suit alleging discrimination based on sex with respect to the terms or conditions of her employment in violation of Title VII. She argued that the transfer, in and of itself, constituted an adverse employment action and claimed that the decision to transfer was solely based on her sex. The trial court granted summary judgment in favor of the City, noting that Muldrow could not meet a heightened-injury standard, as she could not provide evidence of changes in salary or rank, and instead showed only “minor alterations of employment.” The U.S. Court of Appeals for the Eighth Circuit affirmed the decision, citing cases holding that a job transfer is an adverse employment action under Title VII only if it involves “a tangible change in working conditions that produces a material employment disadvantage.” The Eighth Circuit did not address Muldrow’s new work schedule, which, as a result of her transfer, included weekend work, nor did it address the loss of her car.

The Eighth Circuit’s decision was consistent with precedent in most, but not all, federal courts, which required a showing that a job transfer caused a “material disadvantage” in order to establish that the transfer constituted an adverse employment action under Title VII.

The Supreme Court Rejects Use of a “Significance” Standard

The Supreme Court granted certiorari to resolve the circuit split over whether an employee disputing a transfer under Title VII must meet a heightened threshold of injury.

The Court began by examining the contention that the harm incurred from an employee transfer under Title VII must meet a heightened “significance” bar. The City proffered three main arguments in support of its position based on the text, precedent, and policy. The Court rejected all three arguments.

First, the City’s textual claim focused on Title VII, namely §2000e–2(a)(1): An employer may not, for a prohibited reason, “fail or refuse to hire” or “discharge” any person or “otherwise . . . discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment” (emphasis added). The Court disagreed with the City’s argument that the term “otherwise” implies that there must be a level of harm at least equal to the harm resulting from a refusal to hire or discharge of an individual.  Instead, the Court found nothing in the text that would support including a significant harm standard.

Second, the City relied on a case that addressed Title VII’s anti-retaliation provision—Burlington Northern & Santa Fe Railway Co. v. White, 548 U. S. 53 (2006). Burlington Northern established a significant harm standard for cases concerning retaliation for raising discrimination claims.  The Court in Muldrow distinguished Burlington Northern, reasoning that the purpose of the anti-retaliation provision is to ensure that employees are not dissuaded from pursuing discrimination claims.  Because employees would not be dissuaded from pursuing discrimination claims by minor harms, applying a significant-harm standard in the anti-retaliation context does not require applying that standard to discrimination claims.

Finally, the Court was skeptical of the City’s policy argument that “the floodgates will open,” “swamp[ing] courts and employers.” But regardless, the Court stated that “even supposing the City’s worst predictions come true, that would be the result of the statute Congress drafted.” The Court declined to “add words” to the statute to achieve an employer-favorable result.

The Court thus rejected a heightened harm requirement, holding that there only needs to be some harm to support a discrimination claim and that the harm need not reach any level of significance.

While the decision was unanimous, Justices Thomas, Alito, and Kavanaugh wrote separate concurring opinions. Justice Thomas’s concurring opinion agreed that the harm shown by a Title VII complainant must be “more than trifling,” but disagreed that the Eighth Circuit had imposed a heightened harm requirement and that Muldrow had proven anything beyond a “nontrifling” change in her job’s prestige. Justice Alito characterized the Court’s opinion as “unhelpful,” and questioned whether there was any meaningful difference between requiring “some” harm and “significant” harm.  Justice Kavanaugh would have held that there is no harm requirement at all and that any discriminatory job transfer violates Title VII.  He concluded, however, that the practical result of his interpretation and the Court’s interpretation are likely the same given the many ways in which a job transfer can cause “some” harm.

Implications for Employers and Future Outlook

After this decision, a discriminatory transfer no longer needs to be shown to result in a material disadvantage, as long as some harm can be shown. While the Supreme Court’s ruling concerned an employment transfer, there is no reason to believe that its application is limited to that context.  Plaintiffs will likely use this decision to argue that any allegedly discriminatory action by an employer that causes the plaintiff some harm can be the basis for Title VII liability.

This could, of course, result in increased litigation.  While the cost of litigation and the limited damages recoverable when harm is only slight would be deterrents to pursuing litigation based on harms that are not significant, the availability of attorney’s fees in Title VII cases combined with the reduction of the required level of harm could lead to an increase in discrimination claims even when the amount at issue is very small.

In anticipation of the decision in Muldrow, there was considerable speculation that a decision removing the significant-harm standard could lead to increased litigation by opponents of diversity, equity and inclusion (DEI) initiatives.  Some of those initiatives might be alleged to cause “some” harm to employees who are not included in the initiatives.  With the significant-harm threshold removed, some DEI initiatives may be challenged by opponents based on claims that they would have otherwise expected to be barred.

If you have questions about how the Muldrow decision could impact DEI initiatives or other aspects of your business, please contact a member of the Goodwin Employment Practice.

 

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.