Fifth Circuit jettisons “ultimate-employment-decision requirement” for Title VII discrimination claims

In a case involving direct evidence of discriminatory intent, the Fifth Circuit Court of Appeals recently expressly overruled its decades-long precedent that actionable adverse employment actions under Title VII are limited to “ultimate employment decisions.” The case involved an employer that had utilized a gender-based scheduling policy which resulted in only male employees receiving full weekends off from work.

Specifically, the Fifth Circuit held that a plaintiff plausibly alleges a disparate-treatment claim under Title VII if they plead discrimination in hiring, firing, compensation, or the “terms, conditions, or privileges” of their employment.

The decision aligns with existing precedent in other federal circuits and may lead to an increase in discrimination claims based on a broader array of employment actions not involving ultimate employment decisions.  Additionally, the Fifth Circuit’s lack of clarity regarding the minimum level of workplace harm required to support a discrimination claim may hinder an employer’s ability to prevail on a summary judgment motions.

Employers operating in the Fifth Circuit (Louisiana, Mississippi, and Texas), are encouraged to consider whether employment decisions that once failed to meet the applicable threshold could now constitute actionable discrimination.

Background

In Hamilton v. Dallas County, nine female correctional officers sued under Title VII and analogous Texas state law alleging that the defendant altered its practice of determining shift schedules based on seniority and adopted a scheduling policy that only allowed male officers full weekends off, while female employees could only receive weekdays and/or partial weekends off.

The district court granted the defendant’s motion to dismiss, concluding that “[c]hanges to an employee’s work schedule, such as the denial of weekends off, are not an ultimate employment decision.”

On appeal, a panel of the Fifth Circuit reluctantly affirmed. The panel observed that while “[s]urely allowing men to have full weekends off, but not women, on the basis of sex … constitutes discrimination with respect to the terms or conditions of those women’s employment,” it was “bound by this circuit’s precedent … which says that adverse employment actions include only ultimate employment decisions.”

The Fifth Circuit accepted the panel’s invitation to reexamine its “ultimate-employment-decision requirement” and granted rehearing en banc.

The Fifth Circuit’s en banc decision

The full court began by examining the language of Section 703(a) of Title VII, concluding that “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions.”

According to the court, while the statute includes ultimate decisions such as hiring, refusing to hire, or discharging, it also makes it unlawful for an employer to “otherwise discriminate against” an employee with respect to “terms, conditions, or privileges of employment.”

The Fifth Circuit noted that US Supreme Court precedent confirms this conclusion, citing its various decisions:

• An adverse employment action “need only be a term, condition, or privilege of employment.”
• A Title VII plaintiff may recover damages even for “discrimination in the ‘terms, conditions, or privileges of employment’” that “did not involve a discharge,” “loss of pay,” or other “concrete effect on [his or her] employment status.”
• Title VII’s coverage is not “limited to ‘economic’ or ‘tangible’ discrimination.”
• Title VII “covers more than ‘terms’ and ‘conditions’ in the narrow contractual sense.”

The court next concluded that “[t]he days and hours that one works are quintessential ‘terms or conditions’ of one’s employment” and that “the complaint’s allegations support a plausible inference that the right to pick work shifts based on seniority is a ‘privilege’ of employment.”

Significantly, the majority’s opinion does not address the minimum standard for Title VII liability. While noting that circuit courts have adopted various limitations – for example, “materially adverse employment action,” “tangible employment action,” or “objective material harm” – the Fifth Circuit declined to address the “precise level of minimum workplace harm a plaintiff must allege on top of showing discrimination in one’s ‘terms, conditions, or privileges of employment.’”

It acknowledged, however, that Title VII is not a “general civility code” and does not permit liability for “de minimus workplace trifles.”

What’s next

The Fifth Circuit’s decision applies to employers covered by Title VII in Louisiana, Mississippi, and Texas. It does not address the standard under the Texas Labor Code (or other state laws); however, similar to Title VII, Texas law prohibits discrimination “in any other manner in connection with compensation or the terms, conditions, or privileges of employment.”

National employers may receive more guidance on what kinds of discriminatory conduct are actionable when the Supreme Court issues its decision in Muldrow v. City of St. Louis, a case scheduled for hearing during the October 2023–2024 term.

There, a police sergeant alleged that she was involuntary transferred from one division to another because of her sex. While her pay and rank remained the same, plaintiff claims that her schedule, responsibilities, supervisor, workplace environment, and other job requirements and benefits were altered, thereby constituting discrimination in her “terms, conditions, or privileges of employment.”

The district court granted summary judgment, and the Eighth Circuit Court of Appeals affirmed, holding that “an employee’s reassignment, absent proof of harm resulting from that reassignment, is insufficient to constitute an adverse employment action.” The Supreme Court granted certiorari on the question of “[w]hether Title VII prohibits discrimination in transfer decisions absent a separate court determination that the transfer decision caused a significant disadvantage.”

We will continue monitoring these developments. In the meantime, please contact the authors of this alert or your DLA Piper relationship attorney if you have questions about employment decisions and anti-discrimination laws.