Supreme Court eases the path for discriminatory transfer claims

The US Supreme Court’s recent ruling in Muldrow v. City of St. Louis clarifies whether a job transfer on the basis of sex could be considered discrimination within the meaning of Title VII, even where the transfer does not cause “significant” harm to the worker.

The Court ruled on April 17, 2024, that, although employees must show some harm with respect to an identifiable term or condition of employment resulting from a job transfer in order to prevail in a Title VII suit, they do not need to show that the harm incurred was “significant” or otherwise exceeded some heightened bar.

Specifically, the Court rejected the legal standards being applied by any circuit court that has previously required a Title VII plaintiff to show “significant,” “material,” or “serious” injury in connection with the challenge of a job transfer. Simply put, Muldrow is likely to have a reverberating impact on whether job transfers (or work reassignments or other job-related actions that allegedly leave an employee "worse off" with respect to an identifiable term or condition of employment) constitute an adverse employment action for purposes of anti-discrimination statutes.

Factual background

Plaintiff Jatonya Clayborn Muldrow was a plainclothes officer in the St. Louis Police Department’s specialized Intelligence Division. Her duties included investigating corruption and human trafficking cases and overseeing the Gang and Gun Crimes Unit. Muldrow also served as a Task Force Officer with the FBI, which allowed her access to FBI materials, a take-home vehicle, and additional authority to conduct investigations outside of St. Louis.

In 2017, after a change in Department leadership, the new commander transferred Muldrow, against her wishes, out of the unit and into a uniformed position in a different district. While the former commander had given Muldrow high praise for her work, his replacement allegedly preferred to assign a male officer in her position, noting in his deposition that the work could be “very dangerous.” While Muldrow retained her rank and pay, her new responsibilities included supervising neighborhood patrol officers, reviewing and approving arrests, and handling other administrative matters. Because she no longer served as a Task Force Officer, Muldrow was forced to surrender her FBI credentials and take-home vehicle. Further, she claimed, she lost the opportunities, perks, and prestige that were associated with her previous position.

Procedural background

Muldrow filed a Title VII lawsuit against the City of St. Louis, alleging that her forced transfer out of the Intelligence Division constituted gender discrimination.

The District Court granted the City summary judgment, finding that Muldrow needed to show that the transfer caused her “’significant’ change in working conditions producing ‘material employment disadvantage’” with respect to the terms or conditions of her employment. Because the transfer did not impact Muldrow’s salary or rank, and she did not provide evidence that it had harmed her career prospects, the court found that she had not met the requisite standard for harm. Being required to work a rotating schedule (including weekends) and the loss of Muldrow’s take-home vehicle were instead found to be “minor alterations of employment, rather than material harms.”

The US Court of Appeals for the Eighth Circuit affirmed the District Court’s judgment, emphasizing that Muldrow failed to make a showing that the transfer caused a “materially significant disadvantage” because, among other reasons, she maintained the same title, salary, and benefits, and experienced only an “insufficient” change in job responsibilities.

The US Supreme Court granted certiorari to resolve a circuit split on whether an employee challenging a job transfer under Title VII must meet a “heightened threshold of harm – be it dubbed significant, serious, or something similar.”

Holdings

The City presented three arguments for maintaining a “significance” standard, rooted in text, precedent, and policy. In a majority opinion authored by Justice Elena Kagan, and joined by five other justices, the Supreme Court rejected all three arguments, vacating and remanding the case for further proceedings.

First, the City presented a textual argument, predicated on Title VII’s basic prohibition that employers may not fail or refuse to hire, discharge, or “otherwise discriminate” against a person based on a protected trait. Because refusing to hire or discharge someone “causes a significant disadvantage,” the City argued that the “otherwise discriminate” prong covering transfer decisions should be read to require an equal level of harm.

The Court found this argument unpersuasive. Instead of the degree of harm, the Court ruled that the text itself provided a different shared trait: “[e]ach kind of prohibited discrimination [under Title VII] occurs by way of an employment action,” such as hiring, firing, or otherwise altering the terms or conditions of employment. With this finding, the Court concluded there was no need for a “significant-harm requirement” to be read into the text.

Next, the Court considered the City’s argument based on existing precedent. The City relied on Burlington Northern & Santa Fe Railway Co. v. White, a 2006 opinion which found that Title VII applies only when a retaliatory action is “materially adverse,” meaning that it causes “significant harm.” The City argued to the Court that the same standard of significant harm in retaliation cases should be imported into discriminatory job transfer cases.

The Court likewise dismissed this argument, noting that in White, the Court stated that the purpose of anti-retaliation laws is to prevent “those (and only those) employer actions serious enough to ‘dissuade[] a reasonable worker from making or supporting a charge of discrimination.” Insignificant harm, or harm that does not dissuade an employee from complaining of unlawful conduct, would not fall within the scope of anti-retaliation laws. In contrast, any injury caused by discrimination based on traits such as race and sex are covered by Title VII, and the anti-discrimination provision at issue does not “distinguish[] between significant and less significant harms.” As such, the Court reaffirmed that Title VII retaliation claims still require “significant harm.”

Finally, the City presented a policy argument, asserting that doing away with a significant-injury requirement – and thereby removing a barrier to litigation – would “swamp courts and employers” with insubstantial lawsuits. The Court disagreed, noting that discrimination plaintiffs must still show injury and discriminatory intent regardless of the degree of harm alleged. The Court concluded that there were multiple ways to dispose of meritless Title VII claims and, even if the City’s policy prediction materialized, it was not the Court’s job to revise the statute drafted by Congress for a more desirable result.

In the end, the Court held that plaintiff Muldrow needed only "to show that the transfer brought about some ‘disadvantageous’ change in an employment term or condition”: in other words, some specific harm or injury respecting her employment terms or conditions that “left her worse off,” even if not “significantly so." The lower court’s judgment therefore was vacated and remanded for further proceedings.

Concurrences

Justices Thomas, Alito, and Kavanaugh all concurred in the judgment but raised various concerns with the majority’s opinion.

First, Justices Alito and Thomas opined separately that the majority’s ruling would make no practical difference in how lower courts will apply the standard moving forward. Justice Alito saw no reason for switching out “terminology the Court approves [for] the terminology it doesn’t like.” Instead, Justice Alito noted that by definition, significance is inherent in the words “harm” and “injury,” and offered that he had “no idea” how the guidance supplied in the opinion would be applied by trial courts. Justice Thomas did not read the Court of Appeals’ decision as having imposed any heightened requirement of harm, and that minor employment changes, “even unpalatable or unwelcome ones, which cause no materially significant disadvantage,” do not rise to the level of an adverse employment action.

In response to Justice Thomas’s concurrence, the majority opinion expressed the belief that the standard being announced would have real-world impact, citing fact patterns from failed Title VII matters that would have been allowed to proceed under the Muldrow standard, including:

• An engineering technician assigned a new job site in a 14’ x 22’ wind tunnel;
• A shipping worker reassigned to only nighttime work; and
• A school principal forced into a non-school-based administrative role supervising fewer employees.

Justice Kavanaugh took issue with the Court’s new “some harm” requirement, and instead would have presumed that discrimination is itself the harm, with no separate showing of harm required separate and apart from the underlying act of discrimination. Justice Kavanaugh concluded, however, that the majority’s standard appeared to be a relatively low bar to meet and would “lead to the same result in 99 out of 100 discriminatory-transfer cases, if not in all 100” because additional harm of any sort would be easy to show.

Key takeaways for employers

The Supreme Court’s ruling makes Title VII claims less demanding for plaintiffs who allege discriminatory transfers. Even beyond transfers, and presumably, denial of transfers, the Court’s new standard will likely be invoked to more easily satisfy the adverse action requirement of Title VII and other anti-discrimination statutes with similar textual wording (ie, prohibiting employers to “otherwise discriminate”).

A prima facie case of discrimination, as stated in the seminal decision of McDonnell Douglas v. Green, requires the plaintiff to (a) be a member of a protected class; (b) be qualified for the position at issue; (c) suffer an adverse employment action despite being qualified for the job; and (d) show circumstances giving rising to an inference of discrimination. In most jurisdictions to date, lateral job transfers, work reassignments, and the like generally have not been actionable under Title VII. Muldrow would seem to significantly relax (if not lower) the bar of satisfying the third prong of the above test and suggests that many more cases will move beyond summary judgment. But the final outcome will still depend on actual proof of discrimination as well as some actual harm or injury as a result of the lateral transfer (or work reassignment, etc.).

Muldrow also serves to remind employers of the importance of documenting the legitimate, non-discriminatory reasons for transfers, work reassignments and other any job-related actions. Documented proof of budgetary constraints, staffing shortages, mismatched skillsets, performance problems, behavior issues, or other legitimate bases for employment actions will become increasingly important to establish that those actions – whether they would previously have been characterized as “adverse” or not – are being made for reasons unrelated to race, sex, national origin, age, disability, or other legally protected characteristics.

For more information, please contact any of the authors or your DLA Piper relationship partner.