Fifth Circuit Expands Test for Adverse Employment Actions in Title VII Discrimination Claims

August 25, 2023

On Aug. 18, 2023, the U.S. Court of Appeals for the Fifth Circuit reversed its long-held test to determine what adverse actions can support an employee’s Title VII claim. Title VII requires an employee alleging a discrimination claim to have suffered an “adverse employment action.” Before this decision, successful discrimination claims in the Fifth Circuit required the employee to have suffered an adverse “ultimate employment decision.”

In Hamilton v. Dallas County, the court significantly expanded this definition to include decisions or actions affecting more than hiring, firing and compensation. Nine female officers within the Dallas County Sheriff’s Department sued Dallas County based on a vacation policy that permitted only male officers full weekends off. Female employees, on the other hand, could not take off both Saturday and Sunday.

A three-judge panel upheld the trial court’s dismissal of the officers’ complaint, holding “the discriminatory policy did not amount to an ‘ultimate employment decision,’” which, at the time, was limited to hiring, granting leave, discharging, promoting, and compensating. The panel’s decision complied with Fifth Circuit jurisprudence but urged the en banc court to revise the outdated test. The entire Fifth Circuit did just that, holding that “a plaintiff plausibly alleges a disparate-treatment claim under Title VII if she pleads discrimination in hiring, firing, compensation, or the ‘terms, conditions, or privileges,’ of her employment,” regardless whether he or she points to any ultimate employment decision.

Relying on the plain language of Title VII, the court noted that its “ultimate employment decision” requirement did not appear anywhere in the statute and “thwarts legitimate claims of workplace bias.” The plaintiffs’ complaints here illustrate just that scenario: Male and female employees were not given the same scheduling opportunities despite all employees performing the same tasks. Under this revised definition, the right to select work shifts is a “privilege” of employment, and Dallas County’s policy affected this privilege based on sex alone. While the court did not define the bare minimum for actionable harm, it acknowledged that the officers’ allegations here presented enough harm to satisfy the pleading standard.

This ruling brings the Fifth Circuit in line with other circuits (who had disapproved of the Fifth Circuit standard) and decades-old U.S. Supreme Court precedent, which held that an adverse employment action “need only be a term, condition, or privilege of employment.” Hishon v. King & Spalding, 467 U.S. 69, 77 (1984).

Yet, the Hamilton decision leaves at least one glaring question: What is the minimum standard for Title VII liability? While the court acknowledged Title VII “does not permit liability for de minimis workplace trifles,” it declined to establish a minimum level of harm. Judge Edith Jones’ concurrence emphasized this omission, which leaves lower courts and employers with “no clue” as to what the court may decide. Still, employers should ensure they adopt no policies (like the one in Dallas County) that treat employees differently based on a protected characteristic (such as age, race, national origin and sex). The Supreme Court may clarify this issue next term in Muldrow v. City of St. Louis. No. 22-193, where it is set to answer the question: “Does Title VII prohibit discrimination in transfer decisions absent a separate court determination that the transfer decision caused a significant disadvantage?”

Employers should be mindful that the Fifth Circuit’s test now involves many more employment policies and decisions than previously encapsulated. While the case here involved a rare instance with direct evidence of an employer’s discriminatory intent, employers must consider the broadened scope of personnel actions that can support a discrimination claim. Employers should review all policies that may (1) affect employees belonging to a protected class, or (2) result in disparate treatment among employees, including policies involving shift scheduling, working conditions, benefits, or any other “privilege” of employment.

For guidance with this development, please contact the authors, your McGuireWoods contact or a member of the firm’s labor and employment team.