Upending nearly 30 years of precedent, the U.S. Court of Appeals for the Fifth Circuit recently issued a ruling that makes it easier for employees to challenge perceived workplace discrimination going forward.
Under Title VII, it is an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual’s race, color, religion, sex or national origin. In an unbroken series of cases since 1995, the Fifth Circuit has limited employer liability under this statutory provision to “ultimate employment decisions” — in other words, employment decisions such as “hiring, granting leave, discharging, promoting, or demoting.”
In Hamilton v. Dallas County, the Fifth Circuit, in a 14-3 en bancdecision, expanded actionable discrimination to include not only conduct related to ultimate employment decisions but also employer actions that relate to the “terms, conditions, or privileges of employment.”
In rejecting the “ultimate employment decision” standard, Judge Don Willett wrote, “no other court of appeals applies so narrow a concept of an ‘adverse employment action’ as the ‘ultimate employment decision’ rule” and that such an interpretation impermissibly limited Congressional intent with respect to the coverage and scope of Title VII.
In Hamilton, nine female correctional officers employed by the Dallas County sheriff’s department sued and alleged unlawful gender discrimination under a scheduling policy in which “only male officers are given full weekends off” while female officers could only receive “weekdays and/or partial weekends off.” Dallas County argued that the scheduling decision did not constitute an actionable “ultimate employment decision.”
Initially, an appellate panel agreed with Dallas County under binding precedent, but it simultaneously urged the entire court to reconsider its decades-old stance. The court granted en banc review and concluded that this case was the “ideal vehicle” to align the Fifth Circuit with Title VII’s text.
Following the ruling, Title VII plaintiffs need not allege discrimination with respect to an ultimate employment decision. Rather plaintiffs must only plead that they were discriminated against — because of a protected characteristic — with respect to hiring, firing, compensation or the “terms, conditions, or privileges of employment.” The Fifth Circuit noted that the statutory phrase “terms, conditions, or privileges of employment” is broad but declined to provide guidance on 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.”
As noted in Hamilton, the Supreme Court has long cautioned federal courts not to “transform Title VII into a general civility code for the American workplace.” And the Fifth Circuit reiterated that Title VII does not permit liability for “de minimis workplace trifles,” but it declined to provide any further guidance.
This hesitation likely stems from the Supreme Court’s recent grant of review in Muldrow v. City of St. Louis. A number of federal circuit courts have set a minimum evidentiary standard by requiring Title VII plaintiffs to demonstrate discriminatory intent along with a “material adverse change” or “objectively tangible harm.” In contrast, other courts of appeals have held that Title VII does not require any showing of harm beyond the discriminatory act itself. In Muldrow, the Supreme Court will presumably resolve the circuit split on what “level of harm” is required to establish liability for discrimination claims under Title VII. It seems the Fifth Circuit is going to wait on Muldrow before it delves more deeply into this issue.
In dissent, Judge Edith Jones wrote that the majority opinion was incorrect and largely incomplete for two reasons: (1) it fails to provide the bench, bar, employers and employees with any clear guidance as to what the court will declare to be the minimum standard for Title VII liability, and (2) it strays from the statute by not requiring a materiality standard as a necessary basis for employer liability.
In concurrence, Judge James Ho stated that the Fifth Circuit was correct to overturn its atextual interpretation of Title VII. He further opined that under this new standard corporate DEI policies and programs might run afoul of federal antidiscrimination law, stating that — while not impacting ultimate employment decisions — DEI efforts and similar workplace initiatives may impermissibly alter the “terms, conditions, or privileges of employment.”
This opinion dramatically changes Title VII law in the Fifth Circuit. It provides no “baseline” for discrimination based on terms, conditions or privileges of employment and, therefore, significantly broadens the category and type of decisions that might subject an employer to liability. This uncertainty in the law — no matter how short-lived — will likely lead to more lawsuits challenging “non-ultimate” employment decisions based on policies and practices that employees perceive to be discriminatory and fewer grants of motions to dismiss or for summary judgment.
Employers should reexamine internal policies and practices to ensure compliance with this expanded interpretation of Title VII.
Mark A. Shoffner is a partner at Bell Nunnally. He advises companies on claims brought under the federal and state trade secrets laws, wage and hour laws, and state and federal anti-discrimination statutes.
Mason Jones is an associate at Bell Nunnally, where he advises companies in employment-related matters involving sexual harassment and discrimination; claims involving the Family Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act; and litigation involving noncompete agreements and the misappropriation of trade secrets.