Supreme Court Rules in Job Transfer Case: Litigation and DEI Considerations for Employers

Supreme Court Rules in Job Transfer Case: Litigation and DEI Considerations for Employers

April 19, 2024, Covington Alert

On April 17, 2024, the Supreme Court issued an opinion in Muldrow v. City of St. Louis[1]holding that plaintiffs alleging a discriminatory job transfer can satisfy Title VII of the Civil Rights Act of 1964 by demonstrating that such transfer caused them "some harm." The decision resolves a Circuit split, as some lower courts had required plaintiffs challenging a job transfer on Title VII grounds to show that they suffered "significant harm" or some "materially significant disadvantage" as a result of the transfer to pursue a claim.

Jatonya Muldrow, a sergeant with the St. Louis Police Department, alleged that her supervisor transferred her to a different division because of her sex. Prior to the transfer, Muldrow enjoyed FBI credentials and privileges including working weekday shifts, wearing plainclothes, and driving an unmarked FBI vehicle. In her new role, Muldrow lost her FBI status and had to work weekends, wear a uniform, and drive a marked police car. Muldrow alleged that her transfer violated Title VII, even though her pay and formal rank remained the same, because the transfer impacted the "terms and conditions" of her employment by reducing her responsibilities and benefits. The Court of Appeals for the Eighth Circuit dismissed Muldrow's suit, holding that Muldrow failed to show that her transfer resulted in significant harm.

The Supreme Court, in an opinion authored by Justice Kagan and joined by five other justices,[2]reversed the Eighth Circuit's decision and held that Title VII plaintiffs do not need to show significant harm from a job transfer. Instead, plaintiffs need only show that the challenged job transfer caused them "some harm" and left them somehow "worse off." The high court's decision, however, did not alter the requirement that plaintiffs plead and prove that the employer acted "because of" the plaintiff's protected characteristic, such as race or sex.

Muldrow will likely open the door to more Title VII suits alleging discrimination in lateral job transfers; lower courts previously dismissed many of these cases based on the significant harm standard. The opinion may also encourage plaintiffs to file more suits challenging other types of employment decisions beyond transfers, such as decisions related to training or job development opportunities. Although the Supreme Court only explicitly addressed job transfers, the Court's analysis rests on a statutory interpretation of Title VII. Accordingly, we can expect that lower courts that had applied a "significant harm" or similar standard in other Title VII cases may now apply the lower harm standard to other Title VII discrimination cases. This means that more cases involving a wider variety of employer decisions might survive early motions and proceed to litigation on the question of whether the decision that caused "some harm" was actually motivated by an employee's protected characteristic.

In light of Muldrow, employers should prepare for a potential increase in employment discrimination claims involving a larger variety of employment decisions outside of the traditional hiring and firing context. Employers should keep in mind, however, that Title VII claims still require proof of discriminatory intent. This means that employers should continue to take the same steps now as in the past to build a solid record to refute potential discrimination claims by demonstrating that the employer did not make decisions based on race, sex, or any other protected characteristic. For example, employers should document their legitimate, business-related, non-discriminatory reasons for employment decisions-including for decisions outside of the hiring and termination context such as transfers and training opportunities. Employers should also promptly investigate employee complaints of discrimination to ensure the integrity of employment decisions.

Some commentators have speculated that Muldrow could make corporate DEI programs more vulnerable to Title VII challenges, but DEI programs that are available to all and not restricted to certain employee populations based on race, sex, or other protected characteristics remain lawful under Title VII after Muldrow. For this reason, employers can continue to implement DEI initiatives designed to improve inclusivity, enhance equal opportunity, and mitigate workplace bias-such as affinity groups, efforts to ensure a more diverse pool of candidates for employers, and structured interview processes to ensure a more equitable evaluation of all candidates. Nevertheless, DEI initiatives have faced heightened scrutiny since the Supreme Court's decision in Students for Fair Admissions last summer, and Muldrow will likely renew that scrutiny. Thus, employers should continue to evaluate whether any of their DEI efforts are limited to or targeted at employees based on race, sex, or other protected characteristics, and if so, whether those programs confer a benefit such that excluding other employees could result in "some harm" to those excluded. If so, adjustments may be needed to mitigate the risk of a challenge under Title VII.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Employment practice.