On August 18, 2023, the U.S. Fifth Circuit Court of Appeals, sitting en banc in Hamilton v. Dallas County, overturned nearly 30 years of precedent and held that Title VII disparate treatment plaintiffs need only show that they suffered an adverse employment action because of a protected characteristic with respect to any term, condition, or privilege of employment — regardless of whether the adverse employment action also reaches an ultimate employment decision (e.g., hiring, firing, promotion, or change in compensation).
This holding brings the Fifth Circuit into line with other federal appeals courts and with the U.S. Supreme Court, which have already adopted this broader standard for disparate treatment claims under Title VII.
Background
The Dallas County Sheriff’s Department provides two days off per week to its detention officers. In 2019, Dallas County implemented a sex-based scheduling policy. Under that policy, only male officers were eligible for full weekends off, while female officers were not. Rather, they were limited to two weekdays off or to one weekday plus one weekend day off work. Male and female officers performed the same tasks, and both groups preferred to have weekends off. The only rationale offered by Dallas County for the facially discriminatory policy is that it was safer for male officers to be off on weekends rather than on weekdays, despite the inmate numbers being consistent through the week.
A group of female officers filed a lawsuit against Dallas County, alleging sex discrimination claims under Title VII and the Texas Employment Discrimination Act.
The district court granted Dallas County’s motion to dismiss because changes to an employee’s schedule were not deemed to be an ultimate employment decision. Specifically, the district court found the plaintiffs had not pleaded an adverse employment action that consisted of an “ultimate employment decision[] such as hiring, granting leave, discharging, promoting, and compensating” — the precedential standard in the Fifth Circuit at the time.
On initial appeal, a panel of the Fifth Circuit affirmed the dismissal, noting the panel was bound by Fifth Circuit precedent that required the pleading of an ultimate employment decision. However, the panel also pointed out that Dallas County’s sex-based scheduling policy “fits squarely within the ambit of Title VII’s proscribed conduct: discrimination with respect to the terms, conditions, or privileges of one’s employment because of one’s sex.” The panel urged en banc review to revisit whether established precedent was consistent with the text of Title VII.
Overturning Precedent
Sitting en banc, the Fifth Circuit reversed and remanded the panel’s decision, holding that a plausible claim for disparate treatment under Title VII does not require pleading an ultimate employment decision. Rather, disparate treatment liability under Title VII applies to a broader range of adverse employment actions, including conduct that otherwise discriminates with respect to the terms, conditions, or privileges of employment. As the court noted, “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions. To be sure, the statute prohibits discrimination in ultimate employment decisions — ‘hir[ing],’ ‘refus[ing] to hire,’ ‘discharg[ing],’ and ‘compensation’ — but it also makes it unlawful for an employer ‘otherwise to discriminate against’ an employee ‘with respect to [her] terms, conditions, or privileges of employment.’ ”
In explanation, the court criticized its adoption almost 30 years earlier of the ultimate employment decision standard. The court explained that the adoption was based on a misinterpretation of a Fourth Circuit case, which properly concerned trends in Title VII litigation, not limitations to Title VII’s broad coverage.
The court further explained that for purposes of Title VII, an adverse employment action is “a judicially-coined term utilized as shorthand for the statutory phrase ‘compensation, terms, conditions, or privileges of employment.’ ” Therefore, to plead a Title VII disparate treatment claim, “a plaintiff need only allege facts plausibly showing discrimination in hiring, firing, or in the ‘terms, conditions, or privileges’ of his or her employment.” Further, the court cited Supreme Court precedent stating that the terms, conditions, or privileges of employment are not limited to economic or tangible discrimination but can also encompass broader conditions such as a hostile work environment.
The Fifth Circuit rejected Dallas County’s attempt to limit disparate treatment claims to cases where there is a direct economic result of the adverse employment action. Significantly, the Fifth Circuit acknowledged that other circuit courts have adopted some limitations to Title VII liability by establishing a standard for a minimum level of actionable harm. These standards include “materially adverse” (First, Second, and Seventh Circuits), “serious and tangible” (Third Circuit), “significant detrimental effect” (Fourth Circuit), “excluding de minimis” (Sixth Circuit), “tangible change producing a material employment disadvantage” (Eighth Circuit), “materially affect” (Ninth Circuit), “significant change” (Tenth Circuit), “serious and material” (Eleventh Circuit), and “objectively tangible harm” (D.C. Circuit).
Analyzing the facts at hand, the Fifth Circuit concluded that a work schedule is a quintessential term or condition of employment, and a seniority-based right to select work shifts was a privilege of employment. Therefore, Dallas County’s transition away from a seniority-based scheduling policy to a sex-based scheduling policy denied the plaintiffs the privilege of seniority because of their sex.
Importantly, the court declined to set forth the “precise level of minimum workplace harm” that must be pleaded by a Title VII disparate treatment plaintiff, beyond noting that de minimis harm was not sufficient for pleading. Given the facts of this case, the court found that the plaintiff officers’ allegations would satisfy, at the pleading stage, any standard the Fifth Circuit could apply. Therefore, the court left as a question for another day what the precise minimum standard for actionable claims should be.
On these facts, the Fifth Circuit concluded that the plaintiffs had shown they were discriminated against, because of sex with respect to the terms, conditions, or privileges of employment.
Considerations for Employers
The Fifth Circuit’s reputation for being employer-friendly takes another step back with the adoption of this broader standard for Title VII disparate treatment claims.
While the particular facts of this case are egregious — it is common sense that a facially discriminatory policy without a legitimate, nondiscriminatory business justification likely constitutes unlawful discrimination under Title VII — rolling back the ultimate employment decision precedent does open the door to more potential claims and continues the trend of cases in the Fifth Circuit that broaden standing to sue.
Employers should consider auditing their practices to ensure compliance under this broader standard of an adverse employment action in the Fifth Circuit.
This holding brings the Fifth Circuit into line with other federal appeals courts and with the U.S. Supreme Court, which have already adopted this broader standard for disparate treatment claims under Title VII.
Background
The Dallas County Sheriff’s Department provides two days off per week to its detention officers. In 2019, Dallas County implemented a sex-based scheduling policy. Under that policy, only male officers were eligible for full weekends off, while female officers were not. Rather, they were limited to two weekdays off or to one weekday plus one weekend day off work. Male and female officers performed the same tasks, and both groups preferred to have weekends off. The only rationale offered by Dallas County for the facially discriminatory policy is that it was safer for male officers to be off on weekends rather than on weekdays, despite the inmate numbers being consistent through the week.
A group of female officers filed a lawsuit against Dallas County, alleging sex discrimination claims under Title VII and the Texas Employment Discrimination Act.
The district court granted Dallas County’s motion to dismiss because changes to an employee’s schedule were not deemed to be an ultimate employment decision. Specifically, the district court found the plaintiffs had not pleaded an adverse employment action that consisted of an “ultimate employment decision[] such as hiring, granting leave, discharging, promoting, and compensating” — the precedential standard in the Fifth Circuit at the time.
On initial appeal, a panel of the Fifth Circuit affirmed the dismissal, noting the panel was bound by Fifth Circuit precedent that required the pleading of an ultimate employment decision. However, the panel also pointed out that Dallas County’s sex-based scheduling policy “fits squarely within the ambit of Title VII’s proscribed conduct: discrimination with respect to the terms, conditions, or privileges of one’s employment because of one’s sex.” The panel urged en banc review to revisit whether established precedent was consistent with the text of Title VII.
Overturning Precedent
Sitting en banc, the Fifth Circuit reversed and remanded the panel’s decision, holding that a plausible claim for disparate treatment under Title VII does not require pleading an ultimate employment decision. Rather, disparate treatment liability under Title VII applies to a broader range of adverse employment actions, including conduct that otherwise discriminates with respect to the terms, conditions, or privileges of employment. As the court noted, “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions. To be sure, the statute prohibits discrimination in ultimate employment decisions — ‘hir[ing],’ ‘refus[ing] to hire,’ ‘discharg[ing],’ and ‘compensation’ — but it also makes it unlawful for an employer ‘otherwise to discriminate against’ an employee ‘with respect to [her] terms, conditions, or privileges of employment.’ ”
In explanation, the court criticized its adoption almost 30 years earlier of the ultimate employment decision standard. The court explained that the adoption was based on a misinterpretation of a Fourth Circuit case, which properly concerned trends in Title VII litigation, not limitations to Title VII’s broad coverage.
The court further explained that for purposes of Title VII, an adverse employment action is “a judicially-coined term utilized as shorthand for the statutory phrase ‘compensation, terms, conditions, or privileges of employment.’ ” Therefore, to plead a Title VII disparate treatment claim, “a plaintiff need only allege facts plausibly showing discrimination in hiring, firing, or in the ‘terms, conditions, or privileges’ of his or her employment.” Further, the court cited Supreme Court precedent stating that the terms, conditions, or privileges of employment are not limited to economic or tangible discrimination but can also encompass broader conditions such as a hostile work environment.
The Fifth Circuit rejected Dallas County’s attempt to limit disparate treatment claims to cases where there is a direct economic result of the adverse employment action. Significantly, the Fifth Circuit acknowledged that other circuit courts have adopted some limitations to Title VII liability by establishing a standard for a minimum level of actionable harm. These standards include “materially adverse” (First, Second, and Seventh Circuits), “serious and tangible” (Third Circuit), “significant detrimental effect” (Fourth Circuit), “excluding de minimis” (Sixth Circuit), “tangible change producing a material employment disadvantage” (Eighth Circuit), “materially affect” (Ninth Circuit), “significant change” (Tenth Circuit), “serious and material” (Eleventh Circuit), and “objectively tangible harm” (D.C. Circuit).
Analyzing the facts at hand, the Fifth Circuit concluded that a work schedule is a quintessential term or condition of employment, and a seniority-based right to select work shifts was a privilege of employment. Therefore, Dallas County’s transition away from a seniority-based scheduling policy to a sex-based scheduling policy denied the plaintiffs the privilege of seniority because of their sex.
Importantly, the court declined to set forth the “precise level of minimum workplace harm” that must be pleaded by a Title VII disparate treatment plaintiff, beyond noting that de minimis harm was not sufficient for pleading. Given the facts of this case, the court found that the plaintiff officers’ allegations would satisfy, at the pleading stage, any standard the Fifth Circuit could apply. Therefore, the court left as a question for another day what the precise minimum standard for actionable claims should be.
On these facts, the Fifth Circuit concluded that the plaintiffs had shown they were discriminated against, because of sex with respect to the terms, conditions, or privileges of employment.
Considerations for Employers
The Fifth Circuit’s reputation for being employer-friendly takes another step back with the adoption of this broader standard for Title VII disparate treatment claims.
While the particular facts of this case are egregious — it is common sense that a facially discriminatory policy without a legitimate, nondiscriminatory business justification likely constitutes unlawful discrimination under Title VII — rolling back the ultimate employment decision precedent does open the door to more potential claims and continues the trend of cases in the Fifth Circuit that broaden standing to sue.
Employers should consider auditing their practices to ensure compliance under this broader standard of an adverse employment action in the Fifth Circuit.
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