Fifth Circuit Overturns its Prior Employer-Friendly Interpretation of Adverse Employment Actions Under Title VII

Donovan Estrada, Associate

            On August 18, 2023, with its ruling in Hamilton v. Dallas County,[1] the Court of Appeals for the Fifth Circuit departed from its decades-long precedent and held that discrimination claims under Title VII are cognizable for adverse employment actions beyond “ultimate employment decisions,” such as hiring, termination, promotion, compensation decisions, etc.  This shift reflects a growing trend among the Courts of Appeals, including the Tenth and Sixth Circuits, which have adopted more inclusive interpretations of what may constitute adverse employment actions for discrimination claims under Title VII.  

Hamilton and the Fifth Circuit’s Alignment with Other Courts of Appeals as to What Constitutes an Adverse Employment Action Under Title VII

            In Hamilton, there was no question that the defendant’s policy of providing men full weekends off, while depriving female employees of the same benefit, was discriminatory, but the original Fifth Circuit panel affirmed the district court’s dismissal of the Title VII action based on its prior precedent that denials of weekends off do not constitute ultimate employment decisions.  The Fifth Circuit convened en banc to reconsider its “ultimate employment decisions” precedent and ruled that its prior focus on "ultimate employment decisions" was overly restrictive and not aligned with the plain language of Title VII itself.  

            Under the Fifth Circuit’s revised standard, employees or job applicants need only demonstrate that they were subjected to workplace discrimination "because of a protected characteristic, with respect to hiring, firing, compensation, or the 'terms, conditions, or privileges of employment,'" which necessarily includes a broader swathe of employer actions beyond “ultimate employment decisions.”  But, the court did not define or otherwise discuss a minimum level of harm necessary for an employer’s conduct to constitute an adverse employment action that could give rise to a Title VII claim, and left that issue to future district court decisions.

            The Tenth Circuit has also grappled with the issue of what constitutes an "adverse employment action" under Title VII. Historically, the Tenth Circuit has looked beyond "ultimate employment decisions" to consider discriminatory employer actions that produce a "significant change in employment status," such as changes in job responsibilities.[2]  The Sixth Circuit recently arrived at the same outcome in a similar case, finding that shift changes and scheduling decisions made for discriminatory reasons fall under the ambit of Title VII.[3]

Muldrow v. St. Louis – The Supreme Court Poised to Settle Differing Precedents Within the Courts of Appeals

            Notwithstanding the Fifth Circuit’s precedential shift in Hamilton, the Supreme Court recently granted certiorari to review the Eighth Circuit’s decision Muldrow v. St. Louis[4] in order to consider the injury or harm that must be shown by a plaintiff asserting discrimination under Title VII. As three concurring judges in Hamilton noted, the Supreme Court's consideration of Muldrow, in which it will decide whether Title VII prohibits discrimination in transfer decisions without a separate determination that the transfer caused a "significant disadvantage," suggests that a more settled interpretation of actionable adverse employment actions under Title VII is likely forthcoming.

Employer Considerations

            The Hamilton decision presents a significant change from prior employer-friendly precedent in the Fifth Circuit, and employers there should anticipate greater scrutiny from federal agencies such as the U.S. Equal Employment Opportunity Commission and the U.S. Department of Justice, which have indicated support for Hamilton’s inclusive interpretation of what may constitute actionable employer conduct under Title VII.  Likewise, employers in Colorado and the Tenth Circuit should watch for the Supreme Court’s decision in Muldrow, which could affect current precedent here. 

[1] --- F.4th ----, 2023 WL 5316716 (5th Cir. Aug. 18, 2023). 

[2] See Sanchez v. Denver Pub. Schs., 164 F.3d 527, 532 (10th Cir.1998)

[3] Threat v. City of Cleveland, 6 F.4th 672 (6th Cir. 2021)

[4]Muldrow v. City of St. Louis, Missouri, 30 F.4th 680 (8th Cir. 2022), cert. granted in part, 143 S. Ct. 2686 (June 30, 2023).