On April 17, the U.S. Supreme Court unanimously confirmed that private employers can be liable for changing an employee’s working terms and conditions because of race or another protected status, even if the changes do not reduce pay or otherwise amount to a demotion. In Muldrow v. St. Louis, the Court resolved a split among circuit courts, where some had been misapplying Title VII by reading into it an elevated standard: that an employer could be liable for discrimination only where the change in the employee's position or status was one of significance, materiality or seriousness.
Key Takeaways from the Muldrow Opinion for Private Employers
Before Muldrow, some courts were tossing discrimination claims that seemed trivial because the employee could not show that their career prospects were harmed by the changes to their job. A prime example is a transfer to another role with equivalent pay and title but with less desirable scheduling, perks or other aspects of the work environment. That is essentially what Sergeant Jatonya Clayborn Muldrow complained about.
Employers need not panic. This is not a fundamental change in the law that is Title VII. The more surprising element of Muldrow is that the entire Supreme Court agreed on what Title VII says and does not say. To that end, some courts will have to change their analyses, and employers should pay attention.
In the past few days, courts in the Fourth Circuit have already acknowledged that Muldrow imposes a less rigorous standard for an employee to prove. In one case, the district court presumed that a job change that took away all of the plaintiff’s direct reports, and not much if anything else, qualified as an adverse action under Title VII. However, the employer prevailed at summary judgment because it could show its legitimate business justifications for the change, and the plaintiff could not show that the employer’s reasoning was pretext for a decision based on race.
Muldrow underscores that employers and HR professionals should remind managers to clearly document their legitimate business reasons for changing work terms and conditions, including by way of job or location transfers or alterations. With provable reasons unrelated to race, color, religion, sex or national origin, employers can generally expect that Justice Alito’s closing prediction will come true: that “careful lower court judges will mind the words they use but will continue to do pretty much just what they have done for years.”[1]
Potential Impacts of Muldrow on DEI/IDEA Programs
There is no overt threat to DEI/IDEA programs in the Muldrow decision. Under Muldrow, more employees could claim that they were denied opportunities if they were excluded from participating in diversity initiatives, but employers can avert such claims by ensuring that programs and initiatives that promote diversity, equity, inclusion and accessibility expand opportunities for everyone.
Practical Tips for Private Employers
Best practices to mitigate the risk of viable claims under Title VII include:
- Document legitimate business reasons for making changes to the terms and conditions of work for any employee or group of employees.
- Consider explaining the reasons for the changes in advance. Always do this with compensation and benefits. For changes that management might see as less than significant, material or serious, assume that affected employees will care deeply. Recognize that it is human nature to fill in the blanks and make negative inferences or assumptions when information is lacking or unclear. Avoid dismissing concerns when they are raised, even when the changes seem minor.
- Remember that Title VII prohibits discrimination with respect to compensation, terms, conditions or privileges of employment. That is, not just terminations, demotions and failures to hire. (This is not new.)
- Examples of other changes to terms, conditions or privileges that might give rise to a Title VII complaint:
- Location and all that may be connected
- Commute time
- Working from home or an office
- Proximity to dining or other conveniences
- Schedules/shifts
- Responsibilities
- Access to vehicles
- Travel (requirement or opportunity)
- Uniform/dress code
- Work rules
- Other markers of perceived prestige (or inferiority)
- Seek legal review in advance of changes to compensation, terms, conditions or privileges of employment.
- Verify that employee affinity groups are open to all and closed to none.
- Verify that diversity, equity, inclusion and accessibility programs and initiatives are increasing access and opportunities for everyone, not just certain groups.
- Avoid referring to any individual as "diverse." No single employee or applicant can be diverse alone. Diversity in the DEI/IDEA context refers to a group of individuals with a variety of differing backgrounds.
- Seek legal review of DEI/IDEA programs and initiatives, particularly if newly created or altered.
Given the potential legal implications of the Muldrow decision on running any business, Robinson Bradshaw’s Employment & Labor Practice Group will be monitoring and reporting on the latest developments in lower courts. For assistance evaluating changes to your workplace, contact a member of our team.
[1] See Justice Alito’s concurrence at the very end: https://www.supremecourt.gov/opinions/23pdf/22-193_q86b.pdf.
