On August 18, 2023, the Fifth Circuit, sitting en banc, reversed longstanding Fifth Circuit precedent limiting actionable instances of discrimination under Title VII to so-called “ultimate employment decisions,” such as hiring, firing, promotions, and compensation. Hamilton v. Dallas County, No. 21-10133, 2023 WL 5316716 (5th Cir. Aug. 18, 2023). Under the prior employer-friendly Fifth Circuit rule, employment actions that did not constitute an “ultimate employment decision,” such as decisions concerning scheduling or work assignments, were deemed to not violate Title VII, even if the conduct at issue was discriminatory.
Under the new Fifth Circuit standard, “to plead an adverse employment action, a plaintiff need only allege facts plausibly showing discrimination in hiring, firing, compensation, or in the terms, conditions, or privileges of his or her employment.” The majority described its decision as ending an “interpretive incongruity” between its prior precedent and the text of Title VII.
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In Hamilton, nine female correctional officers alleged that in 2019, Dallas County implemented a new work schedule policy in which male officers could elect to take their weekly two days off on both Saturday and Sunday, whereas female officers could only elect to take one weekend day off, in addition to one weekday. As the court put it, “Bottom line: Female officers never get a full weekend off.”
Even though Dallas County did not “dispute its discriminatory intent” in implementing the sex-based scheduling policy, the trial court dismissed the case because work scheduling disparities were not an ultimate employment decision. On appeal, the Fifth Circuit initially affirmed that decision because it was “bound by this circuit’s precedent.” In doing so, the three-judge panel of the Fifth Circuit invited the full circuit court to revisit its standard for proving workplace discrimination, stating that the scheduling policy “[s]urely . . . constitutes discrimination with respect to the terms or conditions of [plaintiffs’] employment,” even though it was not an ultimate employment decision. The panel deemed the case an “ideal vehicle” for a rehearing by the full circuit to revisit its longstanding Title VII precedent.
The full Fifth Circuit reversed the decision, finding that the County’s conduct plainly violated Title VII. The Fifth Circuit reasoned, “Nowhere 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—hiring, refusing to hire, discharging, 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. Our ultimate-employment-decision test ignores this key language” and “renders the statute’s catchall provision all but superfluous.”
The Court noted that “no other court of appeals applies so narrow a concept of an adverse employment action,” and held that the prior standard was “fatally flawed.” Instead, “to plead an adverse employment action, a plaintiff need only allege facts plausibly showing discrimination in hiring, firing, compensation, or in the ‘terms, conditions, or privileges’ of his or her employment.” The Court reversed the dismissal of the officer’s Title VII claim, finding that “[t]he days and hours that one works are quintessential ‘terms or conditions’ of one’s employment.”
The ruling included no dissents, but three judges concurred in the judgment only, writing that the majority ruling was “incomplete,” in part because the decision purportedly “leaves the bench, bar, and employers and employees with no clue as to what this court will finally declare to be the minimum standard for Title VII liability.” That concurrence also criticized the majority for “eschew[ing] materiality as a necessary basis of employer liability.”
In a separate concurring opinion, Judge Ho responded to that criticism, writing that “overturning atextual precedent can raise a number of unanswered questions. But the existence of unanswered questions should not stop us from restoring text and overturning precedent.” Judge Ho analogized the Fifth Circuit’s Hamilton decision to “overturn[] atextual precedent” to the Supreme Court’s recent decisions in Groff v. DeJoy, 143 S. Ct. 2279 (2023) (addressing religious accommodations), and Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 143 S. Ct. 2141 (2023) (finding affirmative action policies to be unconstitutional), which he also described as decisions in which “the Court favored text over longstanding atextual precedent.”
In Judge Ho’s view, updating Fifth Circuit precedent to more closely track the language of Title VII “will help restore federal civil rights protections for anyone harmed by divisive workplace policies that allocate professional opportunities to employees based on their sex or skin color, under the guise of furthering diversity, equity, and inclusion.” Given the Supreme Court’s reasoning in Students for Fair Admissions that “[e]liminating racial discrimination means eliminating all of it,” many court watchers are expecting an increase in Title VII litigation against employers challenging employer diversity initiatives. The Hamilton decision is likely to facilitate such challenges in the Fifth Circuit.
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With the Fifth Circuit’s expanded definition of an “adverse employment action” in Hamilton, employers in that circuit may face an increase in Title VII employment discrimination claims. As noted in Judge Ho’s concurring opinion (and acknowledged in the majority opinion), however, the decision leaves unanswered certain questions regarding what particular employment decisions will constitute an actionable employment decision. Regardless of the answer to that question, it is clear that this change in longstanding precedent comes at a time when employers may face increased challenges to their policies and procedures, especially with respect to employer diversity initiatives.