On April 17, 2024, the Supreme Court issued a decision in Muldrow vs. City of St. Louis, which held that Title VII – which bars employers from discriminating in decisions involving among other things, lateral transfers – does not require employees to show that discriminatory decision caused significant harm. Interestingly, the Supreme Court decision was unanimous. Justice Kagan, writing for the Court, held that the higher “significance” standard which the lower courts had applied was wrong, and that employees need only show “some harm from the forced transfer to prevail”. The decision lowers the bar for employees to proceed in court with these types of discrimination claims.

Summary of Key Facts

The plaintiff, Sergeant Muldrow, alleged that her employer, the St. Louis Police Department, transferred her from one job to another because she is a woman. For nearly a decade, she worked as a plainclothes officer in the department’s Specialized Intelligence Division. In 2017, the new Intelligence Division commander asked to transfer her out of that unit so that he could replace her with a male police officer. Against Muldrow’s wishes, the department approved the request and assigned Muldrow to a uniform job elsewhere in the department. Although Muldrow’s rank and pay remained the same in the new position, her responsibilities, schedule, and perks did not. After the transfer, Muldrow no longer worked with high ranking officials on departmental priorities; instead, she was tasked with supervising the daily activities of neighborhood patrol officers. She also lost access to an unmarked, take-home vehicle and had a less regular schedule involving weekend shifts.

Key Aspects of the Supreme Court’s Decision

The key issue presented to the Supreme Court was whether Muldrow was required to satisfy the standard articulated by the Eight Circuit; namely whether the transfer caused her a “materially significant disadvantage”, or whether a different standard applied to the analysis of her claim. The Eight Circuit concluded that the transfer “did not result in a diminution to her title, salary or benefits” and had caused “only minor changes in working conditions”.

Justice Kagan, on behalf of the Supreme Court, explained that a transferee does not have to establish that the harm suffered was significant. Rather, she concluded that the language in Title VII – “to discriminate against” – means to treat worse, in this instance, based upon sex. Justice Kagan reasoned that Muldrow was merely required to demonstrate that she had suffered some harm, that the injury asserted concerned the terms and conditions of her employment, and that the employer acted for a discriminatory reason – because of sex, race, or some other protected trait. If Muldrow were able to establish at trial that (i) she was moved from a plainclothes job in a prestigious specialized, division giving her substantial responsibility over priority investigations and frequent opportunities to work with police commanders and transferred to a uniform job supervising patrol officers involving less high visibility matters; (ii) she was required to work a schedule that became less regular; and (iii) she lost the use of a take-home car — then she could demonstrate that she was “left worse off several times over”.

The Supreme Court cited a number of lower court decisions that may have turned out differently if the correct standard of review – “some harm” – had been used.

Justice Alito filed a concurring opinion. He was dubious, however, that the Court’s new standard would actually make much of a difference. He argued that the standard of “some harm” or “some injury” provided little guidance to lower court judges. He predicts that lower court judges will “mind the words they use but will continue to do pretty much what they have done for years.”

Takeaways and Next Steps

It is difficult to predict what the long-term impact of the Supreme Court’s decision in Muldrow will be. At minimum, it seems likely that it will give trial judges pause to grant summary judgment for employers in lateral transfer cases, particularly where the allegations include a description of some harm or injury to the non-economic terms of employment and assertions that the decision was because of a protected trait, such as sex or race. In light of the decision and the uncertainty of its ultimate impact, employers would do well to consider the following:

1. The decision highlights the importance of training managers regularly and effectively on best practices for handling employee discipline, particularly decisions involving lateral transfers. Employers who once thought lateral transfers were a safe way of resolving employment claims may find that this is no longer the case.
2. All employment decision, especially decisions involving transfers, should be centralized and made by HR in conjunction with senior management.
3. The decision places a premium on training managers on the appropriate legal “dos” and “don’ts” of the hiring process.
4. The decision is a cautionary tale about bias, and perceptions about what jobs are “suited” for men and women, respectively.
5. The decision makes it clear that the employer’s action must still be because of sex, race or some other protected trait in order to trigger protection under Title VII. Employers need to think carefully about whether there is a legitimate non-discriminatory reason for the transfer, and whether some other type of employment resolution is more appropriate in the circumstances.
6. As noted, claims of lateral transfer discrimination may now be less likely to be resolved on summary judgment, which will result in such claims being much more time consuming and expensive for employers.
7. Employers should continue to review their Employment Practice Liability Insurance (“EPLI”) to ensure that they have appropriate insurance coverage.

For more information on changes to the federal overtime regulations, contact Marc at [email protected] or 301-657-0184.