On August 18, 2023, the Fifth Circuit sitting en banc in Hamilton v. Dallas County unwound its long-held limitation that an adverse employment action must be an “ultimate employment decision” to be actionable under Title VII. The majority reasoned that this limitation was incongruent with the broad language of Section 703(a)(1), which states that “[i]t shall be an unlawful employment practice for an employer… to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileged of employment, because of such individual’s race, color, religion, sex, or national origin…”

This case presents with “unusual” facts, as characterized by Judge Edith H. Jones in her concurrence, joined by Justice Smith and Justice Oldham. Hamilton was brought by nine female correctional officers who alleged their employer, Dallas County, violated Title VII by adopting a sex-based scheduling policy in place of a seniority-based policy, which allowed only male officers full weekends off. Interestingly, the County stood behind its policy, reasoning that it would be safer for the male officers to be off on the weekends, because having none on duty during the week would be an unsafe practice. The district court granted the County’s 12(b)(6) motion to dismiss and held that changes to an employee’s work schedule, such as the denial of weekends off, was not an ultimate employment decision. The Fifth Circuit initially affirmed on the same grounds, but a rehearing en banc was granted to reexamine the “ultimate employment decision” requirement.

The Fifth Circuit has limited disparate-treatment claims under Title VII to those involving “ultimate employment decisions” for decades, holding that “only ultimate employment decisions such as hiring, granting leave, discharging, promoting, or compensating” were actionable. But in Hamilton, the Fifth Circuit then held that the “ultimate employment decision” standard, which it stood alone amongst the federal circuits in applying, was based on fatally flawed foundations.

In nullifying the “ultimate employment decision” standard, the Fifth Circuit applied Title VII as written, noting that “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions.” In addition to expressly prohibiting discrimination in hiring, refusing to hire, discharging, and compensation, Section 703(a)(1) also prohibits an employer “otherwise to discriminate against” an employee “with respect to his terms, conditions, or privileges of employment.” To require an “ultimate employment decision” would render this statutory language meaningless.

Using the new interpretation of Section 703(a)(1), the Fifth Circuit held the County’s change to a sex-based scheduling policy was actionable at the pleading stage given: (1) the days and hours that an employee works are quintessential “terms and conditions” of employment; and (2) the female officers’ allegations support a plausible inference that the right to pick work shifts based on seniority under the County’s prior policy was a “privilege” of employment.

Although Hamilton expanded the reach of actionable discriminatory acts by eliminating the “ultimate employment decision” standard, the Court refused to opine on “the precise level of minimum workplace harm a plaintiff must allege on top of showing discrimination in one’s ‘terms, conditions, or privileges of employment.’” The Court punted on this issue partly because the Supreme Court is poised to address it in Muldrow v. City of St. Louis, an Eighth Circuit case for which certiorari was recently granted. The only guidance given by the Fifth Circuit on this issue is that Title VII does not permit liability for “de minimis workplace trifles.” As Judge Jones put it in her concurrence, “[t]he majority holding amounts to this: we hold that speeding is illegal, but we will not say now what speed is illegal under what circumstances.”

The majority’s incomplete ruling now leaves employers in the Fifth Circuit guessing as to where the line is drawn for actionable adverse employment actions. Until the Supreme Court clears up this issue in Muldrow, if it so choses, the murkiness of this line will force employers to examine more of their actions taken that affect employees to minimize potential liability under Title VII. Particularly, employers will need to carefully scrutinize any policies or practices in place, or set to be implemented, that may disadvantage certain employees belonging to a protected class.

Notwithstanding the murkiness that remains, the Fifth Circuit’s decision in Hamilton will certainly expand the landscape of disparate-treatment claims employees will bring.

If you have questions about this alert or any issues related to it, please contact the authors or the Reed Smith lawyer with whom you normally work.