The Supreme Court’s 2024 decision in Muldrow v. City of St. Louis set the stage for an increase in claims arising out of circumstances in which an employee experiences a change in their working conditions that doesn’t rise to the level of a pay cut, demotion, or termination. The effects of the Court’s decision were highlighted in a recent decision issued by the U.S. 4th Circuit Court of Appeals, which encompasses federal courts in Maryland, Virginia, West Virginia, North Carolina, and South Carolina.
Setting the Standard
The Supreme Court’s decision in Muldrow began with a sex discrimination claim filed by a female police officer who was transferred to a different position within the police department after she was replaced by a male employee in a specialized intelligence unit. The city argued she couldn’t sustain a claim because she hadn’t suffered a loss in pay or other tangible harm that could be considered an adverse employment action.
Although the city had prevailed at the trial and appellate court levels, the Supreme Court reversed those decisions. In the Court’s view, “although an employee must show some harm from a forced transfer to prevail [under Title VII of the Civil Rights Act of 1964], she need not show that the injury satisfies a significance test.”
Applying the Standard
The 4th Circuit recently decided on a case that involved an employee of the Social Security Administration (SSA) who had requested authorization to telework as a form of accommodation for a disability. Although her request was initially denied, after she informed her supervisors of her intention to pursue an equal employment opportunity complaint, she was transferred to another position in which she would be able to telework as she had requested. The transfer resulted in the employee moving from the position of branch chief to that of management analyst. The transfer didn’t involve any loss of pay or benefits but did result in her no longer having supervisory responsibilities.
The employee filed an Equal Employment Opportunity Commission (EEOC) charge and then a lawsuit in the U.S. District Court for the District of Maryland. The court granted summary judgment (dismissal without a trial) for the employer, finding that her transfer did not constitute a sufficiently significant change in her employment to qualify as an adverse employment action capable of supporting a claim.
The employee filed an appeal with the 4th Circuit. The appellate court analyzed the case under Muldrow and explained that it was no longer necessary for an employee to show a “significant detrimental effect” from an employer’s action to sustain a claim but only that they experienced “some disadvantageous change in an employment term or condition.”
Applying that standard to the facts before it, the 4th Circuit concluded that the employee’s loss of her supervisory responsibilities (even in the absence of a loss of pay or benefits) was a potentially disadvantageous change that required the case to be remanded (sent back to the lower court) for further consideration of her claim. In doing so, the appeals court declined to hold that a loss of supervisory responsibilities would always be deemed to constitute an adverse employment action, instead holding that such issues would need to be resolved on a case-by-case basis. Herkert v. Bisignano.
Bottom Line
The 4th Circuit’s decision highlights the need for employers to account for the Supreme Court’s holding in Muldrow when implementing transfers for employees, particularly when the transfer is being made in response to a request for a disability accommodation. You should scrutinize whether the transfer could be disadvantageous to the employee somehow (such as by reducing future opportunities or reducing their responsibilities or supervisory authority). A transfer that doesn’t result in a financial loss to the employee will not operate to fully protect you against a potential claim.
David M. Stevens is an attorney with Whiteford, Taylor & Preston, L.L.P., in Columbia, Maryland, and can be reached at dstevens@whitefordlaw.com.