United States: Fifth Circuit Overrules Long-Standing Precedent To Align Itself With Other Courts Addressing Title VII Claims

Executive Summary: The United States Court of Appeals for the Fifth Circuit (which covers Texas, Louisiana and Mississippi) recently held that Title VII plaintiffs can show they were subjected to an adverse employment action for purposes of a Title VII claim even if they were not subjected to an "ultimate employment decision."

History: Until August 18, 2023, the Fifth Circuit maintained that an "adverse employment action" in connection with a Title VII claim must be an action that constitutes an "ultimate employment decision," interpreting that term to mean hiring, firing, promotions, granting leave, and compensation. This was a stark contrast to other federal circuit courts and resulted in many claims being dismissed by courts within the jurisdiction of the Fifth Circuit where they would not likely be dismissed in other jurisdictions. On August 18, 2023, the Fifth Circuit issued its en banc decision (meaning it was decided by the full court instead of a 3-judge panel) in Hamilton v. Dallas County (No. 21-10133), bringing the Fifth Circuit more in line with other appellate courts (including the 2nd, 3rd, 4th, 6th, 8th, 9th, 11th, and D.C. Circuits) and Supreme Court precedent.

Case Background: As explained in the Fifth Circuit's decision, the Dallas County Sheriff's Department had a policy where it gave its detention service officers two days off each week. The department used a sex-based policy to determine which two days an officer can pick, noting that it would be safer for male officers to take days off during the weekend and not during the week. This led to a defacto policy that only male officers could select full weekends off, while female officers could not. Instead, female officers could pick either two weekdays off or one weekend day plus one weekday. Nine female detention service officers sued Dallas County, alleging that this sex-based scheduling policy violates Title VII's prohibition against sex discrimination.

The trial court dismissed the female officers' lawsuit because the weekend scheduling policy – even though it was undisputedly sex-based – did not amount to an "ultimate employment decision" as it did not involve hiring, firing, promotions, granting leave, or compensation. The decision was appealed to the Fifth Circuit. In August 2022, the Fifth Circuit, relying on what it later called in its en banc decision to be "decades-old, atextual precedent," upheld the dismissal of the Title VII claims, finding that the weekend scheduling policy did not amount to an "ultimate employment decision" for the same reasons as the trial court. However, despite affirming the dismissal, the 2022 decision noted that the "case was the ideal vehicle" for en banc review to align the Fifth Circuit with the text of Title VII. The Fifth Circuit ultimately considered the case en banc and rendered a decision on August 18, 2023.

En Banc Decision: In its en banc decision, the Fifth Circuit found its prior precedent regarding ultimate employment decisions was based on "fatally flawed foundations" and held that no such requirement is needed to state a claim under Title VII, overruling decades-old precedent. In reaching this conclusion, the Fifth Circuit analyzed the language of Title VII itself. It reasoned an earlier Fifth Circuit decision misinterpreted the clear language of Title VII and erroneously interpreted a decision by the Fourth Circuit to craft the "ultimate employment decision" restriction on the types of adverse employment actions that are actionable and those that are not. The Fifth Circuit ultimately found that its prior decision assumed a list of conduct discussed in the Fourth Circuit decision (which was relied upon for the "ultimate employment decision" standard) regarding types of actions creating a claim under Title VII was the complete list of cognizable actions as opposed to mere examples. In ultimately overruling the "ultimate employment decision" standard, the Fifth Circuit noted that no other court of appeals applied such a narrow view of an adverse employment action, and that Supreme Court precedent supports the overruling of the Fifth Circuit's prior precedent.

While overruling prior precedent regarding adverse employment actions under Title VII, the Fifth Circuit left "for another day 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.'" Accordingly, the Fifth Circuit ultimately held that to plead an adverse employment action, a plaintiff need only show "that she was discriminated against, because of a protected characteristic, with respect to hiring, firing, compensation, or the 'terms, conditions, or privileges of employment'—just as the statute says."

The Bottom Line

While the Fifth Circuit's decision in Hamilton aligns that court's position with other federal appeals courts, it left several questions unanswered, including the minimum level of workplace harm necessary to support a Title VII claim. Employers should be careful to ensure that all employment policies, procedures and decisions that impact employees are crafted and followed in a fair and equal manner based on the conduct at issue. In addition, employers should review their workplace policies and practices to ensure that any differential treatment of employees in a protected category is justified by a legitimate business reason and that such reason is effectively documented. Finally, employers should regularly train management to discharge their duties and responsibilities in a manner that protects the organization and minimizes the risk of harm to all employees.