Adverse Employment Action: Did the Sixth Circuit Apply the Wrong Definition?

On January 14, 2014, a divided Sixth Circuit panel in Deleon v. Kalamazoo County Road Commission[i] ruled that a lateral transfer constituted an adverse employment action, reversing the district court’s decision that granted summary judgment to the employer on the employee’s federal race, national origin, and age discrimination claims. In so doing, in my opinion, the Sixth Circuit improperly applied a broader definition of adverse employment action to the employee’s discrimination claims.

Timing is Everything

In Deleon, the employee applied for a job transfer to Equipment and Facilities Superintendent position in November 2008 because he viewed the new position as providing better potential for career advancement. The posting for the open position described the working conditions as “primarily in the office and in garage where there is exposure to loud noises and diesel fumes.”[ii] The employee did not receive the position, but the successful applicant left the position shortly thereafter. In 2009, the employer transferred the employee to the same Equipment and Facilities Superintendent position for which he had previously applied. Shortly after his transfer, he began to complain about the diesel fumes and alleged he suffered from bronchitis and sinus headaches.

Four days after the employee had a contentious meeting with his supervisor involving the redesign of a truck, the employee was hospitalized for five days, which he attributed to work-induced stress and a stress-related mental breakdown. The employee then took leave under the Family and Medical Leave Act. When he was cleared to return to work by his psychiatrist, the employee learned he had been terminated for exhausting all of his leave. He then filed charges for race, national origin, and age discrimination, asserting that the job transfer was an adverse employment action.[iii] The lower court disagreed and granted the employer summary judgment because it determined that transferring the employee was not an adverse action.

The Sixth Circuit’s (Mis)reliance

The Sixth Circuit, while recognizing that a “mere inconvenience or an alteration of job responsibilities” was not enough to constitute an adverse employment action, nevertheless concluded a voluntary transfer may constitute an adverse employment action if there is a “less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation.”[iv] In making this distinction, the Sixth Circuit relied heavily upon the U.S. Supreme Court’s reasoning in Burlington Northern and Santa Fe Railway Company v. White, [v] a Title VII retaliation case.

In Burlington Northern, the Supreme Court concluded the determination of whether the reassignment of an employee from a forklift operator to a track laborer position rose to the level of a materially adverse employment action was for the jury, given the evidence that the forklift operation position had a higher prestige, was considered a better job, and was less arduous than the track laborer position.[vi] The Supreme Court specifically noted that the scope of Title VII’s anti-retaliation provision was broader than Title VII’s discrimination provision, in that it was not limited to the employer’s actions that affect the terms, conditions, or status of employment.[vii] Rather, the Supreme Court held in a Title VII retaliation claim that an employee must show that a reasonable employee would have found the employer’s challenged action “materially adverse.”[viii] The Supreme Court noted that, while the terms “hire,” “discharge,” “compensation, terms, conditions, or privileges of employment,” “employment opportunities,” and “status as an employee” are in Title VII’s anti-discrimination provision, the anti-retaliation provision has no such limiting words.[ix] The Supreme Court reasoned the anti-discrimination provision seeks a workplace where individuals are not discriminated against because of their status, while the anti-retaliation provision seeks to prevent an employer from interfering with an employee’s efforts to secure or advance enforcement of Title VII’s basic guarantees.[x]

The Sixth Circuit in Deleon, in concluding that the employee had made his threshold showing at the summary judgment stage, found there was a question of fact as to whether the transfer was materially adverse to a reasonable person, “especially in light of the factual similarities between the instant case and Burlington Northern.”[xi] In relying upon Burlington Northern, the Sixth Circuit specifically noted “an employer’s transfer may constitute a materially adverse employment action, even in the absence of a demotion or pay decrease, so long as the particular circumstances present give rise to some level of objective intolerability.”[xii] However, it appears the Sixth Circuit’s reliance on Burlington Northern was misplaced because that caseanalyzed a retaliation claim, not a discrimination claim.

Moreover, other cases that the Sixth Circuit relied upon to support its holding that a lateral transfer constitutes an adverse employment action in a discrimination case — such as Hollins v. Atlantic Company,[xiii] Strouss v. Michigan Department of Corrections,[xiv] and Mattei v. Mattei[xv] — also analyzed retaliation claims. Informatively, the discrimination cases the Sixth Circuit relied upon — Kocsis v. Multi-Care Management, Inc.[xvi] and Policastro v. Northwest Airlines, Inc.[xvii] — all concluded the reassignments at issue were not adverse employment actions because, in relevant part, they did not involve a reduction in salary or benefits.

Bad Decision for Employers (in more than one way)

The Deleon case is a concerning decision for at least two reasons. The more obvious reason is that employers may face liability when they refuse to transfer an employee to a position for which they applied, or when they actually do transfer an employee to a position for which they applied.

Perhaps the less obvious reason is that it appears that the Sixth Circuit has broadened the definition of adverse employment action in discrimination cases, so it is effectively the same definition applied in retaliation cases. Not only was this not the Supreme Court’s intention in Burlington Northern, but, more importantly, the Sixth Circuit has given more protection to employees than was originally intended by the legislature. Given the Sixth Circuit’s mixed jurisprudence in these cases, later decisions may finally and conclusively show Deleon to be an outlier. Until then, though, employers in the Sixth Circuit need to take special care in dealing with employees who may perceive an employment action taken against them as adverse. Similarly, attorneys representing employers in discrimination cases need to be aware of the judicial landmine that is the Deleon decision — and have a plan for showing it to be the misapplication that it is.
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[i] 739 F.3d 914 (6th Cir. 2014).
[ii] Id.at 916.
[iii] Id. at 917-18.
[iv] Id. at 918.
[v] 548 U.S. 53 (2006).
[vi] Id. at 71.
[vii] Id. at 67.
[viii] Id. at 68.
[ix] Id. at 62.
[x] Id. at 63-64.
[xi] 739 F.3d at 920.
[xii] Id. at 919.
[xiii] 188 F.3d 652, 662 (6th Cir. 1999) (discussing definition of adverse employment action under Title VII retaliation claim).
[xiv] 250 F.3d 336, 343 (6th Cir. 2001) (analyzing whether lateral transfer constitutes adverse employment action under Title VII retaliation claim).
[xv] 126 F.3d 794, 808 (6th Cit. 1997) (analyzing retaliation claim under ERISA).
[xvi] 97 F.3d 876, 885-87 (6th Cir. 1996) (analyzing discrimination suit brought under the ADA).
[xvii] 297 F.3d 535, 539 (6th Cir. 2002) (analyzing constructive discharge claim brought under Title VII and Age Discrimination in Employment Act).

As appearing in the Tennessee Bar Association Newsletter; Labor and Employment Law Section