Employer Exposure to Some Bias Claims Hinges on New View of Harm

The unanimous US Supreme Court decision April 17 in Muldrow v. City of St. Louis unlocks a range of discrimination claims previously shut off to employees. Employers should take a hard look before making changes to workers’ jobs and as they move forward with workplace DEI programs.

The high court ruled that employees don’t have to show they suffered significant financial or other harm when bringing a discrimination claim under Title VII of the Civil Rights Act of 1964.

The justices’ ruling effectively eliminates a barrier that some courts created that prevented employees from bringing certain kinds of discrimination claims against their employers.

The case focuses on a female police officer who alleged she was transferred to a less prestigious position due to her gender. The officer must show “some harm” from such a transfer, Justice Elena Kagan wrote in the court’s opinion, but “she need not show that the injury satisfies a significance test.”

Employers should prepare for a potential increase in Equal Employment Opportunity Commission charges and lawsuits filed under Title VII as a result of the court’s ruling.

For that reason, the ruling should prompt employers to think about their risk management strategy. It is also likely to impact some DEI programs.

‘Some’ Harm

For years, some federal appellate courts have applied varying versions of a materiality standard to decide whether an employee could challenge certain employment actions in court. Essentially, if the employment action caused no economic impact or other tangible harm, a discrimination claim was likely to get tossed out.

In Muldrow, the female police officer was moved to a “rotating schedule” that involved weekend work and lost access to a take-home vehicle. She brought a sex discrimination claim to challenge the transfer. The lower courts rejected her claim because the transfer didn’t cause her “materially significant” harm, such as diminishing her title, benefits, rank, or pay.

The Supreme Court, however, concluded that the lower courts applied the wrong legal standard. It determined that an employee who was transferred doesn’t have to show the harm incurred was significant. There is nothing in Title VII that establishes such an elevated threshold of harm, Kagan wrote.

The court’s ruling establishes that a Title VII plaintiff must show that his employer’s actions caused “some harm,” meaning some “‘disadvantageous’ change in an employment term or condition.” But that “harm” need not be “significant… serious, or substantial, or any similar adjective suggesting that the disadvantage to the employee must exceed a heightened bar.”

“To demand ‘significance’ is to add words—and significant words, as it were—to the statute Congress enacted,” Kagan wrote. “It is to impose a new requirement on a Title VII claimant, so that the law as applied demands something more of her than the law as written.”

Implications for Employers

It isn’t yet clear how drastically the ruling in Muldrow will impact DEI programs and other employer-led opportunities like mentoring and professional development programs.

It stands to be seen, for example, whether a discrimination claim could be brought by an employee who perceives they were passed over for a benefit or advantage in hiring, promotion, or salary related to a company’s DEI program.

DEI mentoring programs or employer-sponsored affinity groups that are only offered to employees based on certain protected traits and exclude others might be problematic for employers under Muldrow.

Employers should expect there to be a case-by-case analysis of how allegedly adverse employment actions meet the new standard set by Muldrow—that employees need to show some level of harm versus a significant harm.

For now, employers should expect Muldrow to raise the bar for employers to obtain dismissal of Title VII claims through summary judgment. Employees who view an employment action as negative or harmful now have a greater chance of presenting their claims to a jury. This in turn could increase the settlement value of some Title VII lawsuits.

Employers should strongly consider a risk management strategy in the wake of this ruling. That strategy should include assessing the potential impact of even seemingly minor changes to terms and conditions of employment on workers, especially those who are members of a classification protected under Title VII.

For companies with DEI initiatives, careful attention should be paid to qualifications for mentoring programs and similar professional development initiatives or sponsorship of affinity groups. These groups are typically formed around employees’ interests, backgrounds, or identities.

Companies can still have these programs in their workplaces, but they should think carefully about avoiding participation qualifications based on protected classifications.

The case is Muldrow v. City of St. Louis, US, No. 22-193, decided 4/17/24.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Brandon Moulard is partner in Parker Poe’s Atlanta’s office and Jonathan Crotty is partner in Parker Poe’s Charlotte office.

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