4th Circuit Reversal Says Job Reassignment Can Be Adverse Action

Takeaway: Muldrow was a landmark case that substantially altered the landscape of employment discrimination law. Unlike in years past, an employer can no longer expect that courts will consider a job transfer involving no reduction in pay or benefits a change that does not qualify as an adverse employment action. Instead, any change to employment status, particularly one that involves modification of responsibilities, schedule, or location, could make the action adverse.

Historically, employers may have believed that relatively minor employment changes, lesser in magnitude than demotion or termination, would not subject them to litigation. Now, under a more relaxed U.S. Supreme Court standard, litigation based on such actions is much more likely and the bar is lower for a successful claim by an employee. 

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In light of this standard, the 4th U.S. Circuit Court of Appeals reversed a district court's grant of summary judgment for the Social Security Administration (SSA) on an employee's claims of disability-based discrimination, retaliation, and failure to accommodate. Underscoring the importance of the recent change in controlling Supreme Court precedent regarding what constitutes an adverse employment action for purposes of such claims, the 4th Circuit held that the district court erred in determining the reassignment of the employee to a position with the same salary and benefits did not qualify as adverse.

The employee, who had a disability, supervised others. As an accommodation, she requested, as needed, and received remote work days beyond the SSA's general policy of one per week.

According to the SSA, the employee's performance declined. Around that time, the employee asked that the SSA make her telework accommodation a scheduled, rather than ad-hoc, arrangement.

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The employee's supervisor said that change was unnecessary, and the SSA would continue to approve telework as needed. The employee alleged the supervisor then began scrutinizing her and was hostile, and the SSA started denying telework requests it had granted before.

Later, after the supervisor raised a performance concern, the employee reported internally that she had been denied equal employment opportunities, alleging harassment, failure to accommodate, and hostile work environment.

The SSA then gave the employee the scheduled telework accommodation she had requested. Soon thereafter, however, it informed the employee that, for performance reasons, it was transferring her to a different position at the same pay grade, but without supervisory responsibilities. The SSA called this a lateral transfer, but the employee said she considered it a demotion.

The SSA then offered the employee a different position, also at the same pay grade but still not supervisory, in a different office, removing her from the work environment about which she had complained. The employee accepted that offer.

After the transfer, the SSA approved the employee's request for more telework days, which it said the transfer made possible.

Granting summary judgment for the SSA, the district court determined that the reassignment was not a "significant" change, as then required in the 4th Circuit to establish an adverse employment action that would sustain a discrimination claim, nor was it "materially adverse" as required for a retaliation claim. The district court focused primarily on the lack of change to salary and reasoned that the employee's acceptance of the transfer made it voluntary and thus not adverse.

The district court also held the SSA had met its obligation to accommodate the employee's disability by granting her telework request after the transfer.

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On appeal, the 4th Circuit acknowledged that the U.S. Supreme Court's 2024 decision in another case, Muldrow v. City of St. Louis, which came after the district court's ruling, governed the employee's claims. Muldrow rejected the "significant" change requirement and articulated a lower standard: "some disadvantageous change." Under Muldrow, the 4th Circuit held, issues of fact existed as to whether the transfer was an adverse employment action. And, for similar reasons, a jury could reasonably find the transfer "materially adverse" for retaliation purposes. Additionally, the court found fact issues as to the transfer's voluntariness.

Finally, the 4th Circuit held, the district court reached an erroneous conclusion about failure to accommodate, predicated on its adverse employment action analysis.

On these bases, the 4th Circuit reversed the district court and remanded the case.

Herkert v. Bisignano, 4th Cir., No. 24-1420 (Aug. 14, 2025).

Adam D. Brown is an attorney in the Philadelphia office of Duane Morris.