Job Transfer Case May Implicate IE&D Programs

The U.S. Supreme Court recently heard a case centered on lateral job transfers, but the case could impact other employment policies and practices, especially the criteria for inclusion, equity and diversity (IE&D) initiatives.

Under Title VII of the Civil Rights Act of 1964, employers cannot discriminate against workers with respect to their compensation, terms, conditions or privileges of employment because of their race, color, sex, religion or national origin.

In Muldrow v. City of St. Louis, a female police officer alleged sex discrimination. The court focused on whether tangible harm is required in order to prove discrimination in an involuntary job transfer. Examples of harm would be getting less pay, fewer benefits, less promotion potential, lower rank or unfavorable hours.

The tenor of the justices' questioning during oral arguments on Dec. 6 "suggests they will establish that an employee doesn't need to show additional harm to state a claim based on a discriminatory transfer," said Brandon Moulard and Jonathan Crotty, attorneys with Parker Poe in Atlanta and Charlotte, N.C., in an email. Justice Ketanji Brown Jackson noted plaintiffs won't receive damages if they don't show material harm for which they should be compensated.

"Employers should bet on Muldrow widening Title VII's reach," Moulard and Crotty said.

Along with involuntary transfers, the case could have ramifications for other employment decisions, such as performance evaluations, disciplinary actions, client or project assignments, attendance policies, and work travel, according to Delaney Busch, an attorney with Mintz in Boston.

It's unclear when the court will issue its decision.

Possible Impact on IE&D Initiatives

A ruling in favor of expanding Title VII could be a boon for opponents of IE&D programs, said Martin Bell, an attorney with Simpson Thacher in New York City. Critics have argued that such programs discriminate by excluding white men.

Companies "will want to gauge the possibility that they may become easier to sue [over IE&D programs], but with minimal cash changing hands, although defending lawsuit after lawsuit has its own cost in legal fees, convenience and potential stigma," Bell said.

"A broad ruling on Title VII's reach might put many IE&D programs on the chopping block," Moulard and Crotty said. "After Muldrow, many programs, such as race - based decisions for mentoring or training, may give rise to a claim, even though those employment decisions may cause no tangible harm to the groups who cannot participate in the race - restricted benefit."

Regardless of the outcome in Muldrow, many corporate IE&D programs will remain lawful and appropriate if they are not limited to certain demographic groups, said Lindsay Burke, an attorney with Covington in Washington, D.C. "Employers can continue to implement IE&D initiatives designed to improve inclusivity, enhance equal opportunity and mitigate workplace bias," she said.

Tips for HR

Businesses should be mindful that any treatment perceived as being on the basis of a protected characteristic may be grounds for legal action, said Meredith Kirshenbaum, an attorney with Goldberg Kohn in Chicago.

Corporations should review their policies and practices to ensure they do not reflect a discriminatory intent or have a disparate impact on workers based on protected characteristics, such as gender or race, said Wendy LaManque, an attorney with Pryor Cashman in New York City.

Employers also should carefully document the legitimate, nondiscriminatory business reasons for all workplace decisions, even minor ones, Moulard and Crotty said.

Until the Supreme Court rules, "employers can continue to support employee affinity groups open to all, adopt structured interview processes to mitigate potential bias in selecting among applicants, and take steps to ensure a more diverse pool of job candidates," Burke said.