Whenever one of your employees files a discrimination claim, you now need to be ultracautious about making any changes to that employee's job. That's because almost any change—including lateral transfers with the same pay and title—can now be deemed an illegal "adverse employment action" by the court.
Lawsuits claiming retaliation have spiked in recent years, and a 2006 U.S. Supreme Court decision only added fuel to the fire. That ruling established a broader new definition of "retaliation," essentially making it easier for employees to file and win retaliation cases. (Burlington v. White)
If you must transfer employees after they file complaints, make sure the new position is truly equivalent to the old one, not just in title and pay but in responsibility and duties. If the transfer even smells a bit like punishment, a court could see it as an "adverse action" and declare it illegal retaliation.
Recent case: Richard Kessler, a Jewish white male, managed 100 employees and oversaw social-service programs in Westchester County. When he thought he was passed over for promotions in favor of females and non-Jewish males, he complained to the New York State Division of Human Rights and the EEOC.
Shortly after, the county transferred Kessler to another office. He kept the same pay and title but no longer supervised anyone and was told to complete certain clerical tasks.
Kessler filed a retaliation claim, and the 2nd Circuit Court of Appeals sided with him. The court said a reasonable person would see the transfer—even if it didn't affect his pay or perks—as punishment for filing the complaint. (Kessler v. Westchester County, et al., No. 05-2582, 2nd Cir., 2006)