Recent anti-discrimination suits could impact DEI initiatives

A federal appeals court just made it harder for some employers to defend against discrimination claims, and the ruling could set up a big Supreme Court fight that may put diversity, equity, and inclusion programs in jeopardy nationwide.

The 5th Circuit Court of Appeals on Aug. 18 ruled that employers violate Title VII’s prohibition on sex discrimination when they treat women differently than men in any aspect of employment—and whether the treatment is an “ultimate employment decision” is no longer relevant.

With this one decision, the 5th Circuit—which has jurisdiction over employers in Louisiana, Mississippi, and Texas—went from being the appeals court most favorable for employers to one most favorable for workers suing those employers. If the court’s reasoning stands, the case could transform employers’ DEI initiatives in every state.

The 5th Circuit case

The Dallas County Sheriff’s Department gave detention officers two days off each week. It formerly used seniority to assign weekends off, but then switched to a sex-based system: Male detention officers could take both Saturdays and Sundays off, but women never could.

The women sued, but a trial court threw out their case, reasoning that for the past 30 years, the standard within the 5th Circuit was that unless someone claiming sex discrimination suffered an “ultimate employment decision,” they could not sue. Ultimate employment decisions included hiring, granting leave, firing, promoting, and compensating—but not scheduling.

On appeal, the full 5th Circuit reversed precedent and said the plain language of Title VII bars discrimination “with respect to … compensation, terms, conditions or privileges of employment.” Conditions and privileges, said the court, certainly includes scheduling days off.

In a concurring opinion, Judge James C. Ho wrote that the law’s plain text was clear—and then quoted two 2023 Supreme Court decisions that analyzed statutory language also involving the Civil Rights Act.

In Groff v. DeJoy, the Supreme Court said employers that want to turn down an employee’s request for religious accommodation can only do so if they can prove granting it would cause substantial economic harm—an undue hardship.

In Students for Fair Admissions v. President and Fellows of Harvard College, the Supreme Court struck down affirmative action in college admissions, noting that such programs put some applicants at a disadvantage strictly because of a protected characteristic such as race.

Ho went on to state that, “… our decision today will help restore federal civil rights protections for anyone harmed by divisive workplace policies that allocate professional opportunities to employees based on their sex or skin color, under the guise of furthering diversity, equity, and inclusion.” (Hamilton, et al., v. Dallas County, 5th Cir., 2023)

Pending Supreme Court case

On June 30, 2023, the U.S. Supreme Court agreed to hear Muldrow v. St. Louis, another Title VII employment case. The plaintiff in that case, Jatonya, was a sergeant with the St. Louis Police Department. She sued for sex discrimination when her supervisor transferred her from the intelligence division to a patrol role, allegedly because he wanted a man to hold the intelligence division job.

As with the detention officers in Hamilton, et al., v. Dallas County, Jatonya did not lose any pay or other benefits and thus did not experience “a significant employment disadvantage,” much like the ultimate employment decision the Dallas detention officers didn’t experience.

The question the Supreme Court will answer in Muldrow v. St. Louis is whether “Title VII bars discrimination in transfer decisions if a court has not determined … that the transfer decision caused a significant disadvantage.” If the court concludes—as the 5th Circuit did in Hamilton—that Jatonya only needs to prove her supervisor preferred a male over a female and transferred her because she is a female, then any DEI program that similarly offers an advantage to one protected class over another may violate Title VII’s employment provisions. A decision is expected sometime in 2024.

Advice: Employers should be aware that any differences in working conditions that favor one protected class over another may be held to violate Title VII. Work with your attorney to carefully review all policies, decisions, and programs in light of this emerging development.