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Important Developments in Employee Discrimination

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For decades, Title VII of the Civil Rights Act of 1964 has aimed to define employment discrimination. Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. However, confusion has arisen about when and under what circumstances these governing words apply.

A recent Supreme Court case has shed some light on this confusion, prompting employers to reconsider the meaning of the term “adverse action.”

The Federal Standard

Historically, workplace discrimination cases involved a breach of conduct on the basis of the aforementioned protected categories that directly affected compensation, terms, conditions, or privileges of employment.

But what exactly constitutes a term or condition in a workplace discrimination claim? Must there be a direct economic implication or formal adverse action?

The U.S. Supreme Court recently offered its take on these questions.

Muldrow v. City of St. Louis, et al.

This case involved a female police officer who was transferred and ultimately replaced by a male police officer while retaining the same pay and rank. In other words, neither her compensation nor her employment privileges were affected. However, specific terms of employment (i.e., location) were altered.

Both the trial and appeals courts ruled in favor of the police department, finding that no “materially significant disadvantage” was caused and did not result in “a diminution to her title, salary, or benefits.”

The U.S. Supreme Court Reverses Ruling

On April 17, 2024, the Supreme Court reversed, ruling in favor of the police officer. The Supreme Court holds that while an employee must show some harm resulting from their employer’s action, the harm need not be significant. The Supreme Court explained that Title VII does not require a material impact or ultimate adverse employment action (i.e., termination, withdrawal of offer, demotion, etc.).


The net for employment discrimination has been cast a bit wider than before. Moving forward, employers will need to consider all terms and conditions of employment more carefully, including (but not limited to)  job location, remote capabilities, and perks. The Supreme Court has shown us that these factors can be the basis for a successful employee discrimination lawsuit. Materially significant adverse actions are no longer the sole basis of consideration.

Such a Supreme Court action will likely make diversity and inclusion initiatives more necessary, helping to protect employers from future lawsuits and better positioning organizations susceptible to discrimination claims.

For more legal news and updates, browse our regulatory updates library.

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