Employers in Texas need to be aware of a recent Fifth Circuit holding that will open the door to a wider number of discrimination claims. For almost three decades, employees in Texas have faced a significant hurdle in bringing discrimination claims against employers under federal law. To bring a discrimination claim under Title VII, an employee had to allege and prove an “ultimate employment decision”–such as firing, promoting, and compensating–resulting from the discrimination. Lesser decisions such as policies that discriminated based on sex, race, or other protected classes in setting schedules were deemed not actionable. That changed on August 18, 2023, when the Fifth Circuit reversed precedent it had installed in 1995 and allowed an employee to proceed if they could allege facts plausibly showing an adverse employment action taken against the employee was because of their protected status.

On August 18, 2023, the full (en banc) Fifth Circuit Court of Appeals–which oversees federal cases arising out of Texas, Louisiana, and Mississippi–ruled that a plaintiff (employee) reasonably “alleges a disparate-treatment claim under Title VII if [they] plead[] discrimination in hiring, firing, compensation, or the ‘terms, conditions, or privileges’ of [their] employment.” Hamilton v. Dallas Cnty., No. 21-10133, 2023 WL 5316716, at *1 (5th Cir. Aug. 18, 2023) (emphasis added).  Previously, an employee could only bring a Title VII claim if they experienced discrimination in “ultimate employment decisions” such as hiring, firing, granting leave requests, promoting, or compensating. Id. at *2.

This case arises out of a gender-based scheduling policy Dallas County adopted in 2019 in which “only male officers are given full weekends off[,]” and female officers could only take “weekdays and/or partial weekends off.” Id. 

This policy resulted in sex-based scheduling since “male and female employees perform the same tasks.” Because the County did not dispute the assertion that its policy was sex-based the Fifth Circuit did not analyze this issue. Previously, the district court granted the County’s motion to dismiss the complaint because, under Fifth Circuit existing precedent, the ultimate adverse employment action element of a Title VII case was missing.

On appeal, the Fifth Circuit focused its analysis on the text of Section 703(a)(1) of Title VII, which states, “[i]t shall be an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin[.]” 42 U.S.C. § 2000e-2. As the Fifth Circuit noted, “Congress says what it means and means what it says[]” and “Congress d[oes] not say that Title VII liability is limited to ultimate employment decisions.” Hamilton, 2023 WL 5316716, at *4. Additionally, the text of Section 703(a)(1) of Title VII does not say that it only applies to discrimination claims that result from ultimate employment decisions.

Now in the Fifth Circuit, to plead a disparate-treatment claim under Title VII, a plaintiff must allege facts plausibly showing (1) an adverse employment action, (2) taken against a plaintiff because of their protected status. Id. at *5 (emphasis added).

In this case, the Fifth Circuit had “little difficulty concluding that [the officers] have plausibly alleged discrimination with respect to [their] … terms, conditions, or privileges of employment.” Id. at *6. Days and hours the Officers worked are “quintessential ‘terms or conditions’ of one’s employment[]” and these facts are essential to a “work-for-pay arrangement.” Id. The Officers also argued that the County’s switch from a policy based on seniority to one based on sex has plausibly denied the Officers the “privilege” of their seniority and “a benefit that is part and parcel of the employment relationship may not be doled out in a discriminatory fashion.” Because of this policy switch, “the County has plausibly denied the Officers the ‘privilege’ of seniority because of their sex.” Id.

The issue before the Fifth Circuit is about the standard applied at the pleading stage of a claim. Therefore, the Fifth Circuit did not rule on “the precise level of minimum workplace harm a plaintiff must allege on top of showing discrimination in one’s ‘terms, conditions, or privileges of employment.’” Id. at *8.

Employers should be aware of changes to the interpretation of Title VII. This is a great time to have a qualified attorney review your company’s policies, procedures, and handbook to verify that no revisions or updates need to be made.