Reconsidering, DC Circuit holds that denying lateral transfer can be Title VII adverse action
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Tuesday, August 15, 2017

Reconsidering, DC Circuit holds that denying lateral transfer can be Title VII adverse action

By Lorene D. Park, J.D.

Deciding sua sponte to reconsider a prior decision, and then vacating that decision in an opinion that prompted all three judges on the panel to issue concurrences, the D.C. Circuit has now held that the denial of a Hispanic employee’s request for a lateral transfer could be a materially adverse action under Title VII. Reversing summary judgment against his discrimination claims, the appeals court noted evidence that the locations to which he sought transfer offered better career opportunities and would remove him from the supervision of an individual he claimed was biased against minorities (Ortiz-Diaz v. U.S. Department of Housing & Urban Development, Decided August 2, 2016, Vacated and Reissued August 11, 2017, Rogers, J.).

Employee sees bias. The employee started working for HUD as a criminal investigator in 1998, and transferred to Hartford, Connecticut, in 2000 to be closer to his wife, who was in Albany, New York. By 2009, he was promoted to senior special agent at HUD’s Washington, D.C. headquarters. While working there, the employee observed what he believed was a discriminatory work environment fostered by the Assistant Inspector General who made promotion decisions. For example, the AIG referred to Latino employees as the “hired help.”

Transfer denied. Concluding that his career would suffer at that location, the employee sought to transfer to a field office in Albany or Hartford, which would improve his professional advancement by affording him valuable experience in high-profile work, and would allow him to be closer to Albany, where he and his wife maintained their home. Pursuant to HUD’s voluntary transfer program, employees could request transfer to a different location, at no cost to the government. However, his requests were summarily denied by the AIG, despite the fact that other, non-minority employees had routinely been granted similar transfers. The AIG has since stated that the denials resulted from a lack of an investigative office in Albany and the lack of an open position in Hartford, though many investigators were allowed to work remotely and the Hartford position was filled shortly after the employee’s transfer was denied. The employee resigned in 2011, three months after his transfer was denied.

Prior proceedings. In the employee’s subsequent Title VII suit alleging discrimination based on race and national origin, the district court granted summary judgment for HUD, finding that the denial of his transfer request was not an adverse employment action. The D.C. Circuit, over Judge Rogers’ dissent, affirmed in a 2016 opinion, agreeing that the denial of an employee’s request for a lateral transfer, absent a loss of pay and benefits, was not a materially adverse action. The employee sought en banc review, but before that petition was resolved, the original three-judge panel sua sponte reconsidered its 2016 opinion and reversed summary judgment.

Title VII’s “heartland.” In the majority opinion authored by Judge Rogers (who also penned a short concurring opinion), the court explained that the employee’s “allegation of harm, that he was denied a transfer away from a racially and ethnically biased supervisor to a non-biased supervisor more likely to advance his career, falls within Title VII’s heartland. Although lateral transfers to different positions within a Department offering the same pay and benefits are ordinarily not changes in the ‘terms, conditions, or privileges of employment,’ a discriminatory denial of a lateral transfer away from a biased supervisor can certainly be actionable under Title VII, given the adverse impact on the employee’s potential for career advancement.”

Materially adverse action. The court also pointed out that the employee’s claims involved far more than mere dislike of a supervisor; there was evidence that the AIG’s bias against minorities would have hindered the employee’s career, and that was a “cognizable injury” to his “future employment opportunities.” Thus, the denial of a lateral transfer in these circumstances could constitute a materially adverse employment action.

The appeals court next concluded that he provided sufficient evidence that would allow a reasonable juror to find in his favor. While the district court found that the employee offered only “his own speculation” that a transfer would improve his career opportunities, this was an error of law because the appeals court has repeatedly held that a plaintiff’s sworn declaration can raise a genuine issue of material fact in certain circumstances. Here, among other “objective, non-conclusory statements of fact,” the employee attested that the requested transfer would allow him to gain valuable experience and the special agent in charge at the requested location thought he would be a good fit for the “important, high profile work” done in the region. He also attested to remarks showing bias against minorities on the part of the AIG at headquarters and that transferring would make it less likely for that AIG to deny the employee promotions. There was also evidence that the AIG facilitated transfers for non-minority employees. Based on the foregoing, summary judgment was inappropriate.

Judge Henderson concurs. Concurring in the judgment, Judge Henderson wrote to express reservations about her colleagues’ discussion of the factual record; finding that they appeared to cherry-pick from the factual record concerning the AIG’s alleged racial bias and noting that the same AIG had on one occasion approved the employee’s promotion and had worked to find the employee a comparably attractive job after denying him a New York position. Judge Henderson also expressed reservations over the majority’s broader approach in finding that the denial of lateral transfers can support Title VII claims.

Judge Rogers concurs. In addition to penning the majority opinion, Judge Rogers wrote a concurrence that expressed: “it remains long past time for the en banc court to join its sister circuits to make clear that transfers denied because of race, color, religion, sex, or national origin are barred under Title VII.”

Judge Kavanaugh concurs. According to Judge Kavanaugh, “uncertainty will remain about the line separating transfers actionable under Title VII from those that are not actionable. In my view, the en banc Court at some point should go further and definitively establish the following clear principle: All discriminatory transfers (and discriminatory denials of requested transfers) are actionable under Title VII. As I see it, transferring an employee because of the employee’s race (or denying an employee’s requested transfer because of the employee’s race) plainly constitutes discrimination with respect to “compensation, terms, conditions, or privileges of employment” in violation of Title VII.”

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