Employee Transfers May Be Considered 'Adverse Actions': Fourth Circuit Provides Guidance

By Michael W. Mitchell and Edward Roche

Employers should be aware of the risk of liability under anti-discrimination and anti-retaliation statutes when transferring employees to other positions.

A recent decision of the U.S. Court of Appeals for the Fourth Circuit considered whether an employer subjected an employee to an "adverse action" when the employer granted an employee’s request to transfer to a new position, a transfer that later turned out to be unsatisfactory to the employee. An adverse action is a prerequisite to an employee’s claim of discrimination or retaliation under the Americans with Disabilities Act (ADA). The concept of an adverse action is central to employment law even beyond the ADA. Employees’ claims under other federal employee-protection statutes—including the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, and the Age Discrimination in Employment Act of 1967—also require an adverse action.

Background on 'Laird v. Fairfax County'

The plaintiff had served 25 years in the County government, working her way up through various positions and eventually becoming a contract specialist in the procurement division. After the plaintiff was diagnosed with multiple sclerosis, she asked her boss if she could telework as she needed to. Her boss agreed they could try the as-needed telework arrangement and revisit the issue periodically.

This arrangement did not work well for the County. The plaintiff’s boss wanted the plaintiff to have more visibility and a more predictable schedule. The County changed the plaintiff’s schedule to allow the plaintiff to telework two days a week, provided that she would attend scheduled meetings in person even if they fell on scheduled telework days. The plaintiff believed that the new schedule did not sufficiently accommodate her disability, and she filed a complaint with the Equal Employment Opportunity Commission (EEOC). But the parties discussed the issue and ultimately settled on a working arrangement that would accommodate the plaintiff’s disability and would work for the County.

The settlement involved a transfer to the County police department, in a role that was related to her previous position in that it involved providing uniforms and equipment to the department. The two positions were at the same pay grade. But the plaintiff was unsatisfied with the new job. She viewed it as a boring, thankless job, and worried that it limited her opportunities for future promotion.

The plaintiff sued the County, raising two claims under the ADA. She alleged that the County unlawfully discriminated against her by "demoting" her because of her multiple sclerosis. Second, she asserted that the County "demoted" her in retaliation for filing the EEOC complaint. The district court ruled in the County’s favor, and the plaintiff appealed to the Fourth Circuit.

The ADA’s 'Adverse Action' Requirement

A plaintiff can prevail on a disability discrimination claim only if the employer subjected her to an adverse action because of her disability (in Laird, the plaintiff’s multiple sclerosis). Likewise, a plaintiff cannot win on a retaliation claim unless the employer took an adverse action because of her protected conduct (in Laird, the plaintiff’s EEOC complaint).

As the Fourth Circuit explained in Laird, there is a slight difference in what qualifies as an adverse action for each type of claim. For a disability discrimination claim, the adverse action must be one that affects the employer’s employment or her workplace conditions. In contrast, an adverse action for a retaliation claim can include action taken outside the workplace. For example, a terminated plaintiff could claim that—in retaliation for her filing an EEOC complaint or taking other adverse action—her former employer withheld her final paycheck or provided a negative reference to a future employer.

Any kind of adverse action, for any claim under the ADA, must result in a significant detriment to the employee.  An action that causes trivial harm or discomfort does not suffice.

The Fourth Circuit’s Decision in Laird

On appeal, the Fourth Circuit determined that the evidence showed that the County had not subjected the plaintiff to an adverse action. The plaintiff had consented in the settlement agreement to the transfer to the new position. As a result, regardless of any harm she suffered, the County had not taken an adverse action.

One of the three Fourth Circuit judges deciding the appeal, Judge Wynn, wrote separately to explore the question of how the ADA would protect an employee who agreed to a transfer in the face of significant pressure from the employer. Judge Wynn explained that—though an employer does not take adverse action when an employee voluntarily requests a transfer—"a request for a transfer is not 'voluntary' if an employee is subject to work conditions sufficiently intolerable to force them to seek a transfer."

Forcing an employee to request a transfer to an inferior position is known as a "constructive demotion." The Fourth Circuit has not yet had the opportunity to decide whether a constructive demotion constitutes an adverse action for ADA purposes. But Judge Wynn’s concurring opinion suggests the Fourth Circuit might consider a constructive demotion to be an adverse action, in keeping with the decisions of other federal appeals courts. The recognition of constructive demotion seems to parallel the well-established understanding that a "constructive discharge"—making working conditions intolerable to force an employee’s resignation—is an adverse action.

Judge Wynn’s discussion of constructive demotion made no difference in the circumstances of the case—as the employee in Laird was not arguing that the County had forced her to accept the transfer to the police department—but his concurrence does suggest how the Fourth Circuit might rule in future cases involving ADA claims based on employee transfers. Accordingly, it provides helpful guidance to employers in navigating these situations.

Takeaways from the 'Laird' Decision

The Fourth Circuit’s decision highlights the care employers must take in making internal transfers to accommodate employees’ disabilities or illnesses. Employers similarly must take care in making transfers in the wake of employees’ exercise of their protected rights, such as filing EEOC complaints.

Any transfer that could be considered a demotion—a reduction in salary or benefits, or a significant change in job title, responsibilities, or promotion prospects—could be an adverse action. The transfer still may be an adverse action even with the employee’s consent if the employee’s work situation effectively forced her to request a transfer. Where an employee requests a transfer of her own free will, the employer should keep detailed documentation of the request and the surrounding circumstances.

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This article was first published on LAW.COM on December 7, 2020, and is republished here with permission. ©2020 ALM Media Properties, LLC. All rights reserved.