One of the bedrock principles of employment law is that discrimination based on protected status (race, national origin, sex, etc.) is illegal under Title VII only if it affects an individual’s “compensation, terms, conditions, or privileges of employment[.]” 42 U.S.C. § 2000e-2(a). This is often referred to as the adverse action requirement.
The adverse action requirement is usually met without difficulty – for example, where an employee is demoted, terminated, or paid a lower hourly rate. A harder question, however, is whether an employee who is laterally transferred, or is denied a lateral transfer request, has suffered adverse action. (A lateral transfer involves a change in department or office assignment, but no corresponding effect on salary, benefits, etc.). In a hotly disputed decision, the D.C. Circuit recently concluded that the answer to this question is “no.” Ortiz-Diaz v. Dep’t of Housing & Urban Development, No. 15-5008 (D.C. Cir. Aug. 2, 2016).
Samuel Ortiz-Diaz started working for the U.S. Department of Housing & Urban Development (HUD) in April 1998. Two years later, he was reassigned from his Puerto Rico office to an office in Hartford, Connecticut so that he could be closer to his wife, who worked in Albany, New York. In 2009, Ortiz-Diaz sought and accepted a promotion to a GS-14 position in Washington, D.C.
The following year, Ortiz-Diaz applied for a position with HUD in New York City but was not chosen. Later that year, Ortiz-Diaz accepted a GS-13 position in HUD’s Albany Office of Public and Indian Housing. He then attempted to utilize HUD’s no-cost, voluntary transfer program in order to be closer to his wife, requesting a position in Albany or Hartford. The HUD program considers applicants as vacancies arise, with no guarantee that the applicant’s request will be approved. John McCarty, Ortiz-Diaz’s boss, denied the request on the ground that there was no comparable position available in Albany and no vacancy in Hartford.
Believing that McCarty denied the transfer because Ortiz-Diaz is Hispanic, Ortiz-Diaz filed a lawsuit claiming race and national origin discrimination under Title VII. HUD moved for and was granted summary judgment, as the district court concluded that the denial of Ortiz-Diaz’s lateral transfer request did not constitute adverse action. Ortiz-Diaz then appealed.
In a 2-1 decision, the court affirmed the grant of summary judgment. As the court noted, Ortiz-Diaz suffered no loss of pay or benefits as a result of his transfer requests being denied. Furthermore, although the court observed that “a lateral transfer that increased promotion prospects might qualify” as adverse action, Ortiz-Diaz had presented only his own belief that the denied transfer hurt his future chance of promotion.
Judge Kavanaugh concurred in the result on the narrow ground that precedent compelled the outcome, though he noted his skepticism with those cases. Left to his own devices, Judge Kavanaugh would have concluded that “a forced lateral transfer – or the denial of a requested lateral transfer – on the basis of race is actionable under Title VII.”
Judge Rogers dissented, noting that the First Circuit had concluded that the denial of a lateral transfer can be adverse action if the plaintiff can show the impact it had on him or her, as well as evidence that transfer requests were typically granted to other employees outside the protected class. Furthermore, because Ortiz-Diaz had provided undisputed affidavit testimony that the job experience he could obtain if his transfer request were granted would enhance his likelihood of future promotion, Judge Rogers would have allowed the case to proceed to trial.
The decision is consistent with precedent requiring that employees suffer some significant change in responsibilities or other terms and conditions of employment in order to claim adverse action. An employee’s own unhappiness or dissatisfaction, however severe, is simply not enough.