On Friday, August 18, the US Court of Appeals for the Fifth Circuit issued a landmark decision overturning nearly 30 years of precedent limiting plaintiffs in Title VII cases to claims based on “ultimate employment decisions.” Where previously employment discrimination claims were limited to actions such as “hiring, granting leave, discharging, promoting, and compensating,” employees can now pursue claims based on any discriminatory practice that alters the “terms, conditions, or privileges of their employment.”

Here is what employers need to know:

Facts leading to the change of law

Nine female correctional officers employed by the Dallas County Sheriff’s Department filed suit under Title VII for sex-based employment discrimination. The guards alleged that prior to April 2019, shift schedules were determined based on seniority, rather than any discriminatory characteristic. However, the guards alleged that in April 2019, the county changed its policy, only allowing male officers full weekends off while requiring female officers to work over the weekend.

The lawsuit was dismissed at the early stages of litigation, as the Fifth Circuit previously held that only an “ultimate employment decision” could form the basis of a claim under Title VII. Because the female officers did not raise a claim related to discharge, hiring, promotion, compensation, or any other “ultimate employment decision,” their case was dismissed.

Fifth Circuit changes precedent

Looking at the plain language of Title VII, the Fifth Circuit overturned its prior precedent. Title VII makes it unlawful for employers “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 ….”

The court noted that “terms, conditions, or privileges of employment” is broad, and referenced US Supreme Court precedent holding that an adverse employment action that can support a Title VII claim need not be limited to “economic” or “tangible” employment discrimination.

Applying the language of the statute to the claims brought by the correctional officers, the court held that the “days and hours that one works are quintessential ‘terms or conditions’ of one’s employment.” “[B]y switching from a seniority-based scheduling system to one based on sex,” the court concluded, “the County plausibly denied the Officers the ‘privilege’ of seniority because of their sex.”

Takeaways for employers

For many years, employers and human resources directors have been familiar with the entrenched Fifth Circuit standard — an employee may sue an employer for discrimination only in an “ultimate employment decision.” This standard no longer applies.

Where previously aggrieved employees could bring claims under Title VII only for actions like failure to hire, failure to promote, termination, failure to grant leave, and pay disparity, now employees may seek relief under Title VII for any act that alters the “terms, conditions, or privileges” of their employment. While it remains to be seen how the courts precisely define this new standard, a much broader range of claims will now be permitted.

It is now more important than ever for employers to reevaluate their policies in all aspects of employment. Nondiscrimination should extend beyond merely hiring, firing, and pay. Employers should have policies in place to prevent discrimination, harassment, and retaliation on the basis of any protected characteristics in all aspects of employment as well as procedures for employees to report grievances.