In an issue of first impression, the Third Circuit Court of Appeals ruled Wednesday, August 12, that a paid suspension does not constitute an adverse employment action under Title VII, joining the unanimous opinion of the six other Courts of Appeal that have considered the issue (the Second, Fourth, Fifth, Sixth, Eighth and Ninth Circuits).

The Plaintiff-Appellant in Jones v. Southeastern Penn. Transp. Auth. et al. was terminated in 2011 by her employer for submitting falsified time sheets, and alleged that her termination was the “culmination of years of unlawful sexual harassment, gender discrimination, and retaliation.”  In December 2010, Plaintiff’s supervisor suspended her with pay after discovering apparent fraud in her timesheets.  Jones immediately filed an EEO charge following her suspension with pay.  Later, after investigation by SEPTA’s Inspector General’s Office confirmed that Jones had committed fraud, she was suspended without pay in February 2011 and formally terminated in April 2011.  The District Court summarily dismissed all of Plaintiff’s claims, specifically finding that a suspension with pay is not an adverse employment action.

The Third Circuit affirmed.  Noting that an adverse employment action is one that is “serious and tangible enough to alter an employee’s compensation, terms, conditions, or privileges of employment,” the Court found that a paid suspension does not meet this standard.  “[B]y design” a paid suspension does not affect compensation, “[n]or does it effect a ‘serious and tangible’ alteration of the ‘terms, conditions, or privileges of employment’ . . . because ‘the terms and conditions of employment ordinarily include the possibility that an employee will be subject to an employer’s disciplinary policies in appropriate circumstances.’”

Suspending an employee with pay pending an investigation into misconduct is an important tool for employers to separate a possible offender from the workplace with minimal conflict while an appropriate review may take place.  Employers can add the Third Circuit to the list of jurisdictions where they may act confidently and without distress when utilizing this tool.  While a number of other Circuit Courts have not yet considered the issue, the growing tide of those that have presents additional compelling arguments in favor of the adoption of this bright-line rule nationwide.