Why it matters

In a victory for the employer, the Third Circuit Court of Appeals recently concluded that a paid suspension does not "typically" constitute an adverse employment action under Title VII. The case involved an employee suspended with pay while her employer investigated claims that she had submitted fraudulent timesheets. When the investigation determined she had forged the records, the employee was terminated. She then filed suit alleging discrimination and retaliation in violation of Title VII. A federal district court granted summary judgment for the employer and the federal appellate panel affirmed. The employee failed to establish that she was the subject of an adverse employment action as required by the statute because the suspension was not a refusal to hire or a termination, nor did it change her compensation or alter the terms, conditions, or privileges of employment, the panel wrote. Since the issue was a matter of first impression, the court looked to other circuits and joined the chorus of the Second, Fourth, Fifth, Sixth, and Eighth Circuits, which have reached a similar decision.

Detailed discussion

Does a suspension with pay constitute an "adverse employment action" under the discrimination provision of Title VII? The Third Circuit Court of Appeals answered in the negative in a case brought by Michelle Jones.

Jones had worked as an administrative assistant for the Southeastern Pennsylvania Transportation Authority, or SEPTA, for nine years when she was suspended with pay by her supervisor because of apparent fraud in her timesheets. While on suspension, Jones filed a claim alleging that her supervisor had sexually harassed and retaliated against her.

When an extensive investigation concluded that Jones collected pay for days she hadn't worked by submitting fraudulent timesheets, SEPTA suspended her without pay and then formally terminated her. The company also completed its investigation into Jones' allegations of sexual harassment, finding that the supervisor engaged in inappropriate behavior by once asking Jones to step on his back to relieve spinal pain. He was required to attend a training session and his lapse in judgment was noted in his performance review.

Jones then filed suit against SEPTA alleging discrimination and retaliation in violation of Title VII. A federal district court judge granted the employer's motion to dismiss and the Third Circuit Court of Appeals affirmed.

"We have described an adverse employment action 'as an action by an employer that is serious and tangible enough to alter an employee's compensation, terms, conditions, or privileges of employment,' " the panel wrote, based on the language found in Title VII.

"A paid suspension pending an investigation of an employee's alleged wrongdoing does not fall under any of the forms of adverse action mentioned by Title VII's substantive provision," the court said. "A paid suspension is neither a refusal to hire nor a termination, and by design it does not change compensation. Nor 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.' "

Without more, a suspension with pay "is not an adverse employment action under the substantive provision of Title VII," the panel wrote, joining other federal circuits that have reached similar conclusions, including the Second, Fourth, Fifth, Sixth, and Eighth Circuits.

Applying this legal standard, "we readily agree with the District Court that Jones's suspension with pay did not constitute an adverse employment action," the court said. "Having failed to marshal evidence that her suspension with pay was atypical in any way, Jones's argument fails."

Further, the record was "devoid" of evidence to support the assertion that her suspension and termination were products of discrimination instead of the natural result of SEPTA's investigation into allegations of timesheet fraud, the panel added.

As for Jones' claim that SEPTA's decisions to suspend her without pay and then terminate her were acts of retaliation, the court said she lacked a causal connection or evidence that her complaints of harassment caused SEPTA to discharge her. The court noted that it did not consider or decide whether a paid suspension constitutes an adverse action in the retaliation context.

To read the opinion in Jones v. Southeastern Pennsylvania Transportation Authority, click here.