Why it matters

Denying an employee a lateral transfer can be an adverse employment action, the U.S. Court of Appeals, D.C. Circuit recently held, vacating an earlier panel decision. An employee of the U.S. Department of Housing and Urban Development (HUD), Samuel Ortiz-Diaz, observed what he believed to be a discriminatory work environment, with a supervisor who referred to Hispanic employees as the “hired help,” for example. Ortiz-Diaz asked for a lateral transfer out of the D.C. office where he worked, but his request was denied, despite the fact the agency had a policy of permitting such transfers and other, nonminority employees had their requests granted. He sued, and a district court granted summary judgment in favor of HUD, holding that the denial of a lateral transfer request was not an adverse employment action. Although the D.C. Circuit initially affirmed, the three-judge panel then sua sponte decided to reconsider the case, vacating the initial opinion and reversing the summary judgment ruling. In a new opinion, the court concluded that the denial of an employee’s request for a lateral transfer could be a materially adverse action under Title VII, reversing and remanding the case.

Detailed discussion

Samuel Ortiz-Diaz began his career with the U.S. Department of Housing and Urban Development (HUD) in the Hartford, CT, office, transferring to Washington, D.C., in 2009 with the hopes of enhancing his career prospects. There, Ortiz-Diaz observed what he believed was a discriminatory work environment fostered by a supervisor.

The supervisor referred to Hispanics as “hired help,” said that all Latinos “look alike,” and involuntarily transferred Ortiz-Diaz and an African-American investigator to Mississippi in the wake of Hurricane Katrina over Ortiz-Diaz’s protest, even though nonminority investigators who protested were not transferred. Ortiz-Diaz also learned of discrimination complaints filed against the supervisor by other workers.

Concerned about his future prospects, Ortiz-Diaz requested a transfer to Hartford or Albany pursuant to HUD’s no-cost voluntary transfer program. Involved in the approval process was the allegedly discriminatory supervisor, who denied both requests without explanation. Ortiz-Diaz resigned a few months later and filed a Title VII lawsuit.

A district court judge granted HUD’s motion for summary judgment, ruling that denial of a lateral transfer did not constitute an adverse employment action under the statute. On first review, the U.S. Court of Appeals, D.C. Circuit affirmed. But the three-judge panel then sua sponte decided to reconsider the case and vacated its opinion.

After a second pass at the case, the panel reversed summary judgment in favor of the employer and remanded the case.

“Ortiz-Diaz’s allegation of harm, that he was denied a transfer away from a racially and ethnically biased supervisor to a non-biased supervisor more likely to advance his career, falls within Title VII’s heartland,” the court said. “Although lateral transfers to different positions within a Department offering the same pay and benefits are ordinarily not changes in the ‘terms, conditions, or privileges of employment,’ a discriminatory denial of a lateral transfer away from a biased supervisor can certainly be actionable under Title VII, given the adverse impact on the employee’s potential for career advancement.”

Nothing in the court’s precedent required a contrary result, the panel noted, and other circuits have reached a similar conclusion, including the First, Second and Seventh.

The plaintiff’s Title VII claims “involve far more than a mere dislike of” the supervisor, or a subjective preference to work in another office location, the court wrote. Instead, “Ortiz-Diaz proffered evidence that [the supervisor’s] bias against minorities would have hindered his career advancement if he remained at headquarters, and that a transfer to work under [another boss’s] supervisor would have improved the likelihood that his career could advance based solely on merit.”

Title VII promises Ortiz-Diaz “nondiscriminatory consideration for [a no-cost transfer] where consideration is held out as a privilege of employment,” the court added.

Further, the panel found that the plaintiff provided sufficient evidence to allow a reasonable juror to find in his favor, as he offered his statements about the opportunities available to him at the other offices and the statements made by the supervisor indicating his bias. In addition, HUD confirmed that other discrimination complaints had been made against the supervisor and a coworker filed an affidavit about the supervisor’s bias.

“[I]n the context of Ortiz-Diaz’s particular claim, it logically follows that the stronger his showing that [the supervisor] discriminated against him in denying the transfers, the stronger his claim that remaining with [the supervisor] at headquarters would have materially harmed his career,” the court said.

To read the opinion in Ortiz-Diaz v. U.S. Department of Housing and Urban Development, click here.