The term “adverse action” or “adverse employment action” emerged from a number of federal court cases concerning the enforcement of Title VII of the 1964 Civil Rights Act. Title VII forbids employers from discriminating against employees based on protected characteristics like age, race, religion, gender, and other factors, but the term “adverse action” (and a clear definition of the phrase) cannot be located within the statutory text of Title VII.
Interpretation of conduct that qualifies as adverse action has varied based on the state in which a lawsuit has been filed and the court of appeal where it has been reviewed. Under Title VII, employers are forbidden from discriminating against an employee based on protected characteristics and in a context that impacts “compensation, terms, conditions, or privileges of employment.” Even so, many employers wonder if all forms of termination qualify as an adverse action and how they can ensure legal compliance and best practices in their termination procedures.
In this article, we’ll help employers gain a clear understanding of whether termination counts as an adverse action under employment law, and how employers can protect themselves against potential lawsuits by undertaking corporate training for adverse terminations resulting from performance issues or misconduct.
Adverse Action Defined
Although court interpretations have varied, the Equal Employment Opportunity Commission (EEOC) considers hiring, termination, demotion, pay reduction, suspension, and failure to promote all forms of adverse employment action.
Recently, the U.S. Court of Appeals for The Third Circuit in Fowler v. AT&T, Inc. ruled that even in cases where a notice of termination doesn’t lead to an employee’s permanent dismissal (for instance, a case of horizontal mobility where the employee maintains employment with the employer in a different position or role) still qualifies as an adverse action.
This ruling creates some friction with other federal court rulings that require a “materially adverse consequence” (quantifiable economic loss) for a termination to be viewed as an adverse employment action. Meanwhile, in other U.S. Court of Appeals cases, the categories of employer action that qualify as adverse action are narrower than the EEOC’s definition, including (in some cases) only hiring, termination, and compensation decisions and excluding demotion, failure to promote, suspension, and other potential definitions of adverse action.
Given the wide range of legal interpretations in federal courts regarding the definition of adverse action as it relates to termination and other employer decisions, it is extremely likely that a Supreme Court ruling will eventually clarify all of the following:
- The legal definition of adverse action
- All forms of employer action that qualify as adverse action
- The employee’s burden of proof (“materially adverse consequence[s]”, a preponderance of evidence of discrimination, or otherwise)
Requirements to Demonstrate Employer Discrimination or Retaliation
Broadly speaking, to demonstrate intentional employment discrimination on the part of an employer, an employee must not only prove that they suffered an adverse employment action, but also show that they are a member of a protected class, consistently met the requirements/expectations related to their position, and endured treatment that was different from fellow employees outside of their protected class.
Unlike discrimination cases, The Supreme Court has already asserted a broader view of what constitutes adverse action when it comes to Title VII retaliation and whistleblower cases, defining adverse action as essentially any employer conduct that “dissuade[s] a…worker from making or supporting” a whistleblower or discrimination complaint against their employer, including after their employment period has expired.
Since the definitions of adverse action can vary based on the state in which the claim is filed and the nature of the claim, employers should ensure they implement legally compliant termination practices to mitigate the risk of an employment discrimination claim, especially as it relates to job termination.
Ensure Long-Term Compliance with the Orsus Group
Confused about the legalities surrounding termination and adverse actions? Trust The Orsus Group's expertise in HR services to guide you through complex employment laws. We offer extensive corporate training for adverse terminations, helping you properly and legally handle involuntary employee terminations due to legitimate performance issues, misconduct, and other factors.
Contact us today for personalized assistance that safeguards your business and supports fair employment practices.