Friday, June 23, 2017

EEOC v. AutoZone: Is it per se unlawful to limit, segregate, or classify employees because of race?

In EEOC v. AutoZone, Inc., No. 15-3201 (June 20, 2017), the Seventh Circuit held that a plaintiff alleging that a transfer violates Title VII's provision making it unlawful to "limit, segregate, or classify his employees" must establish that the transfer constitutes a materially adverse employment action. In so holding, the court rejected the EEOC's contention that any action to limit, segregate, or classify employees because of race or another protected characteristic constitutes a per se Title VII violation.

In this case, the EEOC alleged that the defendant violated Title VII of the Civil Rights Act of 1964 when it transferred a black sales manager, Kevin Stuckey, to another store because it wanted to make the location from which he was being transferred a "predominantly Hispanic" store.

If the EEOC had alleged a violation of 703(a)(1), which prohibits discrimination with respect to terms, conditions, and privileges of employment, it would have been undisputed that the EEOC would have been required to show that the transfer was materially adverse, meaning that the transfer affected Stuckey's pay or promotion opportunities or otherwise made him worse off. The EEOC, however, instead alleged that the transfer violated section 703(a)(2), which makes it unlawful for an employer to "limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adverse affect his status as an employee, because of such individual's race, color, religion, sex, or national origin." In the EEOC's view, by alleging a violation under 703(a)(2), it was not required to show that Stuckey's transfer was materially adverse. Rather, the transfer was actionable so long as the defendant had limited, segregated, or classified Stuckey based on his race.

In rejecting the EEOC's argument, the court explained:
This argument eliminates much of the statutory text. Or more precisely, it leaves much of the statutory text with no meaningful work to do. If it's not necessary to show that the challenged employment action "deprive[d] or tend[ed] to deprive" the employee of employment opportunities "or otherwise adversely affect[ed] his status as an employee," what is the point of this statutory language? We read § 2000e-2(a)(2) to require case-specific proof that the challenged employment action had these effects.
Unfortunately, the EEOC may have missed an opportunity to provide some real guidance on the scope of section 703(a)(2).  Even if that provision does not cover all actions involving limiting, segregating, or classifying, its coverage of any adverse effect on "employment opportunities" or on an individual's "status as an employee" may nevertheless be broader than 703(a)(1)'s coverage of discriminatory terms, conditions, and privileges of employment. The EEOC, however, chose to advance an extreme interpretation that ignored part of the statute. No wonder the EEOC had its head handed to it.






This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.