On August 12, 2015, the Third Circuit – the federal appellate court with jurisdiction over Pennsylvania – held that an employer’s decision to suspend an employee with pay was not an “adverse employment action” under Title VII of the Civil Rights Act of 1964.  Because this was an issue of first impression in the Third Circuit, Pennsylvania employers need to be aware of the case.

Title VII forbids employers “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”  In order to state a case for discrimination, a plaintiff must usually prove that there was an adverse employment action of some kind.  In prior opinions, the Third Circuit described an adverse employment action “as an action by an employer that is serious and tangible enough to alter an employee’s compensation, terms and conditions, or privileges of employment.”

In this case, Michelle Jones sued her employer, Southeastern Pennsylvania Transportation Authority (SEPTA), under Title VII claiming that her termination was due to unlawful sexual harassment, gender discrimination and retaliation.  Part of Jones’ claims were based on the actions SEPTA took during an investigation as to whether she submitted fraudulent timesheets to SEPTA.  During the investigation, SEPTA suspended her with pay.  At the conclusion of the investigation, she was terminated when it was determined that she collected pay for days that she did not work.

In issuing their opinion, the Third Circuit agreed with the District Court which first heard the case that a suspension with pay – in and of itself – did not constitute an adverse employment action because, “[a] paid suspension is neither a refusal to hire nor a termination, and by design it does not change compensation. Nor does it affect ‘serious and tangible’ alteration of the ‘terms, conditions, or privileges of employment.’”    While it was at it, the Court brushed off Jones’ other claims, too, finding that any adverse action she may have actually suffered was not sufficiently linked to any alleged misconduct to support a claim of discrimination or retaliation.

While it would seem to make sense on the surface that a suspension with pay should not be considered an adverse action, and while many other courts have reached a similar conclusion, this is the first time the issue went to the highest federal Court with jurisdiction over Pennsylvania.  Employers there can now rest assured that they may continue to take such a step in legitimate workplace investigations, if necessary, without worrying that they are likely to be found responsible for discrimination for that act alone.

Marcia DePaula focuses her practice in the areas of labor and employment law and higher education. She represents hospitals, manufacturers, banks and corporate clients in complex litigation. Ms. DePaula defends employers before administrative agencies, including the Pennsylvania Human Relations Commission and the Equal Employment Opportunity Commission, and in state and federal courts for claims involving employment discrimination, harassment, Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA).
» See more articles by Marcia L. DePaula
» Read the full biography of Marcia L. DePaula at Steptoe & Johnson