In Sol Back v. Bank Hapoalim, B.M., Gil Karni, 2024 WL 4746263 (2d Cir. Nov. 12, 2024), the U.S. Court of Appeals for the Second Circuit vacated a lower court’s dismissal of plaintiff’s claim of sex-based discrimination under Title VII of the Civil Rights Act of 1964.
The district court held that plaintiff did not suffer an “adverse employment action” – either by way of transfer away from her position as the Executive Assistant to the CEO, or her claim of constructive discharge.
The Second Circuit disagreed as to both points. This decision is instructive of the interpretation and application of the Supreme Court’s recent decision in Muldrow v. City of St. Louis, 601 U.S. 346 (2024).
As to the transfer, the court explained:
Title VII makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to [her] compensation, terms, conditions, or privileges of employment, because of such individual’s … sex.” 42 U.S.C. § 2000e–2(a)(1). At the time of the district court’s decision, to adequately allege an adverse employment action, our Circuit required a plaintiff to plead that she “endure[d] a materially adverse change in the terms and conditions of employment.” Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 85 (2d Cir. 2015) (emphasis added) (internal quotation marks and citation omitted). However, shortly after the district court issued its decision, the Supreme Court decided Muldrow v. City of St. Louis, 601 U.S. 346 (2024). Muldrow held that to allege an adverse employment action—such as an adverse transfer—the plaintiff “does not have to show … that the harm incurred was significant[ ] [o]r serious, or substantial, or any similar adjective suggesting that the disadvantage to the employee must exceed a heightened bar.” Id. at 355 (internal quotation marks and citation omitted). Instead, the text of Title VII requires only that a transferee show “some harm respecting an identifiable term or condition of employment.” Id. (emphasis added). In other words, “[t]he transfer must have left her worse off, but need not have left her significantly so.” Id. at 359. Muldrow therefore overruled our precedent, which required that the changes to a term or condition of employment be materially adverse. See id. at 353 & n.1 (listing the “materially adverse” standard and similar formulations as those that require a “heightened threshold of harm”).
Under the standard articulated in Muldrow, Back has sufficiently alleged that she was harmed when, after she was given and declined the option to either “consider a ‘severance package’ ” or move to a different department at BHI, App’x at 25, ¶ 98, she was “transferred to the Compliance Department for a week as a ‘temporary alternative,’ ” id. at 28, ¶ 115. It is reasonable to infer from the complaint that the transfer to the Compliance Department was deemed a temporary one so as to allow additional time for a permanent reassignment to be determined. According to the complaint, Back viewed the transfer away from her position as a demotion because, in her role as an executive assistant, Back acted as “a kind of Chief of Staff to the CEO” and “became the CEO’s main point of contact with” BHI’s highest-ranking executives and directors across the world. Id. at 10, ¶ 21. Thus, Back alleged that her forced transfer to another department, including the Compliance Department, was a “transfer away from the center of power” and “would be perceived by her colleagues for what it was—a demotion.” Id. at 26, ¶ 99. Moreover, it is reasonable to infer from the complaint that Back had never worked in the Compliance Department during her time at BHI. In short, Back has plausibly alleged that the transfer negatively affected the terms and conditions of Back’s employment by, inter alia, impairing her career advancement prospects by removing her from a position in the center of power and placing her into a role for which she lacked experience, while her transfer to another department was arranged. Under Muldrow, such allegations are sufficient to allege an adverse employment action that survives a motion to dismiss.
As to constructive discharge, the court explained:
“An employee is constructively discharged when [her] employer, rather than discharging [her] directly, intentionally creates a work atmosphere so intolerable that [s]he is forced to quit involuntarily.” Terry v. Ashcroft, 336 F.3d 128, 151–52 (2d Cir. 2003). In assessing whether a plaintiff articulated a constructive discharge claim, we ask whether “a reasonable person subjected to the same conditions as the plaintiff would have felt compelled to step down.” Chertkova v. Conn. Gen. Life Ins. Co., 92 F.3d 81, 90 (2d Cir. 1996) (emphasis omitted). “Because a reasonable person encounters life’s circumstances cumulatively and not individually,” id., “a constructive discharge claim can be premised on the cumulative [e]ffect of a number of adverse conditions in the workplace,” Terry, 336 F.3d at 153 n.24.
Considering Back’s allegations of her working conditions cumulatively, we find that she has stated a plausible constructive discharge claim, in connection with her sex discrimination claim, that survives a motion to dismiss.1 According to the complaint, shortly after Back filed her formal whistleblower complaint in December 2021, Karni directed executives to “reduce their interactions with” her. App’x at 23, ¶ 87. Senior management ceased to interact with Back, even though they previously did so on a near daily basis. Karni also became “noticeably hostile,” id. at 22, ¶ 82, and told Back in March 2022 during her annual bonus review: “I don’t get what you are doing at your station” and that she was “not doing her job,” id. at 24, ¶ 92.2 That conversation “stunned” Back, and Karni’s comments in the meeting “suggested, in no uncertain terms … that her job was in danger.” Id. at 24, ¶ 93. A few weeks later, Back was allegedly presented with a choice of either transferring to a different department or leaving the bank altogether. The complaint further alleged that, after Back refused both options, she was forcibly transferred to the Compliance Department on a temporary basis, ostensibly until she was assigned to another department. Construing those allegations cumulatively and most favorably to Back, one could reasonably infer “that the employer made her working condition, viewed as a whole, so difficult or unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign.” Green v. Town of E. Haven, 952 F.3d 394, 405 (2d Cir. 2020) (internal quotation marks and citation omitted); see also id. (“The fact that this substantive standard is an objective one … does not necessarily mean that what a reasonable person in the plaintiff’s shoes would have felt compelled to do is determinable as a matter of law, for an objective question is often fact-specific.”). Accordingly, the district court erred in finding that Back failed to adequately allege a constructive discharge in connection with her sex discrimination claim.
The court further held that plaintiff plausibly alleged adverse employment actions “because of her sex” – specifically, by alleging that “that, although five male executives also made complaints about Karni’s conduct in triggering a COVID-19 outbreak at BHI, they were not disciplined or constructively discharged.”