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January 30, 2019

Legal Update
Kenneth N. Thayer

Employer’s denial of a lateral transfer can form the basis for a discrimination claim: What employers should know about Yee v. Mass. State Police

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In Yee v. Mass. State Police, the Supreme Judicial Court held that an employer’s alleged discriminatory failure to grant an employee’s request for a lateral transfer may constitute an “adverse employment action” under the Massachusetts Fair Employment Practices Act, G.L. c. 151B. In doing so, the SJC overturned a lower court’s summary judgment ruling that the employee, a Chinese Asian-American lieutenant in the State police, had not presented sufficient evidence to show that the denial of a transfer to another troop, where his title, salary and benefits would remain the same, was an action that materially changed the “objective aspects” of his employment. Yee claimed that the transfer would have presented more opportunities for overtime and detail work, and he presented evidence that a white officer who transferred to the other troop had earned more overtime and detail pay than while working in Yee’s troop. Although the lower court characterized Yee’s evidence as “entirely anecdotal” because it reflected the experience of only one of nine potential “comparators,” the SJC concluded that the evidence was sufficient to satisfy Yee’s burden, at least at the summary judgment stage.

Because the lower court never reached the issue of whether Yee met his evidentiary burden on the issue of discriminatory animus, the SJC remanded the case back to the motion judge to consider whether the State police could articulate a legitimate, nondiscriminatory explanation for denying the transfer and, if so, whether Yee could put forth evidence that this explanation was not the real reason for the State police’s action.

The key takeaways from this new decision are summarized below:

1.  Lateral transfers may constitute adverse employment action

To assert a successful discrimination claim under G.L. c. 151B, employees must show that they suffered some adverse employment action based upon their membership in a protected class, such as age, race or gender. In Yee, the SJC construed the phrase “adverse employment action” broadly to encompass not only demotions, denials of promotion or terminations, but any actions that “would deprive the employee of the potential to earn additional compensation.” The Court agreed with Yee that the State police’s decision to deny his transfer was adverse because it was reasonable to infer that the new troop where he sought to be transferred would have provided “material differences . . . in the opportunity for compensation,” specifically in the form of opportunities for overtime and detail work.  Critically, the Court recognized that an employee’s opportunity to earn additional compensation is “an objective indicator of desirability” and, consequently, denying the employee that objectively desirable opportunity will be deemed adverse action by an employer.

2.  Employees may survive summary judgment even on a “sparse” factual record         

In order to defeat an employer’s motion for summary judgment and reach a trial on the merits of a discrimination claim, employees must produce evidence that (1) they are members of a protected class under G.L. c. 151B, (2) they performed their job at an acceptable level, (3) they were treated differently from otherwise similarly-situated employees who were not members of their protected class, and (4) they suffered an adverse employment action as a result. In Yee, the State police argued that Yee did not meet his burden of showing that the transfer he sought would have necessarily yielded greater compensation opportunities, as he only pointed to one other “comparator” and, as the lower court concluded, he offered no evidence that he would have worked the same overtime and details as the other officer. While acknowledging that Yee’s evidence—the change in earnings of a single officer—was “rather sparse,” the SJC nonetheless found that Yee had met his “modest” burden at the summary judgment stage. The SJC did warn Yee, however, that “evidence from a single comparator might prove to be insufficient to prevail at trial.”

3.  Employers must be prepared to justify their subjective employment decisions     

Noting that the motion judge on remand may permit the parties to supplement their evidence, the SJC emphasized the importance of a “developed factual record” in evaluating “discriminatory animus,” especially because the State police’s procedures for determining lateral transfers were “wholly subjective” and were not governed by any written policies. Citing an earlier SJC decision, the Court warned that, in cases where an employer’s actions are based solely on subjective considerations, the “opportunity for unlawful bias is particularly great.” This cautionary note highlights the importance to employers of documenting the legitimate, nondiscriminatory factors that form the basis for adverse employment actions, particularly when those factors appear to be purely subjective.