Opinion ID: 26085
Heading Depth: 2
Heading Rank: 1

Heading: Whether the Denial of a Pay Increase Can Be

Text: an “Adverse Employment Decision” TDH argues that the district court properly interpreted Mattern as holding that pay increase denials are not “ultimate employment decisions” as a matter of law, and thus cannot form the basis of a Title VII claim. Fierros contends that this court should repudiate its “ultimate employment decision” doctrine because it is contrary to the Supreme Court’s decisions in 1 In the district court, Fierros claimed that TDH retaliated against her by subjecting her to unjustified disciplinary actions (i.e., the two “counseling sessions”) as well as by denying her the merit pay increase. On appeal, however, she bases her retaliation claim only on the pay increase denial. Accordingly, we do not address whether the disciplinary counseling sessions constitute adverse employment actions for Title VII purposes. 8 Robinson v. Shell Oil Co., 519 U.S. 337 (1997), Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775 (1998). According to Fierros, these three decisions indicate that this court’s “ultimate employment decision” doctrine improperly narrows the scope of Title VII by excluding employment actions such as pay increase denials from the statute’s protection.2 2 In Robinson, Burlington Industries, and Faragher, the Supreme Court’s holdings expanded the category of “employment actions” that may provide the basis for liability under Title VII. In Robinson, the Court held that actions by former employers are included within the anti-retaliation provision of Title VII. 519 U.S. at 346. In Burlington Industries and Faragher, the Court held that an employer may be held vicariously liable for an employee’s sexual harassment claim in cases in which a “tangible employment action” did not occur. See Burlington Indus. 524 U.S. at 765-66; Faragher, 524 U.S. at 807. In addition to the generally expansive nature of these cases, Burlington Industries and Faragher are noteworthy in the context of this court’s “ultimate employment decision” doctrine because the Supreme Court sets out a relatively broad definition of “tangible employment action”: “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” Burlington Indus., 524 U.S. at 761; see also Faragher, 524 U.S. at 790 (stating that tangible employment actions include “hiring, firing, promotion, compensation, and work assignment”). In pointing to Burlington Industries, Fierros undoubtedly relies on the Court’s conclusion that “[i]n the context of this case, a tangible employment action would have taken the form of a denial of a raise or a promotion.” 524 U.S. at 761 (emphasis added). This court has recognized that the definition of “tangible employment action” developed in the sexual harassment context in Burlington Industries may be the proper “adverse employment action” standard for Title VII retaliation claims, but has not yet decided the issue. See Watts v. Kroger Co., 170 F.3d 505, 510 n.4, 511 n.5 (5th Cir. 1999) (“We do not reach the question of whether ‘tangible employment action,’ as defined by [Burlington Industries], is identical to our definition of an ‘adverse employment action’ found in Mattern,” because “even if Burlington lowers the bar as to what qualifies as an adverse 9 Fierros paints with a broader stroke than is necessary to decide this case. We need not evaluate whether the “ultimate employment decision” doctrine is undermined by the Supreme Court’s recent Title VII decisions because Mattern does not hold that the denial of a pay increase can never be an “ultimate employment decision.” Rather, Mattern establishes only that the denial of the pay increase that occurred in that case was not an “ultimate employment decision.” In reaching that conclusion, we explained that the possibility of a pay increase was significant to the plaintiff only because it was one of the necessary conditions of passing a training program for a new position. The plaintiff’s “conten[tion was] that . . . receiving poor evaluations and a missed [pay] increase were ‘quickly leading to the ultimate adverse employment action.’” Id. (emphasis in original). In contrast, in the instant case, Arnold’s denial of Fierros’s recommended pay increase is the employment action from which Fierros sought relief in federal court. The language of Title VII further supports our reading of Mattern. Title VII’s anti-retaliation provision makes it unlawful “for an employer to discriminate against any of his employees” because the employee engaged in a protected activity. 42 U.S.C. § 2000e-3(a) (emphasis added). In Mattern we relied on § 2000e-2(a)(1) to ascertain the meaning of “discriminate” in employment action, Watts cannot satisfy the definition of a tangible employment action as defined by Burlington.”) (citations omitted). 10 § 2000e-3(a). See Mattern, 104 F.3d at 708-09. Subsection 2000e-2(a)(1) provides: “It shall be an unlawful employment practice for an employer . . . 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.” § 2000e-2(a)(1) (emphasis added). This language clearly contemplates that the denial of a pay increase can be an act of “discrimination” against an employee. Moreover, in cases since Mattern, we have held that a denial of a pay increase and similar actions are “ultimate employment decisions.” In Rubinstein v. Administrators of the Tulane Educational Fund, this court upheld a jury verdict that the employer had unlawfully retaliated against the plaintiff in denying him a pay raise. See 218 F.3d 392, 402 (5th Cir. 2000). Similarly, in Mota, we reasoned that the employer’s discontinuation of the plaintiff’s stipend qualified as an “ultimate employment decision” because it was “a compensation decision.” 261 F.3d at 521; see also id. (concluding that the employer’s denial of paid leave was an “ultimate employment decision” for purposes of the plaintiff’s Title VII retaliation claim). Conceding that our cases recognize that employment actions affecting compensation are often “ultimate employment decisions,” TDH argues that such actions are “ultimate employment decisions” 11 only if the employee’s current compensation is reduced. According to TDH, the employment action at issue in the instant case, i.e., a “simpl[e] fail[ure] to receive a modest increase in pay,” does not rise to the level of an “ultimate employment decision.” This distinction is untenable. If Fierros had received the merit pay increase, she would be making a higher salary. The merit pay increase is important to her not only as a recognition of her contribution to TDH as a laboratory technician, but also as a source of income. As Fierros points out, in light of her annual salary of $20,924.97, the $57-permonth pay increase is not, as TDH claims, “de minimis.” It is illogical to construe Title VII as prohibiting discriminatory decreases in pay, but permitting discriminatory denials of pay increases. We hold that in light of our reasoning in Mattern, the language of Title VII, and our post-Mattern jurisprudence, the denial of a pay increase can be an “ultimate employment decision” actionable under Title VII’s anti-retaliation provision. We further conclude that in the instant case, Arnold’s denial of Fierros’s merit pay increase was an “ultimate employment decision.” Fierros seeks Title VII relief from the denial of the pay increase itself, and not from any employment action that the pay increase denial might lead to. Thus, she has established the second element of a prima facie case for retaliation. 12 Because Fierros’s filing of the internal discrimination complaint against Arnold is a Title VII “protected activity,” Fierros has also satisfied the first element of the prima facie case for retaliation. See Dollis, 77 F.3d at 779, 781 (recognizing that the plaintiff’s use of her employer’s internal administrative process to file an employment discrimination complaint “is clearly protected activity” for purposes of a Title VII retaliation claim). TDH does not attempt to argue otherwise. Accordingly, Fierros is entitled to a jury trial if she presented sufficient summary judgment evidence of the third element, i.e., that Arnold denied her the merit pay increase because she filed the discrimination complaint against him.