When is a Lateral Transfer an Adverse Employment Action?

To succeed in a workplace discrimination or retaliation claim, the aggrieved employee must prove that he or she was the subject of an “adverse employment action.”  In Outley v. Luke & Associates, Inc., 840 F.3d 212 (5th Cir. 2016), the Court of Appeals for the Fifth Circuit discussed when a lateral transfer can qualify as an adverse employment action.

A “purely lateral transfer” is not an adverse employment action.  A purely lateral transfer is a transfer that doesn’t change the employee’s benefits, duties, and responsibilities.  On the other hand, a transfer may qualify as an adverse employment action if the transfer amounts to a demotion by virtue of being “objectively worse” than the employee’s former position. 

A court may determine that a lateral transfer is an adverse employment action based on factors such as reduced compensation or loss of full-time status. Transfer to a less prestigious or desirable position can be the equivalent of a demotion if the new position is “objectively viewed” as less prestigious or desirable.  The employee’s subjective view of the transfer as a demotion is irrelevant.

The requirement that an employee attend training to prepare for a new position doesn’t tend to show that the transfer is an adverse employment action. The court points out that “training may be required for even a coveted position.”  Different working hours in a new position doesn’t transform a lateral transfer into an adverse employment action so long as the employee maintains full-time status.  The same is true with respect to an increased workload in a new position.

In Outley, the court held that the aggrieved employee failed to show that her transfer from inpatient pharmacist to outpatient pharmacist was an adverse employment action because her new position was not “objectively worse” than her previous one.


Mike Loftin is a shareholder in the Underwood Law Firm’s Amarillo Office, who is board certified in Civil Trial Law. This article is not intended as legal advice.  If you seek legal counsel regarding a specific employment law matter, please contact an attorney.

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