Suspension with Pay is Not Discrimination

August 18, 2015

By James B. Shrimp, Esq.

When an employer investigates potential wrongdoing by an employee, there are a number of potential landmines. One is the issue of how to treat the employee during the internal investigation; it’s possible the treatment of the employee could lead to liability under various employment discrimination statutes. In a decision last week, the United States Third Circuit Court of Appeals provided clarity on one common aspect of that treatment: “suspension with pay.”

In the case Jones v. Southeastern Pennsylvania Transportation Authority the court was asked to determine for the first time whether a suspension with pay can be considered discrimination under Title VII. The Third Court held that, absent unusual circumstances, a suspension with pay cannot support a discrimination or hostile environment claim. The Third Circuit did not decide whether a suspension with pay could support a retaliation claim.

suspension with pay

The details of this case

The plaintiff in Jones began working as an administrative assistant with SEPTA in 2001. In 2010, Jones’ supervisor suspended her with full pay after discovering apparent fraud in her timesheets, and referred the investigation to SEPTA’s office of inspector general. Within days, the plaintiff filed a complaint against the supervisor alleging that the supervisor sexually harassed and retaliated against her. She had never filed any complainst against him before.

After a nearly three month investigation, SEPTA’s office of inspector general concluded that the plaintiff had in fact submitted fraudulent timesheets. SEPTA suspended her without pay, and formally terminated her approximately two months later. In March 2011, the plaintiff filed a complaint with the Pennsylvania Human Relations Commission and thereafter filed an action in Federal court.

Here’s what employers need to consider

Substantive Discrimination – In order to establish a substantive discrimination claim, a plaintiff must prove that she suffered an “adverse employment action.” The Third Circuit has described an adverse employment action as “an action by an employer that is serious and tangible enough to alter an employee’s compensation, terms, conditions, or privileges of employment.” Based on this definition and a review of decisions from other Federal Circuit Courts of Appeal, the Third Circuit held that “a paid suspension pending an investigation of an employee’s alleged wrongdoing does not fall under any of the forms of adverse action mentioned by Title VII’s substantive provision.” To circumvent this bright line rule, a plaintiff must prove that the suspension with pay is somehow “atypical.”

In Jones, the Third Circuit held that there was nothing “atypical” about the plaintiff’s suspension with pay. Notably, the plaintiff’s suspension with pay lasted three months, and therefore it can be concluded that an extended period of suspension with pay does not create an atypical situation.

Hostile Environment – In hostile environment cases, even if a plaintiff establishes severe and pervasive hostile conduct, the employer can defend against such a claim if the plaintiff suffered no “tangible employment action.” The Third Circuit held that the suspension with pay is not a tangible employment action, which is akin to adverse employment action, and therefore the plaintiff in Jones could not bring a hostile environment claim.

What it means for employers

The Third Circuit has provided clarity for employers in Pennsylvania, New Jersey and Delaware on when, or if, to incorporate a suspension with pay into a progressive discipline policy. In Jones, the court declared that a suspension with pay cannot support a discrimination or hostile environment claim unless it is atypical. To avoid a finding of an atypical suspension with pay, I recommend that an employer specifically incorporate a suspension with pay into its progressive discipline policy and that suspension with pay be neutrally applied among protected classes.

For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

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