Fifth Circuit Applies Its New Broader Title VII Standard in Bias Case

On October 11, 2023, the Fifth Circuit issued the first decision applying its broadened standard for Title VII claims in Narayanann v. Midwestern State University. The unanimous three judge panel ruled that a Malaysian professor could pursue his race-based case against a Texas university when his request to teach summer courses was rejected. 

Under the Fifth Circuit’s new standard, a plaintiff’s Title VII claim can survive a motion to dismiss by pleading adverse actions with respect to the “terms, conditions, or privileges of employment” without showing that their employer’s action was consequential with respect to compensation or other major benefits, a departure from the previous requirement, in which plaintiffs bringing workplace bias claims had to demonstrate that their claims involved an ultimate employment decision related to hiring, granting leave, terminations, promotions, or pay.

Background of the Case

Plaintiff N. Sugumaran Narayanan, a Malaysian academic, was a tenured professor at Midwestern State University.   In 2017, Narayanan requested and was granted leave due to stress-related issues including anxiety and hypertension. Upon recovering, Narayanan offered to teach courses during the summer of 2018, but Midwestern State University did not schedule him to teach. 

In September 2018, Narayanan requested a two-year leave of absence, to begin in the Spring of 2019, for good cause without compensation. Midwestern State University denied this request, citing an undue hardship on the Political Science Department. Soon thereafter, in November, Narayanan also sought and received expedited funding for travel to Malaysia to present a paper at a conference. 

Despite Midwestern State University’s denial of the September request, Narayanan ended up taking an extended leave, since, while in Malaysia, he was diagnosed with cervical spondylotic myelopathy. In response to documentation about the diagnosis, which stated that Narayanan could not return for at least six months, Midwestern State University granted leave and further  composed an Employee Individual Accommodation Plan (the “Plan”) acknowledging Narayanan’s disability and offering accommodations.  Midwestern State University later proposed an updated plan (“Updated Plan”), which recommended leave time unless such accommodation would have an undue hardship on the functioning of the department or university.  Insisting that the accommodations of the original Plan, as well as the updated Plan, were insufficient, Narayanan refused to sign his annual employment contract and did not report to teach his assigned fall classes.

Viewing Narayanan’s refusal to sign the annual employment contract or to teach his classes as breaches of duty that justified dismissal, in 2020, Midwestern State University revoked Narayanan’s tenure and terminated his employment. Thereafter, Narayanan filed a lawsuit under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA), alleging bias and retaliation based on his race and disability. Narayanan raised ADA claims for failure to accommodate, discrimination based on disability, and retaliation.  Narayanan alleges in his Title VII discrimination and retaliation claims that the university failed to grant his summer teaching assignments because of (a) his race, color, and national origin; and (b) a previous discrimination complaint that he filed against the university.

The lower court granted the university summary judgment. It dismissed Narayanan’s disability claims under the ADA related to his employment termination, and as to the Title VII claims based on race, held that the university’s failure to give Narayanan the opportunity to teach summer courses was not an adverse employment action, because it did not constitute an “ultimate employment decision.”

The Fifth Circuit’s Split Decision

A Fifth Circuit 3-member panel affirmed the district court’s summary judgment order dismissing the ADA claims against the university. It found that Narayanan did not show that the accommodations Midwestern State University offered to him after his diagnosis were insufficient. The panel pointed out that he did not offer any reasonable alternatives to the university, nor did he engage in the interactive process, despite the employer’s attempts.

However, the Fifth Circuit vacated and reversed the portion of the district court’s order dismissing plaintiff’s Title VII claims, in light of the recent en banc decision in Hamilton v. Dallas County.  The appellate panel found that the district court failed to consider Narayanan’s lost income when the university denied him the opportunity to teach summer classes in 2018. The Hamilton decision clarified that Title VII requires a broader reading of the “adverse employment action” than prior cases that required an “ultimate employment decision.” The panel reasoned that lost income can qualify as compensation, under both pre- and post-Hamilton interpretations of an “ultimate employment decision” and “terms, conditions, or privileged of employment.” Accordingly, the district court was directed to review whether the lost income that Narayanan experienced from the denial of the opportunity to teach summer classes amounts to an “adverse employment action.”

The surviving claims now face renewed analysis at trial, giving the court a renewed opportunity to adjust to and apply the broader standard.

In this first of many decisions to be applying this new broader standard for Title VII discrimination cases, the Fifth Circuit is signaling to Texas lower courts as to how this standard is to be applied.