Bethany Reynolds v. Ethicon Endo-Surgery, Inc. Dave Burns
2006 U.S. App. LEXIS 18296, 454 F. 3d 868, 88 Empl. Prac. Dec. (CCH) 42,485 (2006)
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Rule of Law:
An employer's elimination of an employee's position for legitimate business reasons, coupled with an offer of a lateral transfer to a different location with the same title, pay, and benefits, does not constitute an adverse employment action under Title VII.
Facts:
- In January 2002, Bethany A. Reynolds began working as a Bariatric Account Manager (BAM) for Ethicon Endo-Surgery, Inc., based in Sioux Falls, South Dakota.
- Following a business analysis, Ethicon determined that the Sioux Falls market, where Reynolds was based, was the lowest-ranked market with an assigned BAM.
- On August 13, 2002, Ethicon management decided to eliminate the Sioux Falls territory and offer Reynolds a transfer to a new BAM position in Louisville, Kentucky.
- On September 4, 2002, Reynolds learned she was pregnant and informed her supervisor, David E. Burns, of the pregnancy on the same day.
- On September 11, 2002, Burns informed Reynolds that her Sioux Falls position was being eliminated due to a territory collapse.
- Ethicon offered Reynolds a choice between a severance package or a lateral transfer to an equivalent BAM position in either Louisville or St. Louis, with the same title, pay, and advancement prospects.
- Reynolds refused to accept the transfer, later suffered a miscarriage, and was ultimately terminated for her refusal to relocate.
Procedural Posture:
- Bethany A. Reynolds sued her former employer, Ethicon Endo-Surgery, Inc., and supervisor David E. Burns in the U.S. District Court for the District of South Dakota.
- Reynolds alleged a violation of Title VII (sex/pregnancy discrimination) and state law claims of intentional and negligent infliction of emotional distress.
- The defendants moved for summary judgment on all claims.
- The district court (a court of first instance) granted summary judgment in favor of Ethicon and Burns.
- Reynolds (appellant) appealed the grant of summary judgment to the U.S. Court of Appeals for the Eighth Circuit, with Ethicon and Burns as appellees.
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Issue:
Does an employer's elimination of an employee's position and subsequent offer of a lateral transfer to a different location, with the same pay, title, and benefits, constitute an adverse employment action under Title VII?
Opinions:
Majority - Benton, Circuit Judge
No. An employer's offer of a lateral transfer with equivalent pay and benefits is not an adverse employment action under Title VII. To be considered an adverse employment action, there must be a 'tangible change in working conditions that produces a material employment disadvantage.' Here, Reynolds did not dispute that she was offered a lateral transfer with the same job title, salary, and advancement prospects as her previous job. Although Reynolds would have preferred to remain in Sioux Falls, an employer's disregard of an employee's location preference is not, by itself, an adverse employment action. Because Reynolds voluntarily rejected equivalent positions, she cannot establish a prima facie case of discrimination. The court also found no basis for her emotional distress claims, as the employer's conduct was not 'extreme and outrageous,' and in an at-will employment state, the employer owed no duty of continued employment that could support a negligence claim.
Analysis:
This decision reinforces a narrow definition of what constitutes an 'adverse employment action' under Title VII, making it more difficult for plaintiffs to succeed in discrimination cases involving corporate restructuring. The court clarified that an employer's business decision to eliminate a position does not become discriminatory simply because the offered alternative, a lateral transfer, requires relocation that the employee finds undesirable. This precedent gives employers significant latitude to reorganize their workforce based on business needs, provided they offer genuinely equivalent positions to affected employees, thereby placing the onus on the employee to either accept the transfer or resign.
