Editor's Note
Investigating Administrative Leave
Putting someone on administrative leave while there is an investigation of the employee's conduct is discretionary unless there is a policy or union contract that requires it. Whether administrative leave is paid is also usually optional. But even though you have discretion, you have to apply that discretion fairly and consistently or you could end up with additional claims to deal with.
When an organization puts someone on administrative leave, it's a determination that it's better not to have the employee around, at least during the investigation. There are really good reasons for administrative leave such as:
- the evidence is pretty clear the person should be terminated and you don't want them causing trouble (like taking documents, messing around with the computers, intimidating people involved in the investigation, or interfering with other employees' work) while you go through the process;
- the situation involves violence or harassment and there is reason to believe that it's not safe to have the person around during the investigation;
- the issue involves other illegal conduct such as theft, embezzlement, illegal drugs, or sensitive information like disclosure of trade secrets, proprietary information, or confidential business information.
When an employer does put someone on administrative leave, the perception is that they did something really bad, which is usually accurate.
It's often the right thing to do, but it's also a pre-termination termination. And that's why courts are considering whether administrative leave, even when paid, can be an adverse employment action under discrimination laws.
One option is to put everyone on paid administrative leave whenever there is a disciplinary investigation. But even then, there is stigma attached, teams are disrupted, the work must be reassigned, and drama ensues.
Many investigations don't require putting anyone on leave because there is no danger to the organization or the people who work there. It's clear from the beginning that nobody's going to be fired over what happened because it didn't actually happen or the claim is not really about whatever the personality conflict or dispute is about.
In considering administrative leave, first consider personal safety of everyone involved and the risk of harm to the organization. If there is even a decent chance of problems, it's better to put someone on paid administrative leave than risk additional harm.
This is a great discussion of additional legal issues involved in administrative leave.
- Heather Bussing
Employers often place employees on paid administrative leave while they investigate accusations of employee misconduct or make decisions regarding the employees’ employment. Traditionally, most federal courts agreed that this practice, without more, did not constitute an “adverse employment action” under Title VII.[1] But some courts have recently recognized that paid administrative leave might, in some cases, give rise to liability. A catalyst for this shift appears to be the U.S. Supreme Court’s recent ruling in Muldrow v. City of St. Louis, Missouri.[2]
As we wrote earlier this year, Muldrow involved a police officer’s claim that the city subjected her to a discriminatory job transfer based on gender. The lower courts held that, because the transfer did not result in a diminution in the officer’s title, salary, or benefits, it did not cause a “material employment disadvantage” and was thus “insufficient” to support her Title VII discrimination claim.[3] But the U.S. Supreme Court disagreed and held that to establish a Title VII discrimination claim based on a job transfer, an employee does not have to show that the harm from the transfer is significant “[o]r serious, or substantial, or any similar adjective.”[4] Rather, the employee need only prove that the transfer left them “worse off.”
Although Muldrow was a case about an alleged discriminatory job transfer, several courts have recently relied on it to undercut long-held beliefs about paid suspensions. The U.S. Court of Appeals for the Sixth Circuit, for example, noted that Muldrow called into doubt the circuit’s precedent regarding suspension with pay because “one might reasonably argue that a temporary suspension (even with pay) causes ‘some harm.’”[5] Similarly, the Third Circuit noted that Muldrow “arguably abrogated” previous caselaw “so that a suspension with pay might, under some circumstances, constitute an adverse employment action.”[6] And the Fifth Circuit relied on Muldrow, in part, to support its conclusion that a plaintiff being placed on paid administrative leave constituted an adverse employment action for purposes of that appeal.[7]
In another case, the U.S. District Court for the District of Columbia recognized that Muldrow may have impacted previous holdings that suspension with pay does not constitute an adverse employment action.[8]
Several questions remain regarding Muldrow’s impact on paid suspensions in the context of employment discrimination claims. Does it matter whether the employee opposes the paid suspension? What type of harm must be shown from a paid suspension for it to qualify as an adverse employment action? Is a loss of network or advancement opportunities required, or is psychological harm enough? While these and other questions remain unclear, Muldrow has at least changed how lower courts are thinking about this issue.
This does not mean employers should stop placing employees on paid administrative leave. But before they do, they should consider things like whether a paid suspension might hinder the employee’s professional advancement, subject the employee to reputational harm, or affect the employee’s morale or job performance. And, as always, the employer should consider whether the employee could claim the paid suspension was not the employer’s policy or practice and was indeed driven by discrimination. Doing so will help protect employers from a potential shift in how courts view and treat these employment decisions.
[1] See Jones v. Se. Pa. Transp. Auth., 796 F.3d 323, 326 (3d Cir. 2015) (collecting cases).
[2] 601 U.S. 346 (2024).
[3] Muldrow, 601 U.S. at 353–54.
[4] Id. at 355.
[5] Blick v. Ann Arbor Pub. Sch. Dist., 105 F.4th 868, 885 (6th Cir. 2024).
[6] Russo v. Bryn Mawr Tr. Co., No. 22-3235, 2024 WL 3738643, at *4 (3d Cir. Aug. 9, 2024).
[7] Yates v. Spring Indep. Sch. Dist., No. 23-20441, 2024 WL 3928095, at *4 (5th Cir. Aug. 26, 2024).
[8] Richard Young v. Sonny Perdue, Sec’y, United States Dep’t of Agric., No. 19-2144 (RC), 2024 WL 3967358, at *6 (D.D.C. Aug. 26, 2024).
