In EEOC v. AutoZone, Inc., the United States Court of Appeals for the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin) ruled that AutoZone did not violate the anti-segregation provision of Title VII of the Civil Rights Act of 1964 (“Title VII”), when it transferred Kevin Stuckey, an African American employee, from a store with a predominately Hispanic clientele to a store with a predominantly African American clientele.  The Equal Employment Opportunity Commission (“EEOC”), which brought suit on behalf of Mr. Stuckey, argued that AutoZone transferred him from its Kedzie Avenue store in Chicago, Illinois (“Kedzie store”) because the Company was trying to create a predominately Hispanic workforce to match the clientele in the Kedzie store.  AutoZone management asserted that Mr. Stuckey voluntarily transferred out of the Kedzie store because he had “communication issues” with the Hispanic clientele, and also did not get along with the store’s supervisor.

The EEOC brought the suit under 42 U.S.C. § 2000e-2(a)(2), which makes it illegal for employers to “limit, segregate, or classify [] employees or applicants … in any way that would deprive or tend to deprive [them] of employment opportunities or otherwise adversely affect [their] status as an employee” due to a protected characteristic such as race.  Section 2000e-2(a)(2) is litigated far less frequently than its complementary provision, Section 2000e-2(a)(1).  The latter prohibits a broad range of employment actions based on protected characteristics, whereas (a)(2) requires a plaintiff to show their employer maintained a classification system based on a protected characteristic.  The Seventh Circuit also noted that an employee can only succeed on a subsection (a)(1) claim by proving that they suffered an “adverse employment action,” whereas subsection (a)(2) only requires proof that the act of segregation “tends” to deprive an individual of an employment opportunity.

Despite this distinction, the Seventh Circuit considered factors very similar to the factors often considered under subsection (a)(1) to determine whether an adverse action has occurred.  Indeed, the Court explained that because Mr. Stuckey’s transfer did not involve any “reduction in pay, benefits or job responsibilities” or any other “detrimental” effects on his conditions of employment, the transfer did not deprive or “tend to deprive” him of an employment opportunity.

The Seventh Circuit accordingly found that, even assuming the truth of the EEOC’s assertion that AutoZone management intended to create a homogenous, Hispanic workforce at the Kedzie store, the EEOC could not succeed on its Title VII claim.  In so ruling, the Seventh Circuit expressly rejected the EEOC’s argument that any act of segregation by race or other protected status would violate Section 2(a)(2), pointing to cases in which the Seventh Circuit itself had determined that “humiliation, embarrassment, and like injuries” were sufficient to constitute a compensable injury under Title VII.  Accordingly, the Seventh Circuit clarified that a transfer for the purpose of segregating employees by race was not sufficient, in and of itself, to create a cognizable harm leading to Title VII liability.