Ignored Employee Harassment Claims Became a Sexual Harassment Lawsuit That Lost, Then Won on Appeal

The decision of the Fifth Circuit in Wallace v. Performance Contractors has been hailed as one of the most significant Fifth Circuit employment law cases of 2023. It maps a path for more protection in the future from workplace harassment. In January 2023, the Fifth Circuit reversed the district court’s grant of summary judgment to the employer on the plaintiff’s Title VII claims of sex discrimination, sexual harassment, and retaliation. In general, the decision departs from the Fifth Circuit’s employer-friendly approach to workplace sexual discrimination lawsuits under Title VII of the Civil Rights Act of 1964.

Fighting Sex Discrimination at Work

More importantly, this decision provides a roadmap for those who want to challenge existing precedent in workplace discrimination lawsuits. The appeals court’s meticulous analysis bears fruit in a similar case, Hamilton v. Dallas County, learn more click here Unlawful Employment. Wallace opened the door for Hamilton to change the law in ways that expand legal precedent and workplace rights throughout Texas, the Fifth Circuit, and beyond. This analysis of the Wallace decision may help future cases of workplace harassment and retaliation.

Workplace Equality and Sexual Discrimination

Magan Wallace was hired by Performance Contractors, a construction company, in December 2016. She was laid off as part of a reduction-in-force in April 2017 but was rehired shortly thereafter. Her initial job classification was as a helper, but she was rehired as a laborer. The two job categories pay the same wage, but helpers are permitted to work while on scaffolding. The helper classification is seen to offer better opportunities for promotion and training. Prior to her April 2017 layoff, Wallace had worked for Performance Contractors while on scaffolding.

Sexual Discrimination Examples

When Wallace was rehired, she asked to continue working on scaffolding. However, a supervisor told her that she had “t*** and an a**” and could not work on scaffolding because Performance Contractors had no safety harnesses that fit women. Her supervisor also stated (in Wallace’s vicinity) that he needed “a bucket of b*** jobs.” Another supervisor texted Wallace a picture of his genitals and asked her to send back a picture of her breasts. On several other occasions, Wallace alleges that the same man asked to “grab and squeeze” her breasts. Another massaged her shoulders without her consent. Yet another supervisor commented that she was in her “sexual prime.” She complained to HR, but never received a call back. When she took a sick day to attend a medical appointment where she sought treatment for anxiety and depression, she was first suspended, and then fired.

Wallace brought a Title VII lawsuit in the Western District of Louisiana alleging sex discrimination, sexual harassment, and retaliation. The District Court granted summary judgment to Performance Contractors. The Fifth Circuit reversed, holding that her allegations were sufficient to merit a full trial on all three issues.

Title VII Sexual Discrimination

Title VII provides that “it shall be an unlawful employment practice for an employer to limit, segregate, or classify his [or her] employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his [or her] status as an employee because of such individual’s race, color, religion, sex, or national origin.” Wallace’s claim focuses particularly on the issue of sex discrimination.

An employer may not take an adverse employment action against an employee because of his or her sex. In the Fifth Circuit at the time of Wallace’s claim, the term adverse employment action was understood to mean an ultimate employment decision affecting hiring, firing, demoting, promoting, granting leave, or paying. The District Court found that preventing Wallace from working at elevation was not an ultimate employment decision and thus was not an adverse employment action that would support a Title VII sex discrimination claim.

In Wallace, the Fifth Circuit finessed the ultimate employment decision issue. Instead, it found that Wallace’s re-classification as a laborer, even without a reduction in pay, was a demotion. Under existing precedent, a demotion could support a claim for sex discrimination. The court decided, as a result, that Wallace’s complaint was sufficient to withstand a motion for summary judgment.

Sexual Harassment

The District Court acknowledged that Wallace faced severe or pervasive harassment. But it concluded that she could not establish a nexus between that harassment and her termination, which was a tangible employment action. It also accepted the employer’s defenses that:

  • The company had exercised reasonable care to prevent and promptly correct any sexual harassment; and
  • Wallace unreasonably failed to take advantage of the appropriate HR procedures for dealing with the harassment.

The Fifth Circuit analyzed the harassment Wallace suffered in two alternate ways, mirroring the two ways in which sexual harassment is seen to occur at work. The first, quid pro quo (this for that) harassment, usually requires submission to sexual contact as a condition for favorable treatment. The second, hostile work environment harassment, exists when a workplace is “permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive enough to alter the conditions of the victim’s employment and create an abusive work environment.”

Regarding quid pro quo harassment, the Fifth Circuit found that a reasonable jury could find that Wallace was suspended and later fired because she rejected harassment from her supervisors. Similarly, with respect to hostile work environment harassment, the court found that a reasonable jury could conclude that the workplace environment was objectively hostile and there was a material fact issue about whether the employer effectively implemented its anti-harassment policy. An issue of material fact must be decided at trial and cannot be dismissed at the summary judgment phase.


Title VII also forbids retaliation as a form of sex-based discrimination. To establish a retaliation claim, the employee must show that:

  • He or she participated in an activity protected by Title VII;
  • The employer took an adverse employment action against the employee; and
  • A causal connection existed between the protected activity and the adverse employment action.

The District Court had characterized Wallace’s complaints about harassment as general gripes. The Fifth Circuit, on the other hand, held that by complaining to her supervisors about not being afforded opportunities based on her sex, Wallace engaged in protected activity. This, alone, was sufficient to survive a motion for summary judgment.

Why the Wallace Decision is Significant to Sexual Discrimination and Harassment Lawsuits

As with many decisions, the real measure of importance may be in the decisions that follow. On August 18, 2023, the Fifth Circuit set new legal precedent by holding that workers who have been victims of discrimination at work can file a Title VII lawsuit, even if the employer’s action did not affect hiring, firing, pay or leave. In the Hamilton case, the court’s decision tackles the issue that was sidestepped in the Wallace case. That is, whether a change in duties, even without a change in pay, may be an ultimate employment decision that amounts to an adverse employment action.

Title VII Employment Law

The painstaking analysis of the Wallace case may set out a path for additional decisions in the areas of sexual harassment and retaliation. Time will tell. The bottom line is that employees in Texas and throughout the Fifth Circuit may now be able to succeed with a wider variety of gender bias lawsuits under Title VII.

Kilgore & Kilgore Employment Lawyers Understand Title VII and Fight for Workplace Equality

Fighting sex discrimination and harassment at work is what we have been doing for decades, as laws have evolved. For more information, click here Sexual Harassment. Experience counts as laws change. Learn how we have evolved, click here Employment Law. Our Texas employment lawyers have experience with workplace discrimination claims under a variety of state and federal laws. Contact us if you have been the victim of discrimination, harassment, retaliation, wrongful termination, or other workplace equality issues. Click here to get the conversation started Kilgore Law. Fill out and submit the form on our website. We will contact you to see if we can help.

Leave a Reply

Your email address will not be published. Required fields are marked *