Is it discriminatory to transfer a minority employee to a different store where the customer base matches his race? Not necessarily, according to The United States Court of Appeals for the Seventh Circuit, which covers Illinois, Indiana and Wisconsin.

In EEOC v. AutoZone, Inc., the court recently ruled that defendant AutoZone did not violate the anti-segregation provision of Title VII of the Civil Rights Act when it transferred Kevin Stuckey, an African-American employee, from a store with a predominantly Hispanic clientele to a store with a mostly African-American clientele.

Stuckey alleged that the transfer was discriminatory because its purpose was to create a predominantly Hispanic workforce to match the clientele in AutoZone’s Kedzie store. EEOC filed suit on behalf of Stuckey, alleging that the transfer violated § 2000e-2(a)(2), which makes it unlawful for an employer to segregate his workforce by race “in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee.”

The case is interesting and a bit convoluted, especially since much of the testimony hinged upon the recollections of the employee and his supervisor. However, in the end, the Seventh Circuit Court found that the EEOC’s assertion of bias was without merit. The court noted that such a suit can only succeed if the employee can prove an “adverse employment action.”

Given that Mr. Stuckey’s transfer did not involve any reduction in pay, benefits or job responsibilities, or any other detrimental effects, the court did not accept the EEOC’s argument. The Court also rejected the EEOC’s contention that “humiliation, embarrassment and like injuries” were sufficient to constitute a compensable injury under Title VII.

With this ruling, the court has clarified that transfers to segregate employees by race are not sufficient, in and of themselves, to create harm leading to Title VII liability. This decision should minimize employer concerns about the racial makeup of locations where they transfer minority employees. However, that is only true if the worker does not suffer any adverse action, such as a reduction in pay or job classification, as a consequence of the move.