Ninth Circuit clarifies McDonnell Douglas “similarly situated” requirement: Lui v. DeJoy

In Lui v. DeJoy, (9th Cir.)           F.3d           (Feb. 27, 2025), the Court of Appeals for the Ninth Circuit clarified the fourth element of the McDonnell Douglas test for disparate treatment claims under Title VII, specifically regarding the “similarly situated” requirement. 

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Plaintiff, a postmaster for the USPS, alleged harassment based on race, gender, and national origin. Subsequently, she was transferred to a lower-paying position at a different post office and replaced by a white male. After an unsuccessful appeal of her demotion, she sued for Title VII disparate treatment, hostile work environment harassment, and retaliation. The district court granted summary judgment for Defendant on all claims, finding that Plaintiff had not established a prima facie case of disparate treatment, failed to exhaust her administrative remedies regarding her harassment claim, and failed to establish a causal connection between her protected activity and demotion. Plaintiff appealed.

The Ninth Circuit affirmed the dismissal of Plaintiff’s retaliation claim but reversed the dismissal of her harassment and disparate treatment claims.  It held that plaintiff established a prima facie case of disparate treatment under St. Mary’s Honor Center v. Hicks (1993) 509 U.S. 502, clarifying that even if plaintiff and her replacement were not “similarly situated,” the fourth element of the McDonnell Douglas test is satisfied if the replacement is “a person outside the protected class.” Following Poland v. Chertoff (9th Cir. 2007) 494 F.3d 1174, the court also determined that subordinate bias may have influenced plaintiff’s demotion. Regarding the hostile work environment claim, the court held that plaintiff’s failure to address administrative exhaustion in her opening brief was “at most forfeiture, not waiver,” and exercised its discretion to address the issue. It found that notice of plaintiff’s demotion was the proper start date for the statute of limitations, and thus the hostile work environment claim was timely. Finally, the Ninth Circuit upheld the district court’s ruling on the retaliation claim, remanding the disparate treatment and hostile workplace claims for further proceedings.

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