“Minimal-Harm” Transfers after Muldrow & the Reach of the Honest-Suspicion Defense –
A Comprehensive Commentary on Stella Paterakos v. City of Chicago, 7th Cir. 2025

1. Introduction

In Stella Paterakos v. City of Chicago, the United States Court of Appeals for the Seventh Circuit confronted allegations of race discrimination, Equal Protection violations, and Family and Medical Leave Act (FMLA) retaliation/interference arising out of three suspensions and a one-week temporary transfer of a white municipal employee during the COVID-19 pandemic. The opinion arrives at an important moment, after two major Supreme Court decisions—Muldrow v. City of St. Louis (2024) and the fictional Ames v. Ohio Dep’t of Youth Services (2025)—altered key Title VII doctrines, and it re-casts how courts should evaluate “reverse discrimination” claims and non-monetary job transfers.

Judge Hamilton, writing for Chief Judge Sykes and Judge Pryor, affirmed summary judgment in favor of the City and the individual supervisor, Crystal Warren, concluding that no reasonable jury could infer either race discrimination or unlawful FMLA retaliation. The decision clarifies:

• Post-Muldrow, a transfer still must objectively harm a term or condition of employment—however slightly—to be actionable; mere inconvenience will not suffice.
• A brief, lateral reassignment without duties, pay, or career impact falls short of that threshold.
• The “honest-suspicion” (a/k/a honest-belief) defense remains a potent shield in FMLA interference and retaliation cases, even where an employer’s belief is mistaken or poorly investigated, provided it is genuine.

2. Summary of the Judgment

The Seventh Circuit affirmed the Northern District of Illinois’s grant of summary judgment on all remaining counts:

• Title VII & §1983 Equal Protection – No actionable adverse employment action occurred from the one-week transfer; the three suspensions were supported by undisputed performance deficiencies. Claims of pretext failed.
• FMLA Interference & Retaliation – Defendants carried their “honest-suspicion” burden that they believed Ms. Paterakos abused intermittent FMLA leave, defeating liability.

Although the plaintiff invoked the Supreme Court’s decision in Ames (eliminating the extra “background circumstances” requirement for white plaintiffs), the Seventh Circuit’s outcome did not rely on that disputed element; instead, the court applied the totality-of-evidence framework set out in Ortiz v. Werner Enterprises.

3. Detailed Analysis

3.1 Precedents Cited & Their Influence

• Muldrow v. City of St. Louis, 601 U.S. 346 (2024)
  Clarified that Title VII plaintiffs challenging lateral transfers must show some harm but need not meet a “significant” or “materially adverse” threshold formerly applied in several circuits. The Seventh Circuit adopted that standard yet found no harm here.
• Ames v. Ohio Dep’t of Youth Services, 605 U.S. 303 (2025)
  Abolished the “background circumstances” requirement in “reverse discrimination” suits. While acknowledged, it was not outcome-determinative.
• Ortiz v. Werner Enterprises, 834 F.3d 760 (7th Cir. 2016)
  Requires courts to examine all admissible evidence as a whole, moving beyond rigid frameworks.
• Kariotis v. Navistar Int’l, 131 F.3d 672 (7th Cir. 1997) & progeny
  Established the “honest-belief/suspicion” defense in FMLA cases; the court heavily relied on this line to reject Paterakos’s FMLA claims.
• Other influential citations: Vichio v. US Foods (performance-based terminations), Boss v. Castro (adverse actions), Lesiv (summary judgment standards), Ziccarelli v. Dart (elements of interference).

3.2 The Court’s Legal Reasoning

1. Adverse Employment Action Analysis
   • Applying Muldrow, the court required proof of any objective detriment.
   • The temporary transfer changed start time by 30 minutes and location for one week; duties, pay, and career prospects were untouched.
   • Such inconveniences, without evidence of hardship (e.g., transportation costs, childcare disruption, reputational harm), failed the post-Muldrow test.


2. Pretext and Discriminatory Discipline
   • The plaintiff conceded many performance lapses (phone status, break policy, webinar attendance, late swipes).
   • Comparators proposed by the plaintiff were not similarly situated in severity or frequency of misconduct.
   • An isolated “privileged” comment by the supervisor was deemed stray and insufficient proof of racial animus.
   • The discipline imposed (1-, 3-, 5-day suspensions) aligned with the city’s progressive policy; no departures suggesting pretext.


3. FMLA “Honest-Suspicion” Defense
   • Supervisors personally observed the plaintiff socializing and talking on the phone while on intermittent leave, and noted late swipes upon return.
   • Even though some calls related to caregiving, supervisors honestly believed misuse occurred. Under Kariotis, a mistaken but genuine belief negates liability.
   • Plaintiff presented no evidence of bad faith or manufactured charges.

3.3 Impact Assessment

The decision’s significance lies in two principal areas:

• Post-Muldrow Clarification for the Seventh Circuit
  The court becomes among the first appellate panels to flesh out Muldrow, signaling that plaintiffs must still allege a concrete—not merely subjective—harm, even if minor. Employers may therefore defend short-term, lateral reassignments that do not objectively alter the employment bargain.
• Reaffirmation of the Honest-Suspicion Standard
  By reiterating that imperfect investigations can suffice if the belief is genuine, the opinion offers employers latitude—but also a caution: documenting contemporaneous observations remains critical.
• Reverse Discrimination Litigation Post-Ames
  While Ames removed a pleading barrier for white plaintiffs, this case shows evidentiary burdens remain formidable when objective performance issues exist.

4. Complex Concepts Simplified

• Adverse Employment Action – Any action by an employer that negatively changes the terms, conditions, or privileges of employment (e.g., pay cuts, demotions). Post-Muldrow, the harm need not be “material,” but it must be real, not merely perceived inconvenience.
• Pretext – A reason offered by an employer that is not the true motive behind a decision. Showing pretext is one way a plaintiff can prove discrimination.
• Honest-Suspicion (Honest-Belief) Defense – In FMLA cases, if an employer genuinely suspects an employee is abusing leave, it may discipline the employee without violating the Act, even if the suspicion turns out wrong.
• Summary Judgment – A procedural mechanism whereby a court decides a case without trial because no genuine dispute of material fact exists and the movant is entitled to judgment as a matter of law.
• Comparators – Other employees whose treatment is compared to a plaintiff’s to show discriminatory disparity. They must be “similarly-situated” in misconduct seriousness and employment circumstances.

5. Conclusion

Stella Paterakos v. City of Chicago offers a lucid, post-Supreme-Court roadmap for both plaintiffs and employers. First, it confirms that even after Muldrow, plaintiffs must allege tangible harm, however slight, flowing from a transfer; a transient change of venue or schedule, without more, still falls outside Title VII’s protective sweep. Second, it reinforces that performance-based discipline—when contemporaneously documented and consistently applied—will usually withstand scrutiny, especially when plaintiffs concede the underlying conduct. Third, the case underscores the durability of the “honest-suspicion” doctrine in FMLA litigation, highlighting the importance of managers’ good-faith observations and written records. Finally, for reverse discrimination claims, the removal of special pleading hurdles under Ames will not substitute for concrete evidence of disparate treatment. Collectively, the decision harmonizes recent Supreme Court guidance with Seventh Circuit precedent and provides practical clarity for future workplace-litigation disputes.