Formal hierarchies are presumed to eliminate any doubt about status orderings for their members because they imply a consistent global ranking. However, formal hierarchies in organizations are not merely linear, but include branching and nesting—subunits within the organization and subunits within other subunits—which creates a local ranking of individuals within each subunit. This can generate a tension between global and local ranks as status cues. As a consequence, when organizational members from different sub-units within an organization encounter each other, they may experience Upward Status Disagreement (USD), where employees perceive that they rank higher than their counterparts. We develop a theory that identifies conditions necessary for USD to arise as a function of the positions of interacting individuals in the formal hierarchy and the factors that affect the likelihood that these conditions will be met. Additionally, we discuss the role of informal status cues (i.e. cues that are not drawn from an organization’s formal hierarchy) and department status in producing USD. We then identify individual-level and contextual determinants of status weights that moderate the degree to which USD based on formal ranks is likely to occur. Finally, we elucidate how USD can result in status conflict and identify moderators of this relationship. Our research contributes a novel mechanism through which formal hierarchy, rather than suppressing status conflict, may under certain conditions intensify it.