High Court Opens Door for Retaliation Claims Under § 1981


by Aaron Clark

Clark, Aaron
aclark@mcgrathnorth.com
(402) 341-3070

In a recent decision, the U.S. Supreme Court confirmed that another avenue exists for employees to pursue retaliation claims. Most federal laws precluding discrimination, including Title VII of the Civil Rights Act, contain provisions that expressly prohibit employers from retaliating against individuals who complain about discrimination. 42 U.S.C. § 1981 (Section 1981) prohibits race discrimination in the making and enforcement of contracts, including employment contracts. However, it does not specifically prohibit retaliation. In CBOCS West, Inc. v. Humphries, the U.S. Supreme Court recently concluded that retaliation discrimination is prohibited by Section 1981.

Section 1981 has always been interpreted to prohibit race discrimination in the workplace because the employment relationship is deemed a contractual relationship regardless of whether there is a formal written employment contract. In CBOCS West, Inc., Hendrick Humphries (African-American) was an Associate Manager of a Cracker Barrel restaurant. After he was fired, he filed a lawsuit claiming discrimination and retaliation under § 1981 of his challenge to the restaurant’s alleged mistreatment and termination of another black worker. Humphries lost his case at the district court level; however, on appeal to the Seventh Circuit, the court found that his retaliation claim was viable under § 1981.

In a 7-2 ruling, the U.S. Supreme Court agreed with the appeals court that retaliation claims are recognized under § 1981. The Court relied upon an earlier opinion involving an interpretation of 42 U.S.C. § 1982, which prohibits race discrimination in real estate transactions.  In the earlier case, the court found that retaliation claims should be recognized under § 1982, even though the statute does not specifically address such a claim. The Court found that § 1981 should be interpreted in a similar fashion.

The Supreme Court’s decision is not surprising and is consistent with lower courts that have addressed this issue. However, the case may have a significant effect on future employment litigation.  Plaintiffs who pursue race and retaliation claims will find that it is more advantageous to file under § 1981, rather than Title VII since § 1981 provides several benefits to a potential plaintiff:

  • Unlike Title VII, a § 1981 plaintiff is not required to file his or her race claim with the Equal Employment Opportunity Commission or a state agency and may immediately proceed to court.
  • Section 1981 plaintiffs benefit from a longer statute of limitations (4 years after the alleged discrimination or retaliation occurs) rather than the shorter statute of limitations under Title VII.
  • Unlike Title VII, there is no statutory cap on punitive or compensatory damages under § 1981.
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