Section 1981: An Old Law Becomes The Newest Weapon Against Retaliation.

This week, the Supreme Court of the United States decided for the first time that a provision of the Civil Rights Act of 1866, known as Section 1981, covers claims of retaliation that follow complaints about discrimination on the basis of race. According to the Court, an individual who believes he or she was retaliated against for having complained of race discrimination prohibited by Section 1981 may also bring a separate claim of retaliation under the same law.

In CBOCS West, Inc. v. Humphries, Hendrick Humphries, an African-American male, worked for three years at the Cracker Barrel restaurant in Bradley, Illinois. In 2001, he complained to a district manager that the general manager at the Bradley restaurant made racially offensive remarks and that the general manager's termination of a fellow employee had been racially motivated. The district manager took no action against the general manager, but fired Mr. Humphries instead. In response, Mr. Humphries filed a lawsuit in federal court claiming that he had been fired because of his race and because he had complained about race discrimination. He brought these claims under both Title VII of the Civil Rights Act of 1964 ("Title VII") (which prohibits discrimination in employment on the basis of race, color, religion, sex or national origin) and Section 1981.

Unlike Title VII, Section 1981 is limited to the protected characteristic of race, providing that "[a]ll persons within the … United States shall have the same right … to make and enforce contracts … as is enjoyed by white citizens." The issue before the Supreme Court in the Humphries case was whether, in addition to this "equal contract rights" provision, Section 1981 also encompasses claims of retaliation against individuals who previously complained about denial of equal contract rights. Despite the fact that Section 1981 does not specifically mention a cause of action for retaliation (unlike Title VII), the Court ruled by a 7-2 majority that Section 1981 does, in fact, encompass retaliation claims.

Since Title VII already prohibited retaliation against individuals complaining of racial discrimination, what is the significance of the Supreme Court's holding in Humphries? The significance is that Section 1981 gives individuals a much longer period of time to file claims than Title VII, does not contain the limitations on damage recoveries imposed by Title VII and applies to employers of all sizes (as well as individuals and entities who are not employers).

In Section 1981 claims, employees have up to four years  from the date of an allegedly retaliatory action to file retaliation lawsuits relating to previous race discrimination complaints, whether those previous complaints were internal or external. In contrast, Title VII requires that a charge of retaliation be filed within 300 days of the alleged retaliation.  In addition, the compensatory and punitive damages a successful plaintiff may recover in a Title VII lawsuit are capped, depending on the size of the employer, at between $50,000 and $300,000 for each complaining party. Section 1981, on the other hand, contains no limits on the amounts of compensatory and punitive damages a prevailing plaintiff may be awarded. Additionally, Section 1981 applies to all employers regardless of size, unlike Title VII's coverage of only employers with fifteen or more employees.

From a practical standpoint, the Humphries decision means that employees now have up to four years following their termination or other adverse employment action to claim they were retaliated against for an earlier complaint of racial discrimination. Because memories can fade over such a lengthy period of time, employers will want to take extra precautions to make sure their employment decisions are carefully documented and that their record retention policy is followed.

If you would like assistance in discussing your documentation and retention practices, please contact any member of Ice Miller's Labor and& Employment Practice Group.

Wayne O "Skip" Adams III is a partner in Ice Miller's Labor and Employment Practice Group. Lindsay Ramsey is an associate in the Firm's Labor and Employment Practice Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances

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