The U.S. Supreme Court expands the scope of liability for employers

The U.S. Supreme Court held in CBOCS West, Inc. v. Humphries, (No. 06-1431), that 42 U.S.C. 1981 (Section 1981), a law enacted just after the Civil War, which prohibits race discrimination in the making and enforcement of contracts, also protects persons who are subject to retaliation because they have complained about such discrimination - even though Section 1981 never mentions retaliation. Section 1981 was enacted after the Civil War and provides that "All persons within the jurisdiction of the United States shall have the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens." The Court relied in large part on two of its earlier cases that had interpreted a similar law against discrimination to encompass retaliation claims.

Section 1981, which the Court earlier held prohibits discrimination based on ethnicity as well as race, offers plaintiffs three key advantages over the more well-known federal fair employment practice law, Title VII of the Civil Rights Act of 1964. First, although Title VII precludes plaintiffs from suing until they have first filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") and waited for that agency to issue a right-to-sue notice, Section 1981 plaintiffs may sue without exhausting any administrative process. Second, while Title VII has a fairly short statute of limitations, requiring plaintiffs to file an EEOC charge within 180 or 300 days after an act of alleged discrimination or retaliation has occurred, Section 1981 gives plaintiffs four years after such an act has occurred in which to sue. Third, although Title VII allows employees to recover all lost wages and benefits, it limits how much a successful employee can collect for emotional distress and punitive damages, with the cap for such other damages ranging from $50,000 to $300,000, depending on the employer's size. Section 1981, on the other hand, allows a plaintiff to recover unlimited compensatory and punitive damages.

In light of these differences, employers may expect current or former employees who believe themselves to have been subject to retaliation based on complaints about alleged race discrimination to sue under Section 1981 instead of or in addition to Title VII. Retaliation claims have generally increased since the Supreme Court's 2006 ruling in Burlington Northern v. White, which lowered the bar for retaliation claims. With retaliation claims already on the rise, employers should be particularly careful not to act in a manner that could be construed as retaliatory against employees who have engaged in protected activity.

In the wake of this ruling, employers should take care to:

Make sure your organization has an effective anti-retaliation policy. Train your supervisors and employees to ensure compliance with the anti-retaliation policy.

Encourage those who have engaged in protected activity to report any perceived instances of retaliation immediately so that such claims can be investigated promptly, corrective action taken if needed, and litigation can be avoided.

Consult with experienced in-house or outside counsel before taking any adverse action against an employee who has engaged in protected activity

Previous Page
Archived News