United States: Supreme Court Confirms That Employees May Sue For Race-Based Retaliation Under A Reconstruction-Era Law

Section 1981 of the Civil Rights Act of 1866, which provides for equal contract rights for all persons, regardless of "skin color," has long been interpreted as prohibiting race-based employment discrimination. In CBOCS West, Inc. v. Humphries, a 7-2 decision, the Supreme Court has now confirmed what many appellate courts have previously held: Section 1981 also bars retaliation against employees who complain about racial bias. The case is significant because Section 1981 can provide an easier and often more successful path for some employees to sue for race-based discrimination than exists under Title VII of the Civil Rights Act of 1964, and because Section 1981, unlike Title VII, allows for the recovery of unlimited damages.

Moreover, on the same day the High Court handed down its decision in Humphries, the justices also ruled in Gomez-Perez v. Potter that the Age Discrimination in Employment Act (ADEA) gives Federal employees the right to sue for age-based retaliation. Although the Potter decision does not directly affect private employers the statute expressly prohibits retaliation by private employers the fact that the High Court implied a legal protection against workplace retaliation in two statutes otherwise silent on the matter indicates the Court's deep concern about the issue.

The Humphries case arose after Hedrick G. Humphries, an assistant manager of a Cracker Barrel restaurant was fired. The company contended that he was dismissed because he left the restaurant safe open overnight, but Humphries, a black man, claimed that he was terminated because of his race and because he complained to managers that a colleague had been fired for race-based reasons.

Deciding to pursue his claim, Humphries filed a charge against Cracker Barrel for race discrimination and retaliation with the Equal Employment Opportunity Commission and subsequently received a "right to sue" letter from the agency. He then initiated a lawsuit in a Federal district court charging that Cracker Barrel's owner CBOCS West, Inc. had violated his rights under both Title VII and Section 1981.

Section 1981, which was enacted after the Civil War to ensure that African Americans would have the same legal protections as whites, provides that "all persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts&as is enjoyed by white citizens." The Supreme Court has previously held that this "equal contracts rights" provision covers an employee's claim of direct race discrimination by his or her employer, and federal appellate courts have consistently extended the statute to retaliation claims.

In Humphries, however, the district court not only dismissed Humphries' Title VII claim because he had failed to pay the necessary filing fees in a timely manner, but the lower court also granted the employer's motion for summary judgment on Humphries' Section 1981 claims for race discrimination and retaliation, specifically holding that the statute does not cover retaliation. Humphries appealed to the U.S. Court of Appeals for the Seventh Circuit, which reversed the lower court as to the Section 1981 retaliation claim.

The Supreme Court granted the employer's request to decide whether a retaliation claim may be maintained under Section 1981, and on May 27, 2008, the Court affirmed the Seventh Circuit's ruling. In a majority opinion authored by Justice Breyer, the Court reasoned that, even though Section 1981, unlike Title VII and a number of other anti-discrimination statutes, does not expressly protect against retaliation, prior Court decisions, as well as the Civil Rights Act of 1991, which, in part, amended Section 1981, compelled the conclusion that Section 1981 does in fact cover race-based retaliation. The Court so ruled notwithstanding that, as Cracker Barrel had argued, Congress had failed to expressly include retaliation within that statute's purview when it amended Section 1981 in the 1991 civil rights law.

The majority further rejected the employer's attempt to distinguish direct race discrimination from retaliation. Justice Thomas, however, in a dissent joined by Justice Scalia, found merit in this argument. Justice Thomas reasoned that "[r]etaliation is not discrimination based on race. When an individual is subjected to reprisal because he has complained about racial discrimination, the injury he suffers is not on account of his race; rather, it is the result of his conduct" (emphasis in the original). Disagreeing with the dissenters, the majority countered that even where Congress does not expressly prohibit retaliation in an anti-discrimination statute, the Court may nevertheless find an implicit ban on such conduct.

Bottom Line

As indicated above, a Section 1981 suit provides employees with a number of advantages over a Title VII action. First, Section 1981 allows an employee to bypass Title VII's administrative procedures and directly file suit. Second, employees generally have a significantly longer time in which to sue under Section 1981 than they do under Title VII. Third, Title VII applies only to employers with 15 or more employees, but Section 1981 contains no such restriction. Fourth, and perhaps most importantly, Title VII provides for limited damages whereas there is no cap on damages under Section 1981.

Thus, as a result of Humphries, plaintiffs' attorneys may now be encouraged to bring more race-based retaliation actions under Section 1981. Similarly, the Court's decision in Potter, extending to Federal employees the right to sue for age-based retaliation under the ADEA, will likely add considerably to the ever-increasing number of retaliation cases brought each year.

The broader significance of these decisions is that they underscore the Court's willingness, since the addition of John Roberts as Chief Justice and Samuel Alito as Associate Justice, to liberally construe the law on workplace retaliation. The Roberts Court first indicated its bent in this regard two years ago when it decided Burlington Northern & Santa Fe Railway Co. v. White. In Burlington, the Court broadly held that the scope of Title VII's anti-retaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm, and that, in fact, "an employer can effectively retaliate against an employee by taking actions not directly related to his employment or by causing harm outside the workplace" (emphasis in the original).

The EEOC's most recent statistics vividly demonstrate the impact of Burlington. In Fiscal Year 2007, the number of retaliation claims filed with the EEOC rose 18 percent, and represented over 32 percent of all charges received by the agency. Retaliation claims saw the greatest increase of all charges filed, and, for the first time, retaliation was the second most popular charge filed with the Commission (race discrimination continued to hold the top spot).

The lesson, then, emerging from the Roberts Court appears to be that the business community should not assume that, at least in the area of employment law, a so-called "conservative" Supreme Court will necessarily be more sympathetic to the employer's position than it is to the employee's.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.