Dec 10, 2007

Employment Cases Before the Supreme Court: Part III

court_front_med.jpgThis term, the Supreme Court will decide whether a Civil War-era statute prohibiting race discrimination (42 U.S.C. 1981, known as "Section 1981") also prohibits retaliation. What's interesting about this case is that nobody thought this was an open question: Lower courts have uniformly found that retaliation is covered by Section 1981. If the Supreme Court disagrees, however, employees will lose a legal claim that's often more valuable than the similar right granted under Title VII.

Section 1981 was passed in the Reconstruction era as part of the historic Civil Rights Act of 1866, which declared African-Americans to be citizens of the United States, entitled to a series of rights previously reserved for white men. A primary purpose of the law was to undermine the "Black Codes," state laws adopted after the Civil War that restricted the rights of newly freed slaves to own property, make contracts, or leave a job, among other things.

The case before the Court this time around is CBOCS West, Inc. v. Humphries. Humphries, a former associate manager at a Cracker Barrel restaurant, claimed that he was fired because he was African-American, and because he complained of race discrimination. Humphries filed suit under both Title VII and Section 1981, but his Title VII claims were dismissed because he didn't pay his filing fee within the time limit for filing a Title VII lawsuit. The court later threw out his Section 1981 claims as well. Humphries appealed this ruling to the federal Court of Appeals for the Seventh Circuit and won. Cracker Barrel then appealed to the Supreme Court, asking it to find that retaliation isn't prohibited by Section 1981.

Of course, Title VII already prohibits retaliation against those who complain about discrimination. So why is the outcome of this case important? Because it's often easier -- and sometimes, more lucrative -- for employees to sue under Section 1981, for several reasons:

  • Employees can go straight to court. To bring a Title VII lawsuit, an employee must first file a discrimination charge with the Equal Employment Opportunity Commission (EEOC). This is called "exhausting" administrative remedies. Employees don't have to do this under Section 1981: They can file a lawsuit right away.

  • Employees have much more time to sue. Once the EEOC finishes processing an employee's discrimination charge, the employee has only a short period to file a lawsuit: from 90 days to a year, depending on the state. Under Section 1981, an employee has four years to file a lawsuit. As Humphries's lawsuit indicates, this extra time can make a big difference.

  • Damages are unlimited. Title VII allows employees to recover all of the money they actually lost (for example, out-of-pocket expenses, back wages, and so on), but caps how much a successful employee can collect for emotional distress and punitive damages. The cap ranges from $50,000 to $300,000, depending on the size of the employer. In contrast, Section 1981 doesn't put any limit on damages.

Here's another thing I find interesting about this case: Last time the Supreme Court tried to limit the scope of Section 1981, Congress intervened. In 1989, the Court decided that Section 1981 didn't prohibit harassment. The case, called Patterson v. McLean Credit Union, was one of a series of cases limiting employee rights, all of which were overturned by the Civil Rights Act of 1991. This year, legislation has already been introduced to reverse the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., the case that limited how much time an employee has to file a lawsuit claiming pay discrimination. If the Court decides that Section 1981 doesn't prohibit retaliation, it could fuel an even livelier showdown on Capitol Hill.

Lisa Guerin


The Humphries case really illustrates the supreme court's power to alter and/or spur alteration of even such abiding statutes as Sec. 1981. And, that highlights the significance of judicial appointments -- which should become a major consideration in next year's presidential election.