US Supreme Court Expands Employer Liability For Race-Related Retaliation Claims

Volume 7, Issue 6
June 25, 2008

In conjunction with Title VII of the Civil Rights Act, Plaintiffs with racial discrimination claims often sue under 42 U.S.C. § 1981, a post-civil war statute which guarantees all persons "the same right . . . to make and enforce contracts." Section 1981 claims are particularly troubling because they are not subject to Title VII's cap on damages, they can have a longer statute of limitations than Title VII claims, and they are not subject to the administrative requirements of Title VII - i.e., plaintiffs do not have to first file charges with the Equal Employment Opportunity Commission or state discrimination agency.

On May 27, 2008, in CBOCS West, Inc. v. Humphries, --- U.S. ---, 128 S. Ct. 1951, the United States Supreme Court held that Section 1981 also encompasses retaliation claims, thereby significantly expanding an employer's liability for race-related retaliation claims.

Hedrick Humphries, an African-American assistant manager of a Cracker Barrel restaurant, was terminated after complaining to managers that an African-American employee was dismissed because of his race. Humphries filed a lawsuit under Title VII and Section 1981 alleging race discrimination and retaliation. The trial court dismissed Humphries' Section 1981 retaliation claim, but the Seventh Circuit Court of Appeals reversed, finding that he could bring a retaliation claim under Section 1981.

The Supreme Court agreed, reasoning that retaliation claims are permitted under Section 1981's sister provision, 42 U.S.C. § 1982, which prohibits interference with one's property rights on the basis of race. The Court rejected the employer's argument that nearly all other federal employment law statutes contain explicit language prohibiting retaliation while Section 1981 contains no such language. The Court also rejected the employer's assertion that allowing such claims would circumvent Title VII's administrative requirements, reasoning that any circumvention or overlap was by Congressional design. The strongly-worded dissent, by Justices Thomas and Scalia, argued that Section 1981 prohibits discrimination based upon race and that retaliation is clearly discrimination based upon conduct.

In light of Humphries, employees who believe they have been retaliated against because they made internal or external complaints of racial discrimination or harassment or because they participated in proceedings related to such complaints or issues, such as investigations, can immediately file a federal lawsuit under Section 1981. More importantly, the near unlimited damages available to them for racial discrimination under Section 1981 are now available for a retaliation claim premised upon some type of racial discrimination or harassment. Accordingly, when an employer receives an internal or external complaint of racial discrimination or harassment, the red-flag we normally assign to individuals involved in this complaint, including the complainant, should be colored scarlet because any retaliation claim such individuals possess or garner now presents an even larger potential price tag. The importance of supervisor training on how to react to complaints and guard against retaliation cannot, therefore, be underemphasized.

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