Imagine getting sued by an employee who was fired nearly four years ago. Following a recent Supreme Court decision, lawsuits from forgotten former employees will now become much more common. And more expensive.
In CBOCS West, Inc. v. Humphries, the Supreme Court ruled 7–2 in favor of an assistant manager at a Cracker Barrel restaurant. The employee sued claiming that he was fired because he was black and because he had complained about the dismissal of another black employee. What’s unusual about this case is that he sued under a Reconstruction-era statute, 42 U.S.C. § 1981. Unlike the more-common Title VII, Section 1981 does not address retaliation in its text. But the Supreme Court decided that the employee could sue for retaliation under that law nonetheless.
The implications for employers are substantial. With the Supreme Court “discovering” a retaliation claim in Section 1981, employees have a better option than the traditional Title VII claim. To bring a claim under Title VII, employees must first file with the EEOC — and they must do so within 180 days of the alleged retaliation (or 300 days if filing with a state agency). They must also file in court within 90 days of the EEOC’s issuing a right-to-sue letter. None of these restrictions applies to Section 1981, and an employee has four years to bring a claim. Also, Title VII caps the amount of damages an employee can win. Section 1981 has no cap.
In the Court’s opinion, Justice Breyer wrote that even though the statute lacked retaliation language, Congress must have intended that the right to “make and enforce contracts” free from discrimination included protection against retaliatory discrimination. The Court cited legislative reports that suggested Congressional intent to have § 1981 apply to retaliation claims. Justice Thomas wrote a scathing dissent (which Justice Scalia joined), arguing that if Congress intended to include retaliation in the statute, it would have written the law that way.
With no agency-filing requirements, no damages caps, and a much-longer limitations period, Section 1981 provides disgruntled employees claiming retaliation with a more-powerful weapon. Even employees who have already missed their Title VII deadlines can now file in federal court under Section 1981. Employers who thought they were safe after 180 days now have another three-and-a-half years to worry about new lawsuits.
What employers can do
• Don’t penalize employees for complaining about discrimination
• Train all supervisors to properly handle discrimination claims
• Read the Supreme Court’s opinion here (PDF, 228K)