Volume 3, Issue 6
May 3, 2004
The U.S. Supreme Court today announced that race discrimination claims arising under 42 U.S.C. § 1981 ("§ 1981"), as amended by the Civil Rights Act of 1991, are governed by the four (4) year statute of limitations contained in the federal "catch all" statute, 28 U.S.C. § 1658, rather than the applicable state statute of limitations.
The protections of 42 U.S.C. § 1981 were originally enacted by the Civil Rights Act of 1866 to ensure that "all persons . . . shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens". In 1991, Congress amended the statute to define the term "make and enforce contracts" to include the "termination of contracts and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship". Thus, any harassing conduct that occurs after the formation of a contract, including employment contracts, is subject to a cause of action under § 1981, as well as Title VII of the Civil Rights Act of 1964. Section 1981 applies to both public and private sector employers. More importantly, § 1981 is not subject to the caps on compensatory and punitive damages or the administrative charge requirements placed on Title VII race discrimination claims. It is also generally accepted that at-will employment creates a relationship sufficient to file suit under § 1981. The Ninth Circuit, however, has not definitively addressed this issue.
In the case considered by the Supreme Court, Edith Jones, and several other former employees of R.R. Donnelley & Sons, filed a class action suit alleging that they were subjected to a racially hostile work environment, given an inferior employee status, and wrongfully terminated, in violation of § 1981. The suit was filed more than two years, but less than four years, after the date of termination. The employer argued that the claim was barred by the Illinois two year statute of limitations. The District Court disagreed, finding that the "catch all" statute, which provides that any "civil action arising under an Act of Congress enacted after [December 1, 1990] may not be commenced later than 4 years after the cause of action accrues", applied. The Seventh Circuit reversed, finding that the Civil Rights Act of 1991 merely amended Section 1981, and thus the original Act was enacted prior to the "catch all" statute. The U.S. Supreme Court determined that Congress' intent in drafting the "catch all" statute was to eliminate the uncertainty caused by borrowing state statutes of limitation, and that purpose would not be served if the federal "catch all" statute was applied only to new Acts of Congress. The Court held that the plaintiffs' claims arose under the Civil Rights Act of 1991 amendments to § 1981, and thus the four year statute of limitations applied.
This decision is important to employers in that it provides employees and former employees with far more time to pursue a race discrimination claims under § 1981 and thereby avoid the damage caps and administrative charge requirements associated with similar Title VII claims.
Jones v. R.R. Donnelley & Sons Co., 514 U.S. ---, No. 02-1205 (May 3, 2004 ).
Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.