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High Court Confirms Alternate Avenue for Retaliation Claims

May 27, 2008
Related Topics: Wrongful Discharge, Corporate Culture, Discrimination and EEOC Compliance, Latest News
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Employees can pursue race-related retaliation claims under a law passed during the Civil War era, the Supreme Court confirmed on Tuesday, May 27.

Although the decision gives plaintiffs an avenue for higher damage awards and a longer deadline to file cases than they have under a four-decade-old civil rights law, employment lawyers say the impact will be limited.

Citing numerous circuit court decisions, a 7-2 Supreme Court majority ruled that Hedrick Humphries, a former Cracker Barrel assistant manager, could sue the restaurant’s parent company under a 19th century law for allegedly firing him after he complained about the discriminatory behavior of a supervisor. Humphries is African-American.

Known as Section 1981, the law does not explicitly mention retaliation but it does provide a four-year statute of limitations as well as unlimited damages. It was established following the abolition of slavery to protect African-Americans in making and enforcing contracts.

A provision of the Civil Rights Act of 1964, called Title VII, is more restrictive. It caps damages, requires plaintiffs to file their cases within months of a discriminatory act and establishes an administrative procedure through the Equal Employment Opportunity Commission to try to resolve disputes.

The Supreme Court ruling “allows an employment law plaintiff to do an end run around Title VII,” says Joel Rice, who is of counsel to Fisher & Phillips in Chicago. “It’s beneficial to employees but not entirely surprising given the trend of the law in this area.”

Companies are used to defending themselves against Title VII and Section 1981 suits simultaneously, Rice says, because courts have been allowing the practice for years.

In a 1989 case, a ruling narrowed the interpretation of Section 1981, effectively preventing a plaintiff from bringing retaliation claims under the law.

But the Supreme Court said that Congress broadened the definition when it approved the Civil Rights Act of 1991. Lower courts then consistently applied it to retaliation cases.

The Supreme Court decided to respect those decisions. In the majority opinion, Justice Stephen Breyer argued that “the view that Section 1981 encompasses retaliation claims is indeed well embedded in the law.”

But in a dissenting opinion, Justice Clarence Thomas said that the majority was misguided in upholding what he called the flawed reasoning of the lower courts. Thomas was joined by Justice Antonin Scalia in the opinion.

“Two wrongs do not make a right, and an aesthetic preference for symmetry should not prevent us from recognizing the true meaning of an Act of Congress,” wrote Thomas, a former EEOC commissioner.

He maintained that Section 1981 does not address retaliation.

“On its face, Section 1981 is a straightforward ban on racial discrimination in the making and enforcement of contracts,” he wrote.

Although that was one of the arguments made by Cracker Barrel’s parent company, employment lawyers say the ruling will not come as a shock to employers.

It will not change the way retaliation cases are defended or significantly increase the damages awarded, said Sarah Kelly, a partner at Cozen O’Connor in Philadelphia.

“It’s the sort of decision that perpetuates and confirms what most lawyers thought the current law was,” she said. “The decision doesn’t have a big impact.”

But it does reinforce the image of the Supreme Court under Chief Justice John Roberts as a body that looks to the past when making its decisions.

“They don’t legislate from the bench, but rather they follow precedent,” said Ted Meyer, a partner at Jones Day in Houston. “This is typical of a fairly conservative court. They follow the law.”

—Mark Schoeff Jr.

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