Differences between racial discrimination claims under Title VII and Section 1981

Employment discrimination claims under Texas and federal law often require sorting through a web of statutory and administrative requirements. Many employment laws overlap. A set of facts of a Texas employee may provide several claims for employment discrimination due to the overlap. Maneuvering the overlap and setting up an employee for the best employment discrimination claims is an important part of a Texas employment lawyer’s work. One type of employment discrimination with a high degree of overlap is racial discrimination. Race-based discrimination is prohibited under both federal and Texas law. (Sometimes local law as well.)

Title VII and Section 1981 racial discrimination claims in Texas

Racial discrimination claims often arise under Title VII of the Civil Rights Act of 1964 and the Texas equivalent in the Texas Labor Code. Title VII prohibits employment discrimination for a number of protected classes, including race.

Racial discrimination in employment is also prohibited by federal law under Section 1981 of the Civil Rights Act of 1866. The Civil Rights Act of 1866 was enacted to protect recently freed African-American slaves from discrimination following the end of the Civil War.

Section 1981 protects the right to “make and enforce contracts” and to ensure “full and equal benefits of all laws and proceedings for the security of persons and property” which includes entering into employment–including employment at-will. Employment is not explicitly mentioned in section 1981, as in Title VII, because it was intended to provided broader protections.

As a result of the differences in language and purpose of each portion of these civil rights acts, there are some important differences in remedies under each.

Section 1981 only applies to race and ethnicity as a basis for employment discrimination

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, ethnicity, national origin, sex and religion. (Disability, age and other forms of employment discrimination fall under other federal laws.)

Section 1981 of the Civil Rights Act of 1866 only applies directly to race and ethnicity. This distinction is important, particularly where multiple forms of discrimination may be present in an individual situation.

Each statute offers different types of discrimination claims, remedies and procedures to bring claims to court (as discussed below).

This can be an important issue particularly in cases where discrimination occurs on the basis of multiple protected classes.

For example, an employee might suffer discrimination as a Muslim, Arab, Syrian woman. That is four types of employment discrimination: religion (Muslim), ethnicity (Arab), national origin (Syrian) and sex (woman). All four types enjoy protection under Title VII but only ethnicity clearly falls within Section 1981. A lawsuit in this scenario might apply all four claims under Title VII for disparate treatment discrimination, one claim of disparate treatment discrimination for ethnicity under Section 1981, and again all four claims under the Texas Labor Code.

But national origin…

Courts disagree the extent Section 1981 might apply to national origin discrimination. National origin is not perfectly aligned with either race or ethnicity but the three are often closely related. Discrimination purely based on national origin will usually fail under Section 1981. In the above example, a claim for discrimination because the employee is Syrian would likely fail under Section 1981. That’s clearly national origin.

She would have a Section 1981 claim for discrimination as an Arab, which is an ethnic group.

However, the close relationship between the concepts can make sorting out claims difficult. Often people use terms of national origin to apply broadly to ethnic or racial groups.

For example, “Mexicans” is often used without distinction in harassing language to apply broadly to all ethnic Latinx people. The same is often true of slurs which originally implied one national origin but used indiscriminately for an entire ethnic group. (This is common for Asian slurs originally referencing China or people from China.)

No disparate impact discrimination claims under Section 1981

Disparate impact discrimination claims relate to facially neutral claims that have a discriminatory basis. These claims are available under Title VII and frequently underlie class actions for employment discrimination. Common disparate impact claims include hiring and promotional practices. Here the question is not what the employer intended, only what effect the employer’s practices produced.

Section 1981 only prohibits intentional forms of discrimination, known as disparate treatment claims. Disparate treatment claims are more common and what most people think of with employment discrimination lawsuits. These claims include those in which the employer (directly or through its employees) acted with intent to discriminate against an applicant or employee on a protected class. Section 1981 does not apply to disparate impact claims.

Title VII requires the EEOC administrative charge process; no EEOC for Section 1981

Title VII requires employees to file an administrative complaint with the EEOC (or another process for federal employees) before a lawsuit may be filed on a Title VII claim. This administrative complaint is known as a charge of discrimination. It triggers an administrative process of investigation, mediation and reconciliation with the EEOC. Only after the EEOC issues a Right to Sue letter or accepts a case for its own lawsuit may an employee file a lawsuit.

If, however, the employee or applicant fails to file a charge of discrimination within the statute of limitations then the Title VII claim is permanently lost.

Section 1981 does not require an EEOC charge of discrimination, nor does the EEOC have jurisdiction to investigate solely on a section 1981 claim. An employee or applicant may go directly to court with a section 1981 claim. (Even if the employee also filed a charge of discrimination under Title VII with the EEOC).

Section 1981 has a longer statute of limitations than Title VII

Title VII claims have a short statute of limitations–just 300 days. An employee or applicant must file a charge of discrimination with the EEOC within that period or lose the Title VII claim.

After filing a charge the charging party may remain in the EEOC process for an extended period of time until the EEOC issues a Right to Sue letter. When the charging party receives the letter, he or she has a mere ninety days to file suit. (Deadlines are shorter for federal employees.)

Section 1981 does not follow the EEOC charge process so its limitations periods do not apply. Section 1981 has its own limitations period. The length of this period was a source of disagreement among federal circuits; but a 2004 Supreme Court case locked it in at four years. This is the longest limitations period for any federal anti-discrimination law currently in effect. (It is also longer than the two year statute of limitations for employment discrimination under Texas law.)

No damage caps under Section 1981

Title VII caps several types of damages for employment discrimination. The damages cap breaks out into tiers depending upon the size of the company. Larger companies have a larger cap. The cap applies to mental anguish damages and out of pocket expenses (like medical bills or job search costs), known as compensatory damages.

It also includes punitive damages.

It does not apply to awards of compensation (back pay or front pay), attorney’s fees and litigation expenses. Employers with 15-100 employees cap out at $50,000 while employers with 500 or more employees cap out at $300,000.

However, section 1981 has no damage cap. An employer liable for employment discrimination under section 1981 can suffer almost limitless damages. These can include compensatory damages, wages, benefits, attorney’s fees, litigation expenses and punitive damages.

Why the differences matter in an employment discrimination lawsuit

Generally in all cases an employment lawyer will include section 1981 if it applies, in addition to Title VII, the Texas Labor Code and other applicable employment laws in a lawsuit. Along the path of litigating an employment discrimination lawsuit a Texas employment lawyer may have to choose the strongest claims for a client and these differences can be important. A reason section 1981 might appear without Title VII is the employee did not timely file an EEOC charge. That may require the employment lawyer to file suit under section 1981 alone.

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