Magazine article Workforce Management

A Higher Price for Payback?

Magazine article Workforce Management

A Higher Price for Payback?

Article excerpt

Supreme Court says retaliation claims can be filed under a 19th century law that provides for uncapped damages, but experts predict a limited impact.

A recent Supreme Court decision reinforces that racial discrimination is bad, but striking back against employees who report it is even worse-and now potentially more costly for companies.

In late May, the court ruled that plaintiffs can pursue retaliation suits under a Civil War-era law that does not explicitly address such claims. Known as section 1981, it was established following the abolition of slavery to ensure that African-Americans were treated fairly in contracts.

The law has a much longer statute of limitations than Title VII, a more restrictive provision of the Civil Rights Act of 1964. section 1981 also provides unlimited damages.

Title VII caps damages, requires plaintiffs to file their cases within months of a discriminatory act and establishes a dispute resolution procedure through the Equal Employment Opportunity Commission.

Although the Supreme Court ruling provides an avenue for higher damage awards and a longer deadline to file cases, experts say the impact will be limited.

It "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 part because of those 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 section 1981 for allegedly firing him for complaining that a colleague fired another African-American employee for racial reasons. …

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