U.S. Supreme Court Sets High Bar for Section 1981 Race Discrimination Claims

On March 23, 2020, the U.S. Supreme Court issued a decision in which it held that plaintiffs bringing claims under Section 1981 must show that race was the only reason, not just one of the reasons, for the challenged action. Although this case arose in a non-employment context, the holding is equally applicable to Section employment claims.

Background. Section 1981 guarantees “[a]ll persons … the same right … to make and enforce contracts … as is enjoyed by white citizens.” This has been interpreted to prohibit race discrimination in employment “contracts,” meaning with regard to hiring and employment. As relevant to the Supreme Court’s decision, it also establishes criminal sanctions permitting the prosecution of anyone who “deprive[s]” a person of “any right” protected by the law “on account of” that person’s prior “condition of slavery” or “by reason of” that person’s “color or race.”

In Comcast Corp. v. Nat’l Assn. of African American-Owned Media, the plaintiff company alleged that Comcast systematically disfavored 100% African American-owned media companies. The U.S. Court of Appeals for the Ninth Circuit held that a Section 1981 claim required only a showing that race played “some role” in the decisionmaking process. The Ninth Circuit’s holding, however, was not consistent with that of other sister Circuits, which have held that a Section 1981 plaintiff must plead and prove that its injury would not have occurred “but for” the unlawful conduct.

The Supreme Court’s Ruling. The Supreme Court reversed the Ninth Circuit’s ruling. Applying traditional tort principles, which it found to be the “default” or “background” rule for federal antidiscrimination laws, the Supreme Court found that the stricter “but-for” standard was the appropriate causation standard under Section 1981. The Supreme Court looked to the statute’s language (i.e. “by reason of … color or race”), history, and its own precedents (using “because of race” language) in arriving at that ruling.

The Supreme Court rejected the argument that Title VII’s motivating factor standard – under which a plaintiff need only show that discrimination was a motivating factor in the adverse decision – should be imported into Section 1981. Given Section 1981’s long history without reference to motivating factors, as well as the lack of evidence that Congress intended for the two statutes to incorporate the same causation standard, the Supreme Court found no basis to apply that standard to Section 1981.

What This Means for Employers. This case is good news, as it will be more difficult for employees to meet the standard for maintaining a successful Section 1981 claim.