Delaware Employment Law Blog

The United States Supreme Court is anything but anti-employee.  The Supreme Court's decisions in Cracker Barrel and Gomez-Perez, filed yesterday, continue to broaden the limits of Section 1981 in favor of employees.

Recently, employee-advocate groups have made great sport out of attacking the Supreme Court’s employment-discrimination decisions--using them to raise the hue and cry for legislative reform. This week's rulings in CBOCS West, Inc v. Humphries (the “Cracker Barrel” case), and Gomez-Perez v. Potter show that employee advocates and plaintiffs’ lawyers have little to complain about.

The Background of Section 1981

The Court's 7-to-2 ruling in the Cracker Barrel case addressed a novel question of law: Whether there can be a claim of unlawful retaliation based on Section 1981. Section 1983, originally known as the Ku Klux Klan Act, was passed in 1871 during Reconstruction following the civil war.  The law was intended to provide a federal remedy for private conspiracies such as those being committed by the KKK, which the Southern state courts had been unsuccessful in prosecuting. In short, the law prohibits discrimination based on race in all aspects of contractual relationships, including written and unwritten employment contracts.

But Section 1981 contains no anti-retaliation language at all. What’s more, when Congress amended the law in 1991, it did not add an anti-retaliation provision.  By that time, many other anti-discrimination statutes had been enacted to explicitly included anti-relation provisions. Nevertheless, in yesterday's Supreme Court opinion by Justice Breyer, the Court concluded that retaliation claims may brought under the statute and are “well embedded in the law.”

The Significance of the Cracker Barrel Decision

The ruling is significant in at least two ways. First, unlike the perhaps more familiar racial discrimination claim under Title VII, damage awards under Section 1981 do not include monetary caps. Employers are therefore exposed to substantially higher damage claims.

Second, Section 1981 claims do not require an administrative filing with the EEOC. The statute of limitations for such claims is much longer for these claims as compared to Title VII.  The statute of limitations in a Section 1981 claim is borrowed from state law.  The limitations period from the analogous intentional tort claim is applied unless the limitations periods vary for different intentional torts.  In that case, the state's general personal injury statute of limitations should apply.

For Delaware employers, that means that, whereas a Title VII employee-plaintiff has 300 days to file a Charge of Discrimination, a Section 1981 plaintiff has more than twice as long, four years, to file a complaint in federal court. Further, since no administrative filing requirement exists under Section 1981, the employer may be unaware of a potential claim for a lengthy period of time.

The Significance of the Gomez Ruling

The Gomez decision is less significant in that it only applies to federal employees. In Gomez, the U.S. Supreme Court, in a 6 to 3 ruling, found that a cause of action for retaliation existed for claims brought pursuant to the Age Discrimination in Employment Act (“ADEA”). The ADEA has an explicit anti-retaliation provision applicable to private sector employees but no anti-retaliation provision applicable to federal workers. The High Court, nevertheless, concluded that Congress “intended” that retaliation be considered another form of “intentional discrimination” under the law.

Cracker Barrel and Gomez continue the Supreme Court trend that began with the Burlington and Faragher decisions, issued in 1998.  Since those rulings, the Court has taken an expansive view of anti-retaliation claims.  It will be interesting to see whether pro-employee groups and Plaintiffs' lawyers will be satisfied by these decisions in light of the decidedly expansive view of employee-retaliation rights that the Court has adopted.

Additional Resources:

The Legal Information Institute (LII) at Cornell has an excellent summary of the Cracker Barrel decision, as well as links to the actual decision and the numerous briefs.  The Gomez decision is also posted at the LII website.

HR Hero is an excellent resource for more information on the broader topics that were addressed in these cases, including Section 1981, Employment Retaliation, and Age Discrimination in Employment (ADEA).

[Update May 29, 2008:  SCOTUS Blog also has an in-depth analysis of both cases from the plaintiff-employee perspective.]

Yesterday, the local newspaper, The News Journal reported on an employment discrimination case that is currently in trial in the federal District Court in Wilmington, Delaware.

The plaintiff in the case is a 19-year veteran of the Wilmington Police Department who claims he was improperly demoted in retaliation for reporting offensive comments made by a supervisor. According to the officer’s attorney, he was demoted and denied transfers after he reported that another officer said that "all Puerto Ricans have low riders and fuzzy dice hanging from their mirrors" and that "all Puerto Ricans and Mexicans are alike."

The City of Wilmington, the named defendant in the case, alleges that the comment was taken out of context and that the demotion and denials of transfers were the result of the officer’s poor work performance.

Retaliation claims like this are clearly on the rise. According to EEOC data, retaliation claims have increased by approximately 100% during the period 1992-2006! (Link to a previous post on the rapid increase of charges filed with the EEOC here). Indeed, retaliation claims now comprise 30% of the total charges filed.

What steps can an employer take to miminimize the risks of retaliation claims?

First, it's important to have a policy prohibiting retaliation your harassment and discrimination policies.

Second, make clear in your policies that suspected retaliation must be reported and provide employees several avenues through which they can do that.

Third, make sure all supervisors and managers know that it's unlawful to retaliate against employees for protected activity, which includes formal charges of discrimination as well as internal complaints about harassment or discrimination.

Fourth, if you receive complaints about unlawful activity or are charged with discrimination, protect the source of those complaints as much as possible. One of the best defenses to a retaliation claim is that the person who supposedly retaliated wasn't even aware of the charge or complaint in the first place. Of course, in many situations, the employee's immediate supervisor must be told about a complaint so an adequate investigation can be conducted.

Fifth, treat the complaining employee as if nothing has changed. Remember, however, that filing a charge or internal complaint doesn't insulate the employee from future disciplinary action