Client Alert - Employment Law Update
United States Supreme Court Expands Ability of Employees to Bring Retaliation Suits.
The U.S. Supreme Court recently issued an opinion, allowing employees to bring retaliation claims under a Civil War-era statute that makes it easier to file retaliation suits, applies to more employers, and greatly expands the potential liability in these types of cases. The decision places renewed importance on understanding and avoiding retaliation claims.
In the case of CBOCS West, Inc. v. Humphries, No. 06-1431 (May 27, 2008), the Supreme Court held that claimants may bring suit for alleged employment retaliation that is racially motivated under Section 1981 of the Civil Rights Act of 1866 (Section 1981). The case involved an African-American assistant manager at a casual dining chain restaurant, who complained to his district manager that his general manager had made racially offensive remarks, and had wrongfully terminated another black employee. The district manager took no corrective action, and instead terminated him when another employee reported that he left a safe open overnight.
Section 1981 prohibits racially discriminatory treatment in the making, enforcement, and termination of contracts. Because the employment relationship is considered contractual, Section 1981 has long applied to claims concerning terminations based on race. However, Section 1981 was not clear on whether it applied to claims of retaliation. The Supreme Court concluded that it did.
The decision is noteworthy because Section 1981 differs significantly from other laws concerning employment discrimination. Specifically, it has a longer statute of limitations, which means that claimants will have more time to file their cases. In addition, claimants need not pursue the administrative process of the Equal Employment Opportunity Commission before filing suit, and there are no caps on compensatory and punitive damages. Of importance to smaller companies, Section 1981 covers all employers, including those that do no meet the 15-employee threshold of other laws.
The prospect of more claims, unlimited damages, and the application to small employers means that great care should be taken in making termination decisions. If you would like more information about how to minimize the risks associated with these decisions, or would like counsel concerning your employment policies and practices in general, please contact Mr. Gonzalez at 312-558-9779 or at egonzalez@elvisgonzalezltd.com.
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