By: Abbey Mullins

Section 1981 of the Civil Rights Act of 1866 (42 USC § 1981) is one of the oldest civil rights laws in the United States, and remains a powerful tool for protecting individuals against racial discrimination in the workplace and beyond. In the aftermath of the Civil War, Section 1981 was enacted as a method of enforcing the newly ratified Thirteenth Amendment, which outlawed slavery in the United States. 

In the 1960s, the Supreme Court held that the Civil Rights Act of 1866 prohibits both private and state-backed discrimination in contractual matters. The Court emphasized that Congress, under the Thirteenth Amendment, has the authority to prohibit private acts of discrimination that amount to “badges and incidents of slavery.” 

Key Provision

“All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.” 

Important Facts

Section 1981 applies broadly to any contractual relationship, not just employment. This includes contracts related to housing, education, retail transactions, lending, and business services—any context where the right to make or enforce a contract is affected by racial discrimination. The Supreme Court has interpreted Section 1981 to protect “identifiable classes of persons who are subjected to intentional discrimination solely because of their ancestry or ethnic characteristics.” This means that, while it was originally enacted to guarantee formerly enslaved citizens the same rights as White citizens, individuals of any race can sue under Section 1981 if they feel they have been discriminated against based on their race. 

Key Differences Between Section 1981 and Title VII 

While most race based employment discrimination claims are brought under Title VII of the Civil Rights Act of 1964, Title VII and Section 1981 are different in several respects. Section 1981 provides another avenue for vindicating civil rights violations when Title VII may not apply.

What’s Covered? 

As stated above, Section 1981 only covers racial discrimination. Title VII covers discrimination based on race, color, national origin, religion, and sex – including pregnancy, transgender status, and sexual orientation.

Section 1981 applies to all contractual matters. Title VII only applies to employment. 

Procedural Requirements

Unlike Title VII, Section 1981 claims do not require a complaint be filed with the EEOC before pursuing a lawsuit. 

Statute of Limitations

The statute of limitations for a Section 1981 claim is four years, provided that the alleged discriminatory action occurred after the Act was amended in 1991. To pursue a claim under Title VII, you must file a charge with the EEOC within 180 days of the last alleged unlawful employment practice and you must file a lawsuit within 90 days of the EEOC issuing your Notice of Right to Sue. 

Damages

Section 1981 contains no cap on damages. Title VII limits the amount of damages that may be recovered based on the size of the employer. 

Who Can Be Sued? 

Title VII only applies to employers with fifteen or more employees and does not apply to independent contractors. Section 1981 applies to employers of all sizes and protects independent contractors. 

How This Affects You

Section 1981 may be an avenue for vindicating your rights. If you believe you have suffered racial discrimination in an employment or contractual matter, call our office today for a consultation to discuss your legal options. 

Click here for more information about Section 1981.