- The 5th U.S. Circuit Court of Appeals has ruled that a staffing company has the right to bring a Section 1981 race bias claim against a client, even though the staffing company lacks a corporate racial identity (White Glove Staffing, Incorporated v. Methodist Hospitals of Dallas, No. 19-10006 (5th Cir. Jan. 15, 2020)).
- A kitchen staffing company looking to work with a Dallas hospital was allegedly told that the hospital chef only wanted to work with Hispanics. When the staffing company sent an African-American prep cook to work at the hospital, another worker allegedly told her she was "surprised" to see her there because "[t]hey usually don't let blacks in this kitchen." The prep cook was sent home the next day, allegedly because she was not Hispanic, and the deal between the staffing company and the hospital was called off.
- Reversing a lower court, the 5th Circuit ruled that the staffing company could bring a Section 1981 race bias claim against the hospital, even though it was not minority-owned, because there was no requirement that it needed a racial identity in order to have standing to sue. Even though the alleged bias was against one of the staffing company's employees and not the staffing company itself, their interests sufficiently overlapped. Additionally, Section 1981 prohibits racial discrimination in making and enforcing contracts.
Section 1981 of the Civil Rights Act of 1866 protects equal rights on the basis of race with regard to making and enforcing contracts. According to the U.S. Equal Employment Opportunity Commission (EEOC), this includes "all contractual aspects of the employment relationship, such as hiring, discharge, and the terms and conditions of employment," as well as retaliation against those who complain about race bias. The EEOC says Section 1981 is enforced by individuals rather than a federal agency.
There is, of course, some overlap between Section 1981 and Title VII of the Civil Rights Act of 1964, which offers protections that are more familiar to employers. According to the Society for Human Resource Management (SHRM), there is a longer statute of limitations for Section 1981 claims, and plaintiffs need not go through the administrative process required for Title VII claims. Section 1981 also applies to private employers of all sizes, not just those with 15 or more employees as Title VII does.
Regardless of which particular statute may be cited in a lawsuit, employers of all sizes are well-advised to stay up to speed on relevant state and federal anti-bias laws, train managers and employees as appropriate, and cultivate an inclusive culture that embraces diversity and is intolerant of illegal bias or harassment.