Section 1981 Race Discrimination Claims in California

Employees who experience racial discrimination at work may have options under both California and federal law. One important federal statute is 42 U.S.C. § 1981, which protects the right to make and enforce contracts without racial discrimination. In employment, this protection can apply to discriminatory hiring, workplace treatment, promotions, and termination when the conduct interferes with contractual rights.

A California race discrimination lawyer can help determine whether Section 1981 may apply to your situation, including when you missed an administrative filing deadline or work for a small employer that may not be covered by certain other discrimination laws. Section 1981 has distinct requirements, however, and its longer limitations period does not mean every race discrimination claim automatically qualifies.

What 42 U.S.C. § 1981 covers

Section 1981 guarantees all persons the same right to make and enforce contracts as is enjoyed by white citizens. The statute also protects the performance, modification, and termination of contractual relationships, including the enjoyment of their benefits, privileges, terms, and conditions. In employment, these protections can cover discrimination that interferes with the contractual relationship because of race.

A claim may involve an employer refusing to hire a qualified applicant because of race, denying an employee a promotion, providing unequal employment benefits, or terminating a worker for a discriminatory reason. Section 1981 can also apply to certain race-based harassment claims when the conduct interferes with contractual rights and meets the applicable legal requirements.

The statute is not limited to discrimination against one racial group. Its protections apply to racial discrimination affecting people of different racial backgrounds. Depending on the circumstances, discrimination involving ancestry or ethnic characteristics may also be relevant to a Section 1981 claim. However, not every form of unfair treatment based on national origin, language, or another protected characteristic necessarily falls within the statute.

Section 1981 differs from some employment discrimination laws because it focuses on racial discrimination affecting contractual rights. A claimant must connect the challenged conduct to a right protected by the statute and satisfy the required standard of proof. General workplace unfairness, without the necessary connection to race and contractual rights, is not enough.

Filing period: generally four years

One important feature of Section 1981 is the four-year limitations period that generally applies to claims arising under the Civil Rights Act of 1991 amendments. In Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (2004), the U.S. Supreme Court held that the four-year federal limitations period in 28 U.S.C. § 1658 applies to Section 1981 claims made possible by the 1991 amendments.

Those amendments expanded the statute to cover the performance, modification, and termination of contracts, including employment relationships. As a result, many modern employment discrimination claims under Section 1981 are subject to a four-year period. The applicable period can depend on the nature of the claim and when the right being asserted arose, so four years should not be assumed to apply to every possible Section 1981 dispute.

This distinction matters when an employee believes the deadline for filing a complaint under California’s Fair Employment and Housing Act (FEHA) or another law has passed. A different limitations period may apply to a Section 1981 claim, but the underlying facts must still support that particular federal cause of action.

The date on which a claim accrues also matters. In many cases, the relevant date is when the discriminatory employment decision occurred, although continuing conduct and other legal issues may affect the analysis. Waiting until the end of a potential four-year period can create unnecessary risks, particularly when evidence becomes harder to obtain or separate claims have shorter deadlines.

No agency complaint required

Unlike Title VII, Section 1981 generally does not require an employee to file an administrative charge with the Equal Employment Opportunity Commission (EEOC) before bringing a lawsuit. A qualifying Section 1981 claim can ordinarily proceed directly in court without first completing the EEOC charge process.

This distinction may matter when an employee did not file an EEOC charge within the applicable deadline or did not pursue a complaint through the California Civil Rights Department (CRD). The absence of an administrative filing does not automatically defeat a Section 1981 claim, provided the employee can establish the necessary legal elements and the claim is timely.

However, skipping the administrative process does not remove the need to investigate the facts, gather evidence, and satisfy the applicable court procedures. The employee must still identify the contractual rights affected, establish the required connection to race, and comply with court filing rules. A lawsuit also requires a sound factual and legal basis rather than simply an allegation that the employer acted unfairly.

Employees should also avoid assuming that an available Section 1981 claim preserves separate claims under FEHA or Title VII. Those laws have their own administrative requirements and deadlines. If more than one legal route may apply, each should be assessed independently.

Any employer size

Section 1981 does not contain the same minimum employee-count threshold that applies to certain other employment discrimination laws. Title VII generally covers employers with 15 or more employees, while FEHA’s employment discrimination provisions generally apply to employers with five or more employees. Section 1981 may therefore be relevant when a worker experiences racial discrimination at a smaller business that falls outside those statutory coverage thresholds.

For example, an employee at a small company may believe a supervisor denied a promotion or ended the employment relationship because of race. Even if the company does not meet the employee-count threshold for Title VII or FEHA discrimination claims, Section 1981 may provide a potential federal route if the facts establish discrimination affecting contractual rights.

The lack of an employee-count threshold does not mean every person working for a small business automatically has a viable Section 1981 claim. The claimant must still establish the necessary contractual relationship, racial discrimination, causation, and other legal elements. The circumstances of the employment arrangement and the conduct at issue remain important.

Independent contractors and other workers whose relationships differ from conventional employment may also need a careful analysis of the relevant contractual rights. Section 1981 is not restricted to standard employee relationships, but coverage depends on the contractual relationship and the facts.

Section 1981 vs. FEHA vs. Title VII

Section 1981, FEHA, and Title VII can all provide protection against certain forms of race discrimination, but they differ in coverage and procedure. Understanding these differences helps employees evaluate which claims may be available.

The Supreme Court clarified Section 1981’s causation requirement in Comcast Corp. v. National Association of African American-Owned Media, 589 U.S. 327 (2020). A claimant must show that race was a but-for cause of the injury. In practical terms, the claimant must establish that the challenged harm would not have occurred in the absence of the alleged racial discrimination.

That requirement does not mean race must be the only factor in the employer’s decision. It does mean the evidence must support the conclusion that race made a difference to the outcome under the applicable legal standard. Documents, comparative treatment, discriminatory remarks, shifting explanations, and the sequence of events may all be relevant.

When it makes sense

Section 1981 may deserve consideration when an employee believes race affected an employment decision and the administrative deadline for another claim may have expired. It may also be relevant when an employer is too small to be covered by FEHA’s employment discrimination provisions or Title VII. In other cases, it may provide an additional claim alongside state or federal statutory claims.

The first step is to identify the employment decision and the contractual right allegedly affected. Gather relevant employment agreements, job descriptions, performance reviews, pay records, messages, and written explanations for the decision. If similarly situated employees received different treatment, record what you know and how that information can be obtained lawfully.

An attorney can assess whether the facts satisfy Section 1981’s requirements, whether the four-year period applies, and whether other claims should be considered. You can also review our California employment law resource for an overview of workplace protections and our California CRD and EEOC claims page for information about administrative procedures under other discrimination laws.

About Attorney Milan Chatterjee

Milan Chatterjee is an attorney licensed in California and Nevada and the founder of Best Employment Attorney, the dedicated employment law practice of Milan Legal. He represents employees and employers in disputes involving harassment, discrimination, retaliation, wrongful termination, wage claims, employment contracts, severance agreements, and related employment matters.

Milan earned his Juris Doctor from UCLA School of Law and studied at NYU School of Law as a visiting student. Before founding his practice, he served as Associate Compliance Counsel at Las Vegas Sands Corporation, advising on employment compliance, workplace investigations, corporate governance, workforce restructuring, and risk management.

Legal Disclaimer: This article provides general information about federal and California employment law and is not legal advice. Section 1981 claims depend on the contractual rights involved, the evidence of discrimination, causation, and the applicable filing period. Consult a qualified attorney about your specific circumstances.

Frequently Asked Questions

Conclusion

Section 1981 provides a federal route for certain race discrimination claims involving contractual rights, including employment relationships. Many claims arising under the Civil Rights Act of 1991 amendments are subject to a four-year limitations period, and an employee generally does not need to file an EEOC charge before bringing a Section 1981 lawsuit. The statute also has no minimum employer-size threshold.

These features can make Section 1981 important when other legal routes are unavailable or deadlines have passed. However, the claim must still satisfy the contractual-rights requirement and the Supreme Court’s but-for causation standard. A timely review of the evidence and applicable law can help determine whether this federal protection fits your circumstances.