Section 1981

Issues

42 U.S.C. § 1981 ("Section 1981") provides that any “person within the jurisdiction of the United States” has the same right to "make and enforce" contracts, regardless of their skin color. Section 1981 protects parties from discriminatory treatment both at the time when contracts are formed, and in post-formation conduct. Section 1981 applies to many aspects of the employment relationship because that relationship is considered contractual; however, the extent of this protection is unclear. This case addresses the question of whether an employee can bring a claim for retaliation under Section 1981. Retaliation does not clearly come under the scope of Section 1981 because often it is based not on an employee's characteristic, such as race, but instead on an action taken by the employee, such as complaining about work conditions or discriminatory treatment. However, retaliation claims often overlap with, and are difficult to separate from, claims of discrimination. Should the Supreme Court decide that Section 1981 protects an employee from race-based retaliation, it will give employees greater flexibility in filing claims of retaliation, because they will not be subject to the filing deadlines and limits on damages found in Title VII of the Civil Rights Act of 1964, an alternate provision which does encompass retaliation claims.

Questions as Framed for the Court by the Parties

Additional Resources

Issues

JWM Investments, Inc., a company wholly owned by Respondent John McDonald, entered into a contract with Petitioner Domino’s Pizza under which it the parties agreed that JVM would build and lease to Domino’s four restaurant buildings.  After the relationship began to sour, McDonald, an African-American, demanded that Domino's perform their end of the bargain. Another petitioner Deborah Pear Phillips, employee of Domino's, refused to sign contractually required "estoppel certificates," and the general counsel for Domino's said that it would perform the contracts only if McDonald would agree to amend them, which he refused to do. McDonald claimed that Petitioners' decision to breach the contracts was motivated by racial discrimination and sued under 42 U.S.C § 1981, which protects the right to make and enforce contracts. Petitioners argue that McDonald does not have standing to sue because he was not personally a party to the contract. The Supreme Court will thus decide whether 42 U.S.C. § 1981 creates a cause of action in one who is not a party to a contract, but who sustained personal injuries as a result of a breach of that contract, where the breach was motivated by racial discrimination against him.

Questions as Framed for the Court by the Parties

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