The U.S. Supreme Court last month set a four-year statute of limitations in so-called "Section 1981" discrimination cases.
While most employees file discrimination cases under Title VII of the Civil Rights Act, an increasing number are taking the "backdoor" approach, filing suit under Section 1981 of the same law. Section 1981 bans discrimination in the making of contracts. The contract, employees claim, is their agreement to work at a company.
Employees find many benefits to taking the Section 1981 route. Specifically, no cap on damages exists and the law lets employees at even the smallest companies file suit. In comparison, to file a Title VII claim, employees must work for a company with at least 15 employees.
The problem: Section 1981 didn't have its own statute of limitations, leaving confusion among the lower courts.
Solution: But the Supreme Court now says employees have four years from the date of the negative job action (firing, demotion, etc.) to file a Section 1981 claim. In this case, the high court unanimously overturned a lower court ruling that set the filing deadline at two years. (Jones v. R.R. Donnelley & Sons, No. 02-1205)