Recently, the United States Supreme Court, in Jones v. R.R. Donelly & Sons Co., addressed the applicable time period employees could sue employers for claims brought under a federal civil rights statute that prohibits intentional racial discrimination. See 42 U.S.C. § 1981. Most employee discrimination statutes, such as Title VII or the Texas Commission on Human Rights Act, specify the time period within which a charge and/or lawsuit must be filed. Unlike those laws, however, Section 1981 (which has no relation to the year in which it was passed and does not sound as catchy as Title VII) has no administrative prerequisites, nor any caps on compensatory or punitive damages. Section 1981 also does not have a specific period of time for when suit shall be brought, although in Texas, it has generally been understood that the time period for an employee to sue under this law is two years. Jones changes that time period under certain circumstances and may allow up to four years for an employee to sue an employer.
Jones was a Section 1981 class action lawsuit where the plaintiffs filed suit more than two years, but less than four years, after the alleged discriminatory terminations. Because Section 1981 does not contain a limitations period in which a plaintiff can sue, courts traditionally use comparable state limitations period. In Jones, Illinois law was involved, and the time limit to sue is two years, just like in Texas. Plaintiffs argued they should be entitled to a lengthier filing period.
Plaintiffs turned to Congress' enactment of a law which provides a four year limitations period under certain circumstances. See 28 U.S.C. § 1658. Specifically, Congress enacted a non-user friendly catch-all four year limitations period to sue for actions arising under federal statutes that are enacted after December 1, 1990. What this confusing language means (Congress spared no expense on making the language difficult to understand) in the employment context is that if a discrimination law is enacted after December 1, 1990, employees may now have four years to sue an employer unless a different time period to sue is listed in that discrimination law. These are not exactly comforting words from Congress.
Thus, the issue in Jones was whether the plaintiffs' hostile work environment, wrongful termination, and wrongful denial of transfer claims were civil actions under a law enacted after 1990. While Section 1981 has been around for a long time, Congress, in 1991, amended Section 1981 to help employees and to make actionable discrimination that occurred after the employment relationship commenced. Some examples include racial harassment on the job, wrongful termination, and the denial of a job transfer. Before 1991, only pre-employment discrimination was actionable, such as a failure to hire an employee.
Ultimately, the U.S. Supreme Court, in a unanimous decision, concluded that plaintiffs had a four year period to sue employers for adverse personnel actions that occur after the employment relationship begins.
Unfortunately, the Court did not elaborate on what happens in the initial stages of the employment relationship, such as cases that concern discrimination on a failure to hire. Presumably, a failure to hire case based on race will continue to have a two year period to sue in Texas, although the United States Supreme Court did not specifically address that issue.
Employers need to take several steps to protect themselves because of this decision. First, employers should review their record retention policies. Policies that indicate documents should be destroyed within two to three years need to be revamped to retain such documents for at least four years since discrimination claims may now be brought four years later. When in doubt, "don't" throw it out.
Second, employers need to maintain accurate records on the location of former employees. With the passage of additional time, locating fact witnesses may be difficult, especially if the employer's business has a high turnover ratio. Locating key witnesses may be the difference between success and failure especially when it is a "swearing match" on a former employee's allegations. And locating fact witnesses will be even more difficult with the additional passage of time.
Fortunately, even in light of Jones, plaintiffs cannot wait forever to sue an employer. At the end of the day, plaintiffs should generally have no more than four years to sue under Section 1981.
Jones v. R.R. Donnelley & Sons Co. 124 S. Ct. 1836