Patterson v. McLean Credit Union

Syllabus Petitioner, a black woman, was employed by respondent credit union as a teller and file coordinator for 10 years until she was laid off. Thereafter, she brought this action in District Court under 42 U.S.C. § 1981, alleging that respondent had harassed her, failed to promote her to accounting clerk, and then discharged her, all because of her race. The District Court determined that a claim for racial harassment is not actionable under § 1981 and declined to submit that part of the case to the jury. The court instructed the jury, inter alia, that in order to prevail on her promotion-discrimination claim, petitioner had to prove that she was better qualified than the white employee who allegedly had received the promotion. The jury found for respondent on this claim, as well as on petitioner's discriminatory-discharge claim. The Court of Appeals affirmed the judgment in favor of respondent.

Held: 1. This Court will not overrule its decision in Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 that § 1981 prohibits racial discrimination in the making and enforcement of private contracts. Stare decisis compels the Court to adhere to that interpretation, absent some "special justification" not to do so. The burden borne by a party advocating the abandonment of an established precedent is greater where the Court is asked to overrule a point of statutory construction, which, unlike constitutional interpretation, may be altered by Congress. Here, no special justification has been shown for overruling Runyon, which has not been undermined by subsequent changes or development in the law, has not proved to be unworkable, and does not pose an obstacle to the realization of objectives embodied in other statutes, particularly Title VII of the Civil Rights Act of 1964. Furthermore, Runyon is entirely consistent with society's deep commitment to the eradication of race-based discrimination. Pp. 171-175. 2. Racial harassment relating to the conditions of employment is not actionable under § 1981, which provides that "[a]ll persons . . . shall have the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens," because that provision does not apply to conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations. Pp. 175-185. (a) Since § 1981 is restricted in its scope to forbidding racial discrimination in the "mak[ing] and enforce[ment]" of contracts, it cannot be construed as a general proscription of discrimination in all aspects of contract relations. It provides no relief where an alleged discriminatory act does not involve the impairment of one of the specified rights. The "right . . . to make . . . contracts" extends only to the formation of a contract, such that § 1981's prohibition encompasses the discriminatory refusal to enter into a contract with someone, as well as the offer to make a contract only on discriminatory terms. That right does not extend to conduct by the employer after the contract relation has been established, including breach of the contract's terms or the imposition of discriminatory working conditions. The "right . . . to . . . enforce contracts" embraces only protection of a judicial or nonjudicial legal process, and of a right of access to that process, that will address and resolve contract-law claims without regard to race. It does not extend beyond conduct by an employer which impairs an employee's ability to enforce through legal process his or her established contract rights. Pp. 176-178. (b) Thus, petitioner's racial harassment claim is not actionable under § 1981. With the possible exception of her claim that respondent's refusal to promote her was discriminatory, none of the conduct which she alleges-that her supervisor periodically stared at her for minutes at a time, gave her more work than white employees, assigned her to demeaning tasks not given to white employees, subjected her to a racial slur, and singled her out for criticism, and that she was not afforded training for higher level jobs and was denied wage increases-involves either a refusal to make a contract with her or her ability to enforce her established contract rights. Rather, the conduct alleged is postformation conduct by the employer relating to the terms and conditions of continuing employment, which is actionable only under the more expansive reach of Title VII. Interpreting § 1981 to cover postformation conduct unrelated to an employee's right to enforce her contract is not only inconsistent with the statute's limitations, but also would undermine Title VII's detailed procedures for the administrative conciliation and resolution of claims, since § 1981 requires no administrative review or opportunity for conciliation. Pp. 178-182. (c) There is no merit to the contention that § 1981's "same right" phrase must be interpreted to incorporate state contract law, such that rac al harassment in the conditions of employment is actionable when, and only when, it amounts to a breach of contract under state law. That theory contradicts Runyon by assuming that § 1981's prohibitions are limited to state-law protections. Moreover, racial harassment amounting to breach of contract, like racial harassment alone, impairs neither the right to make nor the right to enforce a contract. In addition, the theory would unjustifiably federalize all state-law breach of contract claims where racial animus is alleged, since § 1981 covers all types of contracts. Also without merit is the argument that § 1981 should be interpreted to reach racial harassment that is sufficiently "severe or pervasive" as effectively to belie any claim that the contract was entered into in a racially neutral manner. Although racial harassment may be used as evidence that a divergence in the explicit terms of particular contracts is explained by racial animus, the amorphous and manipulable "severe or pervasive" standard cannot be used to transform a nonactionable challenge to employment conditions into a viable challenge to the employer's refusal to contract. Pp. 182-185. 3. The District Court erred when it instructed the jury that petitioner had to prove that she was better qualified than the white employee who allegedly received the accounting clerk promotion. Pp. 185-188. (a) Discriminatory promotion claims are actionable under § 1981 only where the promotion rises to the level of an opportunity for a new and distinct relation between the employer and the employee. Here, respondent has never argued that petitioner's promotion claim is not cognizable under § 1981. Pp. 185-186. (b) The Title VII disparate-treatment framework of proof applies to claims of racial discrimination under § 1981. Thus, to make out a prima facie case, petitioner need only prove by a preponderance of the evidence that she applied for and was qualified for an available position, that she was rejected, and that the employer then either continued to seek applicants for the position, or, as is alleged here, filled the position with a white employee. The establishment of a prima facie case creates an inference of discrimination, which the employer may rebut by articulating a legitimate, nondiscriminatory reason for its action. Here, respondent did so by presenting evidence that it promoted the white applicant because she was better qualified for the job. Thereafter, however, petitioner should have had the opportunity to demonstrate that respondent's proffered reasons for its decision were not its true reasons. There are a variety of types of evidence that an employee can introduce to show that an employer's stated reasons are pretextual, and the plaintiff may not be limited to presenting evidence of a certain type. Thus, the District Court erred in instructing the jury that petitioner could carry her burden of persuasion only by showing that she was in fact better qualified than the person who got the job. Pp. 186-188. 805 F.2d 1143 (CA4 1986), affirmed in part, vacated in part, and remanded. KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, and SCALIA, JJ., joined. BRENNAN, J., filed an opinion concurring in the judgment in part and dissenting in part, in which MARSHALL and BLACKMUN, JJ., joined, and in Parts II-B, II-C, and III of which STEVENS, J., joined, post, p. 189. STEVENS, J., filed an opinion concurring in the judgment in part and dissenting in part, post, p. 219. Julius LeVonne Chambers, Charlotte, N.C., for petitioner. Roger S. Kaplan, New York City, for respondent. Justice KENNEDY delivered the opinion of the Court.