Section 1981 vs Title VII: What’s the Difference?

Quick answer: Title VII and Section 1981 can both protect employees against racial discrimination, but they differ in coverage, filing requirements, legal standards, and available remedies. Title VII prohibits discrimination based on race, color, religion, sex, and national origin and generally requires an employee to file an EEOC charge within 180 or 300 days, depending on the jurisdiction. Section 1981 prohibits intentional racial discrimination in the making and enforcement of contracts, including employment relationships, and does not require an EEOC charge before filing suit. The applicable statute of limitations for a Section 1981 claim can depend on the type of claim involved.

Workplace racial discrimination remains a serious problem across the United States. Thousands of employees file charges with the Equal Employment Opportunity Commission (EEOC) each year, and many more incidents go unreported. Two federal laws give employees the power to fight back: Title VII of the Civil Rights Act of 1964 and Section 1981 of the Civil Rights Act of 1866.

These laws often overlap, but they are not interchangeable. The differences between Section 1981 and Title VII can shape how a claim is filed, how long an employee has to act, and how much compensation they can recover. The racial discrimination attorneys at Barrett & Farahany can help those who have experienced workplace racial discrimination and want to know their legal options. 

Key Differences Between Section 1981 and Title VII

1. Scope of Protection

Title VII protects employees from discrimination based on race, color, religion, sex, and national origin. Sex discrimination under Title VII includes discrimination based on pregnancy, sexual orientation, and transgender status.

Section 1981 is narrower. It prohibits intentional racial discrimination in the making and enforcement of contracts, including employment relationships. Its protections can also reach discrimination based on ancestry or ethnic characteristics when that discrimination constitutes racial discrimination under Section 1981. However, the statute does not independently prohibit discrimination based solely on sex, religion, or national origin.

2. Types of Discrimination Covered

Title VII prohibits both intentional discrimination and neutral practices that create a discriminatory effect, known as disparate impact. For example, a hiring test that disproportionately screens out Black applicants could violate Title VII, even if the employer didn’t intend to discriminate.

Section 1981 only prohibits intentional discrimination. If a claim relies on a disparate impact theory, such as a seemingly neutral policy that disproportionately harms employees of a certain race, that claim can only proceed under Title VII.

3. Employer Coverage

Title VII applies to employers with 15 or more employees. Smaller businesses are generally exempt from Title VII claims.

Section 1981 applies to all employers, regardless of size. This makes Section 1981 an important option for employees of small businesses that fall outside Title VII’s employee threshold.

4. Administrative Requirements

Before filing a Title VII lawsuit, an employee must first file a charge with the EEOC and receive a “right to sue” notice. This administrative step is mandatory.

Section 1981 does not require an EEOC filing. Employees can go straight to court. This matters most for employees who missed the deadline to file an EEOC charge but may still have a viable claim under Section 1981.

5. Statute of Limitations

Title VII generally requires an employee to file an EEOC charge within 180 days of the alleged unlawful employment practice. That deadline may be extended to 300 days when a state or local agency enforces a law prohibiting employment discrimination on the same basis. After receiving a notice of right to sue from the EEOC, an employee generally has 90 days to file a lawsuit.

The deadline for a Section 1981 claim requires a different analysis. Under the U.S. Supreme Court’s decision in Jones v. R.R. Donnelley & Sons Co., a four-year federal statute of limitations applies to claims made possible by the 1991 amendments to Section 1981, including claims involving discriminatory termination and a hostile work environment. Claims that were actionable under Section 1981 before the 1991 amendments may instead be governed by the applicable state’s statute of limitations. Because the deadline can depend on the type of claim, employees should not assume that every Section 1981 claim has a four-year filing period.

6. Monetary Damages

Under Title VII, compensatory and punitive damages are subject to statutory caps based on the size of the employer. The combined caps range from $50,000 for employers with 15 to 100 employees to $300,000 for employers with more than 500 employees. Back pay and certain other forms of relief are not included in these caps.

Section 1981 claims are not subject to Title VII’s statutory caps on compensatory and punitive damages. Depending on the circumstances, this difference can significantly affect the remedies available in a racial discrimination case.

Which Law May Apply to Your Situation?

Whether Title VII, Section 1981, or both apply depends on the facts of the case. Title VII covers several protected characteristics and permits certain disparate-impact claims, while Section 1981 focuses on intentional racial discrimination involving contractual rights.

The two laws also have different procedural and legal requirements. Title VII generally requires an EEOC charge before a private lawsuit can proceed, while Section 1981 does not. Section 1981 also applies a different causation standard: under the U.S. Supreme Court’s decision in Comcast Corp. v. National Association of African American-Owned Media, a plaintiff asserting a Section 1981 claim must ultimately show that race was a but-for cause of the injury.

In some racial discrimination cases, an employee may be able to assert claims under both Title VII and Section 1981. Doing so can provide overlapping protections, but the filing deadlines, elements, and remedies available under each statute are different. An employment attorney can evaluate which claims may apply to a particular situation.

Frequently Asked Questions

Can I file a claim under both Section 1981 and Title VII?

Yes. Depending on the circumstances, an employee may be able to pursue claims under both Title VII and Section 1981 based on the same alleged racial discrimination. However, the statutes have different procedural requirements, causation standards, filing deadlines, and available remedies.

What is the time limit for filing a claim under each law?

Title VII generally requires an employee to file an EEOC charge within 180 days of the alleged unlawful employment practice. That deadline may be extended to 300 days when a state or local agency enforces a law prohibiting employment discrimination on the same basis. After receiving a notice of right to sue from the EEOC, an employee generally has 90 days to file a lawsuit.

The deadline for a Section 1981 claim can depend on the type of claim. Under the U.S. Supreme Court’s decision in Jones v. R.R. Donnelley & Sons Co., a four-year federal statute of limitations applies to claims made possible by the 1991 amendments to Section 1981. Other Section 1981 claims may be governed by the applicable state’s statute of limitations.

Does Section 1981 apply to small businesses?

Section 1981 is not subject to Title VII’s 15-employee threshold. Title VII generally applies to employers with 15 or more employees, while Section 1981 can apply to racial discrimination involving employment contracts even when an employer has fewer than 15 employees.

Is there a cap on how much I can recover under these laws?

Under Title VII, compensatory and punitive damages are subject to statutory caps based on the size of the employer. The combined caps range from $50,000 for employers with 15 to 100 employees to $300,000 for employers with more than 500 employees. Back pay and certain other forms of relief are not included in these caps.

Section 1981 claims are not subject to Title VII’s statutory caps on compensatory and punitive damages. The damages available in a particular case depend on the facts and applicable law.

Do I need to file an EEOC charge before suing under Section 1981?

No. Section 1981 does not require an employee to file an EEOC charge before bringing a lawsuit. Title VII, by contrast, generally requires an employee to file a charge with the EEOC and complete the required administrative process before bringing a private Title VII lawsuit.