Tuesday, September 19, 2006

Section 1981 case

The second circuit has decided, in Ofori-Tenkorang v. AIG , that Section 1981 claims cannot succeed in cases where the conduct occurred outside the jurisdiction of the United States. Although other circuits had made similar determinations, none had been published.

What is Section 1981? Section 1981 refers to a section of the U.S. Code that prohibits discrimination in "making and enforcing contracts", which for our purposes applies to hiring and promotion decisions. The law has traditionally been used in race discrimination cases against private sector entities.

Why do we care? How about this: The statute of limitation is four years, compared to 300 days for laws administered by the
EEOC and typically 1-2 years for state laws. There is no administrative requirement, meaning someone can file directly in federal court without going through the EEOC or similar agency. And the kicker? Unlimited compensatory and punitive damages (whereas remedies under federal, and some state, laws are capped).

What now? Although this is good news of a sort for employers with personnel in other countries, there may be other laws that apply in these situations, Congress can always modify the law, and...do you really want to go to court? So make sure your supervisors are trained in how to avoid discriminatory hiring procedures as well as retaliatory treatment.

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