General Building Contractors Association, Inc. v. Pennsylvania et al.
458 U.S. 375 (1982)
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Rule of Law:
A claim of racial discrimination under 42 U.S.C. § 1981 requires proof of purposeful, intentional discrimination. Employers and trade associations cannot be held vicariously liable for a union's intentional discrimination in operating an exclusive hiring hall when the employers did not have discriminatory intent and no principal-agent relationship existed.
Facts:
- In 1961, Local 542 of the International Union of Operating Engineers (the Union) and several construction trade associations entered into a collective-bargaining agreement establishing an exclusive hiring hall.
- Under the agreement, signatory employers were contractually obligated to hire operating engineers only from referrals made by the Union through its hiring hall system.
- Workers were barred from seeking work directly with these employers and had to go through the Union's referral process, effectively channeling all employment through the hiring hall.
- In 1965, the Union and the trade associations established a Joint Apprenticeship and Training Committee (JATC), administered by trustees appointed by both the Union and the associations, to serve as a path to Union membership and referral.
- The Union, in its administration of the hiring hall and referral system, engaged in a pattern and practice of intentional and systematic discrimination against racial minorities.
- This discrimination included denying minorities access to referral lists and skewing referrals to favor white workers for higher-paying, longer-duration jobs.
- The defendant employers and trade associations as a class did not have actual knowledge of the Union's discriminatory practices.
- The employers and trade associations did not themselves possess any intent to discriminate against minority workers.
Procedural Posture:
- The Commonwealth of Pennsylvania and a class of minority workers sued Local 542, the JATC, and a class of employers and trade associations in the U.S. District Court for the Eastern District of Pennsylvania, alleging violations of 42 U.S.C. § 1981.
- The District Court conducted a bifurcated trial, addressing liability in the first stage.
- The District Court found that the Union and the JATC had engaged in a pattern of intentional racial discrimination, violating § 1981.
- The District Court also found that the employers and trade associations (petitioners) had not intentionally discriminated and were not aware of the Union's discrimination.
- Despite the lack of intent, the District Court held the employers and associations vicariously liable under § 1981 for the Union's actions and issued an injunction against them.
- The employers and associations appealed to the U.S. Court of Appeals for the Third Circuit.
- The Court of Appeals, sitting en banc, affirmed the District Court's judgment by an equally divided vote.
- The Supreme Court granted certiorari to review the judgment.
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Issue:
Can employers and trade associations be held liable under 42 U.S.C. § 1981 for a union's intentional racial discrimination in operating an exclusive hiring hall, absent proof that the employers and associations themselves had any discriminatory intent?
Opinions:
Majority - Justice Rehnquist
No. Liability under 42 U.S.C. § 1981 can be imposed only for purposeful discrimination, and employers cannot be held liable for a union's discrimination without such intent or a valid basis for vicarious liability. First, the legislative history of § 1981, which traces to the Civil Rights Act of 1866, shows it was enacted to combat intentional, blatant discrimination like the Black Codes, not facially neutral practices with a discriminatory impact. Its standard of proof should align with the Equal Protection Clause, which requires discriminatory purpose, as established in Washington v. Davis. Second, there is no basis for vicarious liability under the doctrine of respondeat superior because no principal-agent relationship exists between the employers and the union; employers do not have a right of control over the union, and their relationship is fundamentally adversarial under federal labor law. Finally, § 1981 does not impose a nondelegable duty on employers to guarantee workers' rights against infringement by third parties; it only imposes a duty to refrain from their own intentional discrimination.
Dissenting - Justice Marshall
Yes. Proof of discriminatory intent should not be required for a § 1981 claim, and even if it were, the employers should be subject to injunctive liability for the union's intentional discrimination. The plain language of § 1981 guarantees the 'same right' to make contracts, focusing on the discriminatory effect on the protected class, not the perpetrator's motivation. Congress's broad remedial purpose was to eradicate all 'badges of slavery,' including subtle and systemic discrimination where intent is hard to prove. Furthermore, employers have a nondelegable duty to ensure their hiring decisions are free from racial discrimination. When they delegate their hiring function to a union hall, they cannot escape responsibility when that entity intentionally discriminates, as the ultimate employment contract is with the employer, who is a necessary party to provide full relief.
Concurring - Justice O'Connor
No. I concur with the majority's holding that § 1981 requires proof of intent and that vicarious liability is inappropriate on the current record. However, this holding does not prevent the respondents on remand from attempting to prove the traditional elements of respondeat superior, for example, by showing that the employers exercised control over the Joint Apprenticeship and Training Committee (JATC). Furthermore, while a party not found liable cannot be subject to the full weight of a remedial decree, a court's equitable powers may permit imposing minor and ancillary provisions on them, such as reporting requirements, if necessary to ensure the decree against the liable parties is effective.
Concurrence - Justice Stevens
No. While I believe the original Civil Rights Act of 1866 contained no intent requirement, the Court has since expanded § 1981's scope beyond its original intent into employment discrimination, an area better covered by Title VII. Since the Court is applying § 1981 to a judicially created area of coverage, requiring proof of discriminatory intent helps define the statute's scope in a way that better reflects Congress's original, more limited purpose. Therefore, I concur in the judgment and join the parts of the majority opinion dealing with the rejection of vicarious liability and nondelegable duty theories.
Analysis:
This decision significantly narrowed the scope of 42 U.S.C. § 1981 by aligning its standard of proof with that of the Equal Protection Clause, requiring a showing of discriminatory purpose. In doing so, the Court distinguished § 1981 from Title VII of the Civil Rights Act of 1964, which permits claims based on disparate impact alone. The ruling makes § 1981 claims more difficult for plaintiffs, as proving intent is a higher bar than demonstrating a discriminatory effect. The Court's rejection of vicarious liability for employers in the context of a union hiring hall also reinforces the legal separation between management and labor, clarifying that employers are not automatically guarantors of a union's non-discriminatory conduct.
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