On March 31, 2016, United States District Court Judge Karen Bowdre enforced a two-year statute of limitations in a failure to promote claim asserted under 42 U.S.C. Section 1981.  See Barclay v. First National Bank of Talladega, No. 1:14-cv-01573-KOB, 2016 WL 1270519 (N.D. Ala. Mar. 31, 2016).  Section 1981 prohibits race discrimination in the making, enforcement performance, modification, and termination of contracts.

Statute of limitations issues in Section 1981 claims can be complex.  Until 1991, the statute of limitations was unquestionably two years.  But, in 1991 Congress amended Section 1981 to make new discrimination claims available under that statute.  And, Congress required that any new claims under Section 1981 must receive a four-year statute of limitations.

Prior to 1991, an employee could only sue for failure to promote under Section 1981 if “the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer.”  Patterson v. McLean Credit Union, 491 U.S. 164, 185 (1989)(emphasis added).  As a result, there is a lot of litigation on the issue of whether a promotion creates a “new and distinct relationship” between the employer and employee.

If a “new and distinct relationship” would be created by the promotion at issue, the historical two-year statute of limitations applies.  If the promotion only involves “routine increases in salary or responsibility,” the four-year statute of limitations applies.

In Barclay, the plaintiff was employed as an Assistant Manager of Data Processing, and claimed that she was denied a promotion to the position of Bookkeeping Supervisor.  Judge Bowdre imposed the two-year statute of limitations because that promotion would have created a new and distinct relationship between the plaintiff and her employer.  In particular, Judge Bowdre relied upon the fact that the plaintiff would receive additional supervisory duties and would have been elevated from a non-management to a management position.  Barclay filed her law suit more than two years after the failure to promote.  Therefore, Judge Bowdre dismissed the claim as untimely.