# Section 1981 Section 1981 (42 U.S.C. § 1981), which originates in the [[Civil Rights Act of 1866]], guarantees all persons the same right "to make and enforce contracts" as is "enjoyed by white citizens." It was enacted to protect the contracting rights of freed slaves during Reconstruction. The Supreme Court extended it to private discrimination in 1976 (*Runyon v. McCrary*), and the Civil Rights Act of 1991 broadened it to cover the whole life of a contract. In 2020 the Court required plaintiffs to show race was the but-for cause of the harm (*Comcast v. NAACP*). ## Two jobs at once - **The shield.** Section 1981 has no damages cap, unlike Title VII, so it is the usual vehicle for large workplace racial-harassment verdicts. The best-known recent example is [[Diaz v. Tesla]]. In 2021 a federal jury awarded a Black former Fremont factory worker $137 million; after a judge's reduction and a retrial, the award ended at $3.2 million. - **The sword.** After [[Students for Fair Admissions v. Harvard]], conservative litigators turned the statute against private-sector [[DEI]]. [[Edward Blum]]'s American Alliance for Equal Rights and [[Stephen Miller]]'s [[America First Legal]] sued fellowships, grant programs and scholarships restricted by race. The same statute does opposite jobs in the same period: a remedy for anti-Black harassment in one courtroom, and a weapon against race-conscious programs in another. ## The sword's record - **Fearless Fund (the template).** On June 3, 2024, the Eleventh Circuit (2–1) held that a privately funded $20,000 grant contest for Black women–owned businesses likely violated § 1981, because entering the contest was a "contract." It rejected the fund's First Amendment defense. The case settled on September 11, 2024, which left the ruling binding in Alabama, Florida and Georgia and the question open elsewhere. It also left open whether a true gift, as opposed to a contract, escapes the statute. - **The ABA (April 27, 2026).** The American Bar Association settled AAER's suit over its Legal Opportunity Scholarship by opening it to all applicants regardless of race, while denying liability. - **The limits.** Some suits stall on the statute's own terms. In December 2025 a federal court dismissed § 1981 damages claims against the University of Illinois Chicago as barred by state sovereign immunity. So far the pattern is settlement, not doctrine. Defendants tend to change a program rather than risk an appellate loss, so the statute is reshaping philanthropy and professional pipelines mostly through the threat of litigation. ## See Also - [[Affirmative Action]]: the broader policy regime - [[DEI]]: the post-SFFA litigation target - [[America First Legal]] · [[Edward Blum]] - [[Diaz v. Tesla]]: the statute's original function, an uncapped-damages harassment verdict