Colin Walsh
Texas Employer Lawyer Colin Walsh

On December 18, 2020, I published a blog all about 42 U.S.C. § 1981 (“§ 1981” or “Section 1981”) claims.  I’m sure you remember it.  It was pretty great, if I do say so myself.  

But just in case, very briefly, § 1981 prohibits race discrimination and retaliation in contracting, which includes employment contracts.  Further Section 1981 applies to at-will employment.  That is significant because it means that if employers or companies are not subject to Title VII of the Civil Rights Act of 1964 because they are either too small or do not have employees, an aggrieved person can bring a claim under § 1981.  Section 1981 claims can even be brought against local governmental entities through another statue located at 42 U.S.C. § 1983.

All of the above was discussed in my December 2020 blog.  So why the follow up?  Well, the second half of my blog is no longer accurate in the Fifth Circuit.  You see, in the second half of my blog, I stated that third-party interference in contracts based on race was also prohibited by § 1981 even in the Fifth Circuit.  The rest of the blog then detailed though citation to Supreme Court and Fifth Circuit precedent the basis for my belief.  The analysis was based on a brief I had filed that was currently pending at the Fifth Circuit.

Well, as the saying goes, “time makes fools of us all.”  Since that blog, the Fifth Circuit has ruled.  And . . . I was wrong.  Currently, in the Fifth Circuit, § 1981 only covers third-party interference in very limited circumstances.  Specifically, the Fifth Circuit put it this way:

Since we decided Faraca, however, we have clarified the reason for the Director’s liability. The Director “was only nominally a third party,” we have explained. Id. Because the Director was acting on behalf of the State of Georgia when he instructed a subordinate not to hire Dr. Faraca, the Director and the State “were essentially one and the same.” Accordingly, we do not read Faraca to recognize, as Dr. Perry contends, a true third-party-interference theory of § 1981 liability. Rather, we read Faraca to allow § 1981 liability where the “third party” and the contracting party are “essentially one and the same.” No evidence suggests that VHS and PICCS are “essentially one and the same.” follows that Dr. Perry cannot recover against VHS under § 1981 on the theory initially articulated in Faraca and clarified in Bellows. 

Perry v. VHS San Antonio Partners, LLC, dba North Central Baptist Hospital, 990 F.3d 918, 932-33 (5th Cir. 2021).  In other words, essentially, a third-party interference claim can only be brought under § 1981 if the third-party is an employee, agent, or officer of the party with a contractual relationship.

So how am I going to get out of this with my credibility intact and on a positive, hopeful note for a broad view of § 1981 even in the Fifth Circuit?  Well, how about this!

The Fifth Circuit’s reading conflicts with established law in eight other courts of appeals.  In fact, the Fifth Circuit is the only court of appeals to read § 1981 so narrowly.  The eight other courts of appeals that have addressed this issue have all found that § 1981 prohibits third-party interference in contracts based on race.  Another way to put it would be that if Dr. Perry in the case quoted above had filed his lawsuit in the First, Second, Fourth, Sixth, Seventh, Ninth, Tenth, or Eleventh Circuits, he would have had a cause of action.

Because of this clear circuit conflict, Professor Eric Schnapper from the University of Washington School of Law, and I have just filed a petition for certiorari with the United States Supreme Court asking them to resolve this conflict.  The Case is Melvin G. Perry v. VHS San Antonio Partners, LLC, dba North Central Baptist Hospital, No. 21-172.

Stay tuned because maybe my December 2020 blog will actually turn out to be correct . . . even in the Fifth Circuit! 

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Photo of Colin W. Walsh Colin W. Walsh

We asked Colin W. Walsh, an experienced Trial Attorney in the Austin office of Wiley Walsh, P.C., to impart his candid answers to a range of questions.   After reading, you will be more more informed on the well-respected reputation that Mr. Walsh

We asked Colin W. Walsh, an experienced Trial Attorney in the Austin office of Wiley Walsh, P.C., to impart his candid answers to a range of questions.   After reading, you will be more more informed on the well-respected reputation that Mr. Walsh carries.

1. What do you like most about being an employment lawyer?

I enjoy getting tangible results for my clients and being involved in an area of law that affects everybody every day.

2. What is the most important issue to you of being an advocate?

One of the most important issues to me as an advocate is to not only zealously represent my clients, but also the law.

3. What kind of clients do you like best?

I like the clients that I am able to help who were not able to find help elsewhere.  On a couple of occasions now, a client has told me that my firm is the first one that has listened to his or her issue and offered any kind of assistance.

4. What do you think is the most important part of a good case?

The client.  If the client is not invested, then the other side won’t take it seriously and neither will the jury.

5. What labor and employment issues do you think are currently trending?

The biggest employment discrimination issues I see right now are related to age, disability, and pregnancy discrimination.  For some reason, these types of discrimination seem to be acceptable to employers.  The other issues right now are minimum wage and overtime pay.

6. Who is your favorite Supreme Court Justice?

Justice William Brennan.

7. What would you say to HR of a company about how to treat employees?

It would be to listen to your employees.  Most employees are not looking to sue when he or she goes to Human Resources.  These employees are sincerely looking for help.  Nothing makes an employee seek legal counsel like when he or she complains about something and HR starts investigating the employee instead of the complaint.

8. Besides Rob Wiley, P.C., what is the most interesting job that you have had?

The most interesting job I’ve had is working as an extra in film and television.  I should have known that I was destined to be a lawyer at that point because two of my biggest gigs were the TV show “Boston Legal” and the film Charlie Wilson’s War.

9. What is your favorite food?

Meat pies.  I first discovered them when I studied abroad in undergrad.  I can’t believe these have not caught on in the U.S. because they are brilliant.

10. What’s the best part of living in Austin?

All of the outdoor festivals.  And the Longhorns.

Colin W. Walsh is a Trial Attorney in the Austin office of Wiley Walsh, P.C.  He graduated from The University of Texas at Austin with a bachelor’s degree in theatre in 2006.  Mr. Walsh then graduated from The University of Texas School of Law with honors in 2011.