The Economic Inclusion Civil Rights Act of 2023

About the Bill

Media mogul Byron Allen lobbied Congress to strengthen the original civil rights act in America, the Civil Rights Act of 1866, and on June 24, 2021, responding to Mr. Allen's call to action, two Members of the U.S. House, Rep. Jamie Raskin (D-MD) and Rep. Mondaire Jones (D-NY), along with three U.S. Senators, Sen. Richard Blumenthal (D-CT), Sen. Cory Booker (D-NJ), and Sen. Ron Wyden (D-OR) introduced the Economic Inclusion Civil Rights Act of 2021, landmark legislation that would amend and strengthen Section 1981, a product of our nation’s first civil rights law enacted after the Civil War, and bring us one step closer to true economic inclusion. The bill was reintroduced on June 15th, 2023 even larger group of lawmakers.

Section 1981 is this nation’s oldest federal civil rights law. Its passage in 1866 was a watershed, legislating, for the first time, that all Americans “of every race and color” “shall” have the “same” rights. Many proponents hoped it would “break down all discrimination between” the races for “basic civil rights.” Jones v. Alfred H. Mayer Co., 392 U.S. 409, 432–433 (1968). Tragically, the statute has not lived up to that hope, largely because of a series of Supreme Court decisions hostile to it. 

With the Economic Inclusion Civil Rights Act Congress takes a step toward correcting those Supreme Court decisions, fulfilling one of Congress’ most essential roles in our constitutional structure: acting, as the most democratically accountable branch of government, to repudiate and correct errors by the least democratically branch—just as it did when the late John Lewis won passage of the Civil Rights Act of 1991.  

This bill represents the start to updating our oldest, and one of our most sacred, civil rights statutes for the 21st century—to make it a match for the racism that persists in the United States economy. 

“This statute can and should be an engine of economic opportunity, protecting not just equal rights to “make and enforce contracts”—the words that the original drafters in 1866 chose—but equal opportunity in all economic activity. This bill changes the statutory language to ensure that equal opportunity is the law, and that racism has no place in commerce, not just in “making and enforcing contracts” but in all forms, and at all stages of commerce, not just when deciding whether to enter a contract. 

How can it be that a bank violates the statute when it refuses Black borrowers credit outright, but not when it requires five reference letters from Black applicants and only one reference from White applicants?  How can it be that only “buying" while Black or brown is protected but “shopping while Black or brown” is not?  It should not be so. An equal right only “to make … contracts” leaves too many barriers in place. It is an empty promise. 

This bill fixes the problem by specifically enumerating a full panoply of economic rights: browsing, shopping, waiting for goods or services, applying for and accessing credit —and not just purchasing.  

It has been thirty years since Congress took on a civil rights restoration bill like this—with the Civil Rights Act of 1991.  It’s time to act. 

The Economic Inclusion Civil Rights Act aims to restore private individuals’ ability to enforce civil rights, in the wake of several Supreme Court decisions limiting remedies and making rights harder to vindicate. 

  • First, in addition to expanding the scope of economic activities protected, this bill also overturns the Supreme Court’s Comcast decision, to make it the law, once again, that when race is “a motivating factor” in a decision, that is actionable, even if it was not the decisive factor, thereby eliminating the so-called “but-for” causation standard. As Justice Ginsburg rightly explained in her Comcast concurring opinion, a strict “but for” causation standard “is ill suited to discrimination cases and inconsistent with tort principles.” It is Congress’ prerogative to repudiate the Court’s misinterpretations, as Justice Ginsburg pointed out. This bill takes up Justice Ginsberg’s call to action. 

  • Second, this bill would overturn the Court’s decision in General Building Contractors, which made Section 1981 inapplicable to anything except purposeful, intentional discrimination. In his dissent from that decision, Justice Thurgood Marshall lamented that the Court was “shutting its eyes to reality.” And he was right. So-called disparate impact suits, which this bill restores, are essential both to uncover hidden and hard-to-prove intentional and unconscious discrimination, and to remove artificial and arbitrary barriers to equal opportunity. For decades, federal agencies have had regulations under Title VI prohibiting not only intentional discrimination but also policies and practices that unjustifiably inflict discriminatory effects. It’s time to give that tool back to private civil rights litigants, too.

  • Third, this bill will outlaw both forced arbitration and class action waivers for Section 1981 claims. The Supreme Court has said that “absent contrary Congressional command” both tools can be used to restrict access to courts. Today, we take the Court up on its invitation to re-open the courthouse doors by banning both forced arbitration and class action waivers in this context. 

Read the full text of the bill here.

Section-by-Section

  • Sections 2a & 2b:  Finding and Purpose and Authority. 

    These two sections declare the intent and purpose of the bill: to strengthen the scope and effectiveness of federal civil rights protections of our nation’s oldest federal civil rights law, by restoring its original potential for guaranteeing  economic inclusion, regardless of race; and to overturn several Supreme Court decisions, which have restricted Section 1981 and thwarted civil rights enforcement.

  • Section 2(c): Definitions.

    Section 1981 does not currently have a definitions section. The added definitions in this section serve several purposes:

    The definition of “economic activity” clarifies that Section 1981 must be understood to prohibit discrimination on the basis of race in all economic activity and not just narrowly in contractual relationships, as too many courts have misinterpreted it. This is achieved by adding the words “economic activity” to the statute and defining them.  

    Too often, courts have given Section 1981 a pinched interpretation, for example, enforcing the statute when a Black person has been denied service altogether but refusing to enforce it when, although service was provided, White persons received better service. By defining “full and equal” to include full and equal benefit and enjoyment of “the same” “service and treatment,” this bill corrects that misinterpretation. 

    “Full and equal” are also defined to include freedom from racial intimidation and harassment.

    The added definition of the statutory phrase “security of person and property” clarifies that those words mean what they say:  Section 1981 protects all races not only in their right to engage in commercial activity without racial discrimination but also to receive the same legal protection “of their person and their property as is enjoyed by white citizens.” This protection for person and property also explicitly includes the same protection, for persons of all races, from environmental harms (environmental justice).

  • Section 2(d): Statement of Equal Rights.

    This section clarifies the grant of “equal” rights to all races, in all economic activity, and to security of both their persons and property, free from discrimination on the basis of race.

  • Section 2(e): Discriminatory Effects Also Prohibited.

    In General Building Contractors Ass’n v. Pennsylvania (1982), over a powerful dissent by Justice Thurgood Marshall, the Supreme Court held that Section 1981 is only violated by purposeful (intentional) discrimination. This section overturns that decision. And in doing so, brings Section 1981 in line with other civil rights statutes, like Title VII (employment) and the Fair Housing Act, which already cover not just purposeful discrimination (disparate treatment) but also conduct that has the effect of creating or perpetuating racial disadvantage (disparate impact).

  • Section 2(f): Protection Against Impairment.

    There is currently disagreement in the courts about the scope of Section 1981’s prohibitions against nongovernmental discrimination, with some courts holding that the statute’s prohibitions are broader for governmental than for private  discrimination. The Supreme Court has declined to resolve the disagreement in the lower courts on this question. This section resolves it, making clear that the prohibitions on governmental and private discrimination are coextensive.

  • Section 2(g): Burden of Proof for Discriminatory Treatment Claims

    Section 1981 does not explicitly contain causal language. But in Comcast Corp. v. National Ass’n of African American-Owned Media (2020), the Supreme Court ruled that the statute is only violated when race is a “but for” cause of injury—that is, with proof that race was a decisive factor. Some lower courts had found violations of the statute if race was “a motivating factor,” which is easier to prove. In Comcast, the Supreme Court rejected the “motivating factor” standard, making civil rights under Section 1981 cases harder for plaintiffs to win. This section overturns the Supreme Court’s Comcast decision, reinstating the “motivating factor” standard. 

  • Section 2(h): Standing

    This section provides for broad standing for plaintiffs bringing suit under Section 1981—including, in part, by overruling the Supreme Court’s decision in Domino’s Pizza, Inc. v. McDonald (2005), where the Supreme Court restricted standing under Section 1981 by denying a Black franchisee’s standing to sue, in his own name, for a franchisor’s race-based discrimination against his franchise, of which he was both the president and only shareholder. 

  • Section 2(i): Respondeat Superior

    This section makes principals liable for violations of the Act committed by their agents, and municipalities liable for violations of the Act committed by their employees, while carrying out their job duties.

  • Section (j): Jury Trial Right

    This section bans forced arbitration and class action waivers, for suits brought to enforce Section 1981, and protects the right to a jury.

  • Section 2(k): Statute of Limitations

    Section 1981 does not contain a statute of limitations, and under current law, some suits to enforce the statute are subject to a 4-year statute of limitation while others are not. This section creates a uniform 4-year statute of limitations for all suits brought to enforce the Act. 

  • Section 2(l): Remediating Past Discrimination

    This section is intended to prevent this bill from being weaponized to prohibit or limit otherwise lawful efforts to address racial discrimination.

  • Section 3: Application to Claims

    This section addresses retroactivity—stating that the Act will apply to all suits pending on or after it is enacted.

Senate Sponsors

  • Senator Richard Blumenthal

    “The Economic Inclusion Civil Rights Act will help restore the unrealized promise of an economy in which all Americans have full, equal opportunity, free from racial discrimination. In the wake of the Civil War, Congress passed the Civil Rights Act of 1866 to guarantee that all Americans had the same rights to enter into contracts – but decades of bad court decisions have blocked Black Americans and other racial minorities from relying on this law to hold companies accountable for violations of their civil rights.”

  • Senator Ron Wyden (D OR)

    “America should be strengthening laws that protect the civil rights of Black Americans and people of color and support economic justice. Yet, the Supreme Court has chipped away at Section 1981, a pillar in the fight against racial discrimination and expanding economic opportunities. Congress must right this wrong and do more to address the serious economic inequities that persist in America and make sure that every American has equal opportunity.”

  • Senator Cory Booker

    “Over 155 years ago, Congress enacted Section 1981 to guarantee equal treatment for Black Americans and other communities of color in our economy. However, the Supreme Court’s decades-long pattern of systemically striking down its critical protections has left the law’s promise unfulfilled today. The Economic Inclusion Civil Rights Act would be an important step toward restoring these protections and addressing the systemic racial discrimination in our nation’s economy. We must ensure that all Americans are afforded the same opportunities to thrive.”

  • Senator Elizabeth Warren (D MA)

  • Senator Mazie Hirono (D HI)

  • Senator Sheldon Whitehouse (D RI)

  • Senator Bernie Sanders (D VT)

  • Senator Ed Markey (D MA)