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Staffing Company May Bring Section 1981 Race Claim

White Glove is a staffing company that provides kitchen staff and food service personnel to its clients. Methodist Hospital was negotiating with White Glove to become one of its clients. The company was told by Methodist’s catering coordinator that the hospital’s chef “only want[ed] to work with Hispanics” and that the chef preferred “Hispanics” over other groups. Although White Glove and Methodist had not yet signed a contract, White Glove sent over some temporary workers. One of those workers was an African-American woman. When she arrived, she was allegedly told by the only other black employee, “I’m surprised you’re in here. They usually don’t let blacks in this kitchen.” White Glove was thereafter contacted by Methodist’s catering coordinator who was upset that they had not sent over just Hispanics. When White Glove did not have a Hispanic worker to send over the next day and again placed the African-American employee at Methodist, the kitchen sent her home. Methodist then decided not to enter into a contract with White Glove.
White Glove brought suit against Methodist under Section 1981 of the Civil Rights Act. Methodist challenged White Glove’s ability to bring a claim for racial discrimination as a corporation. The Fifth Circuit Court of Appeals found that White Glove did have standing. Underlying Methodist’s argument was the assertion that a corporation must have a racial identity to be able to sue under §1981. According to the appellate court, “[A] party may suffer a legally cognizable injury from discrimination even where that party is not a member of a protected minority group.” The right to pursue this injury existed irrespective of whether the company was minority-owned. White Glove was found to have satisfied the “zone of interest” the statute was intended to protect. Section 1981 prohibits racial discrimination in making and enforcing contracts. In this case, Methodist was alleged to have denied White Glove a contract because it sent a black woman to work in the kitchens, which was found to be “sufficiently close” to the discrimination that Section 1981 was intended to prohibit.